Natural Capital Evaluation

Facts as the basis for sustainability decisions
HUGO BOSS is aware of its responsibility to people and the environment. The natural capital evaluation identifies the places in the value chain where the greatest environmental impacts arise – and helps to develop strategies aimed at minimizing them.

What is a natural capital evaluation?

Along the entire value chain at HUGO BOSS, important natural resources are used, along with chemical and energy inputs – from the extraction of raw materials and production to shipment of finished products. This has an impact on climate change, the quality of ecosystems, and human health, among other factors.

To live up to our responsibility, it is important to know about these impacts in detail. Fact-based knowledge is needed to set strategic priorities, make well-founded decisions, and develop sensible, sustainable innovations.

That’s why HUGO BOSS has conducted life cycle assessments since 2009, to examine the environmental impacts of the individual product categories. Findings by partners and scientific studies are also included to support and validate the study. But environmental impacts – such as water consumption, land requirements, and CO2 emissions, for example – are not directly comparable, because they are measured in different units such as kilograms and liters. A further intermediate step is needed to render the different environmental impacts comparable. This is why HUGO BOSS began using the Natural Capital Protocol by the Natural Capital Coalition in 2016. It renders the results comparable by translating them into standardized monetary values.

In short, the natural capital evaluation identifies the steps in the value chain that cause the greatest environmental impacts. These findings form the foundation for HUGO BOSS to implement targeted measures to achieve more environmentally-friendly production and distribution of its products.

Results of the natural capital evaluation

Impacts along the value chain

The greatest weight among the environmental impacts of the value chain arise during the production steps: raw materials extraction and wet and dry processes. That’s why HUGO BOSS has set special targets in these areas and become involved in relevant initiatives, such as the Better Cotton Initiative (BCI) and the Leather Working Group (LWG).

For other steps in the value chain that are not directly related to products (logistics, administration, and store operation), HUGO BOSS also aims to implement measures to reduce environmental impacts. For more information, see the Environment section.

Impact by damage category

The different work steps along the value chain can be categorized by their corresponding ecological effects. Some of the work steps have a greater impact on climate change, for example, while others affect human health. This creates hot spots where more precise analysis and suitable measures can be employed to improve the overall environmental balance.

The largest hot spots identified in the raw materials stage are water consumption and the impact on ecosystem quality, while the wet processes have their greatest impact on climate change and human health.

  • Water consumption (raw material)

    Main drivers of environmental impacts

    Conventional cotton cultivation has a high water consumption compared to the production of other materials. At the same time, large amounts of this material are used in the fashion industry. Cotton also plays an important role at HUGO BOSS due to its characteristics as a material: it accounts for nearly 50% of all input materials, making it the most-used raw material at HUGO BOSS.

    Measures

    HUGO BOSS strives to cover 80% of its cotton needs through sustainably produced cotton that meet the criteria defined in the HUGO BOSS Cotton Commitment by 2025. These criteria include the responsible use of water. To achieve this goal, HUGO BOSS works together, among others, with the Better Cotton Initiative (BCI) and the Cotton LEADS Program.

    For example, in practice every BCI-licensed cotton farmer must develop and implement a water management plan, to optimize its water consumption. This strategy is proving successful: BCI-certified cotton farmers in China, for example, consumed 10% less water in the 2016/2017 season than non-BCI cotton farmers in the same region.

  • Ecosystem quality (raw materials)

    Main drivers of environmental impacts

    For conventional cotton cultivation, agricultural chemicals are used, such as pesticides to protect the crop against pests and fertilizers to boost its growth. However, the use of these chemicals results in water pollution and acidification of the soil and may also pose risks to native species.

    Measures

    Firstly, the optimization of water consumption already helps to support the quality of the ecosystem. Secondly, as defined in the HUGO BOSS Cotton Commitment, sustainable cotton cultivation also entails responsible soil management and the protection of biodiversity. That’s why the company also uses organic cotton, whose production involves only natural fertilizers and natural means of pest control – for example, in the BOSS Men Bodywear Signature Line made of pure, organic Egyptian cotton.

  • Climate change (wet processes)

    Main drivers of environmental impacts

    In the wet processes, it is primarily the energy required for procedures such as dyeing, finishing, and tanning that has an impact on climate change.

    Measures

    Leather tanning, in particular, requires large amounts of energy. That’s why HUGO BOSS has joined the Leather Working Group (LWG), to ensure increasing use of sustainable leather. The LWG audits and certifies leather producers with a low environmental impact. Statistics from the LWG show that a leather producer’s energy consumption can be reduced by 30-35% over the course of four audits, depending on the certification category. HUGO BOSS strives to increase the share of leather sourced from LWG-certified tanneries to 25% by 2019.

    HUGO BOSS also became active in the Global Climate Action for Fashion working group of the United Nations Framework Convention on Climate Change (UNFCCC) in 2018. In this group, brands, manufacturers, and organizations discuss targets and measures for climate protection along the entire textile value chain. This year, the group worked on developing a mutual understanding and also agreed on the next steps for contributing to the goals of the Paris Agreement.

  • Human health (wet processes)

    Main drivers of environmental impacts

    Tanning, dyeing, and finishing require the use of numerous chemicals, some of which have potentially negative impacts on human health.

    Measures

    HUGO BOSS is working on increasing the share of leather it sources from LWG-certified tanneries. In addition, the company joined the ZDHC Roadmap to Zero Programme in 2017, whose goal is to eliminate dangerous chemicals in textile, leather, and apparel production. A list of substances to avoid has been compiled by the program. This ZDHC Manufacturing Restricted Substances List (ZDHC MRSL) is now a component of all contracts with HUGO BOSS partners. You can find out more about environmental aspects in the supply chain here.

Downloads

Three white papers document research efforts by HUGO BOSS in the area of natural capital evaluation. The detailed method is described in the first version (white paper 2016). All three publications contain results for the individual product groups. In addition, the third white paper, published in 2018, describes the impacts of the HUGO BOSS value chain on climate change in greater detail.

White Paper - Environmental Impact Valuation - 3rd Edition (May 31, 2018)

White Paper - Environmental Impact Valuation - 2nd Edition (June 27, 2017)

White Paper - Environmental Impact Valuation - 1st Edition (October 07, 2016)

Further information

Vision and strategy

The natural capital evaluation is a key component of the sustainability strategy at HUGO BOSS – find out everything about the values, vision, and goals of this strategy here.

Materiality analysis

In its materiality analysis, HUGO BOSS and its stakeholders examined the business opportunities and risks associated with the subject of sustainability.

Company commitments

You’ll find all the sustainability-related commitments and guidelines for all HUGO BOSS stakeholders here. The obligation to ensure compliance applies equally to our partners and our own business activities.