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Andreas Streubig, director of global sustainability at Hugo Boss |
It’s been almost a year since Hugo Boss outlined its latest, annually revised set of ambitious sustainability targets and the German premium fashion brand continues to make progress towards its goals, including upping its use of more responsibly sourced cotton and reducing the number of potentially hazardous substances within its supply chain. Driving these efforts is Andreas Streubig, director of global sustainability, who also tells just-style of his concerns that despite efforts by individual companies, a concerted industry approach is still in its beginning when it comes to driving systematic change.
With foundations dating back almost 100 years, Hugo Boss today has a presence in about 130 countries with more than 7,600 points of sale, including 1,100 retail stores where it sells men’s and women’s wear under the Hugo and Boss brands – achieving full-year sales of EUR2.8bn (US$3.2bn) for fiscal 2018.
Streubig, who joined the company just 18 months ago from German mail order and e-commerce giant Otto Group, says sustainability was already embedded throughout the Hugo Boss business, and that an important part of his role has been “helping our company to align all the good things that we do already, and that we have in mind for the future, with one strategic framework for sustainability.”
He adds: “Overall, we have made really good progress over the last 12 months. We have further developed the topic of product sustainability, because this is where sustainability is visible for our customers.” Highlights have been the development of a men’s shoe produced with Piñatex, a natural-based material made of pineapple leaf fibres, new concepts for more sustainable products throughout the whole assortment, and progression on the latest edition of its sustainability goals which the group reviews each year.
Hugo Boss AG employs some 14,000 people, with Streubig’s department of more than 20 people operating as a “hub”. It is linking with other colleagues both within the group and other players in the industry, including suppliers, to understand the challenges they face and to learn how best to move forward together. It’s what he calls the “Power of the many”.
“We would be nothing without the colleagues in all those other operational units that are necessary to propel our initiatives forward, because those are the ones who have a close relationship with vendors, our investors or with the media; and this is what we need to be successful.
“Improving the sustainability of a business – no matter what business we are talking about – requires all of us in the company to make adequate decisions that will enable us to be more sustainable than we were in the past.”
Also in charge of central quality management and product risk and safety, Streubig believes that developing more sustainable apparel, which in turn will lead to a more sustainable industry, begins at the very first step in the supply chain – product design and development.”Improving the sustainability of a business – no matter what business we are talking about – requires all of us in the company to make adequate decisions that will enable us to be more sustainable than we were in the past.”
With about 80% of a product’s environmental impact already defined at design stage, Hugo Boss is taking care to ensure its designers are aware of the key role they play in developing more sustainable products. “It all starts with design and technical development – so we put a lot of effort into ensuring our designers and technical developers bear in mind the special sustainability requirements such as material use and bringing down the complexity of styles.” Streubig adds that selecting the right supplier is just as important, as is focusing on energy efficiency, chemicals management and defining “the right logistics processes and structures that you need to bring produced readymade garments from A to B.”
“We need to bundle our forces, link our arms and really share the efforts that are necessary to make textile production more sustainable than it has been in the past.”
And finally, brands and retailers must “tell the right story to our consumer” to help them understand what steps have been taken to offer a more sustainable product. “We need to bundle our forces, link our arms and really share the efforts that are necessary to make textile production more sustainable than it has been in the past to really gain this systematic change.”
Sourcing
“The direct way to make things happen with regard to sustainability is always to always have a contractual relationship,” Streubig says, adding this is how the group ensures its suppliers know exactly what is expected of them.
As a contributor of the Zero Discharge of Hazardous Chemicals (ZDHC) programme, for example, the ZDHC MRSL – the so-called Manufacturing Restricted Substances List – is an important part of all Hugo Boss supplier relationships. “This list defines the thresholds for specific chemicals and can hopefully help our partners to minimise the use of those substances, or to eliminate them completely.”
Another approach to try to reduce the impact of hazardous substances and health risks within its supply chain networks is to foster the use of alternative processes or technologies to substitute chemicals – such as using laser technology in denim production to replace other “outdated and impactful technologies” to achieve a worn look.
The company is also striving to make a “significant contribution” towards five of the United Nations’ Sustainable Development Goals (SDGs) – quality education; decent work and economic growth; responsible consumption and production; climate action; and partnerships for the goals. This includes, for example, the target of reaching 90% of all cotton used being from sustainable production by 2025. By end of 2018, “we were already at around 40%, which brings us really close to the first threshold of our cotton commitment to reach 50% by 2020.”
Close to 20% of the group’s products are produced in its own factories in Germany, Poland, Turkey, and Italy.
Most of the raw materials that go into a garment (fabric, trimmings, button, yarn, zippers etc), come from Europe; while about 80% of Hugo Boss’ finished products are sourced from around 200 suppliers all over the world – 40% of them in Eastern Europe including Turkey, 38% Asia, and 12% in Western Europe. But a little-known fact is that close to 20% of the group’s products are produced in its own factories in Germany, Poland, Turkey, and Italy. Drilling deeper, a map on the company’s corporate website details the number of suppliers in each production country, their full name and address, number of employees, and what type of product the site produces.
The majority of these suppliers enjoy long-term partnerships with Hugo Boss, with the group’s average partnership duration with its strategic suppliers being ten years.
“These are really long-term relationships where we try to grow together,” he says, adding that while it’s important to consider new technologies or partners that could enhance the group’s supply chain network, jumping from one supplier to the next in a quest for “ever cheaper prices” is not part of Hugo Boss’s philosophy.
“One of the promises we give as a premium fashion brand towards our customers is that we deliver sophisticated design and an adequate value-for-money proposition. That is hard to achieve without having stable, long-lasting and trustful relationships in the supply chain. I cannot see how it would work if you hop from one supplier to the other only for the sake of saving money.”
Transparency
Collaboration across the supply chain and its partners is also key to transparency, which in turn will accelerate sustainability, “not only at Hugo Boss, but through the whole industry. Most of the progressive companies are in close contact with their peers and their supply chain partners to collaborate, to exchange knowledge, and especially to ease the flow of information from stage to stage.”
One of the great challenges for the textile industry is to trace products back to the raw material or origin, and this is where emerging technologies like blockchain could change the game, enabling a retailer – or even a consumer – to trace the “story” of a garment right back to the origins of the raw materials, including for example, where the cotton was grown.
Offering a secure and transparent way of sharing information – as opposed to the current network of proprietary systems – a blockchain is essentially a digital public ledger. Anyone with permission to access the ledger can make changes and add information. These changes are called ‘blocks’ and they are added to the ‘chain.’
“I believe that blockchain can, once it is in a mature state, could replace traditional centralised systems for information sharing.”
“It offers a new approach for the future of supply chain transparency,” Streubig says. “I believe that blockchain can, once it is in a mature state, could replace traditional centralised systems for information sharing that we are all dependent on with an integrated and decentralised approach, where all supply chain partners have access to the same information at the same point in time.
“I personally – and we at Hugo Boss – believe that there is really a great chance to propel the industry forward into a more efficient and more robust data management era where all supply chain partners are on the same page, with everyone knowing exactly what’s going on right from the beginning of the supply chain up to a certain point in time.”
And there are additional benefits. “This is not only true for information about materials, but about the working conditions under which a product is produced, and the results of social audits of the supply chain partners and much more. Blockchain has also the potential to
increase efficiency, for example by replacing manually triggered transactions through so-called smart contracts.”
There are other issues, too, that greater transparency would help to address, including the high water and chemical use in the production of fibres such as cotton; the “enormous” amount of energy used in the deeper supply chain, such as wet processing; and the sheer volume of textile waste that is still not being fed back into the supply chain but ending up in landfill.
“We really need to think about how to tackle these challenges because they are limiting and endangering the future viability of our business. On the other hand, we have to make sure that our customers value the things we do, and that they hopefully feel the support from us, the textile companies, to make better, more sustainable buying decisions in the future.”
Steps to sustainability
Streubig believes there are still plenty of opportunities to move the fashion industry towards more sustainable business behaviour – and he suggests a number of steps industry players can take to help create lasting change.
First off, “all players within the industry have to accept their responsibility. We are closer to this than 10 years ago, for sure, but still there are parts of the industry that are not really acknowledging their responsibility for certain unsustainable or unethical business conduct within their supply chain.”
“There have been a lot of individual commitments and activities over recent years, but still I see a concerted industry effort only for single fields of action.”
“There have been a lot of individual commitments and activities over recent years, but still I see a concerted industry effort only for single fields of action.”
Second is “figuring out the things that matter. Where are the big impacts that are linked to certain industry sectors or certain industry models?”
Another consideration is that companies should be developing objective KPIs and road maps for sustainability management – and ramp up efforts to communicate this to the wider world.
“Even though there have been a lot of activities over the last few years by individual players, the systematic change that we need to see needs a systematic approach. An approach where all the relevant players come together and walk into the same direction and not in diverse ones.
“The other part of the story is that we need a level playing field as well. All the additional efforts that are necessary to obtain more sustainable products, and more sustainable business processes, are not paid back yet from the markets, at least not for companies of our size.
“Here, I see a responsibility also with our policy makers to set an adequate regulatory framework. There have been a lot of good steps in that direction over the last years” – such as the Modern Slavery Act in the UK, the Loi de vigilance in France or the EU directive on non-financial reporting – “which point into the right direction, but I expect more of that to come. My wish, of course, is for thorough consultations to be held prior to putting new regulations in place.”
Looking ahead, Streubig notes there a number of objectives – and challenges – he would like to see both Hugo Boss, and the industry in general, achieve.
Specifically, the group’s long-term sustainability goals include plans for its own operations, such as its own retail facilities, which are to be operated on a more sustainable store concept in all regions by 2025. Beside the group strives to achieve complete transparency for all finished good suppliers and their supply chains, then digitally supported, by 2025.
The group has already started to introduce a governance model for all of its strategic suppliers, Streubig explains, adding it aims to have more than 90% of its goods sourced from suppliers who achieve a ‘satisfactory’ or better result within the company’s social audit scheme by 2020. In addition, Hugo Boss wants to eliminate 30% of the CO2 emissions within its supply chain by 2030, a pledge it has committed to by signing the Fashion Industry Charter for Climate Action.
For the wider industry, Streubig says five years from now should “hopefully” see the sector move closer to banning hazardous substances from its supply chains, make a “substantial impact” to the reduction of greenhouse gas emissions, and improve working conditions within production facilities in a systematic way.
Another thing Streubig is concerned about is the technological development of supply chain automation, or ‘Industry 4.0’, which he says marks the next big leap in industrial development. “Interesting enough is that we, the industry, on the one hand, see the potential of Industry 4.0 to increase efficiency and reduce failure but, on the other hand, we have not really started to reflect on the sustainability-related consequences of doing so; especially looking onto the social consequences for emerging countries that today build the backbone of the global textile industry.”
And while he acknowledges being “totally aware” that not all of these steps will be achieved in the short to medium-term, one thing he would “love” to see is societal consent; that not only something has to be done by someone, but that all of us play a role – the true ‘power of the many’.
“The realisation that the necessary efforts lie with all of us, be it corporations, be it media, be it politicians, civil societies, customers, academia, would be one thing that I really keep my fingers crossed for while trying to contribute to the necessary discussions.”