Workers in the Value Chain

HUGO BOSS recognizes the impact its operations can have on workers’ lives and conditions along the global value chain, particularly in the global south, where vulnerabilities are most pronounced. While challenges exist across both upstream and downstream parts of the value chain, they are especially material within the supply chain, where labor-intensive processes are prevalent. Workers may face challenges such as job insecurity, low wages, long working hours, and limited social protections, with women disproportionately affected. Barriers to freedom of association and collective bargaining further restrict workers’ ability to negotiate fair wages or improve conditions, especially in regions with weak legal protections. Health and safety risks are pervasive across the value chain, from pesticide exposure in cotton farming to hazardous chemicals in dyeing processes. Across the broader textile industry, child labor and forced labor impacts remain critical issues, particularly in raw material production and manufacturing.

Addressing these challenges requires collective action. HUGO BOSS collaborates closely with its direct suppliers, fostering long-term relationships to constantly improve labor practices, while also engaging with stakeholders, such as NGOs, trade unions, and industry initiatives, to drive systemic improvements and care for fair, safe, and equitable working conditions.

For fiscal year 2024, HUGO BOSS is primarily reporting targets and metrics for its Tier 1 suppliers (including its own production facilities), with plans to expand reporting across Tier 2 through Tier 4 in the coming years, as data collection and reporting capabilities are further developed in alignment with ESRS requirements. For an overview outlining the main features of our value chain, please refer to the section “About this Combined Non-Financial Statement.” About this Combined Non-financial Statement, Business Model, Strategy, and Value Chain

Policies related to workers in the value chain

Respect for human rights is a core priority at HUGO BOSS, embedded in our company culture. We are committed to preventing violations both within our operations and across our supply chain. Our publicly available Human Rights Policy sets clear standards for upholding human rights, promoting fair treatment, and ensuring safe, decent working conditions. This policy is binding for all HUGO BOSS employees and business partners, who are expected to actively implement it. In particular, the policy emphasizes specific safeguards for vulnerable groups, including children, young workers, women, migrant workers, and Indigenous people – groups facing heightened risks in the global textile industry. HUGO BOSS is committed to safeguarding workers’ rights, including fair working hours, the right to unionize, and healthy working environments. Equal opportunities, a zero-tolerance approach to discrimination and harassment, as well as fair compensation are central, and we encourage our suppliers to adopt living wage strategies to ensure fair treatment at all levels. HUGO BOSS monitors compliance with the policy through its due diligence process, which is further explained in the section on “Due Diligence and Sustainable Supply Chain Management.” The policy undergoes regular updates, with the most recent revision completed in early 2025.

HUGO BOSS has a Human Rights Statement signed by the Managing Board, reinforcing our Company’s long-standing commitment to respecting international standards. The statement outlines our responsibility to care for human rights within both our own operations and supply chain, highlighting our awareness of potential risks and defining our human rights responsibilities. The statement is reviewed annually, with the most recent update in 2024, and is available in several languages.

Our Supplier Code of Conduct (SCoC) sets minimum standards for all our partners and their networks, requiring a contractual commitment as a condition for collaboration. Therefore, compliance with the SCoC is mandatory for all suppliers and their partners unless they have equivalent standards. This shall ensure that business practices meet our expectations, particularly in regions where national legislation or its enforcement may be lacking. The code mandates standards on working hours and rest periods, with a cap on working hours where national laws are absent, to promote a healthy work-life balance. It prohibits child and forced labor, prescribes decent working conditions, and shall ensure fair wages. The SCoC also supports the right to freedom of association and collective bargaining and requires partners to foster continuous improvement across areas such as human rights, labor standards, and environmental protection. The code also states our zero-tolerance policy towards corruption and unethical behavior. While being available in multiple languages, a simplified one-page version in 30 languages is displayed at our partners’ production facilities, providing direct access to our complaint mechanisms via QR code. Compliance with the SCoC is monitored through annual self-assessments and regular social audits, supported by training on ESG topics. Our SCoC is reviewed annually, with input from stakeholders such as NGOs, with the latest update made in 2024.

Both our Human Rights Policy and the SCoC are based on internationally recognized standards, including the UN’s Universal Declaration of Human Rights (UDHR), the International Labour Organization (ILO) Core Conventions, and the OECD Guidelines for Multinational Enterprises.

HUGO BOSS has a dedicated Child Labor and Forced Labor Policy, underscoring our zero-tolerance stance towards child labor, young labor, forced labor, and human trafficking across our global value chain. Aligned with international standards, including the ILO Core Conventions, the policy shall ensure ethical labor practices as it mandates strict prohibitions on child labor, forced labor and human trafficking in all forms, as well as the exploitation of vulnerable groups. It also sets clear guidelines regarding the employment of young workers to safeguard their rights. The policy requires preventive measures such as age verification during hiring, regular audits, and targeted training for employees and partners. In cases of violations, immediate action is taken to address the issue and support affected individuals, with confidential reporting channels reinforcing compliance. The policy is reviewed and updated regularly, with the latest revision finalized in early 2025.

Our Anti-Discrimination, Anti-Harassment, and Gender Equality Commitment and Anti-Discrimination, Anti-Harassment, and Gender Equality Policy reinforce our dedication to fostering an inclusive, respectful, and ethical work environment, with a strong emphasis on human rights. Aligning with international standards, including ILO and UN conventions, the policy extends beyond our organization to include workers in the value chain, guided by the obligations set forth in our SCoC. This commitment is particularly relevant in addressing challenges faced by vulnerable groups, including women, who are disproportionately affected by discrimination, harassment, and unequal pay.

Our Company’s Human Rights Officer monitors human rights risks and reports at least twice per year to the Managing Board and the Audit Committee of the Supervisory Board on identified risks and the due diligence process to mitigate and prevent them. Our Human Rights Officer is responsible for overseeing the implementation, monitoring, and annual updating of our policies to ensure continued alignment with evolving international standards and our Company values.

Engaging with workers in the value chain

HUGO BOSS is committed to improving working conditions across the supply chain by actively engaging with key stakeholders, including partners, trade unions, civil society organizations, and workers themselves. Our Stakeholder Engagement Commitment, endorsed by the Managing Board, shall ensure ongoing collaboration to gather diverse perspectives on critical issues and collaboratively develop effective, sustainable solutions. Key to this effort is our biennial Stakeholder Dialog on sustainability at our headquarters in Metzingen (Germany). In 2024, the dialog also focused on human-rights-related topics, offering valuable insights to strengthen our policies and processes. To further foster collaboration, our regular Supplier Days offer a platform for open dialog, sharing best practices, and working together to drive, innovation, and ethical standards across our supply chain.

To ensure compliance with our SCoC and gather direct worker input, supplier employees are interviewed during risk-based social audits. Workers are provided with contact details for our Speak Up Channel to report retaliation or misconduct and can also raise concerns with the Fair Labor Association (FLA). In 2024, for example, we conducted a structured worker survey at a facility in Bangladesh to assess working conditions. Over the next three years, we aim to further increase engagement efforts, measuring their effectiveness within a broader process. We also recognize the importance of collective bargaining and the right to freedom of association, as workers shall have the ability to negotiate working conditions and wages.

Beyond direct engagement, HUGO BOSS participates in multi-stakeholder initiatives to promote fair labor conditions. As a member of the Fair Labor Association (FLA), we support initiatives aimed at protecting employee rights, strengthening fair labor standards, and enhancing wages across the supply chain. The FLA also audits selected suppliers, with results published on their website. HUGO BOSS is also a signatory of the International Accord for Health and Safety in the Garment and Textile Industry (International Accord), a legally binding agreement between companies and trade unions building on the legacy of the Bangladesh Accord, of which we have been a member since 2016. HUGO BOSS is also a member of the Pakistan Accord, extending this commitment to an additional sourcing country. Since 2015, we have also been a member of the Partnership for Sustainable Textiles (Textilbündnis), a joint stakeholder initiative led by the German Federal Ministry for Economic Cooperation and Development. This partnership works to improve labor conditions in the supply chain, with HUGO BOSS actively participating in working groups on “Living Wages,” “Complaint Mechanisms,” and “Gender Equality.”

Grievance mechanisms and remediation processes

HUGO BOSS does not tolerate violations of its defined social standards. All workers in our value chain are entitled to use our independent grievance channels, including our Speak Up Channel and a dedicated external Ombudsperson. We promote awareness of these channels through the SCoC Onepager displayed in suppliers’ production facilities and by distributing communication cards with details of the Speak Up Channel during social audits. Beyond internal mechanisms, we actively monitor external incident reports, such as those from the Textile Partnership, to identify potential risks in the supply chain. If incidents are reported within our own or supplier facilities, we engage with management to ensure corrective actions are taken. If a potential violation is identified, we assess whether adjustments to our risk management are necessary, which – in case of doubt – may lead to an event-related risk analysis. Complainants are also free to assert their rights through state authorities. Further details on our grievance mechanisms and remediation processes can be found in the “Governance” section. Governance

Targets related to workers in the value chain

HUGO BOSS is dedicated to ensuring compliance with the standards outlined in its Supplier Code of Conduct (SCoC) across the supply chain. To identify potential risks or violations, adherence to these standards is regularly assessed through audits, self-assessments, or external social compliance certificates.

By 2025, HUGO BOSS aims to source all goods from Tier 1 suppliers (including own production) achieving the two highest social compliance performance levels (“good” or “satisfactory”), with compliance being verified through audits, self-assessments, or external social compliance certificates. In 2024, 93% of goods were sourced from Tier 1 suppliers that achieved these two performance levels (2023: 86%). At the same time, by 2025, 80% of goods should be sourced from Tier 1 suppliers (including own production) achieving the highest social compliance performance level (“good”). In 2024, this figure amounted to 65% (2023: 62%). In calculating both metrics, we consider the performance levels of Tier 1 suppliers, as determined through (follow-up) evaluations conducted in the fiscal years 2022 to 2024.

The progress achieved along both indicators reflects our continuous focus on improving human rights standards in our supply chain. The targeted implementation of corrective actions at our suppliers demonstrates our commitment to increasing transparency and accountability in addressing human rights topics.

These results are based on 125 social compliance assessments conducted in 2024 (2023: 116) across 114 Tier 1 suppliers (2023: 113) out of a total from 200 Tier 1 suppliers (including own production) (2023: 205). The due diligence process outlined below forms the foundation for achieving these targets.

Actions related to workers in the value chain

Due diligence and sustainable supply chain management

At HUGO BOSS, ensuring compliance with human rights, labor, and environmental standards across the supply chain is a core commitment. To address these challenges, we have implemented a comprehensive due diligence process as part of our risk management framework, aligning with the OECD Due Diligence Framework and the UN Guiding Principles on Business and Human Rights.

This risk-based process, informed by the German Supply Chain Act (Lieferkettensorgfaltspflichtengesetz, LkSG), aims to identify, prevent, mitigate, and account for potential human rights risks and violations. The process is routed in our risk management system that undertakes a continuous risk analysis to proactively address risks, minimize negative impacts, and, where necessary, implement remedial actions to uphold human rights and ethical standards throughout the supply chain.

The due diligence process begins with a thorough selection of potential suppliers. Before being accepted into our supplier portfolio, each potential partner must complete a standardized evaluation process. This involves agreeing to general purchasing and production conditions, as well as contractual commitments to our SCoC, the Restricted Substances List (RSL), and the Manufacturing RSL (MRSL) from the Zero Discharge of Hazardous Chemicals (ZDHC) initiative. It also includes completing questionnaires on topics such as customs or supplier governance. Additionally, suppliers are required to complete a standardized self-assessment focusing on human rights compliance and submit valid certifications. They must also successfully pass an online ESG training course covering topics such as social responsibility and environmental standards. For new supplier relationships in countries where HUGO BOSS has not yet operated, an internal decision-making committee evaluates the political, social, and environmental risks associated with the country before any partnership is initiated. Environment, Pollution

Management systems

At the core of HUGO BOSS’ due diligence framework is the SCoC, which establishes minimum standards for all partners and their networks, requiring a contractual commitment as a prerequisite for collaboration. To ensure these standards are upheld, we continually assess suppliers’ social compliance through our Sustainable Supply Chain (SSC) program. This program operationalizes our due diligence process by systematically monitoring supplier adherence to the SCoC’s principles.

Suppliers in the SSC program are classified based on criteria such as industry type and geographical location. This categorization enables targeted management of sustainability risks by addressing both process- and location-specific challenges. The SSC program comprises three core modules, which collectively address key aspects of sustainability management at all our Tier 1 and direct Tier 2 suppliers: the Social Compliance Management module focuses on ensuring respect for human rights and fair labor practices. The Environmental Management module prioritizes efforts to combat climate change, conserve water and soil, and prevent air pollution. The Governance module equips suppliers with tools to enable greater responsibility for sustainability in their operations and along their supply chains, in alignment with the SCoC. By integrating environmental and social criteria, the SSC program provides a comprehensive framework for assessing human rights and labor practices throughout the supply chain. The Social Compliance Management module has been accredited by the FLA since 2018.

The program’s decision-making and oversight processes shall ensure effective risk monitoring. All relevant departments – including our operational teams as well as key central departments such as Corporate Sustainability, Risk Management, and Compliance – collaborate under defined responsibilities, while our Human Rights Officer oversees the overall due diligence process.

As part of its management systems, HUGO BOSS is also committed to increasing supply chain transparency. As part of our Digital TWIN initiative, we are working toward full upstream traceability for all BOSS and HUGO products. After a successful pilot phase in 2024, we began rolling out a traceability tool and continue to onboard additional suppliers, enabling us to collect additional valuable data on product provenance, composition, and further business-critical information in the future.

Risk assessment

HUGO BOSS conducts regular human rights risk analysis to evaluate the actual and potential impact of its business activities on individuals. This analysis distinguishes between supplier risks, country risks, and industry risks. Regarding workers in the supply chain, we assess human rights risks through two key instruments: human rights self-assessments to identify potential risks and on-site social audits to uncover actual risks. This dual approach shall ensure comprehensive oversight while enabling targeted risk management throughout the supply chain.

To identify potential risks, suppliers in Tier 1 and Tier 2 complete annual human rights self-assessments, evaluating compliance with the environmental and social requirements outlined in our SCoC. Conducted through a web-based platform, the system automatically calculates a risk level upon completion and generates Corrective Action Plans (CAPs). Suppliers are required to take corrective action and/or provide additional evidence to HUGO BOSS to improve their risk rating. This process is frequently supported by HUGO BOSS to ensure effective remediation. Based on the results of the self-assessments, social audits may also be conducted before initiating any business relationship.

To uncover actual risks and identify violations, HUGO BOSS conducts on-site social audits using risk-based planning. These audits focus on high-risk suppliers identified either through self-assessment results or previous audits that revealed weaknesses or violations requiring follow-up. They are conducted using systematic auditor guidance, aligning with ILO Conventions, UN Guiding Principles, and legal requirements such as the German Supply Chain Act (LkSG). Each audit generates a detailed report, informing suppliers on specific issues through CAPs and training programs. This approach shall enable suppliers to achieve compliance and continuously improve their performance. We also accept external social compliance certificates or standards, including SMETA, Amfori BSCI, SLCP, FLA, FairWear, and SA8000.

In fiscal year 2024, a total of 56 audits were conducted (2023: 58), with unannounced audits accounting for 13% of the total audits (2023: 3%). At HUGO BOSS, we aim to steadily increase the number of unannounced audits, reflecting our commitment to identifying areas for improvement and addressing potential non-compliances within our supply chain. In 2024, we identified 11 violations within our supply chain (2023: 8), which are detailed below.

Risk management

Suppliers with human-rights-related risks in their operations are provided with Corrective Action Plans (CAPs), which are collectively developed, agreed upon, and monitored through a risk-based audit cycle to ensure compliance. These suppliers are required to implement the CAPs within a defined time frame. If adequate improvements are not achieved after several reviews, HUGO BOSS may ultimately end the partnership as a last resort through a responsible exit process. This involves gradually phasing out order volumes rather than abruptly terminating the relationship, ensuring suppliers have sufficient time to secure new customers and maintain stability, including the reliable pay of their workers. Audits of Tier 1 suppliers in 2024 resulted in a total of 52 CAPs (2023: 53), with their implementation set to be verified through follow-up audits.

Monitoring

Follow-up monitoring follows a risk-based approach, involving collaboration between suppliers, operational departments, and our Sustainable Supply Chain department. Re-audits are scheduled for suppliers with “risky” or “insufficient” results in prior audits to verify the successful implementation of corrective actions. Additionally, the FLA independently monitors our due diligence efforts by conducting annual audits at selected production sites. Any CAPs arising from these audits are implemented by suppliers, tracked diligently, and reported to the FLA to ensure accountability and transparency. This process is also mirrored in audits conducted by ACCORD, which focus on occupational health and safety (OHS) in Pakistan and Bangladesh, which aims to ensure consistent oversight and improvement in these critical areas.

Communication

In addition to the information provided in this combined non-financial statement, HUGO BOSS makes its due diligence policies, procedures, activities, and results available on its Group website as well as through relevant ratings and rankings, including S&P Global’s annual Corporate Sustainability Assessment (CSA). In the case of any third-party complaints via the FLA, such information is publicly accessible on its website. During our biennial Stakeholder Dialog, we also share information on our policies, strategies, and efforts with different stakeholder groups, actively seeking their feedback.

Further actions

Training and capacity building

HUGO BOSS provides ESG-related training to suppliers on its Supplier Code of Conduct (SCoC) and offers access to a third-party learning platform with various training modules, covering topics such as working hours, fair labor practices, and ESG laws and regulations. In 2024, we conducted our ESG onboarding training for new suppliers and selected existing partners. Additionally, we work closely with key partners to enhance quality, efficiency, and other supply chain parameters, including offering programs to improve digital skills among their workforces. HUGO BOSS also contributes to worker training through its membership in the International Accord, which implements OHS training as part of corrective action plans in Bangladesh and Pakistan. Employees of HUGO BOSS whose roles involve social compliance, such as those in procurement, receive regular training on our SCoC and Social Compliance Management module. This shall ensure they are equipped to support suppliers in implementing CAPs.

Support for vulnerable groups

In high-risk countries, HUGO BOSS implements projects to support vulnerable groups in the supply chain. Since 2022, we have partnered with Phulki, an NGO in Bangladesh, to run a women’s café. This initiative offers training on gender equality, grievance mechanisms, and OHS, while providing a platform to voice concerns and give feedback for ongoing improvements. In 2024, we also supported a gender data initiative in India, collaborating with two suppliers to train their representatives on the relevance and advantages of collecting gender-disaggregated data to promote and enhance gender equality within their operations. Additionally, HUGO BOSS actively contributes to the Gender Equality Strategy Circle within the German Textile Partnership, further advancing the rights of female workers.

Fair compensation and living wages

Fair compensation is a fundamental human right and a core principle of our SCoC, serving as a critical factor in fostering and maintaining long-term partnerships with our suppliers. In collaboration with the FLA and as part of an initiative initiated by the German Textile Partnership, we actively advocate for political and economic conditions that promote higher wage levels in the global supply chain. In 2021, we developed a strategy aimed at ensuring that wages paid by our suppliers adequately cover workers’ basic needs, including food, water, housing, education, healthcare, transportation, and clothing for all household members. Additionally, workers should have enough disposable income to save for unexpected events. To achieve this, HUGO BOSS continuously works with suppliers to improve compensation practices and bring wages closer to the living wage standard. We also launched a living wage pilot program with a supplierin Bangladesh addressing wages, benefits, empowerment, social dialog, and purchasing practices. The initial wage analysis confirmed payments exceeding the statutory minimum wage. Based on insights gained, we developed a roadmap with our suppliers and extended the pilot until 2027. A final impact measurement will be conducted at the project’s completion. Notably, in the past fiscal year, we increased the wage reference value in collaboration with the supplier in Bangladesh.

Responsible purchasing practices

Responsible purchasing practices are vital for promoting fair working conditions and wages across our supply chain. In 2024, HUGO BOSS developed Responsible Purchasing Guidelines set to be communicated internally in 2025. These guidelines emphasize trust-based and equitable partnerships, long-term collaborations, responsible exit strategies, efficient production planning, and open dialog with suppliers on order management and payments. To ensure alignment with the guidelines internally employees have been trained on these principes. Going forward, we will further strengthen these efforts by providing tailored training and awareness initiatives for employees in our sourcing and operations departments to ensure alignment with these principles. We are also actively participating in the ”Learning and Implementation Community” (LIC) on responsible purchasing practices. This multi-stakeholder initiative provides a platform for companies, NGOs, and other stakeholders to share insights and best practices for improving purchasing behavior and mitigating risks in supply chains. Finally, to safeguard the financial health of our suppliers, we offer a Supplier Financing Program, enabling faster access to receivables and ensuring their solvency during challenging periods. This program not only strengthens supplier resilience but also supports their ability to meet obligations to their workers, such as paying wages on time and investing in compliance measures.