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Sustainable management has been a fundamental principle of the Otto Group for three decades. With its Sustainability Strategy 2020, the Group is anchoring the principles of sustainable management and, according to its own estimates, is making great progress in its implementation. Luna Journal spoke to Laura Jossberger, Head of Sustainable Supply Chain Management at the Otto Group, about how important sustainability is to the company and what goals the sustainability strategy encompasses.
Why is sustainability important to the Otto Group?
Laura Jossberger, Head of Sustainable Supply Chain Management Otto Group: “Sustainability is indeed a core issue of the Otto Group and of Prof. Michael Otto himself. It is closely linked to our aspiration to operate in such a way that no disadvantage arises for future generations. After all, we at the Otto Group see it as our responsibility not to do business at the expense of people and nature, but for their own good. Moreover, our commitment to sustainability is also a long-term investment in the future of the Otto Group. We believe that doing business with respect for people and nature brings many benefits for companies, such as better resource security, lower energy costs and higher employee retention. Environmental protection and social responsibility have therefore been part of the Otto Group’s DNA since the mid-1980s.
Where does sustainability start for you?
Sustainability must be thought of as a whole. For the Otto Group, this begins on the cotton field, in wood cultivation, energy production and energy consumption and with the people in the factories and at our own sites. And we are of the opinion: Companies not only have social responsibility within the company, but must also feel responsible for compliance with certain social standards at suppliers. Especially in other countries where environmental and social legislation is not as important as it is for us. We want to live up to this Aspiration through our commitment to sustainability.
You make use of sustainable cotton to produce your own and licensed brands. What should be considered in sustainable production?
Our goal is to exclusively use cotton from sustainable cultivation for our own and licensed brands by 2020. We use cotton from the Cotton made in Africa (CmiA) initiative and from certified organic farming. CmiA is committed to the environmentally friendly cultivation of cotton and to improving working and living conditions for small African farmers. In addition, the initiative supports small women farmers on their way to greater independence and advocates children’s rights. It excludes genetically modified seeds, dangerous pesticides according to international conventions and deforestation of primary forests and relies exclusively on rainfed agriculture for the cultivation of cotton.
How do customers recognize whether a company is acting in an environmentally friendly manner and that it is not just pretending to do so?
For the customer this is often really difficult to recognize. A T-shirt, for instance, does not necessarily show the conditions under which it was produced. However, labels for sustainable products can be a point of reference for customers. OTTO informs e.g. with the GOODproduct label about sustainable products. Bonprix has also been using its own label for several months to make the orientation easier for customers. In addition, the Otto Group has been working with nationally established environmental labels and initiatives such as Cotton made in Africa, FSC, Goodweave, GOTS or Blauer Engel for many years. Moreover, for years the Otto Group has also dedicated a chapter in its annual report to the topic o,f sustainability in which we make our commitment to our customers transparent and accountable. In addition, we provide comprehensive information about our sustainability program on our group-wide website.
When should a company take responsibility for sustainability?
At the Otto Group, the responsibility of thinking along with sustainability accompanies us at every step of our business activities. The right answer to this question is therefore: right from the start. In this way, we take the entire value-added chain into consideration – meaning the path of the goods from the extraction of resources, their processing into the finished product and their Distribution and disposal by the consumer.
The Otto Group has developed a management process called “impACT”. What’s this all about?
impACT forms the basis for our sustainable actions. The management process determines all impacts of the Otto Group’s business activities and derives targeted activities from them (act). To this end, the effects on the environment and the social risks along the entire value chain are examined. On the other hand, internal and external stakeholders are surveyed and external costs are also taken into account. Based on the results of this so-called materiality analysis, we develop strategic goals and operational measures. This enables us to use our financial and human resources where they have the greatest impact. The measures are implemented under the umbrella of the sustainability strategy.
What do you want to achieve with your sustainability strategy? What successes are already visible?
We work on the gentle extraction and processing of raw materials such as textiles, furniture and paper, compliance with social standards at suppliers in the final production and the improvement of our Carbon footprint. Our targets are ambitious, but we are well on the way to achieving them: in 2017, we significantly increased our order volume for sustainable cotton to 78 percent. With the purchase of more than 27,100 tonnes of CmiA-certified cotton, we have helped to save more than 57 billion liters of water in cotton cultivation. Last year, the share of FSC®-certified products in the entire furniture range rose to 52 percent, which corresponds to more than 32,000 articles. In addition, our CO2 emissions have fallen by 42 percent compared to 2006.
What motives does the Otto Group pursue with its commitment to sustainable cotton? How is this received by Otto customers?
Since cotton dominates the Otto Group’s textile range well ahead of other fibers such as polyester, viscose or wool, we pay particular attention to this in our textile strategy. By 2020, only sustainable cotton is to be purchased for the use with own and licensed brands. For many customers, this sustainable orientation of the Otto Group is a key factor. We observe that the topic of sustainability has arrived in everyday life. When shopping, consumers are increasingly concerned about the sustainability of the products they consume. People have the desire not to consume at the expense of humans and nature. Next to price and quality, sustainability plays an increasingly important role in purchasing decisions.
By offering certified wooden furniture, you make an important contribution to the protection of climate and species. What requirements must be met for such certification?
Certified wooden furniture bears the logo of the Forest Stewardship Council (FSC®). This signals to the consumer that the wood comes from sustainable and environmentally sound forest management. This gives the customer the opportunity to consciously choose products from responsible forestry. The FSC® defines uniform basic principles worldwide. Strict management criteria prevent uncontrolled deforestation, violation of human rights or excessive environmental pollution. Basic forest functions are thus retained.
How do you ensure safe and fair working conditions in emerging and developing countries?
The basic requirements for working conditions at our suppliers are laid down in our Code of Conduct. This has been continuously extended since 1996 and forms the basis for all business relations with the Otto Group. It is based, among other things, on the core labour standards of the International Labour Organization (ILO), the UN Convention on the Rights of the Child and the UN Convention on the Elimination of All Forms of Discrimination against Women. To ensure compliance with these standards, there is a separate social program aimed at creating transparency in the supply chain, checking working conditions and achieving a sustainable improvement in social standards through training and qualification measures for suppliers. The costs of these training measures are borne by the Otto Group. We are also committed to working with others to ensure human and labor rights are respected in the global supply chain. We participate in a large number of national and international initiatives, are members of various organizations and are in active contact with representatives from civil society, politics and business. Since together we can achieve much more.
What goals has the Otto Group set itself for the future? To what extent should the sustainability strategy be further optimized?
With our sustainability strategy 2020, we are concentrating on reducing the negative impacts on humans and nature along the entire value chain. The goals include, for example, the complete conversion of cotton quantities for own and licensed brands to sustainably grown cotton or the halving of location, transport and mobility-related CO2 emissions. Looking beyond 2020, the Otto Group is working on new ambitious goals for a 2025 sustainability strategy, in which the United Nations’ global sustainability goals, the Sustainable Development Goals (SDGs), will play a particularly important role. In addition, individual Otto Group companies have already set ambitious goals for the coming years. Hermes, for example, is pursuing the strategic goal of zero-emission delivery of goods in German cities by 2025.
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Image: Otto Group