"impACT" is the foundation for our sustainable action. The name impACT combines ‘impact’ (negative effects) and the actions (‘act’) required to counter this. This management process, which we developed in-house, allows the Otto Group to fundamentally change the way in which we analyse the impact of our business activities on people and nature along the entire value chain, to assess them and to derive effective and efficient measures from the results.
On the one hand we identify the effects of our business activities on the environment and the social risks along the whole value chain, and on the other hand we survey internal and external stakeholders. We develop strategic targets and operational measures based on the results of our materiality analysis. This allows us to focus our financial and employee resources in a way they have the most leverage. These measures are implemented under the umbrella of the Sustainability Strategy. For more on impACT, please see our 2015 Sustainability Report or in the following video (only available in German):
To manage this complex process, we divide the value chain into four stages:
|Value added stage||Value chain||Strategic fields of action|
|1. Raw Materials and Processing||Raw Material Extraction -> Spinning Yarn -> Weaving & Knitting -> Refinement||We counterbalance the negative environmental impacts of processing raw materials with our Textile, Furniture and Paper Strategies, which all aim at more sustainable agriculture and forestry. For more information, please see the ‘Environment’ chapter.|
|2. Final Production||Sewing -> Finishing & Packaging||To improve working conditions in factories for final production of merchandising goods, we have developed a Social Programme. For more information, please see the chapter on ‘Working conditions’.|
|3. Trade||Transport -> Warehousing -> Sales -> Distribution||Our Climate Strategy helps us to reduce CO2 emissions at our own locations as well as in sourcing and distribution transports. For more information, please see the ‘Environment’ chapter.|
|4. Customer||Use -> Waste disposal & Recycling||The adverse environmental impacts from product use and disposal by customers are not currently part of the Group-wide CR Strategy. However, there are initiatives taking place on the individual company level such as BeGOOD at OTTO and WE DO! at Hermes.|
The results and insights from the impACT process are integrated directly into our Sustainability Strategy 2020, which aims at minimising the negative effects on people and nature along the value chain in an effective and efficient way. The ‘value chain’ describes the path that products take from the extraction and processing of raw materials, through manufacturing the finished product, its sales and distribution, to its use and disposal by consumers.
The Sustainability Strategy was endorsed by the Otto Group Executive Board in 2012 and includes five sub-strategies. These aim at conserving resources when extracting and processing raw materials (Textile, Furniture and Paper Strategies), ensuring compliance with social standards at suppliers in final production (Social Programme) and improving our carbon footprint at our own locations as well as in purchasing and distribution transport (Climate Strategy).
The five sub-strategies within the Sustainability Strategy 2020
1. Textile Strategy - TARGET: 100% sustainable cotton in own and licensed brands
The Otto Group intends to switch the entire volume of cotton used for own and licensed brands to sustainably cultivated cotton by 2020.
2. Furniture Strategy - TARGET: 100% FSC®-certified furniture products
The range of wooden furniture is to be switched entirely to FSC®-certified articles by 2020.
3. Paper Strategy - TARGET: 50% FSC®-certified gravure paper for catalogues and advertising materials
With its Paper Strategy, the Otto Group intends to increase the share of FSC®-certified paper to at least 50% for catalogues and advertising materials by the year 2018.
4. Social Programme - TARGET: 100% integration of suppliers of own and licensed brands
By the end of 2015, all suppliers are to be integrated into the Social Programme whose factories are in countries where compliance with minimum standards is not guaranteed, or only partially so. A supplier is considered to be ‘integrated’ when all of its factories that manufacture for the Otto Group can provide a valid and recognised certificate, audit or assessment.
5. Climate Strategy - TARGET: 50% reduction of CO2 emissions
CO2 emissions from locations, transport and mobility are to be halved by 2020, compared to the 2006 base year.