Guiding sustainability

Creditor Relations

The economy is there to benefit people – not the other way round. This mindset and the strong awareness it engenders for the Group’s corporate responsibility are among the hallmarks of the Otto Group. Prof Dr Michael Otto recognized at an early stage that the future would be built on sustainable practices, inspiring customers, employees, business partners and like-minded people from other companies with this vision. Climate protection and corporate social responsibility were incorporated within the business strategy as early as 1986, giving rise to numerous initiatives for people, nature and society. 

Today, the Otto Group upholds a CR strategy that is firmly anchored in the corporate strategy, the Otto Group Path, and the shareholder vision “Responsible commerce that inspires”. Sustainability and corporate responsibility have been integral to our identity for more than 30 years and are closely linked to the Otto Group’s corporate success.


CR strategy

The Otto Group assumes responsibility for every part of its value chain — from the extraction of resources, to the processing of products and their delivery and ultimately the use of the product by consumers. Our goal is to make the manufacture of our products ecologically and socially compatible. We use the impACT management process to determine the impact of our actions on the environment and society, deriving operational measures and strategic goals from it. Our CR strategy takes equal account of the economic, environmental and social dimensions and embeds sustainability even more strongly in our business processes. Based on our materiality analysis, the following seven stragegic fields of action and sub-strategies were developed: Climate, Sustainable Materials, Supply Chain, Circularity, Empowered Employees, Conscious Customers and Digital Responsibility.

Within these areas we have formulated visionary, long-term goals – the “transformational goals” –, which enable us to align our daily actions to the long-term objectives of the Otto Group. These goals are substantiated in each case by shorter-term targets with clearly defined time horizons - the "core priorities". They help to measure our progress on the way to long-term change. They are dynamic and regularly reviewed. Their content or schedule can be adapted if necessary to accommodate changes in framework conditions or the emergence of new courses of action. The seven thematic areas and transformational goals of our CR strategy are:

Climate

We achieve climate neutrality in our whole value chain.

  • By 2030, we aim to achieve climate neutrality at our own sites, in transportation, in employee mobility, and in externally operated data centers and cloud services.
  • We are taking the entire value chain into focus and developing a Science Based Target (SBT) to fully align our climate strategy with the 1.5° target of the Paris Climate Agreement.
  • Furthermore, the goal is to reduce our CO2e emissions by 40 percent by the end of 2025 compared to the 2018 baseline.

Sustainable Materials

We apply sustainable raw materials in all our products.

  • We use “preferred fibers” in our textiles, so fibers with a reduced negative impact on the environment compared to conventional alternatives. Our aim is to increase the share of “preferred fibers” in our own and licensed brands to 65 percent by 2025.
  • We will continue to pursue our goal of using 100 percent sustainable cotton in our own and licensed brands in the future.
  • By 2025, we aim to use only FSC-certified wood in our own and licensed brands of furniture and in the materials obtained from strategically relevant suppliers.
  • We intend to use 100 percent FSC-certified or EU Ecolabel paper in our catalogs by 2025.
  • By 2023 we want to switch completely to sustainable packaging for shipments with a recycled content of at least 80 percent.

Supply Chain

We continuously improve the social and ecological performance together with our suppliers along our whole supply chain.

  • As a first step, we identify all suppliers of our own and licensed brands - from raw material to finished product. Because only if we know them, we can jointly address improvements in the supply chain.
  • The exchange of information with suppliers provides us with details and data on the social and environmental production conditions and the measures they are already implementing.
  • With this knowledge, we can drive continuous improvements in production conditions in a data-based and collaborative manner.

Circularity

We incorporate circular principles and ensure circular solutions.

  • We are starting or driving the implementation of at least one project that integrates circular solutions into our business model.
  • We are developing measurable indicators for circularity and define specific goals for 2023.

Empowered Employees

We empower our employees to experience and actively shape sustainability.

  • We actively communicate our CR commitment and activities and activate at least 25% of our employees through various contact points and offers.
  • We also offer various opportunities to experience and actively shape sustainability, involving at least 10% of our employees.

Conscious Customers

We enable and inspire our customers to make conscious and sustainable decisions.

  • We actively communicate our CR activities and core messages to our customers and the market. We regularly collect customer insights in this regard.
  • By the end of 2022, we want to be in a position throughout the Group to label all sustainable products defined according to our criteria.
  • We want to make sustainability visible and understandable along the customer journey. This means that we want to get our customers excited about the topic of sustainability and raise their awareness for a responsible, more sustainable approach to products - throughout the entire life cycle.

Digital Responsibility

We shape a value-oriented digitalization for people and society.

  • We work on at least one focus topic (data and security, future of work, digital education, environment) and implement a pilot project or initiative by the end of 2022.

Sustainability management

Our global sustainability activities are managed and developed jointly by the Executive Board and the CR Board. The operational implementation of the CR strategy takes place at Group companies level.

Executive Board

The Group Executive Board bears overall responsibility for the topic of sustainability. It is tasked with ensuring that sustainability aspects are given adequate consideration in the Group’s landmark decisions and become integral elements of the Otto Group’s management and processes. Relevant topics are regularly on the agenda at Executive Board meetings and other C-level gatherings.

CR Board

The CR Board is another decision-making committee that has been tasked by the Executive Board with advancing sustainability management within the Group. It consists of representatives from relevant companies within the Otto Group. Led by the Chair of the Otto Group Executive Board, the CR Board is mandated with defining overarching transformational goals and new core priorities for the Otto Group within the framework of the CR strategy. Its remit also includes green lighting individual target contributions from Group companies and measures for the following year. The CR Board advises the Executive Board on far-reaching decisions that, for example, incur significant investment costs or have a significant influence on the business models of Group companies.

Group companies

All Group companies that make a sizable contribution to external revenue in two consecutive financial years are subject to the CR strategy. One of the challenges inherent to the CR strategy is also a factor in its success: The different business models at the Group companies must be taken into account within an optimized framework. Each Group company has an interdisciplinary CR team comprising a Sustainability Officer and experts for the individual topic areas within the CR strategy. The CR teams are tasked with advancing the sustainability topics and establishing synergies within the Group. Each of the Group companies decides how to implement the CR strategy within the action framework handed down by the Otto Group Holding, developing specific priority areas, goals and measures that match their business models. They are then recorded in annual action plans, making sure that the Group companies jointly contribute to the Otto Group’s ambitious goals.

Expert Circles

Furthermore, we believe that inter-group dissemination of best practices and the establishment of networks between experts and interested stakeholders in the Otto Group belong to the key success factors underpinning our strategy. Within our seven topic areas, the colleagues responsible for CR at the Group companies and the Otto Group Holding gather regularly in Expert Circles to discuss the achievement of targets within their remits, share thoughts on new ambitions and ideas and to develop and implement suitable measures.


Materiality analysis

Our CR strategy is based on the materiality analysis. The seven topic areas of our new CR strategy were derived from the sustainability topics that were identified to be material. We conduct regular reviews to ascertain whether relevant changes have emerged and to ensure that our CR strategy sets the right priorities. Our materiality analysis is part of the impACT management process, which forms the foundation for the Otto Group’s strategic development. In this way, we identify all the ecological and social effects of our business activities on people and nature.

Materiality analysis