Guiding sustainability

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 strategic 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, regularly reviewed, adjusted, and gradually supplemented to respond to current developments. The CR strategy is a dynamic, learning concept and therefore has no fixed end date. The seven thematic areas and transformational goals of our CR strategy are:

Climate: We achieve net zero emissions throughout our whole value chain until 2045.

Science-Based Target

Sub-target 1: Absolute reduction of Scope 1 and Scope 2 greenhouse gas emissions by 42% by 2030 (compared to 2021).
Sub-target 2 (supplier engagement): 50% of external brands and marketplace partners set their own SBT by 2027.
Sub-target 3: Absolute reduction of Scope 3 greenhouse gas emissions by 42% by 2031 (compared to 2021).

Sustainable Materials: We apply sustainable raw materials in all our products.

65% "preferred fibers" by 2025 while maintaining the 100% sustainable cotton target.
100% FSC-certified furniture products by 2025.
100% sustainable catalog paper, of which at least 70% FSC^® by 2025.
100% sustainable packaging by 2023.

Supply Chain: We continuously improve the social and ecological performance together with the facilities in our supply chains.

Identification of all facilities in the supply chains of our brands - from raw material to finished products (Refers to facilities involved in the production of our products [except for well-known third-party brands]).
Information on social and environmental performance is shared with us by the facilities in our supply chains.
Continuous improvement on identified focus topics among the facilities in our supply chains.

Circularity: We incorporate circular principles and ensure circular solutions.

We increasingly implement circular solutions for products – through circular design criteria, extension of lifespan and collection for high-quality recycling.

Empowered Employees: We empower our employees to experience and actively shape sustainability.

We inspire a significant share of our employees for the topic of sustainability through various touchpoints and participation opportunities. It is important for us to work on measures that enable our employees to integrate sustainability into their daily work and core tasks.

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

We inspire our customers about sustainability along the entire customer journey and help them to easily find more sustainable products and services.

Digital Responsibility: We shape value-oriented digitization for people and society.

We drive projects internally that focus on the interaction between people and technology and have a significant impact on employees.

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

Sustainability is completely integrated into the business activities of the Otto Group and anchored at the highest strategic planning level. The Executive Board bears overall responsibility for the Otto Group’s CR strategy. It is responsible for 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 feature regularly on the agenda of Executive Board meetings and other Executive Board gatherings.

CR Board

The CR Board is another decision-making committee that has been tasked by the Executive Board with continuously 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 “core priorities” for the Otto Group within the framework of the CR strategy and adopting individual targets and measures for the Group companies. 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. That is why the design of the CR strategy is left to the Group companies themselves. They develop individual priority areas, goals and measures that match their business models within their action framework set by the Otto Group Holding. They are recorded in annual action plans and reported to the CR Board and the Executive Board. This ensures that all Group companies jointly contribute to the Otto Group’s ambitious goals. For implementation, each of the relevant Group companies 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.

Expert Circles

Furthermore, the Group-wide exchange of best practices and networks of experts and interested stakeholders in the Otto Group are some of 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 and was last updated in 2021. The seven topic areas of our CR strategy were derived from the sustainability topics that were identified as 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 environmental and social effects of our business activities on people and nature.