Working conditions

A Code of Conduct has been an essential part of our business relationships since 1996. It is based on the core labor standards of the International Labor Organization (ILO), the UN Convention on the Rights of the Child, the UN Convention on the Elimination of all forms of Discrimination against Women, the Global Compact and the guidelines for multinational companies of the Organization for Economic Cooperation and Development (OECD).

As a founding member of the Business Social Compliance Initiative (today's name: amfori BSCI), its values and requirements have been integrated into the Otto Group's sustainability management since 2004. In 2018, we decided to adopt the amfori BSCI Code of Conduct for our supply chain as well, thus contributing to more uniformity in the industry.

Each of our business partner is also obliged to sign the "Business Partner Declaration on Sustainability". In this document, we bundle all of our requirements for our business partners for merchandise. Signing the document is the basic requirement for all business relationships with the Otto Group.

In order to systematically improve working conditions in our supply chains, we launched our social program in 1999 and have been continuously developing it ever since. The aim of the program is to create transparency about working conditions in our supply chains and to support our business partners and their factories in complying with human rights.

In addition to signing and complying with the Code of Conduct and the Business Partner Declaration on Sustainability, audits for all facilities in risk countries are a basic requirement for cooperating with the Otto Group (with the exception of third-party brands). Accordingly, every final production facility producing for the Otto Group must submit one valid social audit recognized by the Otto Group: a certification in accordance with the international SA 8000 labor standard, an audit (result A up to and including C) by amfori BSCI or an audit according to the Otto Group's own standard.

The Otto Group only sources its merchandise from partners that can provide this evidence. This ensures that working conditions in all factories are monitored by accredited auditing companies and that necessary improvements are initiated. If a business partner does not disclose the production structure or places orders with facilities that do not meet the requirements, the Otto Group reserves the right to terminate the cooperation with the business partner.

In order to be able to assess and improve working conditions, the first step must be to create transparency about the supply chain. Therefore, business partners are obliged to disclose the facilities that produce for the Otto Group. This data is recorded in the so-called supply chain database, and we know almost 100 percent of the final production facilities. We aim to continuously expand our information on social and environmental production conditions, including in deeper supply chains and in non-risk countries. In 2022, we were able to identify around 2,000 previously unknown facilities in the deeper supply chain, thus significantly increasing transparency.

To achieve measurable improvements in production conditions, we focus on six social and four environmental priority topics:

• Social topics: Living wages, safe working conditions, freely chosen employment, child-free production, freedom of association and collective bargaining, reasonable working hours
• Ecological topics: climate and energy efficiency, water efficiency, non-hazardous chemicals, resource efficiency (waste)
  

We address these issues with our business partners in order to jointly achieve the formulated goals. To make progress visible, all requirements are backed by measurable indicators and are thus also of interest to our partners. This approach allows us to derive measures and decisions on the basis of data and to track the development of production conditions.

As a retail and services group, we also offer articles from third-party brands via our platforms and set out our expectations in terms of social and environmental standards in our Business Partner Declaration on Sustainability. For these products, responsibility for compliance with the standards lies with the brands themselves.

In addition to auditing production sites, training business partners and factory employees to take responsibility for their own actions is a key element in achieving lasting improvements in the facilities. For this reason, we offer capacity building programs to supply chain actors. These include, for example, workshops, e-learnings, webinars, training sessions and on-site visits. They also provide a protected setting in which factories can improve their social and environmental production conditions. And we are offered opportunities to learn even more about the challenges on the ground.

Many challenges, such as low wage levels, free unionization, respect for human rights or even the effects of climate change, cannot be solved by individual actors alone. The social transformation towards more sustainability is a joint task. For this reason, the Otto Group relies on cooperation and regular exchange with relevant stakeholders to achieve sustainable and comprehensive improvements.

To address the complex tasks along our supply chain, we are therefore involved in various initiatives, partnerships and cooperations, such as the German Partnership for Sustainable Textiles, the amfori Business Social Compliance Initiative (BSCI) or the International Accord for Health and Safety in the Textile and Garment Industry. 

We are convinced that by combining forces and knowledge, we can achieve the greatest possible reach and effectiveness, thereby contributing to the continuous improvement of working conditions.

For our employees, too, as well as for employees of our business partners and service providers - such as external cleaning services at own locations - we have developed specific social standards. They are consistent with internationally applicable standards, such as the United Nations Universal Declaration of Human Rights, the UN Convention on the Rights of the Child and applicable Conventions of the ILO, as well as legislation in the respective country. In Germany, as in all other countries, we comply with local laws and regulations, and we adhere to existent collective agreements.