What makes a good partnership? That's what we want to know from Anna Rüchardt, Head of Impact & Responsibility at HAKRO.

Could you provide an overview of HAKRO’s overall philosophy when it comes to forming and maintaining partnerships with suppliers?
At HAKRO, our philosophy revolves around collaboration rather than dictation, especially in matters of sustainability. We approach partnerships with a focus on balance, engaging in dialogue rather than issuing demands. Our audits aren't about control; they aim to identify our joint development potential. This may sound like a simple concept, but it is rooted in our approach to partnerships. We view our manufacturers not as suppliers but as true partners and collaborators. Every department, including ours, contributes to the partnership. This mutual respect fosters trust and openness.

In our perspective, sustainability involves genuine transparency. And that goes beyond a buzzword – it requires frank and open dialogue with production partners. Our goal is to establish enduring relationships built on mutual trust, openness, and a level playing field. While the term "eye-level" may sound stereotypical, it captures our aim to bridge the inherent power imbalances in such relationships. This approach is simple but crucial in cultivating a sustainable and meaningful partnership. We never try to demand, to instruct, to direct, even when it comes to sustainability. We rather ask, suggest, and discuss together.

Where does HAKRO operate? It would be interesting to hear about your experiences and challenges in different regions, particularly in terms of fostering equal partnerships, as it's likely to vary across countries.
In terms of our selling market, our primary focus is Germany, Austria and Switzerland. Regarding production partners, we strategically operate in Bangladesh, Turkey, Bulgaria, Laos, Cambodia, and a limited presence in China, which lies below 5% of our production. Each of these countries presents unique challenges, from political and social risks to specific issues like the recent earthquake in Turkey, which fortunately did not affect the region where our production partner operates. Our risk assessment considers both country-specific and partner-specific factors, recognizing that partners operate within a broader context. In all these countries, challenges such as labor standards, collective bargaining, and payment of living wages are prevalent. For instance, in Bangladesh, there currently is a significant debate about the legal minimum wage. These challenges are complex and may be influenced by factors like political considerations and climate change. It is critical that we make all of them an integral part of our dialogue with production partners.

What criteria and values guide HAKRO in selecting production partners?
Our approach to selecting production partners is distinctive, as we prioritize long-term relationships, often spanning 20 years or more. Given our B2B business model and corporate focus, we don't frequently switch production projects. However, when onboarding new partners, our criteria revolve around key factors: First and foremost openness to specialization and development, a shared vision for the partnership, and a commitment to transparency. These may sound broad, but they form the foundation of the enduring partnerships we aim to cultivate over the years. We also emphasize a mutual understanding in approaching the partnership, including a willingness to provide and receive open feedback , e.g. also on our purchasing practices.

On a practical level, alignment in terms of quality standards and a commitment to longevity are crucial. These aspects match with our product philosophy. Additionally, a prospective partner must be prepared to engage in an extensive onboarding process, including adherence to our code of labor practices, code of conduct, and a collaborative approach to ongoing development.

How long does the onboarding process take, especially with a new partner like Pakistan?
The duration of the onboarding process varies and is intertwined with our product development approach. We don't separate product development from sustainability considerations; they go hand in hand. From the initial discussions of designs to pricing and trial orders, we concurrently engage with our partners on sustainability. This onboarding process typically spans a few months, but the exact duration depends on the intricacies of the product development, including its complexity.

How do you ensure that partners align with your company's commitment to reliability and equality in partnership?
Alignment is a journey shaped by years of experience rather than a straightforward guarantee. We acknowledge that complete certainty isn't possible from the start. For us, the key lies in fostering continuous and genuine relationships based on mutual respect and collaboration.

We believe in the principle that what you give is what you get. By approaching partnerships openly, we gradually build trust and understanding. It's not about presenting a polished image but genuinely meaning what we say and involving our partners in every step. Active dialogue plays a crucial role in this process. We take our partners along in decision-making, making them a part of the process rather than mere recipients of information. This approach extends to various aspects, including design, product development, pricing, auditing, and even the development of our business strategy. Engaging in ongoing dialogue, seeking their visions for their company, and incorporating those visions into our partnership are integral to building a strong and lasting connection.

How do you convince someone that your approach is not only ethically sound but also beneficial in terms of business values and outcomes?
Our approach builds a foundation of reliability and depth, which shouldn't be underestimated. The impact is evident on multiple levels, especially during challenging times like the COVID pandemic. Investing in a partnership and supporting each other through difficulties creates a reciprocal dynamic. It's a fundamental principle in personal relationships, and we believe it should be integral to business relationships as well.

This investment pays off significantly in maintaining long-term quality. For instance, when our production partner experiences a surge in workload, our interest lies in ensuring their workers’ sustained well-being and satisfaction. This directly correlates to high-quality work, fewer errors, and reduced returns—clear benefits reflected in our business figures.

We recognize that our partner’s success contributes directly to our own success. Our interest lies in avoiding any struggles or downturns for our partners, as their well-being directly impacts the quality and success of our collective business. In essence, fostering long-term relationships and prioritizing quality not only make good business sense but also contribute to a more enjoyable and collaborative working environment—an invaluable aspect of our approach.

Can you elaborate on how HAKRO monitors the working conditions, quality, and ethical practices of its production partners?
Monitoring is one of many key tools, and we employ a system called the iMPACT Program. We take pride in co-developing this audit scheme in collaboration with ELEVATE, a global service provider in auditing and monitoring. This audit scheme is based on our commitment to a solid Code of Labour Practices we adopt as a member of  Fair Wear Foundation.

In general, our approach goes beyond a one-time assessment. Having our own dedicated country teams on-site facilitates ongoing dialogue and collaboration. While monitoring in China presents unique challenges, we are gradually shifting production out of China, focusing on other existing production sites with reliable partners. This gradual transition requires careful planning to ensure a responsible exit, maintaining quality, and ensuring sufficient capacity in alternative production sites. The process is intricate but essential for ethical and sustainable practices.

Are there regular assessments or audits in place to ensure compliance with the company standards?
We don't solely rely on compliance audits, as they offer only a snapshot. While important, they are one aspect of our Human Rights  and Environmental Due Diligence (HREDD) practices. We conduct regular audits every three years but can perform follow-ups if needed. Our focus therein is on the remediation process post-audit, using data to drive improvements within our partnerships. We view audits as a tool to continuously develop and enhance our practices.

Our overall risk assessment involves various data sources, including gender and wage assessments conducted continuously, along with mechanisms at each factory generating additional data. Our HREDD process is a dynamic process, regularly reviewed and updated.

We prioritize an open and transparent approach, engaging in practical proceedings rather than a rigid audit-only mentality. This involves collaborative problem-solving, avoiding blame, and fostering constructive solutions. Transparency is essential, creating a safe environment for partners to invest and collaborate on continuous improvement.

Can you explain HAKRO's commitment to offer production partners wages above the minimum wage and additional social benefits?
Our goal is to pay living wages to all workers on tier 1 by no later than 2030. To achieve this, we are analysing the correlation between our product buying price and the wage component. Collaboratively, we want to set gradual target prices with our partners, considering social and political risks. It's crucial to treat our partners as equals in this process. In the meantime, we implement short-term interim solutions, such as cost reductions for workers through initiatives like a health care fund, and a sanitary project. These measures are effective while we deal with the complex challenge of raising wages. Building equal partnerships is an ongoing process based on trust and respect. In Bangladesh, ongoing protests from garment and textile workers highlight the urgency of addressing wage concerns, and we continue to engage in constructive discussions to improve wage structures.

What's your perspective on the ideal balance? Should it favor brands or manufacturers in fostering equal partnerships? Regarding wage decisions, do you lean towards government involvement, or do you propose an alternative approach?
This is the age-old question of responsibility for sustainability and my answer remains the same: we require a collaborative approach. The debate about whether the push should come from the brands, the manufacturers or the government remains topical. I firmly believe that sustainability requires a joint effort. All stakeholders, including businesses, need to partner with government initiatives to shape the regulatory framework and implement equitable practices. However, it is important to recognize that companies, both brands and manufacturers, have their own responsibilities.  Instead of seeing sustainability as a chicken-and-egg problem, we should recognize the interconnections and act together. Each entity has a role to play and success depends on shared responsibility, not shifting blame. This perspective is critical to overcoming challenges and promoting a sustainable future.

Anna Rüchardt 
As the Head of Impact & Responsibility at HAKRO GmbH, Anna Rüchardt is in charge of driving the corporate wear company's integrated sustainable business strategy and approach to human rights and environmental due diligence. She represents the sector’s sustainability interests on the steering committee of the German Partnership for Sustainable Textiles (PST) and the board of the MaxTex Network. She holds a post-graduate certificate in Business Sustainability Management from the University of Cambridge, and a master's degree in International Business and Sustainability from the University of Hamburg.