BRANDS TAKING STANDS™ NEWSLETTER
Continue the important conversations on corporate responsibility long after 3BL Forum with the Brands Taking Stands™ newsletter. Written by veteran journalist, John Howell, this newsletter is published every Wednesday morning.
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THE BIG STORY
Success Now Requires Sustainability
Denim clothing is riding a wave of popularity these days. Global sales have surged to $66 billion, with projections of $88 billion by 2025, a growth rate of almost 4% annually.
Several factors are driving this jeans “moment”: the global influence of Western culture; the expansion of “athleisure” wear; adoption by the youngest cohort of consumers, Gen Z; and industry innovations in blends, finishes, and embroidery.
There’s one speed bump in this success story: from the production of cotton, which uses large amounts of chemicals and water, to the extensive use of indigo and sulfur dyes and water in the manufacturing process, the ubiquitous cloth represents major environmental challenges. The good news is that the big players are taking stands to address these sustainability issues.
A key factor is the Gen Z consumer, who is pushing brands to go further into sustainable and circular economy practices. Michael Kobori, VP of Sustainability, Levi Strauss, says these young consumers “want the facts and they will research them.”
Alice Hartley, Senior Manager for Sustainable Innovation, Gap, says it will take an industry effort, “a systemwide sustainability model” to satisfy the newest, youngest consumers of denim apparel. “In sustainability we spend a lot of time thinking about impact and footprint of materials,” she told Sourcing Journal. “But we do also have to get out of our comfort zone and challenge ourselves to look farther into the future. We should be thinking 20 years out about where cotton is going to come from.” Hartley also believes the industry needs to “decouple profitability” from the needed investment in research. Concepts such as circular business levels “help us to do that because it’s about the value to our customer.”
Levi’s is taking major steps toward sustainability. Says Kobori, “Levi’s will be using 100% sustainable cotton in its products, and the Water Less Jeans production, a technology shared with the industry that reduces water usage in manufacturing, will up-scale from two-thirds of all production today to 80%t by 2020.” The company has also committed to a 90% reduction in greenhouse gas (GHG) emissions in all owned-and-operated facilities, and a 40% reduction in GHG emissions in its supply chain by 2025.
In addition, Levi’s has joined the Green Supply Chain Map, an online transparency tool that ties companies to their suppliers’ environmental performance in China. Gap, Adidas, Inditex, Target, Puma, New Balance, Tesco, and Esprit are also committed to the project, created by China’s Institute of Public & Environmental Affairs in partnership with the Natural Resources Defense Council.
Another industry-wide effort is the Textile Exchange, the global non-profit organization that focuses on minimizing the environmental impacts of the textile industry. Some Textile Exchange members include C&A, Lenzing, Levi’s, and Patagonia. Isko, the world’s largest producer of denim, is the latest company to join this group. The Turkish company has also obtained Life-Cycle Assessments for its denim collection, totaling upward of 25,000 products. The assessments evaluate the fabrics’ total life cycle from raw materials to waste and recycling.
These collaborative strategies for more sustainable practices by denim producers and retailers are re-defining the terms of success in the global denim market.
NEWS YOU CAN USE
Ethics in Advertising
The Body Shop, Ecover, and Accenture Interactive are among the 30 companies and organizations who have signed on to the Conscious Ad Network. It’s a coalition working to ensure that ad industry ethics “catch up” with the technology of contemporary advertising. To date, the group has produced six “manifestos” on such subjects as fake news, hate speech, and diversity. The position papers are leadership primers for values-driven companies to bring their messaging up to speed with their practices on key issues. Each manifesto includes sections on “the leadership position,” the “commercial imperative” for taking that stand, and an outline of concrete steps to put better practices in place.
Climate Change
For the last three years, climate change has led the list of 30 long-term risks to the world and human society, agreed upon by over 1,000 business, policy, and thought leaders at the World Economic Forum in Davos. Now, there’s evidence that global opinion is turning into action by business. “Investors and executives are focusing more on climate change as its effects on business and the economy become clearer,” concludes the Wall Street Journal. Asset managers, pension funds, index fund managers, and financial advisors are increasingly looking at companies to respond positively to shareholders’ concerns about greenhouse gas emissions, water management, and renewable energy adoption. Exhibit A: about 49% of environment-related shareholder proposals were withdrawn last year, compared with 33% two years prior, according to ISS Analytics. These closed-door agreements, made before annual shareholders’ meetings to avoid public arguments over the issue, are a measure of how seriously companies are now taking the need to integrate climate change into their risk mitigation strategies.
Brands Taking Stands on Tennessee Anti-LGBTQ Bills
Companies are pushing back against discriminatory bills being considered in the Tennessee legislature. The Human Rights Campaign has published a letter signed by 11 major companies that says, “Put simply, these bills do not reflect the values of our companies.” Signees include Hilton, IKEA North America, InterContinental Hotels Group, Lyft, Marriott International, MassMutual, Nike, Replacements, Ltd., Salesforce, Unilever, and Warby Parker. Locally, the Nashville LGBT Chamber distributed its own letter that was signed by seven of its major corporate members, including Bridgestone Americas, Dell Technologies, Salesforce, and Postmates. AllianceBernstein, Curb Records, and Warner Music Group, reports the Nashville Business Journal.
C-SUITE COMMENTS
“When you build a team, you want diversity. You want gender, you want ethnicity, you want geography, you want points of view, you want socio-economic background—diversity that allows folks to complement each other and to get the best outcome.”
— Nancy Prior, President, Fixed Income, Fidelity Investments
Excerpted from Financial Times
PEOPLE ON THE MOVE
Nachy Kanfer has joined Donovan Energy as Partner. Kanfer will lead the company’s consulting practice, focusing on energy strategy and procurement. Prior to joining Donovan Energy, Kanfer served as the Regional Director for Sierra Club's Beyond Coal Campaign.
Shelley Seifer has been appointed Chairman and CEO of First Bank. Most recently, she served as COO. Prior to her position at First Bank, Seifert served as Executive Vice President of Integrations and Operations at PNC Financial Services.
Thomas Emmons and Edward Levin have joined Voya Investment Management as Senior Portfolio Managers. In their new roles, Emmons and Levin's focus will be on opportunities in renewable energy infrastructure projects.
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- John Howell, Chief of Thought Leadership and Editorial Director, 3BL Media