Many companies across the globe are struggling to imbibe ESG culture in their working. But there’s one, probably the only one, American retailer of outdoor recreation clothing that has ESG in its DNA.
Every year, the clothing retailer donates 1% of net revenues to the NGOs working in the environmental and sustainability space.
Though in the business of clothing, it convinces people not to shop for clothes as heavy environmental costs are involved in making of every single garment. The company is against the concept of Black Friday sales. Thus, every penny made from the Black Friday sales is donated to various environmental NGOs working across the globe. Taking it further, the company is running a programme to repair worn clothes to deter people from investing in new clothes when a repair could increase the longevity. This can be construed as both customer care & community service. The clothing retailer also recycles the clothes which are beyond repair.
The company uses 100% organic cotton for clothes as normal cotton uses pesticides, something harmful for nature and sustainability. It also recycles plastic bottles to make fleece fabric for clothes. The company managed 60% reduction in energy use with adoption of solar tracking skylights and radiant heating. This meant less use of fossil fuels, which are harmful for environment, while simultaneously reducing energy costs.
Well-being of the stake holders, like the employees, is central to its working philosophy. It runs an on-site childcare for its staff, which helps the employees to be close to their new-borns even as they work. There’s advantage for the company too – employees get back to work soon, and at the macro level it helps in employee retention. The company also has an on-site cafeteria which mostly serves healthy organic food. Regular training programmes are organised for employees to develop socially responsible habits and to handle the pressures of working hours and deadlines. To inculcate a sense of ‘working for cause’ feeling among the staff, the company allows two-month volunteerism for preservation of environment.
The clothing retailer doesn’t restrict enforcement of ESG criterion only to itself. The partners and manufacturers are chosen on basis of how well they treat their employees, whether they meet the environmental impact, quality and sustainability standards or a not. A social manager ensures social compliance along the entire supply chain. To ensure transparency, the company discloses history of all products, right from the raw material stage to the retail stage.
It runs a digital platform that links local communities with environmental activists, thereby allowing the common people to be part for environmental activism. The clothing retailer is probably the only one to have a post designated as Vice-President (Environmental Activism), whose responsibility, among other things, is to encourage the consumers to join the cause of environment and encourage sustainable consumption behaviour.
The ‘ESG in Soul’ philosophy makes a lot of business sense for the earth-friendly clothes retailer. The employee-first policy makes it one of the most sought-after workplaces among young seekers, apart from employee retention. With the wrath of climate change being seen across the world, the ‘business for a cause’ paradigm helps it retain existing customers, get back the old ones, and new ones too.
The story doesn’t end here. The founder of the clothing retailer has donated 98% of company’s shares to a non-profit entity fighting climate change. The ESG focus is earning respect and admiration for the company. Apart from many other awards, the company is also a recipient of the prestigious UN Champion of the Earth Award. The profit and sales of this company proves Good ESG means Good Business too!
