Sustainability Best Practices Part 1 | Fair Trade & Social Programs

Sustainability Best Practices: What Does It Really Take To Be A Sustainable Company

To consumers who are not familiar with the manufacturing supply chain, they may think being a sustainable-driven company means using solar energy, recycled paper in the office and selling organic cotton garments. All of those are true, but manufacturers agree that employing a full time sustainability director is no longer for the most progressive eco-warrior non-profits. Executive leadership that prioritizes sustainable-driven business is the new standard in the surf, snow, and outdoor market—encompassing sourcing and human labor rights through Fair Trade production, company culture and business decisions.

“The big transition in trying to be a sustainable company is using sustainability as a lens through which all decisions are made,” said Ali Kenney, global sustainability director at Burton.

From offering micro-financing programs to overseas employees, to sourcing only organic materials and offering free repairs to lengthen the life of a product, the paradigm shift to being a sustainable company is a constant evolution that requires significant personnel and resources. Companies that don’t transition towards a sustainable model will be losing valuable market share in the long run.

According to a global study conducted  in November 2015 by Nielsen, the myth that consumers are not willing to pay higher prices as a result of sustainable practices is no longer true. Nielsen’s Global Corporate Sustainability Report found that “[Millenials] continue to be most willing to pay extra for sustainable offerings by almost three-out-of-four respondents.” The study also concluded “among global respondents willing to pay more, statements about product sustainability purchase drivers were 10 to 13 percentage points higher than the global average percentages for these statements.”

U.S. Millenials outnumber Baby Boomers by nearly 10 percent, surpassing them as the nation’s largest living generation in 2015… They’re estimated to reach $1.4 trillion in annual spending by 2020—roughly one-third of all retail spending.

According to an NPD Group study, “U.S. Millenials outnumber Baby Boomers by nearly 10 percent, surpassing them as the nation’s largest living generation in 2015, according to the U.S. Census Bureau. They’re estimated to reach $1.4 trillion in annual spending by 2020—roughly one-third of all retail spending.” In other words, Millenial buying habits that skew toward favoring sustainable business practices can’t be ignored if a company wants to stay in business over the next decade.

What does it take for a company to transition from the traditional model of linear production—extract resources, consume and dispose—to a “closed loop” system—extract resources, consume, and recycle or upcycle? Where do companies go wrong in their efforts to steer in the sustainable direction?

We talked with leaders at companies driving sustainability about key areas of manufacturing: Fair Trade labor, sourcing materials, and paradigm shifts in business practices.

Bureo partners with fishing villages in Chile to collect excess fishing nets that are polluting the coastline. Those nets are the raw materials used to create skateboard decks.

Beyond Minimum Wage | Why Fair Trade and Social Good Programs Matter

The signature product of start-up company Bureo, founded by three engineers, is a fish-shaped skateboard with decorative carved scales on the deck. To make a similar product in the traditional supply chain, virgin plastic would be derived from petroleum and then molded in an overseas factory, employing workers at minimum wage.

In Bureo’s business model, its fish-shaped skateboards are made from discarded fishing nets that are collected by local fisherman in Chile through a program called Net Positiva. “We partner directly with fishing communities to contract and train local workers to manage the recycling process. Just as they catch and sell the fish at a market, we can make a market for their nets, extending the nets life through our products,” said Ben Kneppers, co-founder of Bureo. In addition to employing the local fisherman communities with fair wages, a portion of the skateboard sales profits is donated towards community projects such as education, waste management and environmental education workshops.

Bureo’s approach to designing a product—sourcing upcycled materials or sustainable materials (fishing nets), empowering a local community to make a living (fisherman in Chile), and tackling a measurable solution for an environmental problem (ocean pollution)—is one example of how companies are re-imagining the supply chain to integrate sustainability into every step.

In today’s global economy, the health of a company’s bottom line and longevity is dependent on its partnerships abroad, and a healthy labor force is an essential pillar for a sustainable-driven company.

In today’s global economy, the health of a company’s bottom line and longevity is dependent on its partnerships abroad, and a healthy labor force is an essential pillar for a sustainable-driven company.

“Patagonia has an obligation to conduct business responsibly no matter where we operate in the world,” said Thuy Nguyen, manager of social responsibility and special programs for Patagonia. “When we get to reap the benefits of globalization we need to do our part to protect the workers, communities, and environment that we affect.”

At its Ventura, CA headquarters, Patagonia’s progressive and above industry-standard benefits for employees include maternity and paternity leave, on-site child care, subsidized organic meals, and dedicated flex time for the sports and lifestyle its products speak to. Its socially conscious values also extend to overseas partners through programs such as Fair Trade.

Sustainability Best Practices

A supervisor at one of Patagonia’s Fair Trade certified factories in Agalawatta, Sri Lanka.

Patagonia anticipates that by Fall 2017, more than 30 percent of its styles, totaling more than 300 products, will be Fair Trade, a third party certification in which “companies must buy from certified farms and organizations, pay Fair Trade prices and premiums and submit to a rigorous supply chain audits. This process entails a high level of transparency and traceability in their global supply chains.” One key aspect of Fair Trade is that the premium funds paid for products are designated for social, economic and environmental development projects such as education, better health care, better environmental practices and higher wages, all of which increase quality of life for workers. Worker morale is difficult to quantify, but Patagonia says they know the programs are making a positive impact based on feedback from the factory floors.

“Our factories have told us that there have been marked improvements in management and worker relations as a result of the Fair Trade worker committee and overall greater worker morale and engagement. Our factories are now tracking the impact Fair Trade has on worker retention and quality levels, which we anticipate will also be positively affected,” Nguyen said. He continued that in factories where Fair Trade is “not suitable for one reason or another, we employ alternative programs that work to ensure fair and safe working conditions.”

At PrAna, a commitment to sourcing only organic cotton in India incorporates not just the materials, but also the workforce producing the materials. In addition to being Fair Trade certified, prAna partnered with a cooperative in India to micro-finance farmers that harvest the cotton. Before micro-financing was offered, Brianna Kilcullen, social responsibility and traceability manager for prAna, said the only other financing option for these farmers is high interest loans, which have caused one of the highest suicide rates globally among the farming community.

Sustainability Best Practices

One of the supervisors from a factory in which Patagonia sources Fair Trade garments.

In the case of outdoor company Cotopaxi, workers are involved in the creative process, too. The colorful patchwork design of Cotopaxi’s Luzon Del Día backpack is made from excess material from other company’s production runs that would otherwise end up in a landfill. “We invited the sewers to take part in the design process and pick the colors of the bag. The only direction we gave them was that not one bag should be alike. Each pack is truly limited edition and one-of-a-kind,” said Davis Smith, CEO of Cotopaxi. For its Kusa insulated jacket made from llama fleece in Bolivia, Cotopaxi partnered with the mill to participate in environmental and community development initiatives for the farmers.

Sustainability Best Practices

The colorful cut pattern pieces on Cotopaxi’s Luzon Del Dia backpacks.

These feel-good stories aren’t just for positive marketing campaigns. Practicing sustainable labor affects the bottom line if companies consider that a happy and satisfied work force equals higher productivity and lower turnover.

“Practicing sustainable labor is providing work that offers a decent wage and benefits, respectful working environment, and safe conditions. It is dignified work that people return to and can count on to provide themselves and their families with shelter, food, transportation, medicine, and other basic needs. When these needs are met, communities are stronger and more productive,” Nguyen said.