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AAFA Conference: Better to Be Green

Companies that embrace sustainable business practices — along with helping the environment — stand to lower costs and improve sales.

The introduction of the Toyota Prius has had a significant impact on the company and the auto industry.

The introduction of the Toyota Prius has had a significant impact on the company and the auto industry.

WWD Staff

NEW YORK — Companies that embrace sustainable business practices — along with helping the environment — stand to lower costs and improve sales.

Speakers from the worlds of fashion, automobiles and even carpeting stressed those points to the more than 100 people attending the American Apparel & Footwear Association’s first sustainability conference at the Fashion Institute of Technology here last Thursday.

This story first appeared in the June 3, 2008 issue of WWD.  Subscribe Today.

The apparel industry is becoming more in tune with the benefits of adopting sustainable practices.

Sean Cady, director of environment, health and safety for Levi Strauss & Co., said a particular problem facing the apparel industry is the number of reviews factories must undergo to ensure compliance. Without a uniform code of standards among brands and retailers, factories must attempt to meet the criteria of each of their customers.

“We know in factories right now there is audit fatigue,” he said.

Cady noted the average factory goes through 25 audits a year. Each can range from one to three days.

“We find that 80 percent of our time is spent auditing factories in our supply chain and only 20 percent is spent on actually resolving the issues,” Cady said. “We need to flip that ratio.”

The industry is starting to come together to help alleviate the burden on factories and to save time and money. Levi’s is collaborating with 15 other brands to reduce the number of audits performed at 120 factories. Cady said the program has reduced the amount of resources devoted to inspecting those facilities by 20 percent.

Companies such as Patagonia and Dansko have taken the concept of sustainability beyond their product and applied it to offices and distribution centers. Patagonia’s newest distribution center in Reno recycles 95 percent of its daily waste. Porous materials have been used for the parking lots to prevent runoff and erosion. Mirrors have been installed on the roof to reflect sunlight into the facility, reducing the amount of electric lighting.

Nate Paulson, store manager of Patagonia’s Westport, Conn., location, said the company is also focusing on producing goods that are more durable.

“If you don’t make a product that’s of the highest quality, then it’s going to end up in the landfill much earlier,” Paulson said.

Like Patagonia, Dansko’s new 80,000-square-foot office building has been designed to be environmentally friendly and sustainable. Some of the building’s features include a roof with vegetation, native drought-resistant plantings and a 10,000-gallon cistern that captures rain runoff from the roof and provides water for toilets. Windows are designed to reflect light into the center of the building and sensors control output of the electric lights.

Judah Schiller, executive vice president of advertising firm Saatchi & Saatchi, which represents Wal-Mart Stores Inc., said the world’s largest retailer will be paying added attention to sustainable products.

“With consumers, we’re going to get to a point where it’s no sustainability, no love,” Schiller said. “If your product or your brand doesn’t have sustainable attributes, I guarantee you that consumers are going to start rejecting it. Not today, not tomorrow, not probably this year, but give it a few years and we’re going to see a lot of change.”

Schiller said Wal-Mart chief executive officer H. Lee Scott has made it clear that while he won’t punish suppliers who aren’t implementing sustainable practices, the company will reward those that do. As a result, Schiller believes the biggest opportunity suppliers have with Wal-Mart is to help it take the next step in offering its customers more environmentally friendly or sustainable products.

John Wells, president and ceo for the Americas of Interface Inc., a global carpet manufacturer, discussed his company’s drive toward sustainability and the benefits. Interface, a publicly traded company that specializes in making carpet that is used in offices around the world, generated sales of $1.1 billion last year with products sold in some 100 countries. Wells said the company’s pursuit of a contract for a new environmentally friendly building in California in 1993 served as a catalyst to change its approach to business.

“There were some consultants and designers that began to ask us, ‘What’s Interface’s environmental position?'” Wells said. “The question stumped us.”

Since then, Interface has committed itself to becoming a wholly sustainable business.

“The current and existing environmental industrial life cycle is flawed,” Wells said. “It’s a take, make-waste model.”

Interface is working to implement a more cyclical structure for its product with the goal of eliminating the firm’s environmental footprint by 2020. The company has found ways to reduce emissions, use renewable energy and recycle carpet.

Wells said the business gains realized by embarking on its campaign, dubbed Mission Zero and launched in 1996, have been substantial. The company has avoided more than $376 million in waste, and energy usage is down 45 percent. Water usage has gone to just 100 million gallons from 300 million gallons in 1996. The company now reclaims and recycles carpet, having reclaimed 133 million pounds of carpet so far.

“That sounds like a lot, but 5 billion pounds of carpet per year are thrown in landfills,” Wells said. “We’re hardly scratching the surface, but we see a way through this.”

Improvements in technology have made recycling reclaimed carpet an easier process that requires relatively little energy. Interface has one recycling facility operating in Georgia and Wells believes a series of small plants could be set up around the world. The company’s efforts have translated into increased interest from potential customers.

“We absolutely know that architects and designers are specifying our carpet because it’s more responsible,” Wells said. “They are demanding more from us.”

Steve Sturm, group vice president of communications for Toyota Motor North America, explained how the introduction of the Prius has changed the nature of the automotive industry. Toyota had a goal of selling 12,000 of the hybrid cars in the first year, he said. Despite less-than-stellar reviews and taking 13 seconds to go from zero to 60 miles per hour, the Prius sold out in each of its first three years.

The Prius is now Toyota’s third-best-selling auto. The company has also claimed a large portion of the hybrid market. About 11 percent of sales are hybrids and Toyota claims an 80 percent share of the U.S. hybrid market.

“When we first launched the Prius, Toyota benefited the Prius brand name,” Sturm said. “Now the Prius benefits the Toyota brand.”

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