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Expect Expanded Breadth for CSR

Several speakers at the WWD Global Sourcing Forum noted that the days of “optional” corporate social responsibility are numbered.

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The days of “optional” corporate social responsibility are numbered.

This story first appeared in the October 11, 2011 issue of WWD.  Subscribe Today.

That was the message driven home by several speakers who expect a ballooning world population and limited resources to force governments, companies and industry trade groups to enact more stringent standards regarding everything from labor practices and work environments to land and water use and material utilization. Until recently, much in the broad area of CSR has been motivated by companies’ consciences and those of their customers.

Ann Inc. is marking the 10th year of its CSR program and, according to Jeannette Ferran Astorga, vice president of CSR for the New York-based firm, its efforts have been imbued with the “client first” philosophy that is among the company’s core values. Its mission “is to inspire and connect with women so they can put their best selves forward every day.…How would she feel if we disappointed her in any way?”

That perspective led Ann Inc., which operates the Ann Taylor and Loft retail nameplates, to institute a code of conduct 10 years ago, third-party monitoring of suppliers in 2002, supplier development programs in 2004, a far-reaching green initiative in 2007 and the “AT Connect” program in 2008. Last year, it brought about the launch of the ResponsiblyAnn.com Web site, which brings greater transparency to all the firm’s CSR efforts.

Ann gave 18,000 store associates training in smart energy practices as part of a green initiative. Carbon emissions in its distribution center were reduced by 11 percent per square foot, more than 6.6 million polybags were eliminated and use of tissue paper was cut by 37 percent.

“Stores that participated saved enough energy to power 50 of our stores for a year,” said Astorga, with much of the savings coming from “little things,” such as asking a customer if she’d prefer to take home her purchase in her own bag, rather than one of the store’s.

CSR audits have been particularly burdensome for many suppliers, including one that went through 42 such evaluations in a single year. To lighten the load on the manufacturer as well as on itself, “we actively work with other like-minded brands and do joint remediation when it’s necessary,” she noted.

Suppliers are given a report card following their audits and facilities in need of “substantial improvement” or “immediate action” are coached on how to regain compliance. However, those unable to adapt to the standards are cut out of Ann’s supply chain.

“We have zero tolerance,” the CSR executive said. “We have to make hard decisions. We want to work with suppliers committed to sustainable changes.”

Astorga believes that legislative changes are coming, such as the California Transparency in Supply Chains Act and certain features regarding conflict minerals in the Dodd-Frank bill signed by President Obama last year.

“These will force retailers and brands to become increasingly transparent about our supply chain practice and increase our public reporting,” she said. “It they’re not on your radar now, I’m sure they will be shortly.”

Jay Golden, director of the Duke Center for Sustainability & Commerce in Durham, N.C., said governments are taking different approaches to instituting CSR initiatives, with the U.S. moving slowly and countries in the euro zone “going Mach 2, with their hair on fire.” While legislatures debate the issues, Golden endorsed a different approach: “Let’s, as a global industry, in a noncompetitive way, develop the standards that we are all going to abide by. And let’s leave it to each of the brands to identify their competitive advantage to meet the standard.”

He held out hope that the Sustainable Apparel Coalition is close to a breakthrough on such global standards with an approach that places a consensus among businesses over tools that immediately communicate sustainability information to the consumer. The U.S. Environmental Protection Agency was a charter member of the group, founded in March after a year of informal talks.

Golden noted that population trends and growing consumer awareness make ignoring the environmental and social impact of apparel and footwear production impossible. The world’s population, 5.9 billion in 1998, is projected to hit 9.9 billion in 2050.

Aroon Hirdaramani, director of the Hirdaramani Group and industry representative for Sir Lanka Apparel, detailed his nation’s efforts to export “garments without guilt, free of discrimination, sweatshop practices and child labor,” pointing to a code established in 2008 that “exceeds leading industry compliance codes.” As the small island nation off the coast of India evolves into an export hub for South Asia, which accounts for 17 percent of U.S. apparel imports, he said, “We have found that investing in ‘green’ has helped to make us lean.” Recent initiatives have led to a 50 percent reduction in energy consumption, a 70 percent cut in water usage and the elimination of waste to landfills.

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