Eco-friendly, sustainable and ethical are words that have become part of the permanent lexicon of manufacturers and retailers in recent years. From the smallest 500-square-foot shop to the mass chain with 1,000-plus stores, companies are looking for ways to lower their carbon footprints, conserve energy, identify ethical sourcing partners and educate consumers about the benefits of saving the planet, and consumers themselves are becoming more interested in the topic as well. According to a survey by WSL Strategic Retail, 55 percent of consumers buy organic products, up from 49 percent a year ago.

Many companies are making investments that will lead to cost-saving efficiencies. A healthy regard for the environment has become part of many firms’ identities, from Patagonia to yes, Wal-Mart. For others, such as the Gap, eco-sensitive products and ethical sourcing is part of the culture, something that employees have come to expect and consumers increasingly demand.

Sylvie Bénard, director of environment at LVMH, said the idea of environmental initiatives being more expensive than traditional methods is not necessarily true, adding that maintaining environmental efforts in the downturn makes economic sense. “The message that the environment costs a lot has passed,” she said. “It has really evolved.”

Bénard, noted that LVMH will maintain its investments this year in everything from boutiques that consume less energy to carbon audits to water measurement. These investments will ultimately lead to cost-savings for the group. To companies wondering whether they can maintain their commitment to the environment in the midst of an economic crisis, she said, “We must not stop everything because the financial situation isn’t as good as we would hope. These are resources that will one day disappear. They are irreplaceable. No matter what the financial situation or the social situation, we have to continue to tackle that.”

A stricter regulatory landscape, such as Europe’s Registration, Evaluation, Authorisation and Restriction of Chemicals, (REACH), which came into force last year, is prompting some companies to jump on the green bandwagon. Businesses must respond to new obligations, economic crisis or not. Some government policies see green as the route to recovery. The French Ministry of Ecology is working on developing a label for eco-friendly products by 2011 and possibly lowering the VAT on products deemed eco-friendly.

H&M plans to increase its organic cotton products stable by 50 percent this year, given consumers’ desire to buy sustainable products, said Harsha Vardhan, H&M’s global environment coordinator. “Given that most factories have stopped expanding in the current climate, the credit crunch is actually the best time for factories to embark on cleaner production programs,” she said. “The price gap between organic and ordinary cotton has narrowed sharply from a previous 100 percent to 20 to 30 percent due to higher production volume and the growing number of suppliers, making this a much more affordable alternative.”

Pat Nie Woo, director of Central Textiles, said at the Interstoff Asia Essential textile trade show in Hong Kong last month, “We are almost debt free, which means we have the financial flexibility to continue pursuing sustainable projects. Despite the economic downturn, Central Textiles will go ahead with our sustainable development plans, but of course, these plans must make financial sense. The economic recession presents an opportunity to move ahead of the game.”

From her small store on First Avenue in downtown Manhattan, Lisa Linhardt sells her environmentally sensitive jewelry: engagement rings with ethical diamonds mined in Canada, rings and necklaces made from wood scraps donated by a furniture company and jewelry made from organic South American tagua seeds.

“Customers are reacting positively to it and they are willing to pay more for it,” Linhardt said. “In order to be green, you have to have an environmental conscience and a social conscience.”

Linhardt avoids using newly mined gold collected under unsafe or inhumane conditions, termed “dirty gold.” Rather, she works with recycled gold, although finding manufacturers that share her commitment is difficult. Prices in her store range from $30 for a ring made from EcoResin — 40 percent recycled plastic with wood inlays — to $25,000 for a custom engagement ring or cocktail ring with diamonds or lonsdaleites.

Anthropologie is tapping into Earth Day, April 22, to connect with customers. Organic chefs and food advocates will appear in several Anthropologie stores, while other locations will host farm-to-table and gardening events. In the spirit of recycling, the retailer is offering reinvention workshops where consumers learn to rework cardigan sweaters and revitalize T-shirts.

Loomstate for Target, casual men’s and women’s apparel made from certified organic cotton, will debut at the retailer on April 19. “We continue to do ongoing research about what our guests want and it’s obvious to us that more guests are craving eco-friendly products,” said a Target spokeswoman. “In general, that’s been a trend. There really isn’t a department in the store that hasn’t been impacted by eco-friendly.” Target is working on reducing packaging of existing products, and in conjunction with General Electric, on April 19 will give away one million reusable bags containing coupons for compact fluorescent light bulbs. “We have a really integrated and wholistic approach that encompasses merchandising, marketing, sustainability and energy management,” said the spokeswoman.

One of the strongest emerging trends in Europe is a move away from throwaway fashion toward more lasting apparel. H&M’s first-quarter sales declined 5 percent on a like-for-like basis, suggesting the chain isn’t immune to the economy in key markets such as France and the Netherlands. Meanwhile, “investment piece” has become the industry’s mantra, touted by luxury brands and magazines, retail experts said.

French consumers are fed up with clothes that don’t last. “We are starting to see more people complaining that clothing isn’t good quality and falls apart too quickly,” said Nathalie Ruelle, professor and sustainable fashion consultant at the Institue Francais de la Mode, referring to an IFM study last October. “This falls into the slow fashion trend — products that are fashionable but have a longer life span,” she said. Ruelle praised H&M’s upscale COS chain, which “offers beautiful, quality clothing with good finishes and materials that last.”

“Somewhere along the way, we forgot about making things to last,” said David Hieatt, founder of the Welsh sustainable brand Howies. “We convinced ourselves that being different, being new, being quirkier was the thing. Quality was put at the back of the queue.” The company is trying to change course. Hand-me-downs, Howies’ latest collection, has prices as high as 400 pounds, or $593, for a classic outdoor tweed-lined jacket, but comes with a 10-year guarantee.

For LVMH’s Bénard, a product’s longevity is a top priority. In fact, LVMH is developing a product life cycle analysis tool that will be used by product design groups across the company’s fashion houses. “The goal is that designers take environmental considerations into account at the design stage, and eventually we won’t need the environmental team any more,” she said.

Barneys New York has made organic and eco-friendly fashion a priority. Loomstate for Barneys Green, a 100 percent organic cotton collection, will introduce a series of T-shirts inspired by endangered wildlife for fall. Spring debuts include Koi Suwannagate’s collection made with organic silk or vintage cashmere and overstock threads, Raf Simons for Jil Sander Organic Knits’ exclusive 100 percent organic cashmere collection and Stefano Pilati’s Yves Saint Laurent line made from YSL fabric that would have been destroyed or thrown out. Barneys also encourages customers to recycle. Worn jeans can be exchanged for a small discount on a new pair.

Patagonia, the Ventura, Calif.-based outdoor clothier whose business is based on sustainability, places an emphasis on timeless, classic designs that last. Over the last four years, Patagonia’s sales have grown from $75 million to $300 million. “Our brand is really resonating right now,” said Casey Sheehan, Patagonia’s chief executive officer. Green initiatives are paying off for Patagonia. Doubling the size of a warehouse using the Leadership in Energy and Environmental Design (LEED) building ratings system cost 7 percent more than using traditional techniques, but because the building is 40 percent more energy efficient, Patagonia saw a return on its investment in three years.

Gap Inc. is engaged on several fronts. “We’re working to reduce energy use in our stores, distribution centers and headquarters,” a spokeswoman said. “By the end of 2007, we reduced consumption by 12.7 percent. At Old Navy we relamped all the stores with energy-efficient bulbs that will cut energy costs by 10 percent.” The company installed a 1 megawatt solar power system in its Fresno distribution center, which will generate 1.9 million kilowatt hours. At Gap’s San Francisco headquarters, there’s no bottled water for sale, cutlery is used in the cafeteria and every office contains a compost and recycling bin and tiny trash can that makes employees “mindful about creating waste,” the spokeswoman said. Gap is reducing water use, recycling scraps from cutting room floors and including alternative fibers in all collections. Banana Republic, meanwhile, launched a second sustainable line as part of its Heritage collection. Gap Inc. last month was ranked the number-one retailer among 100 best corporate citizens by CRO magazine for the fourth year in a row.

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