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Macy’s and Tiffany Discuss Sustainability Plans

Being green and generating a profit are not mutually exclusive, competing values for businesses.

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“Being green and generating a profit are not mutually exclusive, competing values for businesses. They have to exist in harmony. It must be a win-win,” said Tom Cole, vice chairman of Macy’s Inc., discussing the retailer’s sustainability action plan at the Initiatives in Art & Culture seminar Friday entitled, “Green: Sustainability, Significance and Style.”

This story first appeared in the December 9, 2008 issue of WWD.  Subscribe Today.

Cole described Macy’s “as the new kids on the block” when it comes to sustainability practices. With 180,000 employees, 155 million square feet of retail space and being one of the largest jewelry vendors in the world, the $26 billion retail chain has embarked on a sustainability strategy that not only preserves the environment, but makes good business sense as well.

“It’s early in the game, and there’s plenty of room for improvement,” said Cole. The retailer has established an action plan that’s “simple and direct,” with the number-one goal of stopping waste and reducing the use of scarce resources.

Among the key initiatives: Reduce the use of paper; turn off the lights when not in use and at night; use recycled paper for mailers; switch to biodegradable hangers, and pack boxes with biodegradable pure corn and potato starch bubble packs, rather than nonrecyclable foam peanuts.

Last year, Macy’s employees used five million pieces of copier paper. “If we reduce paper usage by 20 percent, we can save over $1 million a year,” said Cole. In one pilot, Macy’s started printing copies on both sides of the paper, and reduced paper usage by 43 percent. If that were applied across the company, Macy’s could save $2.3 million for shareholders, said Cole.

The retailer spends $285 million a year on electricity and uses 5 million lightbulbs. The firm switched all the lights to compact fluorescent lamps, and is encouraging employees to turn off lights in stock rooms and turn off all office machines at night. “At a company the size of Macy’s, it makes a difference,” said Cole. The company also installed solar roofs in 30 Macy’s stores, primarily in California. “They cost a lot of money, but they’ll save a lot of money over the years,” he said.

Going forward, Cole said Macy’s plans to reduce its total use of energy by another 10 to 15 percent by 2010, having already reduced energy consumption by about 9 percent over the past five years.

The retailer is also trying to print fewer materials, and is aggressively increasing the amount of recycled paper it uses. On the West Coast, Macy’s recycles 1,000 tons of cardboard a month.

Macy’s uses 300 million hangers, and has begun replacing nonrecyclable ones with recyclable ones, which use 20 percent less material, and cost 3 cents less. Macy’s also shifted to handled shopping bags, which use 30 percent recyclable material.

“The former bags were not recyclable. You couldn’t even burn them. We use 63 million of these shopping bags a year.”

Macy’s also started selling reusable cotton totes where part of the proceeds are donated to the National Park Foundation. So far, Macy’s has raised $2.7 million.

Michael J. Kowalski, chairman and chief executive officer at Tiffany & Co., who spoke at the conference, said his firm also is focused on initiatives centered around the environment and stainability. In 2002, the company discontinued selling jewelry made of coral, an endangered natural resource, and Kowalski even testified on Capitol Hill to create legislation concerning a ban. While it wasn’t passed, the executive was hopeful the incoming administration will help see through such a bill.

Tiffany is also taking aim at U.S. mining laws and has spoken out against opening a mine in Bristol Bay, Alaska — a home to one of the biggest gold and silver deposits in the U.S., and also a center for wild salmon proliferation.

In regard to mining and remaining in accordance with environmental procedures, Kowalski is seeking to create a set of ethical standards within the industry governed by a third party.

“We are taking steps on the road to progress, are we satisfied? Not yet,” said Kowalski. “Our industry needs a group or a common organization to help us all in the movement towards sustainability. Luxury and fashion brands have an opportunity and a responsibility to make great change.”

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