Tapestry Inc. has chosen today, Earth Day, to unveil its corporate responsibility goals for 2025. It is also launching Our Social Fabric, a microsite focused on its sustainability and social governance program.
The goals are published in the group’s annual Corporate Responsibility Report, a concisely drawn document that reviews Tapestry’s performance for fiscal 2018 while articulating an ambitious forward plan for the group and its portfolio of brands, which includes Coach, Kate Spade and Stuart Weitzman. “We’ve made tremendous progress over the past five years and now have simply upped the ante,” said chief executive officer Victor Luis.
Tapestry has articulated three broad-stroke values — Optimism, Innovation and Inclusivity — which Luis maintains inform all of the group’s endeavors, whether operational or philosophical. The report and 2025 goals thus emanate from that triad. In a sense, one can apply the third value, Inclusivity, not only to its most obvious incarnation of developing a diverse workforce that operates in an open-minded, welcoming setting, but to an holistic approach to corporate citizenship. Increasingly, major groups and brands are viewing corporate responsibility as inclusive of concern for the environment and concern for people — employees, consumers and those employed at various points along the supply chain — as inextricably linked. To that end, Tapestry divides its corporate responsibility focus into three pillars — “Our People,” “Our Planet,” “Our Communities” — each with clearly articulated, quantifiable goals.
Leading with the pillar “Our Planet” in honor of Earth Day, Tapestry has committed to reducing carbon emissions by 20 percent from a 2017 baseline; achieving 95 percent traceability and mapping of raw materials through the supply chain; ensuring that 75 percent of its packaging is produced from recycled materials; reducing by 25 percent its North America corporate and distribution center waste, and by 10 percent, its water use across the company and its supply chain.
“Our People” features a focus on heightening diversity among management tiers to better mirror the group’s already diverse North American workforce. The group will also emphasize career development, and stated plans to fill 60 percent of leadership roles, from vice president level up, internally. “Rather than always thinking that the best answer is outside,” Tapestry will “give the benefit of the doubt to internal employees, to allow them to have a shot at greater scope and greater growth,” Luis said, a direction he maintains will benefit the company as much as its employees. “It connects to people with a broader vision,” he noted, while creating “a form of stability and growth for the organization [that] generally insures better execution.”
Addressing “Our Communities,” Tapestry will build on its dedication to volunteerism, with the goal of sponsoring 100,000 employee volunteer hours of community service globally. Its target for philanthropic donations to nonprofit organizations is $75 million in funds and product. The Coach Foundation focuses on youth development, often by working with inner-city public schools, and the Kate Spade Foundation, on women’s empowerment, partnering with organizations from granular (Dress for Success) to globally resonant, (International Rescue Committee).
In a conversation with WWD last week, Luis spoke about various facets of corporate responsibility, from those that impact the day-to-day lives of individuals working at Tapestry’s visually and ecologically impressive headquarters (a notable here: health-care benefits for part-time employees) to the essential subsidiary goals that funnel into the primary goal of saving the planet — waste reduction, cutting CO2 emissions, water conservation. To that end, did you know there’s such a thing as a non-flush urinal? You do now. So does Luis. Learning as much as possible about, and acting on, any detail that might contribute to a healthier planet is, Luis said, “just good business.”
WWD: So, People, Planet, Communities. All of equal weight in terms of Tapestry’s corporate responsibility?
Victor Luis: They’re all equally important as part of this program. It’s a very holistic approach. When we think of people, it’s everyone we’re directly connected with, all of our employees as well as the employees of all the vendors we depend on who participate in the economic activity of Tapestry.
Two, when we think of our planet, the most important part is insuring that we leave no negative impact on it, or as much as possible strive to do so, and to be as carbon-neutral as possible; to take extra care with water and [to minimize] any other actions that may have a negative impact on our environment and sustainability for future generations.
Lastly, our communities. That involves the families of our own people, of course, but just as importantly, all of our consumers across the world. We have a very large global footprint. We are across the world, and each of the communities that we participate in, their viability has a very direct impact on our own business.
When we go into a community and invest, whether in opening a store or an office to run retail in that area, or just as importantly, the factories or facilities of our partners, we want to insure that we play a positive role there. That has a lot to do not only with how we operate as a company, but with encouraging our team members to play an active role, [often] through volunteerism.
WWD: This report starts with the 2018 goals that you accomplished and then looks ahead to 2025. How did you approach this assessment?
V.L.: We [review] our goals every five years. We try to set very lofty goals for ourselves along these three very specific groupings, and then continue to push the envelope. We’ve made tremendous progress over the past five years and now have simply upped the ante, in all of the specific measures.
If you look at inclusion and diversity, if you look at learning and development and how we think about internal targets, we have increased those. If you look at the planet, it’s water usage, decreasing the amount of water that we use, CO2 and setting up very clear reductions to go forward. And then on community, it’s the same thing, setting very clear, measurable targets — how much are we volunteering in the communities that we’re in, how much are we participating through our foundations in supporting the communities we’re in. These are all very specific targets that we’ve set for ourselves in the report.
WWD: Of what from the last round of goals and accomplishments are you most proud?
V.L.: I think we’ve done an amazing job with very specific actions on all three. When we look at, as an example, environment-related activities, one of the most important steps that we took was participation in the designing and development of this building, which is an LEED [Leadership in Excellence and Efficient Design] Platinum building.
WWD: I’m not familiar.
V.L.: There’s several rankings, and when you get to LEED platinum, it comes down to water and recycling, to the type of lights that we have. One very specific example, if there’s no activity in the room, sensors turn the lights off. Quite often, I am the first one on this floor at 6 a.m., before I go out on a run. It’s dark. As soon as I start walking down the hall, the lights come on.
The type of glass that we use, the type of heating that we have, use of green energy, all of that is connected with the certification. This building is a very important part of our carbon footprint; it plays an important role in some of the actions that we took. Of course, there’s initial investment, but all of that comes back to us through savings as well.
WWD: You used the word “holistic.” So it’s not just about the supply chain. It’s about everything, including this building.
V.L.: Down to what are we doing in our specific stores. We have more than 1,500 across the world. We made significant moves in the past five-year plan to change all the lightbulbs to more efficient LED lightbulbs. We’ve moved very efficiently so that a majority of our packaging is made from recycled materials.
WWD: I read that 23 stores use 100 percent renewable energy.
V.L.: Yes, they use 100 percent renewable energy. So that’s a big push for us.
WWD: That sounds like a start, but there’s a big gap from 23 stores to 1,500. Is there a plan for broader conversion? Are there some stores that can’t be converted?
V.L.: It’s about accessibility. So depending on the locations that we’re in, it’s either possible or not. It is definitely a part of our continued rollout plan. That’s on the environment side, the planet side.
WWD: Tell me about the Communities aspect.
V.L.: When you come to what we do with volunteering, our teams volunteer thousands of hours, and we’ve met those [previous] targets. We’ve now set up new targets for 2025, raising the bar on how much volunteering we do in the communities that we’re in, what the [Coach and Kate Spade] foundations are going to support, and what we do in terms of donations. In the next five years, we’ll be making more than $75 million in financial and product donations. One key aspect is that when we have product that is not salable, we donate it. It’s very significant.
WWD: To what types of organizations do you donate?
V.L.: Dress for Success, young women who are graduating either high school or college and looking for their first job and are looking for a pair of shoes or a dress a bag. We also donate through our teams, often to where they volunteer. There’s an organization in Harlem that helps young girls with preparing for their proms.
WWD: That’s wonderful.
V.L.: And then we have broader organizations that we donate to when we have large volumes in fashion, such as Fashion Cares. There’s two or three others. [One the International Rescue Committee, IRC.]
WWD: What are the key aspects of the 2015 goals that you want to call out?
V.L.: I think we have wonderful targets in all three [areas]. The first one is Our Planet, a 20 percent CO2 reduction by the year 2025, from our 2017 baseline. We want to be able to trace our raw materials at 95 percent, to know the origin of every single raw material, so traceability and mapping of raw materials. We want to insure that 75 percent of our packaging is recycled content. We want to reduce our North America corporate and distribution center waste by 25 percent. That means using less stuff in the actual packaging of materials. Achieving a 10 percent reduction in water use across our network.
The last [goal] is to insure that 90 percent of our leather is sourced from silver- and gold-rated Leather Working Group. The Leather Working Group is a standard used by tanneries across the world, and silver and gold are the highest ratings. The ratings consider where they’re sourcing their leather, labor conditions and water usage.
WWD: The report notes that “we do not always have direct control over every stage of our product life cycle.”
V.L.: We use a lot of third-party vendors, so, of course, we depend on them. While we can’t control every single step, we do audit the process very regularly, insuring as much as possible that our supply chain is meeting our standards. If we feel a risk, we will move to different vendors where we achieve the level of transparency that we want. That’s vital.
WWD: Are those gaps in supply chain control the most challenging aspect of this ongoing process?
V.L.: Sure. The perfect example is [the goal] to achieve a 90 percent penetration of our leather coming from silver and gold Leather Working Group tanneries. It probably means that we’re going to have to drop someone we’ve worked with in order to move to others who have achieved the standards that we want. That’s very clear for us. And it’s a nonnegotiable. We’re putting targets [out there] for ourselves and for the world to see, and we’re going to hold ourselves accountable to it. Our board holds us accountable to it as well.
WWD: I imagine that there is a great deal of collateral inspiration here for the facilities you work with to up their game.
V.L.: The wonderful thing about this, I would say for the vast, vast majority of cases, everyone has great intentions and wants to be a part of the future. I think that all of our vendors understand that this is the future for us. I think they also understand that it’s a better future for them as well.
The reality is that participating in these programs is not just about doing good. We believe it’s also good business. We believe that it’s a wonderful opportunity for us to reduce costs and in doing so, to increase our revenues by being more relevant to the trends and being more relevant to the purpose and, at the end of the day, to what’s important to our consumers.
WWD: Water conservation. The goal is 10 percent reduction. The report states that it’s a complex issue that you’re approaching in “a cross-disciplinary way.” What does that mean?
V.L.: We think about [water usage] within the supply chain, about materials and washing…[But] water is used across the organization. So the facilities person who has the main responsibility for the offices has to think about that. The store operations team has to think about that.
It could be something quite simple as discussions we’ve been having are what type of toilets and the amount of flush and such.
WWD: Toilets throughout these offices and 1,500 stores, that’s a lot of flushing water.
V.L.: That’s a lot of water. So you have toilets that flush one-and-a-half gallons; now, in fact, there are some non-flush urinals and the like. These discussions get very, very specific, both on vertical use of water, and then the cross-disciplinary impact of what we do with our suppliers. So are there other ways to treat materials, are there other ways to work with the supply chain that will be water-free?
WWD: Let’s talk “People” goals.
V.L.: There are goals around diversity and inclusion, the diversity snapshot and learning and development. Included in that is good health and well-being and gender equality. We have very specific goals around that — insuring that our board is diverse, insuring that our management team is diverse, promoting people from within rather than from without, insuring that our employee workforce is also diverse. That comes down to race, gender, nationality, etc.
WWD: You say in the report that “anyone, from anywhere, can have the best idea.” A great theory, but how do you make it come alive in practice?
V.L.: I try to sometimes connect it with my own story. I did not become a ceo because of some family connection. I’m here based on merit and based on a very independent board selecting me for the privilege of getting to lead the organization. My successor will be the same.
I came to this country at the age of seven as an immigrant. My mother had no education; my father had four years of education. I get to live each and every single day my own dream of, quite frankly, having created a vision for myself, a dream for myself, and working incredibly hard to make it happen. That story I think is true of anyone else in this organization.
We try as much as possible to have a culture based on a meritocracy and the work that people do, to be as apolitical as possible and to provide those who work hard and drive results with the opportunity for growth. Growth is professional growth; growth has some financial implications. But growth can be life-changing for families, too, and that’s very important to me personally and to our board. I am working incredibly hard to make sure that people across the organization understand it.
WWD: Talk a little more about diversity.
V.L.: The most important thing is, as much as possible, to reflect the communities in which we live. In New York and in the U.S., we live in communities that are much more diverse than some others. For example, we have a large organization in Japan. It is very hard to have much diversity in that market because of the availability of the labor force. But our teams do reflect what I would say is the diversity of Tokyo very strongly.
When it comes to inclusion and diversity, for me, it comes down to, “Is it part of your DNA?” I think it may be trendy for some organizations, but for us, it’s something we live and believe. Part of what has differentiated Tapestry and its brands is that we have by nature been more inclusive. Having individuals with different backgrounds and experiences, from different races and cultures, creates a diversity of perspectives that enriches our organization, and is more reflective of the Tapestry we want to be.
WWD: The report states that Tapestry routinely scores 100 on the Human Rights Corporate Equality Index, was noted as a “Best Place to Work for LGBTQ Equality,” and made Forbes’ “Best Employers for Diversity” list. How, specifically, do you support diversity?
V.L.: One [way] is not just putting the numbers out there. We’re going to evaluate you based on merit and then, by providing a safe environment where people can be free to express themselves.
And then two, it’s reflected in the social insurance policies that we put forth. So we provide same-sex partners with the same health insurance that we would provide to all of our team members, from the family coverage perspective. How we treat maternity and paternity leave. All of these policies very clearly reflect our desire to be as inclusive as possible.
WWD: I was struck that you offer health-care benefits to part-time employees. What’s the minimum weekly hours requirement?
V.L.: It’s about 20. [In the US, store employees who average 22.5 hours weekly at work are eligible for health benefits after 90 days of regular employment.]
WWD: That’s great.
V.L.: That very much is a part of our culture. Another very important example is that we provide equity to a very broad part of our team. We give stock to store managers and at the corporate level, we give stock to I would say a much lower level of the organization down to directors than many of our competitors. I think the sense of ownership and the driving of a connection between our employees and the shareholders is a very important objective that that program hopes to instill. I think as well that driving the social programs such as insurance as deep as possible into the organization is another reflection of us prioritizing [our employees] and insuring that they can have a balanced life.
Again, I just think it’s good business. There are people who are attracted to us as part-time employees because of those benefits. It helps us as a company be as effective as possible.
WWD: Also the goal of making 60 percent of promotions from within. That sounds motivating and should make people feel very good about coming to work.
V.L.: We’re going to give the benefit of the doubt to people who are in the company rather than always thinking that the best answer is outside. I think any organization constantly needs to think about the makeup of its team by looking both internally and externally. But to give the benefit of the doubt to internal employees, to allow them to have a shot at greater scope and greater growth, I think, as you suggested, is inspiring. It connects to people with a broader vision. And again, I think it’s good business. That form of stability and growth for the organization generally insures better execution.
WWD: A little bit about Communities. I know that Coach and Kate Spade each have foundations. Are their programs fully at the brands’ discretion?
V.L.: Each foundation is an independent body. They each have independent boards and specific objectives that are reviewed by those independent boards.
The Coach Foundation is very much tied to youth with a lot of the work focused on encouraging young people to dream and establish greater goals for themselves. In the past [we’ve worked with] Step Up and other charities. We have supported young people’s development, especially through work with inner-city and public school systems across the country.
In the case of Kate Spade, it’s been very much about female empowerment. We’ve supported organizations such as Girls Who Code; we’ve supported a production facility in Rwanda where we’re making Kate Spade handbags; again, we’ve supported organizations in the city such as Dress for Success. We’ve supported a wide range of organizations aimed at women’s economic empowerment and self-development in a very consistent way.
Each [brand] within those objectives then will look for different partners with whom we can, by providing the funds, execute against those very specific goals.
WWD: You are launching a microsite dedicated to corporate citizenship and sustainability. Why?
V.L.: Establishing a site dedicated to sustainability and social responsibility issues provides a platform where we can communicate to our employees, our shareholders, our customers and the communities in which we operate on the important work that we’re doing, as well as where we need to improve.
WWD: Is there a psychological significance as well to distilling these goals into a published report?
V.L.: It’s basically resetting the targets. We communicate it to our internal teams who have to go and execute it, of course. And then we share it with the broader world as a way of being transparent and sharing what we’re working on, but also a way of holding ourselves accountable to it, right? The world knows.