Posts Tagged ‘transparency’

Measuring What Matters and the Higg Index

Last week, the Wall Street Journal published an article about the newly-launched Higg Index, which will allow brands, factories and chemical manufacturers to score the relative sustainability of their products. Eventually, the intent is to also make that information available to consumers to better inform their purchasing decisions — much in the same way you can compare nutrition labels to make smart choices at the grocery store.

The Higg Index was developed by the Sustainable Apparel Coalition (SAC) in partnership with the Outdoor Industry Association Sustainability Working Group (OIA SWG).  Timberland is proud to have been a founder, and to continue to play a leadership role, in both of these groups. In fact, the Higg Index was inspired in part by our Green Index® rating system, which “scores” Timberland products based on their environmental impacts.

The launch of the Higg Index is important news, and a sign that we’re moving in the right direction of increased transparency and sustainability in the footwear and apparel industry.  We look forward to working with the other members of the SAC and OIA SWG as the tool develops.

Progress marches on!

Timberland Honored for Reinventing the CSR Report

On June 25, 2012, Timberland was proud to be one of the companies honored at Ethical Corporation’s Responsible Business Awards, receiving the award for Best Sustainability Report for the way in which we’ve been able to “reinvent the CSR report” with our online Responsibility portal.  Ethical Corporation’s annual awards honor leading companies and individuals for impressive contributions to the responsible business agenda.

When we launched our Responsibility portal in August 2011, we aimed to provide a dynamic, integrated experience to inform, inspire and engage consumers and stakeholders around our key impact areas (also known as Timberland’s Four CSR Pillars):

Climate: Protect the outdoors

Product: Innovate cradle-to-cradle

Factories: Improve workers’ lives

Service: Engage communities

The judges praised the high level of interactivity evident in Timberland’s entry: “It is designed to help people understand the issues at stake and contribute their own comments. Timberland provides comprehensive and honest information on its supplier factories. Its quarterly updates add a real time aspect to the report.”

What’s most rewarding about receiving this award is knowing that we met criteria emphasizing the importance of balanced transparency: Ethical Corporation evaluated companies in this category for how well they are “communicating progress whilst being honest about the challenges they face and clear about the business wins their report has achieved for the company.” These are opportunities and responsibilities we take seriously and work hard to achieve.

We are humbled by Ethical Corporation’s award, and excited that our new approach for transparently measuring and communicating results in an open and accessible way is resonating.  In addition to digging deep into data online, stakeholders who visit http://responsibility.timberland.com can easily access stories about progress we’re making against groundbreaking initiatives. For example, check out what’s behind our most eco-conscious footwear, learn about our ability to incorporate social responsibility into sourcing strategies, and find out how to we’re scaling engagement in local communities.  It’s all part of our effort to leverage social and environmental responsibility as an asset within our brand’s comprehensive communications strategy.

Let us know what you think! We invite you to follow our CSR efforts in real-time at http://responsibility.timberland.com, where you can also join ongoing online discussion through a variety of channels including Timberland’s Bootmakers Blog, CSR Stakeholder Calls, the Voices of Challenge dialogue, Twitter and the brand’s YouTube channel.

Will Sustainability Reach the Mainstream?

A key tenet of being a responsible company is to manage risk and create value for the long-term sustainability of the corporation. At Timberland, we believe the concepts of commerce (sustainable shareholder returns) and justice (operating sustainably, including social and environmental management) go hand in hand.  Our challenge is to not only demonstrate the business case for sustainability within our own company, but to ensure that others do too.

Earlier this year, former Timberland CEO Jeff Swartz and PPR Chief Sustainability Officer Jochen Zeitz engaged in spirited dialogue about PPR’s Puma brand initiating a new sustainability accounting measure: their Environmental Profit & Loss statement.  I am impressed with Puma’s effort to calculate and assign financial costs to environmental impacts – something that will help move the needle for mainstream analysts to incorporate “that type of sustainability” into financial valuations of companies.  We’ve seen few other companies proactively quantify sustainability impacts (Baxter Healthcare and SAP provide interesting examples; see also Timberland’s CSR Stakeholder Call from May 2011 – Reducing Environmental Impact & Improving Bottom Line Benefits), but clearly not a groundswell.

Could the needle be starting to move a little more? Last week Puma announced it would be taking its Environmental P&L to greater scale – the brand’s sustainability accounting work will be extended to other luxury brands owned by PPR, including Gucci, Stella McCartney, and Yves Saint Laurent.  Hopefully, this is an indicator of how one brands’ sustainability efforts can influence more than their individual operations and sustainability plans. (And before you ponder too much about the applicability of this point coming from an employee of a recently acquired brand, yes – we at Timberland are thinking about opportunities to scale our experience within a greater family of brands too. See more on that below).

Engaging the financial community

It’s not just corporations that need to push for greater inclusion of social and environmental issues in financial accounting. I believe the time has come for the financial community to explore the value of “non-financial performance” in meaningful ways.  There are many players working on such efforts. For example, Bloomberg now puts out ESG (environmental, social, and governance) data on its terminals, accessed by 300,000 customers – including Wall Street and other analysts. Last year, the SEC issued interpretive guidance for climate risk to be disclosed in financial filings. And a new reporting framework is being developed by the International Integrated Reporting Committee to bridge the gap between purely financial vs. purely sustainability reporting efforts. All of these efforts aim to put traditional ESG information in front of mainstream analysts. The argument is that if we can translate such issues into financial models, the “dual meaning” of sustainability may actually help drive investment decisions.  I agree with this sentiment – but there’s one player missing: the investors themselves. There’s too much talk of “us” (CSR practitioners) translating/ appropriating CSR data for “them.”  To truly drive the relevance of both financial and ESG information, we should be inviting analysts and investors to weigh in on sustainability accounting practices, standards development, and how to review issues like supply chain vulnerability (in the form of climate adaptation or labor unrest, e.g.) as components of a corporation’s short term and long term business viability.

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Timberland Perspectives: The Truth About Transparency

A Responsibility Revolution Extra Guest Post from Jeffrey Hollender & Bill Breen

During the two years they spent writing The Responsibility Revolution, authors Jeffrey Hollender and Bill Breen conducted an intensive series of interviews at key companies on the leading edge of the corporate responsibility movement. In this bonus excerpt from Bill’s conversations with Timberland CEO Jeffrey Swartz and Timberland CSR Strategy Manager Beth Holzman, they share some of the additional insights and perspectives these encounters provided:

No company can claim to be authentically responsible if it doesn’t dare to get a little naked. Radical transparency—revealing your good, bad, and ugly impacts on society and the environment—is the first step toward turning critics into collaborators and collectively inventing aggressive ways to operate sustainably. As we show in The Responsibility Revolution, few publicly traded enterprises have done as much as Timberland to innovate around transparency.

Along with Nike and Gap, Timberland was among the first big brands to reveal the locations of its suppliers’ factories and open them up to outside scrutiny. More recently, Timberland developed its Green Index tag, modeled on a nutrition label, which rates many of the company’s hiking boots and shoes on their environmental impact. There’s also the quarterly phone dialogs with CEO Jeffrey Swartz, in which callers query him about hot-button issues like eco-labeling and sustainable sourcing, and many more strategies for building a glass house.

When Bill Breen and I reviewed his interviews with Swartz, Beth Holzman, and other corporate-responsibility execs, we found that they’d dug into five essential truths about transparency. Each comes through hard-won experience.

Transparency is often irritating, difficult, and scary.

Swartz: Our efforts to be more transparent around our good and bad impacts on society and the environment started with the disingenuous discourse between activists and brands about where our factories are located. It was kind of a silly argument. It’s not hard to figure out where 300 million shoes are manufactured in China. Ten minutes with a phone book would give you the addresses. I didn’t want to have that conversation. And the best way to not have the conversation was to simply reveal the damn locations.

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