BARRON’S LIST APPAREL
TRENDS AND THE
SUSTAINABLE DEMAND
2022 OCTOBER ISSUE
By CAROLINE KOPAS
Many companies around the world have been heeding the urgent demand for sustainable practice. The global governmental efforts in the past year coupled with the grassroots movements championed by activists like Greta Thunberg have made sustainability and climate change an issue almost the entire world is aware of. Despite some businesses failing to react in response to this awareness for a variety of reasons, often misinformed, many businesses have been updating their supply chains and business models to become more sustainable, some hoping to draw in and keep green-minded consumers, some by the pressure of interest groups, some with honest goodwill towards the earth and its people, some to bow to environmental regulations, and oftentimes, a wild combination of all of the above. It can be agreed, however, that no matter the intention, a step towards sustainability is a good and impactful one.
In February, Barron’s released a 2022 list of 100 companies they ranked “most sustainable,” and noted that the attraction many companies have towards sustainability is only growing, citing the rise in share prices as well as the growing demand for corporate workers employed in the sustainability market. This attention to sustainable practice, Barron’s notes, has been seen throughout a diverse selection of sectors, but one common sustainable theme seen is that of water.
Companies are trying to limit over-abundant use of water and heighten the quality of water already being used, especially in areas where water is precious. Water is important to focus on in the discussion of sustainability because people can see first-hand how climate change is affecting the water, or lack thereof, around us; hurricanes, floods, droughts, wildfires, and the melting of glaciers, to name a few notable examples.
Several companies within the top 10 of the list are focusing particularly on water and water management, perhaps aiding in their favorable ranking. These companies notably include Intel No. 1, Ecolab No. 3 and Xylem No. 10. Water can be a great hot focus for companies looking to become greener.
It’s also prudent to mention that the list of sustainable companies, Barron’s found, “have nearly four women on their boards, on average, or about a 35% gender representation,” which although meager sounding, is nearly 7% more than the Russell 1,000 (A stock market index which represents the 1,000 top companies by market capitalization in the U.S.) average of 28.2%. Barron’s found that William Sonoma, No. 21 on their list, was a particular standout regarding gender representation, “with 67% women on its board.” It is also noted by Barron’s that a lot of these 100 companies also have above-average levels of ethnic diversity as well.
This link between sustainability and diversity is quite interesting, suggesting maybe the more diversity a board has, the more likely they are to switch up the traditional routine to something more progressive and green. Diversity was even counted towards the final rankings of these 100 companies.
In full, this is how Barron’s describes how exactly they ranked their list the way they did:
“To build Barron’s fifth annual ranking of the most sustainable companies, Calvert Research and Management started with the 1,000 largest publicly traded companies by market value, then ranked each by how it performed for five key constituencies: shareholders, employees, customers, community, and the planet. Specifically, Calvert, a unit of Eaton Vance, which is owned by Morgan Stanley, looked at more than 230 ESG performance indicators, such as workplace diversity, data security, and greenhouse-gas emissions.
“Based on these indicators, Calvert assigned a score of zero to 100 in each stakeholder category. Then it created a weighted average of the categories for each company, based on how financially material each category was for its industry peer group. To make our list, a company had to be rated above the bottom quarter in each of the material stakeholder categories. If it performed poorly in any key category that was financially material, it was disqualified.”
Without further ado, here are a few comments on the companies that we have selected from the list:
Best Buy No. 4— Tim Dunn, the head of environmental sustainability at Best Buy, says that “sustainability is at the core of what we do at Best Buy…“This is a critical time for climate action, and we are committed to making great strides in reducing our carbon footprint and helping our customers do the same. (Corporate.bestbuy.com). The company has set a goal to “reduce carbon emissions in [their] operations by 75% by 2030…and become carbon neutral by 2040.” Best Buy also notably has above-average gender diversity and even has a woman, Corrie Barry, as its CEO.
Best Buy is also a signer of the Climate Pledge, and is committed to helping their customers recycle their products and preserve energy. They’ve sponsored beehives to aid in the bee conservation efforts and have greatly invested in solar power, which is a renewable energy source that is undoubtedly better for the environment than nonrenewable sources. Although Best Buy has dropped to No. 4, —it stood at an impressive No. 1 in last year’s report— it stands as a very sustainable company for consumers to take note of.
Next on the table for discussion is PVH (No.5) . The parent company for Calvin Klein & Tommy Hilfiger, among others, stands at a reputable No. 5, right behind the aforementioned Best Buy. Their website declares that their “ambition is for [their] products and business operations to generate zero waste, zero carbon emissions and zero hazardous chemicals, and for [their] products to be circular.”
A few of their sustainability-focused goals are cited as: “PVH offices, warehouses and stores will be powered by 100% renewable electricity by 2030 and the company will drive a 30% reduction in its supply chain emissions by 2030,” “All PVH offices, distribution centers and stores will achieve zero waste and eliminate single-use plastics by 2030,” “Water leaving wet processors will have zero hazardous chemicals and be filtered for harmful microfibers by 2025,” “Three of the company’s most commonly purchased products will be completely circular including the full traceability of key raw materials by 2025,” “100% of [their] products and packaging to be ethically and sustainably sourced, and for 100% of our suppliers to respect human rights and be good employers,” and that “100% of PVH suppliers will meet or exceed all of its social and environmental standards by 2030.”
PVH is clear and active in their sustainability endeavors and will without any doubt be a leader in sustainability and transparency for years to come. As a company which primarily deals with clothing, PVH’s work is particularly significant and welcome because many clothing companies’ commitment to fast fashion has been especially poor for the environment and in aid in climate change. PVH’s efforts are a step in the right direction for the entire industry.
At No. 21 comes William Sonoma. Mentioned previously for their stellar gender representation, this company is very proud of what they refer to as their “corporate responsibility” on their website. They not only clearly list their “planet” goals (dealing with climate and energy, responsible materials, and waste and circularity) but also their “people” goals, (which refers to ethical production, worker wellbeing, investing in associates, and diversity, equity and inclusion) and their “purpose” goals (listed as corporate citizenship, ethics and oversight, and giving and volunteering).
Some of their main commitments are carbon neutrality by 2025,—a sooner and more ambitious goal than most of our contenders—6 million trees planting by 2023, 10 million dollars in Fair Trade Premiums and 50 million dollars in Nest Certified Products by 2025, 75% of products from suppliers with worker wellbeing programs by 2030, and 75% of products labeled with one or more social and/or environmental initiatives by 2030, William Sonoma even encouraged the visitors to its website to track their progress on these goals, a very transparent and admirable move. They’ve continuously ranked in the sustainability accolades, from not only Barron’s but other notable rankers like Fortune, Forbes, and Bloomberg.
To top it all off, sustainability.williams-sonomainc.com is a very user-friendly web page that exercises great clarity and intent in explaining their green efforts. Although not in the top 10, William Sonoma is a worthy contender and a sustainable force to be reckoned with.
Nike holds the No. 18 spot on Barron’s list. As of 2021, the popular sports brand has renewable energy in 78% of owned or operated facilities, 100% of footwear manufacturing waste avoiding landfill, and a 6.7 P.P. reduction in freshwater used in textile dyeing & finishing, an impressive set of accomplishments that proves they are not all talk. Their goals include reducing their carbon emissions to an equivalent of taking 10,000 cars off the road for a year by using environment-friendly materials, extending sustainability practices throughout the entirety of their supply chain, and restoring 13 billion liters of water from their cotton supply.
To me, as a relative surprise, Walmart comes in at No. 25. The company seems to be focused on reducing the carbon footprint of its supply chain, shooting for “0 emissions across global operations by 2040” (Corporate.Walmart.com), and to do so without the use of carbon offsets. Their website, similar to William Sonoma, is very user-friendly and makes it clear to the user that Walmart cares about climate change and is actively working against it.
TJX Companies, Inc. came in at No. 30. Their website states that they are “committed to pursuing initiatives that are environmentally responsible and smart for [their] business,” and that they “work to continually make progress on [their] environmental sustainability efforts.” They have three specific focus areas of their sustainability movement, those being climate and energy, waste management, and responsible sourcing. They are aiming to achieve 0 emissions by 2040, use 100% renewable energies in their operations and use more sustainable packaging (recyclable, reusable, or sustainably sourced materials) by 2030, and divert most of their waste from landfills by 2027.
Alongside water management, waste management is also emerging as a common theme.
Gap, Inc. No. 44 is similar to Best Buy in the fact they are sustainable woman-led companies. There is a statement on their website by Sonia Syngal, CEO, saying that “[Gap is] committed to growing [their] business in a way that protects the planet and supports healthy communities for generations to come,” and that, “there has never been a more important moment for businesses to step up.” Their sustainability goals differ from a lot of the other companies on Barron’s list because despite some goals being climate-related, most goals have to do with the empowerment of and the creation of opportunity for marginalized groups. This, for the unknowing reader, relates to sustainability because the more egalitarian the world, the easier it is to realize sustainable goals. And on the contrary, the more the physical world is protected, the more human rights can grow. This is a very admirable approach from the Gap. Through working towards the same goal with different angles, sustainability can be realized from the ground up and at a quicker pace.
At No. 48 Barron’s has V.F. Corp, a company that owns a myriad of brands including Supreme, North Face, Vans, and Timberland, says they are “taking bold action on climate change.” Narrowing their goals into the following categories—climate, energy, materials, waste, packaging, and water—the language they use to declare their sustainability goals on their website is assertive, confident, and proactive.
At No. 59 we have Ralph Lauren, whose approach—named Timeless by Design—focuses on the longevity of their products. “Meant to be worn and loved by generations,” the company’s strategy has three pillars: (1) Create With Intent, which utilizes circular design and sustainable materials, (2), Protect the Environment, which primarily deals with renewable energies and waste and water management, and (3), Champion Better Lives, a pillar that supports and empowers the Ralph Lauren community.
Similar to William Sonoma, you can even track the company’s progress on their goal at corporate.ralphlauren.com/timeless-by-designer, seeing if they are on track to achieve them by the year they wish to, or if they have achieved them already.
At No. 62 is America’s favorite bullseye brand, Target. Taking a view their website describes as “holistic,” Target views their “sustainability efforts as part of an interconnected system, where [their] actions to help address climate, restore natural systems, and drive opportunity and equity for [their] teams, communities and partners impact and reinforce one another to create change that is good for all.” Target is on track for their raw materials to be “recycled, regenerative or sustainably sourced,” to severely reduce their plastic consumption, hit net zero carbon emissions by 2040, achieve zero waste-to-landfill, maximize renewable energy use, and much more.
Target also has joined the Business Ambition for 1.5°C, a pledge that ensures companies’ emissions will contribute to no more than 1.5 degrees Celsius of climate warming, and has a Racial Equity Action and Change (REACH) committee.
No. 74, Levi Strauss, breaks down their sustainability categories into climate, consumption, and community. The website makes it clear that the classic American company’s call to action was climate change, immediately recognizing the disastrous effect that the rising temperature phenomenon has had on global communities. They’re clear and powerful acknowledgement of climate change is a sign that the company believes in science and does not care that some view whether climate change is ‘believed’ or not as a political issue. They plainly state that they are “committed to doing [their] part to help mitigate climate change and build resilience in the face of increasingly volatile and unpredictable weather conditions,” and the vast majority of their sustainability goals in the climate category are for the shockingly soon date of 2025.
Their consumption category immediately relates itself to the United Nations Sustainable Development goals, saying that their consumption efforts are working towards goals 6 (Clean Water and Sanitation), 12 (Responsible Consumption and Production), and 13 (Climate Action). Levi Strauss has vowed to “address overconsumption and drive toward a more sustainable, less resource-intensive apparel industry,” look “past the traditional take-make-waste model toward a circular economy, where nothing is wasted in the manufacture, use and reuse of products,” and engage “consumers, peers and industry groups in this shared journey to a sustainable future.” A big action of this category is to make the company’s denim more sustainably sourced, and even partly recycled. And in a strong statement, Levi says that “All of [their sustainable action] comes from [their] understanding that the fashion industry not only can be more sustainable — it has to be.”
Regarding community, the company plainly breaks down that no service and company stands alone, and that they are part of a much wider chain, ecosystem, and partnership. This category focuses on employee programs such as supply chain standards and diversity and social issue advocacy, which includes charity.
Levi Strauss has demonstrated they understand not only the urgent need for green action, but also how much impact a company like themselves can have on not only the global climate, but the global community.
Nordstrom—No. 80—says simply that they prioritize the environment. Stating that “bold action” is needed to alleviate their impact on the environment, the business has a wide array of sustainable goals, such as donating $250,000 to climate change initiatives and reducing single-use plastic use by 50%. Nordstrom has also partnered with Clear Air Task Force, Fibershed, and Fabscrap to help reduce their environmental impact and make going green an easier task.
To Oshkosh, No. 85, “sustainability goes well beyond environmental responsibility.” Focusing on “innovations…reducing the environmental footprint of [their] products while improving their safety, quality, efficiency and longevity,” the company has received numerous accolades over the years for their sustainable action. Oshkosh has been a forerunner in developing sustainable products and using sustainable and inventive technology in their supply chain. The company has diverted14 million pounds of waste from landfills by using reusable packaging and even has a program entitled “Bags to Benches,” which “converts plastic shrink wrap and polyethylene plastic foam from [their] manufacturing operations into benches, which are now utilized throughout [their] facilities.” Oshkosh’s philanthropy is also distinguished, which cements a trend of environmental efforts coinciding with humanitarian efforts.
Last but not least for us, we have Columbia Sportswear at No. 97. According to the company whose policy is “positive change,” the business supporting the outdoors is by no means a surprise to those familiar with the brand. The company has a partnership with the national parks of the United Kingdom, donates to outdoors-conservation funds, and transparently recognizes and works against their weaknesses in sustainability.
Columbia is also a big advocate for “responsible sourcing” and specifically advocates for animal welfare, especially concerning the manufacturing of down.
The company is also partnered with Planet Water Foundation, (another instance of the water theme) which helps provide safe and clean water to communities that need it around the world. In fact, “Planet Water and Columbia Sportswear have now brought clean, safe water access up to 15,000 people [per day] while providing water-health and hygiene education programming to the participating communities.”
In sum, giant steps are being made in the corporate community towards a greener and more sustainable future. As more of these steps are taken, the more sure the world can be of an un-apocalyptic future. After all, large corporations are the biggest offenders in the war against climate change. Seeing the efforts of these companies can impart a sense of hope and pride. If they know what’s best, other businesses should follow in the footsteps of these 100 companies and work cooperatively for the good of the planet and the people who call it home.
However, there is always room to improve. There are millions of other businesses in this world that are not doing their fair share. A call to action must occur, because only through a combined response will the biggest results be yielded.