By Jacen Greene
After a five-week trip to climb mountains in Antarctica—including several first ascents—answering questions for an audience of more than 2000 must not be very intimidating for REI President and CEO Sally Jewell. For the opening keynote of the 2011 Net Impact Conference, she was interviewed on-stage by journalist and writer Marc Gunther about competing with online retailers, reducing energy use while increasing profits, and how to track the impact of a product as it moves through a global supply chain.
Jewell started their conversation with a comment about the “competitive disadvantage” that bricks-and-mortar retailers suffer in states with a sales tax as they compete against online retailers. Although in-person customer service and product exclusives—such as the Vibram Five Fingers shoes originally sold mostly through REI—help REI compete against online retailers, Jewell argued that an online sales tax was necessary to protect firms that locate and hire in local communities.
Moving from social to environmental responsibility, Gunther asked, “How do you grow the business and keep your footprint, in absolute terms, flat?” (In 2010, REI’s energy usage declined from the year before, although carbon emissions increased slightly, according to REI’s 2010 Stewardship Report.) Jewell explained how REI originally established carbon footprint and energy usage baselines with help from Bainbridge Graduate Institute students, then built a strategy for reduction. By using Green-e certified energy providers, making energy efficiency improvements to stores, and encouraging employee use of public transportation, REI was able to decrease energy use 4% between 2008 and 2010 even while adding new stores and increasing topline revenue.
As both Gunther and audience members pointed out, products and supply chains are increasingly understood to be some of the biggest threats to—and greatest opportunities for—environmental sustainability. To improve the sustainability of sourcing and supply chain operations, REI is participating in the Outdoor Industry Association’s Eco index. According to Jewell, more than 50% of the world’s apparel manufacturers are currently piloting the index, and she hopes that the program will give both retailers and consumers a greater understanding of product impacts throughout the supply chain.
Gathering and sharing accurate information emerged as a common theme. From carbon footprint analysis to product lifecycle assessments and stakeholder engagement, using both qualitative and quantitive data to drive informed decision making was a clear priority for Jewell. “There’s no mission without margin: if you can’t run a healthy business, you’re not sustainable,” she said, and it was clear that to her, a healthy business is one that has a full understanding of its impacts and a plan to do better.
– Jacen Greene is a social enterprise consultant based in Portland, Oregon.