This Swedish company is showing that ethical supply chains and commercial viability can go hand in hand even in the fast-paced fashion world. Nudie Jeans, the Gothenburg-based brand, is basically the Patagonia of jeans.
Though the company now sells t-shirts, jackets, and other apparel, they started with jeans. That is organic cotton types of denim, which come in dry, salvaged, and washed varieties in unisex designs. However, the brand has evolved in the last 10 years from just manufacturing jeans to one that rallies for fair labor practices, organic farming, and toxic-free dyes.
While in the last three years a new crop of fashion brands have been talking about restructuring supply chains in textiles, Nudie Jeans began venturing down this path in 2006 — a decade ago, when the company shifted to using only organic materials. At that point, Nudie was only 20 percent organic. The founder Maria Erixon invited their suppliers to a meeting in Gothenburg where they broke the news: they were going in a different direction. Even though they lost some of their suppliers who didn’t want to adopt the organic cotton practices, Nudie continued. Four years ago, the company announced that they had become 100 percent organic.
When asked if fashion brands can be mindful and profitable, CEO Palle Stenberg says confidently, “Yes, of course, everybody can.”
Today, the company has an annual turnover of 50 million euros. It employs 230 people around the world, 65 of which are based in Sweden’s second largest city, Gothenburg. Stenberg says they could grow faster, even double their size in a year.But that would not be a wise long-term strategy.“We want to build up slowly and sustainably.”
It’s taken the company 15 years to build a strong foundation, he says.That foundation consists of organic raw materials, like-minded production partners, repair shops, and a company culture that is as much about balance as it is about growth and success.
Most notably, that journey has included an evolution in their supply chain. The company sources organic cotton from two countries: Turkey and India.For their jeans, it’s primarily from Turkey. For the rest of their line, it’s from India and through one of the country’s emerging co-ops, Chetna Organic.
Cotton is grown on less than 3 percent of the Earth’s surface.But it’s a crop that’s easily infected by bugs and pests. Hence cotton farmers have to use significant amounts of pesticides; by some estimates, the cotton crop is responsible for almost 20 percent of the world’s pesticide consumption. New varieties of cotton claim to be more tolerant to these pests but are genetically modified and seeds cost more (plus they cannot be reused after harvest).
India, which is one of the world’s largest producers of cotton, has seen the effects of cotton production: farmers are prone to illness from pesticide exposure and have incurred debt due to the high cost of seeds.
Hyderabad-based Chetna Organic started an alternative model: organic cotton, a seed bank, a co-op that rewards farmers with a stake in the organization. Funds are transferred directly to farmers for their crop, bypassing middlemen. A small administrative team leads workshops to educate farmers on better practices and oversees new initiatives such as a new seed bank to restore India’s collection of cotton seeds. Over 35,000 farmers are now part of their network.
Nudie Jeans is one of the brands that buys from Chetna. In the spirit of transparency, the entire supply chain is available on their website to track. We don’t mind if people want to contact our suppliers and buy from them, says Stenberg.“For change to happen, more companies have to participate. We are too small.”
More than 20 companies, mostly European and American brands, purchase organic cotton from Chetna. This open-source approach to manufacturing is similar to Patagonia, the California-based outdoor brand known for its environmental activism to create industry-wide change.
Not only does Nudie share its resources, but they encourage customers to bring in (or send in) their jeans for repair for free. If a customer lives too far from one of their brick-and-mortar stores, the company will send you a mending kit:, a nimble, a needle, thread, and some denim patches. For those jeans that are out of style or no longer wanted, the company sells them as used, vintage varieties or repurposes them into new material. More 40,000 pairs were repaired by the end of 2015.
Why?“Cotton is one of the most poisoning plants to grow,” Stenberg says. Known for extracting more out of the soil than replenishing it, cotton production is tough on soil health.That’s why even for cotton-based brand, the need for giving it new life, or the longest life possible, is not only trendy but a necessity.
This repair, reuse, and reduce philosophy fits into Nudie’s long-term vision: to change the world, Stenberg says. “This is not something we are doing to pursue an exit.”
In 2001, when the company started, the team (of three then) began with 3000 pairs, manufactured thanks to a 50,000 Swedish kronor loan from the bank. The jeans sold out on their first day at a fashion fair, giving birth to a company and a movement, he recalls.
“If we started the same company today, it would have been a different game. It would have needed more capital to build a brand.”
At the time there were only 5 to 6 major denim brands, Stenberg recalls.Now the market is saturated.
But what makes Nudie stick out?Aside from their Scandinavian minimalism and evergreen approach, a no-compromise attitude. Be it for people, planet, or the integrity of the product, says Stenberg.They’re so steadfast to these ideals that their mission is even written on a patch of fabric and sewn into the jeans itself.
Patagonia believes in an Earth Tax: 1% of its sales, each year, go to environmental charities. Is that enough, though?
This week, the Ventura-based outdoor gear company that’s long been known for it’s do-good activities released a booklet on all its environmental and social initiatives. During the 2015 fiscal year, the company gave to 741 grassroots environmental groups in 18 countries around the world. That added up to $6.2 million in small grants.
The company wants to do more. That’s why CEO Rose Marcario created a new position at Patagonia: Vice President of Environmental Activism. Lisa Pike Sheehy, who has been at Patagonia for over a decade and managing the company’s environmental philanthropy, took the reins. The impact of the new position? According to Marcario, the restructuring is a sign that Patagonia will put activism into every part of the company, not just in philanthropy. Sheehy will now report to Marcario directly.
For me, “it’s important to look at how this position will help us fulfill our mission statement,” Sheehy says.
That mission statement reads: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”
Patagonia has been conscious of the environment from the get-go but this move means that the hundreds of small organizations the company supports have a voice at the big table. As does environmental activism.
Referring to a recent meeting with executives at Patagonia, Sheehy says, “It’s critical to have someone in the room that’s connected to the grassroots environmental movement. To be in that room, not only from a business level, but what can we do to help environmental groups at the street level, making a ruckus?”
The organizations that Patagonia funds are noticeably small: about 5 paid employees with an annual budget of $500,000. Finding them requires a global network. Each year, the company throws out an open call for grant applications. If a retail store sits in the vicinity of a selected organization, that Patagonia store will work with the organization — doing events, fundraisers, handing out pamphlets. Each year, Sheehy says, Patagonia gives out $1 million through its retail stores in America.
Yet, for the rest of the lot, their applications are assessed by ‘grant councils.’ These are Patagonia employees that have been selected by their peers for a two-year term. The company has set up grants councils globally: Europe, Australia, Japan, Canada, and in regions of the US where they don’t have stores.
The grants are small, only about $12,000 or less. But Sheehy says that these small grants help non-profits carry out campaigns, or fulfill a program.
According to the National Committee for Responsive Philanthropy, in 2009, the mega environmental organizations with budgets of $5 million or more took home half of all contributions and grants in the sector. Yet, they only make up 2 percent of environmental non-profits in the country.
Hence Patagonia opts for smaller organizations as opposed to the environmental giants. “Because they’re often underfunded, under-resourced, and up against tremendous challenges,” Sheehy says.
However, keeping track of 700 organizations around the world is challenging. To ensure that they actually fulfill programs, Patagonia asks the organizations to send in a grant report after 9 months.
While $10,000 may seem like a small sum to make impact, Sheehy argues otherwise.
Dan Schawbel | This post first appeared on Forbes here.
I recently spoke with Chip Bergh, who is the President and Chief Executive Officer (CEO) of Levi Strauss & Co, a leading global apparel and consumer goods company with sales in more than 110 countries. In the interview, he talks about the importance of sustainability to Levi Strauss, gives some highlights from their recent sustainability survey, and why he talks about profits through principles.
Bergh is a strategic leader with a proven ability to build and grow brand powerhouses, bring new products to the mass market, develop innovative marketing campaigns, and capitalize on digital platforms to drive brand awareness. Prior to joining Levi Strauss & Co, Bergh was Group President, Global Male Grooming, for The Procter & Gamble Company (P&G). During his twenty-eight year career at P&G, he served in a number of leadership positions with increasing levels of complexity and scope.
Dan Schawbel: How important is sustainability to you and your company?
Chip Bergh: It’s an important pillar for us as a company. It’s an important pillar from an innovation standpoint, but it also goes all the way back to our values as a company. This company’s been around for 162 years, going back to our founder, Levi Strauss; the man, the myth, the legend himself. We invented blue jeans about 142 years ago. He was an entrepreneur—I like to think about us as the original Silicon Valley startup.
He, from the very beginning, was very big into giving back and making sure that the company always operated with principle and doing the right thing. As a result of that, sustainability in the broadest definition of the word—not just environmental sustainability, but social sustainability and everything else—is part of the fabric of this company. It is a very big deal for us, we’re very focused on it. We use sustainability as a constraint to drive our innovation program. It’s part of who we are, and I think more and more consumers are beginning to recognize that.
Schawbel: Can you explain your current sustainability initiatives and how they’ve helped your company while supporting the world at large? Do you have any success metrics you can share?
Bergh: Sure. Just a couple of weeks ago we launched an updated life cycle analysis of a pair of blue jeans. We ran the first life cycle analysis back in 2007, before my time at the company, and it was an industry first. It was the first life cycle analysis done in the apparel industry. It was done based on US data. It was very insightful. It gave us a lot of insight into both water and energy consumption that a pair of jeans actually consumes through their life. We recently updated the life cycle analysis about a month ago. It takes much more of a global look. We studied the life cycle of jeans in the U.S., but also in the U.K., France and also in China, where consumer habits and practices are very, very different. There are differences regionally, but the bottom line is still the same.
A lot of the water and a lot of the energy is consumed before the jeans ever make it into the consumer’s closet, but a significant portion of water and energy consumption happens after the jeans are bought by consumers. So we are focused on every aspect of the life cycle, including what’s within our direct control, which is how the jeans are actually made.
A lot of water is consumed growing the cotton. We work with the Better Cotton Initiative to work with cotton farmers to show them more sustainable ways of growing cotton. That’s becoming a more important source of cotton for us. Making a difference there. We’re very focused on reducing the consumption of water and energy as we manufacture our products. We have a line of products called “Water<Less,” which reducesthe amount of water in the finishing process by up to 96% . That has saved, over the last four years, about one billion liters of water in the actual manufacture of a pair of jeans. Just for perspective, that’s about enough to provide drinking water for the city of New York for more than a month. It’s not inconsequential, that’s a lot of water. Water is one of the most precious commodities on earth these days.
We’ve also committed a lot of energy—no pun intended—a lot of time and effort communicating with consumers about things that they can do to significantly reduce the use of water and energy in the caring of their jeans. I made what is now the quote that’s gone around the world a couple hundred times saying, “Never wash your jeans.” I never actually said, “never,” but it was a comment that I made at a sustainability conference about a year ago to try to wake the consumer up from auto pilot. You don’t need to throw your jeans in the laundry every time you wear them. Encouraging consumers to hand wash, spot clean where possible, and postpone as long as possible throwing their jeans into the washing machine. We have a number of initiatives against every aspect of the supply chain, if you will. From the growing of the cotton, to the manufacturing of a pair of jeans, to really trying to influence and educate consumers on the proper care of their product.
Schawbel: Millennials want to work for a company that is benefiting society. Why are companies starting to emphasize how they are helping the world more today than years ago? Do you think that companies that only focus on profit will have a recruiting dilemma in the future?
Bergh: I’ll tell you what we’ve been doing, but this is not something to just address the Millennials. It goes back to our founder, and it goes back to the values of this company. We actually talk about profits, we are a business. We’re here to make a profit. But we talk about profits through principles. We have a non-profit foundation, called the Levi Strauss Foundation, which has been in existence for more than 60 years. The company, every year, funds that foundation with a percentage of the profits that we make. Through that foundation we have lots of programs in the communities where we live and work. The more successful we are as a company, the more earnings or profits we deliver, the more we’re able to give to the Levi Strauss Foundation, and then give back to the communities. It is a big part of who we are as a company.
Ethisphere just named Levi Strauss & Co. one of the world’s most ethical companies. It’s something that we’re really proud of. It is part of our ethos. It is helpful in attracting and retaining talent, there’s no question about it. Especially today where young people, as you said, are looking for companies that align with their personal values. That’s just the kind of company we are. We didn’t change it to attract Millennials, that’s who we’ve been since the inception of this company. As a result of that, we stand for that, and we’re able to attract a lot of great talent because of what we stand for.
Schawbel: Going back to what you were talking about with the product life cycle assessment study, can you share some interesting findings of the study with us?
Bergh: Sure. We studied only two years of consumption in a consumer’s household. About 25 percent of the water is consumed by consumers once they get the product home. Part of it is just from this auto pilot response of, “After I wear a pair of jeans I’ve got to throw them into the washing machine.” In the US, people wash their jeans every two times they wear it. If everyone delayed or postponed the washing of their jeans and throwing them into the washing machine to every ten wears instead of two, they would save enough water to meet the annual water needs of the city of San Diego for a full year.
This whole notion of not being mindless about throwing your jeans into the washing machine—you really would be amazed how long you can wear a pair of jeans just with spot cleaning them, if you drop a little spaghetti sauce on them, or something. Or hand washing them. The washing machine consumes a ton of water. I think it’s about 9-14 liters in every wash cycle that pair of jeans would consume (depending on efficiency and age of the washing machine).
Dan Schawbel is the Founder of WorkplaceTrends.com, a research and advisory membership service for forward-thinking HR professionals.