Free People’s Julie Verdugo: Sustainability in Practice

It is a frequent point of debate in boardrooms around the world: Should we incorporate sustainability into our business and how much is it going to cost? For many organizations, sustainability and the broader query of social impact seem separate, but the reality is they are very intertwined. How does your product or service impact people? How is it made? Who is making it? How does production impact the environment? How is it delivered? What does the store environment look like? And so on and so on. 

We looked to Julie Verdugo, Director of Sustainability + Social Impact at Free People to provide some direction as to how a company can bridge sustainability with business. Julie has an extensive background in sustainability at both corporations and nonprofits and also in the social impact sector. 

Julie was brought on board at Free People to start the Sustainability Department and tasked with incorporating sustainability into the business which, as we all know, is no easy feat. She walks us through ways in which she was able to bridge sustainability with the business, obtain buy-in from everyone in the organization, take a new look at old ways of doing things, and incorporate KPIs along the way. Some of the key takeaways from our interview with Julie include:

• How sustainability and social impact are intertwined: Sustainability and social impact involve considering how our product impacts people. How it is made, who makes it, what their environment looks like, ensuring we are proud of the way we support them through the making of the product and all the way through to how our product is delivered, our customer, and what the store experience looks like. (1:12)
• Where to look for sustainability opportunities: Talk to other brands, people, experts, coalitions, etc. to find the solutions, and explore product as well to find opportunities for fabric innovations, production innovations, partnering with smaller manufacturers, handmade or artisan made, supporting the history of craft which is sustainable in and of itself, and basically the full life cycle of the product as well as investigating the design into the future of the product. (2:15)
• Where sustainability sits in a company: It doesn’t sit at the beginning or end of a product life cycle. Sustainability encompasses the full spectrum of the business and is all throughout a business. (3:13)
• Where do you begin to incorporate sustainability in your business: Look within and look at your values. Who are we already? What do we stand for? How do we formalize that and use it as a vision board for our better selves. Sustainability becomes sustainable when it is aligned with the way a company is already formed or thinking and not in conflict with your core values. (4:20)
• Knowing what to focus on: Establish brand pillars, set goals, and focus on those. Listen to what others are doing, but stay on track and stay true to yourself because there are so many directions to go in which can sidetrack your efforts. (6:50)
• Why it is important to educate everyone on the team: Set structured standards of what sustainable products are and why. Establish what the impact of using them and not using them are and create space for the questions because it is a learning process for everyone — particularly those who have been in the business for a long time and are now expected to adopt a sustainability mindset. (9:06)
• Why you should measure the progress of sustainability: It can impact so many different things from kilograms of CO₂ to bags saved from hitting the landfill, increase in wage for certain workers, etc. Tracking is very important and motivating to say here’s where we have gotten. It’s important to share the progress both internally and externally because customers are asking for it. (11:06)
• How to identify sustainability goals: Sustainability must align with the business goals. When sustainability didn’t align to the business goals, it didn’t stick around. The key is knowing your values, knowing where the impact opportunities are, and then playing the matching game of what your business needs. Think in terms of the same KPIs you use to measure for other campaigns or product launches. When we tracked how social impact and sustainability campaigns had performed using the same KPIs (engagement, sales, click-throughs, conversion, etc.), it was no surprise those campaigns outperformed our everyday campaigns.  (13:40)
• Sustainability doesn’t need to require a large investment: You don’t need to make a large investment in new technology, etc. A lot of companies actually have a lot of zero cost opportunities or even cost savings in some instances. Look at operations in a new way. Energy reduction programs are actually cost savings. Start with a task force as a side project with someone representing each function and get creative to identify cost savings and net zero initiatives because there is a lot of impact behind those too. (15:48)

Watch the video or read the transcription below.

TRANSCRIPTION

Jennifer: I know that you already have an extensive sustainability background in the areas of both corporations, as well as nonprofits and then also in the social impact world. And you also started the sustainability department at Free People. Could you tell me about your role and responsibilities as the director of sustainability and social impact? 

Julie: It’s sort of both…2 worlds, the sustainability and social impact at the same time which can seem separate and are very intertwined. I think of people, and people being at the core of everything that we do and our mission, and the reason that we want to be better, of course, for the planet as well. They’re so intertwined so kind of runs the gamut of, you know, considering things. How our product impacts people. How it was made. Who’s making it. What their environment looks like. Ensuring that we’re proud of the way that we support them through making the product. And then all the way through to how it’s delivered, [2:00] and our customer, and what our store experience looks like. So, I mean, a lot of the projects I’m working in now, you know, around getting our packaging up to where it could and should be which is no small feat working for a public company but there are so many opportunities in innovation. So, exploring the innovations, talking to other grants, people, experts, coalitions to find the solutions and around the product as well and identifying opportunities for fabric innovations. Also, production innovations. You know, how can we…where we have a big focus on going a little bit smaller, and, you know, partnering with smaller partners as well. Handmade. Artisan made. Supporting the history of craft and that is sustainable, in and of itself. And circularity is another big thing I’m focusing on now so just sort of the full life cycle of the product. You know, what happens after the consumer buys it as well. How do we start to design into the future of a product and then, that sort of finds its way to the social impact side of the humans that are our customers and our communities around where we do business, where we produce our things. So, it’s really working the full spectrum of the business and working internally with so many different teams and brains and functions and it’s kind of my favorite part of the job. Just having a hand in a little bit of everything we do because sustainability doesn’t sit at the end or the beginning, it’s all throughout. It’s a lot of hats, but…I love that challenge.

Jennifer: When you first joined, how did you think about, kind of, setting goals for sustainability and your work? 

Julie: Yeah, that’s a good question because sustainability and social impact, [4:00] it’s something that is within Urban, but it wasn’t formalized as a department. And that’s why I joined. How can we be better? Without knowing, you can sort of go in any direction, but we really started from looking within. I’m like, look at your values. Like, that was just number one. Who are we already? What do we stand for? How do we sort of formalize that and use that as our vision board for our future selves, our better selves and not create things that we’re not already working into? Yes, we do need to change certain things, but not that we’re in conflict with our core values or outside of it because I think sustainability becomes sustainable when it is aligned to the way a business is already formed or thinking. So, we started by identifying, what are our core values, those core value pillars. And for us we identified them as female empowerment, which is very important for us. We are over 90% female employees and we obviously have a female customer base so really bringing up females, other customers as profit partners, we have a very close relationship with Girls Inc. And also, the people that are creating our product. The second one, mother nature. How do we support nature in its true sense? So, with that we developed a partnership with the National Parks Foundation, so we knew many of our customers and our employees were going outside often and appreciating, kind of, the wonder of nature. So, it was very authentic for us to start thinking of mother nature through the lens of how we experience nature. So that led to use experimenting with a lot more natural fabrics and fibers, like linen, euro linen, traceable to the farms in France that we work with. [6:00] And then, the third is, we call furry friends. So, protecting animal rights, essentially. Or, like, so naturally so many of our employees are obsessed with our animals and many people are vegan so we’re just starting to bring that into our product assortment as well. So, no animal cruelty. Bringing in the vegan leathers, alternative options for that and just, kind of, bringing those values into the products themselves. And then with those pillars, it almost…it didn’t become easy let’s say, but it started to shape what our main goals started to be and it felt like we were starting to make steps forward and tracking them. I’m like a big data nerd, so we built up a system to track to the goals as well. So, it can seem daunting, especially when you’re reading things and you’re hearing, this company is doing x, this company is doing y, this company is doing z. And it’s hard to, you know, say, wait, should we be doing that to? And we’re like, wait. We have our goal. We’re on a track. And yes, we should listen. Like, where should we be? But staying true to yourself is really important when there’s so many directions to go in. 

Jennifer: That’s great. And as you’re talking about these three different pillars to give the company and your team direction, how does it manifest in terms of being integrated into everyone’s day to day mindset and their work? 

Julie: Yeah. That’s a really good question because that is one of the most important things is that the employees and the core community of the brand who are making the decisions every single day understand and feel that. So, what, kind of, like, practically, we set up a volunteer program very shortly after setting up the department as well so that our teams could volunteer with the organizations that align to those pillars. And now we have like [8:00] a big volunteer program so they can bring that to life and sort of understand, oh for me…especially they can sort of express themselves to the lens of whatever their passion is. So, if someone is extremely passionate about the outdoors and preserving nature, reducing carbon emissions, and looking to do things outdoors and promote that, we have a partnership with the National Parks Foundation and we have been sort of forming this Women in Parks initiative and when we were able to get together in group, we had an outdoors program where we were coming together, you know, in small groups and coming to parks and cleaning up, planting seedlings. And now that’s kind of taken shape as digital support and we’re actually working towards our first virtual, digital volunteer day. Which we’re getting all of our employees to…instead of cleaning up one part all together, it’s your neighborhood. And just figuring out, you know, how do we bring that to life and make sure everyone on our team is living those values. And then, on top of that, we’ve created some learning resources and, you know, we developed some pretty, you know, structured standards of what a sustainable product is for us and made sure that, you know, all the product teams have gone through that training to make sure that they’re aware and living it. And the why is so important. It’s not just, here are the sustainable fibers. Why is it important? What is the impact of using them and not using them? And what are things to look out for? And really leaving space and creating room for the questions because it’s a learning process. It’s learning, people in, you know, who are incredible in the industry who have been working in it for decades, sustainability could be new to them and, you know, it’s something that needs to be, you know, kind of updated and spoken about often because things are changing by the day. 

Jennifer: Right. I think that’s one thing that I learned about sustainability. It is far more technical than I had ever imagined. [10:00] So, it is a huge learning curve, but I think most people that I work with today are so passionate and very interested in learning more. So, I love that you provide just that education and how it’s really relevant to their day to day work. I’m sure they really appreciate that. 

Julie: Yeah, I mean, like you said, it’s very technical and it’s very much about the why. And it can, you know, easily…and I think like you said a couple years ago it was sort of like a nice to have. It was sort of like something that came up in boardrooms and was like, “Oh yeah, we should do that. That would be nice.” For many reasons, the time is now. Science is telling us that and if we’re talking about this as a business, we need to talk about the business KPIs that this aligned to as well. Track that and, like the analytics pieces, is quite important. It’s actually vital. 

Jennifer: You mentioned that you’re a data person, you love analytics, what is your kind of day to day dashboard, or reports look like you’re kind of making the progress that you’re looking for? 

Julie: That’s a good one. I mean, this basically, impact, can look like so many different things. Kilograms of CO2, saved a number of bags hitting the landfill, it can be a number of volunteer hours, it can increase in wage for certain workers, and it’s basically a massive impact tracker of lots of different metrics and lots of different forms of impact. And it is a challenge to sort of, you can’t really compare one directly to the next if we’re talking about all these different sorts of units, but tracking is very important. And it’s also motivating. It’s also like internally motivating to say…because you don’t always see that. You know, it’s to say, here’s where we’ve gotten. You know, we had a paper reduction initiative that we started internally. It feels very small [12:00] and every day, you know, the whys behind, you know, if you can keep it digital, why not? We set goals of saving trees for pages not printed and while it sounds small, while everyone started to think a little bit differently, we noticed we were saving a couple of trees a week. And sharing that information with the employee base motivated them further and then we saw, sort of like an increase, in reduction over time and just, like a very small example of understanding the importance of sharing the progress, internally and externally as well because  the customers are asking for it. 

Jennifer: I think that visibility is super important and unless you’re able to see the progress, it’s very hard to understand where you are and what you should be doing more of. 

Julie: Absolutely, absolutely. It kind of gives you that North Star of, like, okay, because so many times you can feel like, I am so far from where we should be. It’s like, okay, we’ve done this one step at a time. And that’s sort of our motto to go along with this whole initiative is mindfully taking steps to be better everyday but it’s that every day a little bit. It’s not these huge, sometimes huge leaps and those days are awesome, but in between all the leaps, it’s just the baby steps, one in front of the other. But those little baby steps add up and bring you to the leaps. 

Jennifer: And how does Free People value sustainability? You have all of these different efforts. You’re clearly investing a lot of resources but what is the impact or results it actually drives for the business? 

Julie: Yeah. I mean, that is number one because at the end of the day, that’s what we do, that’s what we are. We’re publicly traded and we have a lot of people to answer to so it’s important that it aligned to the business goals and also when I sort of pitched to create the department, it was very much based [14:00] on the business case as well. And, you know, I’ve worked for nonprofits. I’ve worked for other companies, when sustainability didn’t align to the business goals, it didn’t’ stick around. And, you know, sometimes it’s a hard pill to swallow to understand that but at the end of the day, if its not working towards the goals of the organization, it won’t ever be at the forefront. So, and there are so many opportunities for it to be at, you know, front of line and aligned to the business, so its getting creative to find, you know, if you want to do all of these things, of all of these things, really knowing your values and where the impact opportunities are and then sort of playing the matching game of what your business needs. For us, at the time, and still, it was community engagement, of course, sales, and when I was trying to put together the business case its like, okay, let me think in terms of the same KPIs we measure other campaigns, or other product launches. And I started to sort of combine those two and tracked how social impact and sustainability campaigns had performed using the same KPIs, engagement, sales, click-throughs, conversions, things like that and it was no surprise but a nice one that actually those campaigns outperformed the ones that were just our everyday. 

So that was a nice little business case that I said, okay, the time is right. The customer is asking for this. 

Jennifer: What do you think it’s going to take for more companies to make large investments in sustainability? Maybe start a sustainability department if they don’t have one today. 

Julie: Yeah, I mean, I think that challenge is exactly the word to use. The large investment piece, and of course, right now, so many companies, specifically fashion retailers, are having a hard time [16:00] because of everything that’s a result of COVID and kind of looking at traditionally, like, oh, I need to make this large investment in new technology, or XYZ that would add up to this huge call center, when in reality, a lot of us actually have a lot of, let’s say, like, zero cost opportunities. Even cost saving in some instances. For example, right now I know that a lot of companies are sitting on inventory of unsold products and to see that instead of…to see that actually as an opportunity to maybe have a new little business channel in a sustainable way. Like, maybe there’s a traceable solution for that and that’s where the circularity piece that we’re working on right now, we’re very excited about. And, you know, a lot of energy reduction programs are actually cost savings. They just, they take the time, they require the brain power, they require a couple of people to say, “You know what, we’re spending time on this right now.” Sure, having a department head is great and sort of organizes but at the same time because sustainability teaches so many things to so many people and crosses so many different functions, start with a little task force and maybe its sort of like a side project if they’re not willing to invest a headcount but that task force with someone representing each function, and then starting to get creative of, “We don’t have any budget for this, what are some cost savings initiatives or net zero initiatives that we could start on?” And there’s a lot of impact behind those too. 

Jennifer: That’s a great idea. Well, Julie, thank you so much for joining us today. 

Julie: Yeah, thank you so much, Jennifer. It’s been fun.