Embedding Sustainability Into Founding Principles

Sustainability in business — exactly how can it be established, managed, and monitored? For companies starting up circa 2020, sustainability can be a huge component of their founding mission. But for others who have been around for quite some time, how do you begin to incorporate sustainability into operations, policies, procedures, and overall mindset where it has never existed before? How do you begin to get people inside your organization to truly care about human rights, corporate social responsibility, prioritizing people and planet above profit and value to shareholders when this has never before been a part of the conversation?  

To help us answer these questions and provide a template for how a company can successfully integrate sustainability, we invited Annie Agle, Senior Director, Corporate Social Responsibility at Cotopaxi, to share with us how her company tackles sustainability. Cotopaxi, a “Gear For Good” company, has a creed, “Do Good,” which touches every aspect of the organization. From its giving model to its company culture and sustainable product design, Cotopaxi sees its business as a vehicle to make an impact.

In a truly insightful conversation with Annie, she discusses how companies often engage in cosmetic compliance and admits there is not a lot of clarity from legislation with regard to specific direction for how organizations can engage in sustainability. Our discussion focused on these key questions:

• Can you share more about your role and responsibilities as a Sustainability leader at Cotopaxi?
• How does Cotopaxi value sustainability? How does it fit into the business model or business strategy?
• How do you go about setting sustainability goals knowing that there are so many directions that you can really go in terms of trying to deliver the impact you really want to see?
• Where is Cotopaxi on your sustainability journey?
• What do you think it’s going to take for more companies to make larger investments in sustainability?

Annie noted that a great deal of sustainability is currently voluntary — particularly when you get down to human rights. Infringement on human rights is a moral responsibility but is not often legally prosecuted. Annie poses the question of whether we can expect businesses to voluntarily prioritize sustainability and social responsibility and secure the buy-in we need if there is no policy to back it up and also highlights sustainability legislation and policy in many countries around the globe.

Watch the video or read the transcription below.

TRANSCRIPTION

Jennifer Wong: Hi everyone. My name is Jennifer. I lead sustainability at Convoy. Today you’ll be joining our interview series where you’ll hear directly from a leader on how they’ve transformed corporate cultures, demonstrated material value and position their company as a sustainability leader. Today we have Annie Agle, Director of Impact and Brand at Cotopaxi here with us to share more of her stories. Welcome, Annie. 

Annie Agle: Thank you so much for having me. I’m excited to be here. 

Jennifer: Can you just share more about your role and responsibilities as a sustainability leader at Cotopaxi? 

Annie: Absolutely, yeah. So, I oversee our corporate social responsibility. A lot of our sustainability efforts, especially with our supply chain, and then I also oversee our brand because it was really important to our CEO and our CMO that we remained a brand that supported a mission rather than a mission that supported a brand. And so, I thought it was actually pretty unique. I was very hesitant to take over the brand as well, which I’d never really done. And so that’s a part of my role that is new and a little bit scarier for me. 

Jennifer: How Cotopaxi value sustainability? How does it fit into kind of the business financial model or business strategy? [2:00]

Annie: Sure, I think the first thing to understand is that we were legally incorporated as a benefit corporation and I think this is really important. I think more businesses should consider this incorporation strategy if they truly care about sustainability, about human rights, about corporate social responsibility because it allows the company to prioritize people and planet above profit and value to shareholders. And I think that’s incredibly important because for a lot of larger multinational enterprises, and certainly publicly traded enterprises, its going to be an issue of what to prioritize. Meaning, if you’re a very large company, say you’re a big fast fashion company, and you do want prioritize sustainability, you do want to prioritize human rights in your supply chain…you mentioned early on, which I really love, you know, that means paying workers a living wage, which means that you might not make the same kind of margin on a product that you’re used to. And so, I think it’s important to have the legal infrastructure as a company to prioritize sustainability. And so, I would say for us, its built into our legal structure. And in that way, it is truly built into our DNA. Apart from that too, I’d say its really built into our morals. It’s not just a tactic for us. Its not just about marketing or consumers. Its really our ethos as a business. Our two co-founders, I obviously can’t take credit for this aspect of the business, I only joined around two and a half years ago, was really founded as a sustainable means to alleviate poverty and historically, we have given literally as much away as we possible could manage, of our profits, towards alleviating poverty. And so that’s meant that we’ve awarded, you know, close [4:00] to 60 grants to high performing nonprofits in the areas of education, employment, and health access, which are the three big pillars of investment that have been proven to really alleviate poverty. And so, its just a huge part of our company. And then specifically with sustainability, I say where we really focus our efforts is on the supply chain. And we really try to think innovatively when we design and try to be as sustainable as possible. So, a lot of our products are designed to eliminate waste by using fabric scraps that would otherwise end up in the landfill. When that’s not possible, we use repurposed materials in other ways, or recycled materials, or natural fibers so we really try to design to the problem rather than just sort of addressing it further downstream. Whether its just packaging or something. 

Jennifer: Your products are so recognizable. They’re always fun colors, you have unique runs because it really is taking maybe fabric that might have been wasted or destroyed but now repurposing it into a new product that’s really core to your brand and mission. 

Annie: Yeah, it is. It’s such a refreshing place to be for me. You know, I’ve done a lot of consulting previous to this and to be in a company where its really a values first company, profit second company. And the profit is important because it allows you to act on your sense of value rather than just sort of stating them and not being able to donate to that or really drive change of the business. That said, its really values first and I think a lot of companies may [6:00] talk that talk but very few walk that walk and everyone in the company is aligned around the mission and its just a really inspiring place to work. 

Jennifer: How do you go about setting sustainability goals knowing that there’s so many directions that you can go in terms of trying to deliver the impact that you want to see? 

Annie: You know, that’s a really good question. I think there’s a part of goal setting that is becoming what is being referred to increasingly as cosmetic compliance and that’s what we really try to steer away from at Cotopaxi and one way to look at this is just auditing. So just making, say water usage targets based on auditing. Well, an audit is a challenging way to go about building holistic goals around sustainability because let’s say you’re working with one particular factory, that’s a challenge when you’re small to medium sized enterprises and so many of the sustainability case studies around business are multinational enterprises. Even though small to medium sized enterprises are 90% of companies and 50% of the global economy. And there aren’t a lot of case studies out there for small companies where you know, Cotopaxi, in any given factory we’re at, we’re a very small part of that factory. And so, it can be challenging to make, say goals, around that. Which is why we sort of looked for opportunities more than just saying, “Okay, let’s make a goal and check that box.” We don’t’ really have that checkbox mentality. We certainly have goals with how we want to operate [8:00] and always kind of upping our bar but we more want to be nimble and we want to look for ways where we as a company can fill a sustainability challenge that no one else could. And so, for example, you know, our Del Día line, which uses remnant scraps, that was really done in conjunction with the supplier that was sitting on all of its remnant materials from other outdoor brands. And so, you know, our scraps come from other companies like Patagonia, like Camelback, who also have their own sustainability initiatives. And so, it really becomes part of this more circular mindset where we can say, “Well, we can do something unique. Let’s feed the anti-basic. Let’s learn how to design a backpack using scraps. No one’s done that before. And maybe if we do it, bigger players out there can try to do it.” And so that’s one instance of trying to apply that mentality. Another example that I thought was really fantastic is historically, if you’ve had a shipment of damaged goods, and being in the trucking industry, you’re probably very familiar with this, when you’ve had a shipment of goods that’s been damaged, your only pass to make an insurance claim and getting money back for that damaged product is show proof of destruction, which means literally lighting your product on fire. And we had an ocean shipment that was water damaged and my supply chain manager, Danny, who’s a wonderful person knows our values in and out, reached out and said, “You know, the insurance company is telling us to destroy it and you know, show pictures of destruction and I just can’t do that. We can’t do that as a company. That’s not who we are. You know, we’d be releasing greenhouse gases into the climate and we’d just be destroying all of the natural [10:00] and human capital that went into building these products.” And I said, “That’s exactly correct. Let’s think of something else.” And so, we reached out to our logistics and bulk shipment provider, Flexport, and said, “Hey, can we work with you guys around an alternative? We can’t destroy these products if we try to find a way to donate as opposed to destroy.” And working closely with Flexport and interviewing some alternative insurance companies and insurance providers, we were able to create a path where donate did satisfy the requirements for an insurance claim, which also opened up that path for any other company. And so that’s just an example of how putting your foot down around sustainability and being willing to be nimble and being willing to kind of hold your line from wherever you’re at in the global economy can really make a difference much bigger than yourself. And so, I think that’s more of our attitude than just kind of setting goals. If that makes sense. 

I always sort of stress it sounds corny, but I think motives have to supersede tactics. You can’t just create goals that’s really not part of an internally held moral desire as a company to honor your social contract with society and the environment and to really try to test just how much a company can do to support environmental and social progress. It has to be about a bigger challenge, you know, and I think that’s the real goal is how much can we do as a company to uplift societies out of poverty? How much can we [12:00] do to preserve the environment? How much can we do to open new paths of corporate social responsibility for other companies, even competitors? I think that’s really the mindset we try to lead with. 

Jennifer: One thing that I’ve seen you post on LinkedIn is kind of a quote around, “Sustainability is a path, not a tactic.” So, it really is this journey. Where would you say you are, or Cotopaxi is right now, on your sustainability journey? 

Annie: Oh gosh, you know, it will probably vary employee to employee. I feel like its my responsibility to say that I think we’re just getting started. I try to go to work everyday with a sense of freshness and never resting on our laurels and I just try to keep that sense of urgency and humility every day I come to the office. And so, I would say we’re just getting started, you know, and I kind of like that sense of possibility of just saying, I think there’s so, so much more that we can do as a company. And so, we’ll see. That said, do I think we’ve done a really great job adhering to our values at pretty much every decision we’ve made? Yeah, I do. I stand by our company and mostly I stand by my fellow co-workers. Like, I get to work with some of the most morally upright people I’ve ever had the pleasure to know, let alone work with. And so, I do think that sense of live values really comes down to your employees, and your value chain. And our suppliers live that, our customers live that, and I’d say in that sense, we’ve done a good job up until now, but I’d still say that every day feels like the first day of our sustainability journey, that’s how I see it. 

Jennifer: [14:00] For my last question, what do you think it’s going to take for more companies to make larger investments in sustainability? 

Annie: Like I said, I think there’s a really big challenge for larger companies and small to medium sized enterprises. There’s not a lot of clarity on priority coming from legislation or from political leaders, and business, at the end of the day, needs to be given a sense of direction. A lot of the problem with, say human rights due diligence and supply chain or sustainability comes from the fact that, you know, its voluntary. A lot of it is voluntary, especially when you get down to human rights and sustainability. These are things that are not legally prosecuted really. And especially when, say you look at human rights, that is the duty of the state to protect human rights. Right now, there is not really duty, especially no legal obligation to adhere to any human rights. There’s a moral responsibility, you know, the UN guiding principles for businesses certainly kind of made a great suggestion around, you know, businesses having a responsibility to uphold human rights, and climate activism, and environmental best practices, but there’s no legal obligation. And so, I really think its maybe a little bit cynical, but I don’t’ think it’s a great state of the world to just expect businesses voluntarily to prioritize sustainability and social responsibility. I don’t think you’re ever going to get the kind of buy in you need if there’s not policy to back it up. We are seeing a lot more policy introduction. [16:00] There was the California Supply Chains Act. The EU has been especially rigorous around this. You see a lot of taxation around single use practices. You have the anti-slavery acts in the UK and Australia and then you have France’s Vigilance Act, which is by far the furthest any legislation has gone at forcing companies to take account for their sustainability and social impacts. But until you see widespread or a more internationally cohesive set of obligations there, I don’t’ think you’re going to get that kind of holistic buy in from the business community. And I think the reason for that is, its one thing if you’re in a consumer facing company like we are. There is that, kind of, consumer accountability, but a lot of companies are more intermediaries, especially if you’re a small to medium sized enterprise, you might be a software provider, you might be a parts provider, and those companies don’t really have any visibility to consumers. And they don’t really have any incentive to prioritize sustainability. And given their position in the global economy, it might be pretty hard for them to do that. And so, I think it’s important for policy leaders to step up and think about those considerations. I think its easy to blame companies, but I think right now, most companies just have a lot of confusion around what they’re supposed to do or how to start and I think that’s a challenge. 

Jennifer: Awesome. Well, thank you so much for spending time this morning, Annie. This was fantastic.