Laura Jones

taking the REIgns

In National Parks on September 7, 2009 at 9:55 am

REI

“What we’re realizing is that both the public, our employees, and ourselves count us responsible for environmental and social impacts of products all the way to the beginnings in the dirt and all the way forward at the end of the lifecycle. I think that’s a hard pill to swallow for most retailers.”

In an environment where some people may be looking around at one another, tapping their toes or anxiously twiddling their thumbs, REI is taking the reigns and making headway, breathing sustainability into the outdoor industry.

Several factors lend to REI’s success over the past few years that they’ve been working earnestly to think through the entire manufacture and retail processes and reduce their impact. Kevin Hagen, REI’s Director of Corporate Social Responsibility is quick to note them as we delve into this conversation about sustainability.

“The outdoor industry is a really interesting place, first of all it’s full of incredibly passionate people. Secondly, the connection between the business and the environment is perhaps nowhere more obvious. We enjoy the outdoors and in order for our business to continue as an industry, the outdoors is intimate to that. So we’re full of people who are holding this passion about connecting their business with their values and their business with the environment, frequently overlapping into the social justice space as well, and have recognized that businesses is a tool of change.”

Even within as hospitable an environment as the Outdoor Industry, it’s notable that a company will stand up to take responsibility for not only it’s own operation’s impact, but for its partners, suppliers, and even its customers down the line. Let’s take it a few steps back and think about the big picture shift in thought as the movement has leaked slowly into the mainstream over the past several years. Hagen has a three-step system to describe the past, present and future mindset of sustainability in the industry.

“There’s this idea that you don’t know what you don’t know. Unconscious incompetence. It’s a great place to be, very comfortable,” he laughs. “The next stage up from that is that you start to know that there are things that you don’t know, you start to realize that there are things you don’t understand, that it’s bigger than you thought, it’s bigger than a breadbox. That stage, some call the consciously incompetent stage.

“I would say that as a business and as an industry, we’re fully embracing conscious incompetence when it comes to sustainability. I think that that stage is really enlightening on one hand, frightening on the other, and it causes the average thinking individual to have two places to go from there- denial, which is okay, it works for a while, or despair. I think the next step though, because neither of those are very good answers, is that if you’re working on something that works, and you have a good example at hand, in your own organization or industry, you can move forward into a period of hope. And as soon as you make that shift individually and organizationally, from despair into hope, you can really catch the fire and start to realize that one step at a time can start to make huge differences.”

So that’s where it stands today: consciously incompetent, but hopeful, and with an arsenal of good examples of things that work. According to Hagen, it was around 2005 when REI as a company and many other actors within the Outdoor Industry  started to recognize that so-called random acts of corporate kindness under the conventional structure of “make a lot of money, then give some of it away” was simply not adequate.

“For anyone who’s pondered the paper or plastic question, you know that finding the answer is harder than it looks when you start looking at the details. We needed to get organized, we needed to figure out how to understand the science behind these issues, business drivers, business barriers, technical barriers- to move from ‘green differentiation’ to ‘sustainable business.’”

So, REI recognized that in some instances, it takes a convener to put things together, and they have taken on the role of starting “conversations that are bigger than us.” This action, however, is by Hagen’s admission not completely unselfish, instead, it’s what he calls, “enlightened self interest.”

“We’re not big enough to make a difference, we’re big in our industry, but at a billion and a half in annual sales thereabout, we’re one good day sales at Walmart. So we need to play team ball.” In fact, CEO Sally Jewell has a speech entitled “Sustainability is a Team Sport,” and that’s exactly how they play the game.

REI works with partners in the Outdoor Industry Association (OIA) on a number of programs. Notable amongst them are the Fair Labor Program and the Eco Working Group, both programs that relay a real understanding of, and passion for, the tenants of sustainability as coupled with a refreshing dose of transparency and accountability. As a retailer, it makes sense to look at product and for a decade, REI has been working with others on the issue of fair labor compliance. Not an issue that responsible retailers want to leave to chance or to local government enforcement, instead they’ve developed certain expectations around labor, conduct codes, and compliance on the customer’s behalf that is independent of the legal system. Hagen says, “I think that’s very powerful, I think it’s very helpful, and it has made change in a lot of places. It’s not fixed- in many ways we may be just beginning that work. But, by sharing information, by collaborating with other industry partners whether big or small, we can do more than we can do by ourselves.”

The Eco Working Group has a slightly larger scope, a group of companies, non profit organizations and government agencies that that have gotten together to start thinking about product life cycle and the impact that products have at each stage of that cycle. The idea is to communicate amongst one another and to share information and to put the emphasis in the right place. So far, Hagen says, “We’re making great progress. It’s not about how do we market green products better, it’s how do we change the most important things about products to make them better- whether it markets or not.”

Not a tune you’re used to hearing the conventional retailer sing.

Kevin Hagen, Director of Corporate Social Responsibility at REI

The striking thing to me about REI and the work they have undertaken around sustainability is the character is conveys about the company as a whole. This is no trend right example of corporate greening, their actions are more paternalistic than that. Take, for example, the company’s study of their greenhouse gas emissions which Hagen was quick to note was not intuitive.

“There’s a lot of publicity around greenhouse gas emissions as it pertains to moving product around the world. So if you were just reading the media you would presume perhaps that moving product from Asia to America is the problem. What we are able to show pretty conclusively from this last reporting cycle is that getting our employees from their homes to the store, has a larger greenhouse gas impact than all the product we move worldwide for a year. That’s shocking, right?”

It may also be surprising that REI counts employee transportation as part of their greenhouse gas emissions. This willingness to embrace their impact with open arms is also reflected in their green building initiatives, which started with the flagship store in Seattle that was “green” in 1994 before there was really a word for it. In 2005, REI projected their growth into 2010 and realized that half of the stores that will be operated were not built yet- so they set about initiating prototype work. Despite the high-pressure stakes around opening new buildings in the retail environment, they decided to try some things out including customer facing technologies and a host of green technologies like rapidly renewable building materials, day lighting and what Hagen calls, “a little bit of everything in the kitchen sink.” The result was success, with many technologies like solar hot water that was able to be integrated into mainstream building even before that first prototype store saw its grand opening. They continued in their efforts with the Roudrock store outside Austin, Texas which boasts half the expected energy consumption of a store that size using technology that according to Hagen was cheaper to build, and brought to mind a quote from Amory Lovins of the Rocky Mountain Institute that says, “Energy efficiency is frequently not just the free lunch, it’s the free lunch that somebody pays you to eat.”

But they didn’t stop there. REI built a new distribution center in rural Bedford, Pennsylvania that is massive, covering 525,ooo sq. ft. on 41 acres to LEED certifications- sending a message that green building isn’t just for customer appreciation, but from REI’s perspective is just good business. In addition to energy efficiency, natural lighting and other tehchnology like motion censored conveyor belts, the Bedford distribution center boasts a unique water management system. To compensate for the impact of all those acres of hard surface, REI purchased an additional 12 acres of cornfield to transform back into its original state-wetlands. Today, those 12 acres act as a high tech/low tech way to manage property runoff, a recreated habitat that welcomes Bedford runoff that is the same quality and rate quantity as it would be if there were no development on the land at all.

However great all these successes, Hagen keeps an even keel.

“Despite media hype to the contrary- not all harm can be described in pounds of CO2 or the equivalent. So although it is tempting to be very concerned about the climate impact of a product- which is a legitimate concern, it is quite possible that there are more immediate problems lurking behind the surface. Concerns of chemical processes or toxins or environmental degradation, or human rights issues- so there’s a lot of stuff in products that we need to be concerned about, CO2 being one of them.”

Through their work with the OIA, they’ve been able to determine that products are 80-90% of the impact of the total retail operation which brings us back to that nasty little pill that’s so hard to swallow. A beacon of light in this scenario comes from perhaps an unlikely source: Walmart. Hagen refers, of course, to Walmart’s July 16th announcement that they will create a worldwide sustainable product index, to effectively assist in developing the tools to help enable sustainable consumption on a global scale.

Hagen puts on an exaggerated tone and exclaims, “What retailers really would like to say is you know, somebody else take some responsibility around here! I’ll do my part, somebody else do their part!” But, he adds, “Nice try, but I don’t think that’s going to fly.

“Walmart’s just basically said, we’re going to work on this. I think what’s fabulous about that is that now no retailer on the face of the planet will be able to say, “Not my problem” or “Not my job” because Walmart says it’s their job. So, it is now everybody’s job in retail, to own and consider and be concerned about the environmental considerations of product from end to end. That’s revolutionary.

“I think they are expecting the seam thing we are, which is if you can get to metrics, if you can start driving innovation from a good framework and basis, and measure the difference between products and be able to reward the better performers, we can turn the free market loose on this problem. Basically, we have always counted on our suppliers to amaze us, and they do. So if we can give them the right direction, if we can give them the guardrails, they will amaze us again.”

In true outdoor enthusiast style, Hagen offers an example in the way of waterproof breathable fabrics. What used to be a paradox in the industry is now an expected design, he says, and it’s just gotten even better. REI recently introduced eVent, a new three ply waterproof breathable fabric that allows moisture to escape during aerobic activity while it’s still in water vapor form, a step up from traditional breathable technology that pushes moisture out in liquid form. “This new fabric is so breathable that we didn’t even design pit zips,” he exclaims. “It’s that good.”

“Currently the convention is that it’s an oxymoron, you can’t have performance and price and environmental integrity, we don’t believe that. We accept that  maybe the short term way we are is because we didn’t understand to ask these questions before, but that‘s not the case now and we believe that if we can give the right rewards to the better performers, a lot of great things can happen in the next few years in the supply chain. So we’re out trying to make sure that happens, and use that force for the good, making sure there is good science and good metrics in the supply chain so we can let loose the creativity of the designers, not the marketing spinners.”

So, in light of all the progress and all the work that has gone into reaching this industry-wide state of conscious incompetence I asked a question that any longtime REI member who hasn’t scanned the company’s Stewardship site for a while might ask. “Why didn’t I know any of this?”

The answer surprised me. Hagen asked, “Well, would it matter?”

And that’s the question that I pass on to you readers. Would it matter?

Do we consumers care about the behind-the-scenes work going on to bring sustainability to the forefront? Do we want to know? Is it going to influence our perspectives or roll off our backs?

And, if it does matter, do we want to find out about it from the companies at the forefront? Or, would you rather not?

Please, leave your feedback in the comments below.

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  1. I believe that REI’s educating their customers and the public about REI’s initiatives is one part of the host of solutions they are striving to find and implement. People DO want and need to know about these innovations – recognizing them is part of the big wake up call out of “denial” or “despair” that we are all facing when it comes to the situation we are facing on our planet – Thank you Laura for telling this incredible story. Thank you Kevin for graciously telling the story so that the SAAT can help spread the word!

  2. I personally want to know about the behind-the-scenes work going on to bring sustainability to the forefront and have recently joined the EWG to continue to learn more. Thank you Laura and Kevin for the insight and inspirtation!

  3. Thanks for the article and the great visit. We’re all wishing you the best on your journey..

    I would like to take the liberty of embellishing a few quotes/ comments with a little more context for readers.

    On being the convener: Other Outdoor companies were doing deep work on sustainability before REI. The only reason we made as much progress as we have is because those individuals and organizations have selflessly shared their experience and information with us. Our spirit of cooperation on this work comes in large part from the way we learned it and from our gratitude to those who were here when we arrived.

    Paternalistic approach to sustainable business: As I read the article, my concern was that readers might get the impression from this word that we think “we know what’s best.” We are the self avowed consciously incompetent, our motives are aligned with our values but we know we need true collaboration on methods and solutions.

    Supplier chain innovation: When we talk about asking our vendors to amaze us, we’re expressing confidence in the innovative abilities and creative people we work with in our vendor companies. We don’t mean to imply that will passively wait for good things to happen. We consider our relationships with our vendors as a partnership with the goal of amazing the customer with innovation. Ultimately it really doesn’t matter if we’re impressed, what matters most is that our members and customers know that there is a difference and reward the better performing products.

    Would it matter? : thanks for the comments that it matters what members know about our work. We think so too and my comment was more intended to be rhetorical than provocative. We think it’s our job to provide the information in approachable formats in places that members can find and we’re committed to doing more.

    Kevin Hagen
    Recreational Equipment Inc – REI
    Director – Corporate Social Responsibility

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