WWD: AEO Reveals First ESG Report, Outsized Water Savings

Released Thursday, the report outlines AEO’s goals, spanning jeans water savings, sustainable materials sourcing and charitable aims.

By: Kaley Roshitsh  | Link to Article

After establishing a baseline and climate goals three years prior, American Eagle Outfitters is formalizing reporting with its first annual ESG report.

Released Thursday, the report outlines AEO’s goals — including brands American Eagle, Aerie, Offline by Aerie, Unsubscribed, AE77 and Todd Snyder — spanning jeans water savings, sustainable materials sourcing and the company’s charitable aims. The report trails a reported $42 million quarterly loss last week.

“AEO’s inaugural ESG report underscores our commitment to building a better world, ensuring greater transparency, communication, standardized reporting and, most importantly, outlining our goals for ongoing improvement,” Jay Schottenstein, AEO’s executive chairman and chief executive officer, said in a statement. “We are taking purposeful actions to protect our planet, care for our people and operate with the highest level of integrity through the very best practices. In working toward our goals, every milestone achieved presents new opportunities to do more. We will continue to raise the bar and build a more sustainable, equitable future for our associates, customers and communities.”

More specifically, AEO has “committed to set a goal” of becoming a net-zero company by 2024, cut water use by 50 percent per jean by 2025 and source 100 percent renewable energy for all owned and operated facilities by 2030 (eclipsing extended supply chain), among other callouts.

Achievements highlighted in the first report span water savings, sustainable sourcing initiatives, gender pay advancements and charitable contributions.

Across its jeans factories, AEO claimed it saved 3.5 billion gallons of water per the Water Leadership Program which it implemented in 2017, and 5.1 billion gallons of water per the Better Cotton program, coming out to a 36 percent water savings per pair of jeans. If accurate, then that means AEO blew past what jeans market leader Levi Strauss & Co.’s reported saving (1 billion liters or some 264 million gallons) across four years — 2011 to 2015 — under its Water<Less initiative. (The reported 3.5 billion gallons of water is comparable to cumulative results from the Environmental Protection Agency’s environmental leadership program National Environmental Performance Track, which spanned 450 member companies). 

Specific to the American Eagle brand, the company is also pledging to step up its eco-efforts under its “Real Good” product label, mandating that jeans are made with “a majority of sustainable fibers” like recycled cotton and follow AEO’s overarching water standards. The goal kicks off with back-to-school 2023. Across brands, the company marked overall improvements in sustainable sourcing (59 percent of the cotton they source is sustainable and 16 percent of the polyester is), as well as the procurement of more green energy.

On the DEI and social good front, the company’s board is growing more diverse, with 50 percent of members either being women or non-white,and 47 percent of executive leaders identifying as female. 

After introducing its $5 million “Real Change Scholarship for Social Justice” in 2020, which funds educational opportunities for AEO, Inc. employees progressing anti-racism, equality and social justice initiatives, the company announced in its ESG report, that the scholarship award would be renamed to honor the late AEO board member Steven Davis, who passed away suddenly in July of 2022.

Now called the “Steven A. Davis Scholarship for Social Justice,” the next cohort of recipients will each receive $10,000, which can be used to pay for tuition, housing and books, and they will also have the opportunity to be mentored. 

Over the past two years, AEO also donated 40 million meals to Feeding America, and since 2012, more than $46 million to organizations that champion mental health, youth empowerment, education and the environment.