Sourcing Journal: American Eagle ESG Report Details Water Savings

By: Kate Nishimura | Link to article

American Eagle Outfitters, Inc. is ramping up its efforts to produce more sustainable denim and said it has exceeded its water reduction goals two years ahead of its original target date.

The company’s transition to resource-efficient denim processing has saved more than 3.5 billion gallons of water since 2017, the American Eagle and Aerie owner detailed in its first environmental social governance (ESG) report published last week. So far, it has slashed water consumption by an average of 36 percent per pair of jeans produced, aiming for 50 percent by 2023.

American Eagle’s ESG strategy focuses on mitigating the ecological impact of its denim products and materials portfolio. The company credits the Water Leadership Program it set up in 2017 to set expectations with denim factories and woven mills for wastewater, water recycling and chemical management for accelerating more efficient textile processing. The platform scores each Tier 1 and Tier 2 supplier based on its progress so the company can steer new business toward high-scoring producers.

“We work with key laundries to implement new technologies and equipment that greatly decrease overall water needs for garment finishing and washing, ultimately reducing the amount needed to be discharged,” it said. “Our manufacturers and laundries have made investments to develop new approaches and install computer-controlled washing machines that use a fraction of the water used by conventional washers, as well as other technologies such as nebulization.”

Many laundries have implemented Jeanologia’s Environmental Impact Monitoring (EIM), which assesses water consumption, energy consumption, chemical use, and worker health. This year, the company is able to recycle 45 percent of the water used in denim processing. Its 42 laundries and dye houses and 56 fabric mills submit to annual wastewater tests to track improvement.

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,” CEO Jay Schottenstein said. “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.”

According to Schottenstein, the company is also “expanding the use of sustainable materials in our products—identified by our Real Good label.” The badge, which is applied across American Eagle’s product lines, points to the use of eco-conscious fibers like recycled polyester made from plastic bottles, recycled nylon or sustainably sourced cotton. More than 95 percent of American Eagle denim fall under Real Good, while 50 percent of combined American Eagle and Aerie products feature the badge.

“We’ve made great progress expanding Real Good across assortments and brands, and we will continue to set the bar higher as we strive to make products our customers love while minimizing our impact on the environment,” said president and executive creative director Jennifer Foyle, who oversees design for American Eagle and Aerie.

Aerie’s 2021 bestselling Sunnie bra was made using recycled nylon, while the swim collection also includes recycled nylon and recycled polyester content. Aerie Play leggings contain recycled polyester from First Mile, which sources plastic waste from Haiti, Honduras, and Taiwan to support income generation for local populations.

American Eagle designates more than half of its overall offering as Real Good for its use of recycled and responsibly sourced content. Cotton, polyester, and man-made cellulosic fibers (MMCFs) make up 82 percent by weight of the materials used across its range, with cotton representing 57 percent of material consumption.

“Using materials that lessen the environmental impact is vital to achieving our targets for water, carbon and waste reduction,” vice president of responsible sourcing and sustainability Michelle Tarry said. The company is committed to sourcing 100 percent of its cotton and MMCFs more sustainably by next year through continued partnerships with Better Cotton and Canopy, the latter of which works with brands to help preserve vital forests.

By the 2023 back-to-school season, the company aims to see all of its denim jeans made with sustainably sourced BCI cotton or recycled cotton, she added. American Eagle launched its partnership with the Ellen MacArthur Foundation’s Jeans Redesign project in 2021, debuting four jeans styles made from organic cotton. Easily removable hardware was used to ensure that the products could be recycled at the end of their useful life. That partnership will continue on as the company explores new ways to make its jeans more durable and recyclable while ensuring traceability and material health.

The brand is also forming partnerships with organizations that promote circularity or end-of-life solutions for used garments and textile waste. New York-based Fabscrap collects, sorts and shreds post-production fabric scraps for use in industrial materials such as insulation, while Cotton Inc.’s Blue Jeans Go Green program enables consumers to turn in their used denim by mail or in stores for recycling. Since teaming up with the group in 2014, American Eagle said the partnership has recycled 569,000 pairs.

In light of geopolitical issues and changing legislation, the company reiterated its stance on cotton sourcing, stating it is fully compliant with the Uyghur Forced Labor Prevention Act prohibiting imports of materials or finished products of any kind from China’s Xinjiang region, where reports of the forced labor of Muslim minorities proliferate. The company also said it prohibits its factories from sourcing cotton from Uzbekistan and Turkmenistan due to allegations of forced and child labor in the region. The U.S. government banned cotton goods imports from Turkmenistan in 2018, citing human rights abuses.

While Uzbekistan’s imports have not been sanctioned, American Eagle has banned its factories from sourcing raw material from the region. According to the company, the International Labor Organization (ILO) has documented widespread improvements to labor practices in Uzbekistan. American Eagle is reevaluating its stance, and considering using cotton from verifiable, traceable sources.

The company is a member of ILO’s Better Work collective of industry stakeholders, governments and NGOs aiming to boost competitiveness across the industry while improving working conditions. According to executive vice president and chief operations officer Michael Rempell, the company audits more than 300 manufacturers in 20 countries each year to ensure compliance with its code of conduct. “We are dedicated to upholding global human rights, which is fundamental to living our values wherever we do business,” he said.