Sourcing Journal: AEO will recycle 70% of water used in denim laundries by 2025

By: Kate Nishimura | Link to article

American Eagle Outfitters (AEO) is doubling down on water recycling and conservation efforts, having surpassed its initial goal ahead of schedule.

The Pittsburgh-based brand has released the results of its 2022 ESG study, and announced newly updated commitments based on its performance. “A comprehensive materiality assessment and subsequent refresh was conducted in 2022, which included executive interviews, an associate survey, analysis of customer and industry data, as well as feedback from the majority of our shareholders,” it said.

Last year, the company reduced water use per pair of jeans by 38 percent, beating its original 30 percent goal one year early. Now, AEO is deepening its pledge to reduce water usage and promote water recycling, especially in denim.

The retailer plans to recycle 70 percent of the total water used in its denim laundries by 2025 and reduce its overall water footprint by 30 percent by 2028, spanning its own operations, strategic factories and mills. Last year, it recycled 9 million gallons of water at laundries, accounting for 64 percent of total laundry water use. It saved 4 billion gallons of water by adopting better production practices at denim factories since 2017.

AEO has now committed to zeroing out its emissions by 2050, and initial work on the target is underway. The company reported that it is on track to meet its initial goal of reducing carbon emissions across its manufacturing by 40 percent by 2030, and 60 percent by 2040 from a 2018 baseline. Emissions have decreased by 2 percent since 2021.

Renewable energy adoption will contribute to the goal, as AEO has promised to secure sources for non-fossil-based energy for 100 percent of its electrical power demand across owned and operated facilities by next year. AEO reached 23 percent renewable energy in 2022. The report also detailed its new commitment to phasing out coal-fired boilers across the supply chain by 2030.

In 2022, the company saw a 60 percent decline in Scope 3 transportation-based emissions from a 2019 baseline. While not a part of its science-based targets, the company monitors emissions resulting from upstream transport from factories to distribution centers, as well as downstream transport from distribution centers to retail or consumers. AEO credited the acquisition of Quiet Platforms, its logistics subsidiary, for helping it achieve a 6 percent reduction in downstream transportation emissions.

With 85 percent of the company’s emissions output stemming from raw materials and manufacturing, AEO has also decided to transition to sustainable fiber sources for 75 percent of its fiber uptake by 2028. The company is on track to meet its previous goal of sourcing 100-percent sustainable or organic cotton verified by groups like the Better Cotton Initiative (BCI), the Organic Content Standard (OCS), the Global Organic Textile Standard (GOTS) and the U.S. Cotton Trust Protocol within that time frame, having reached 62 percent last year. Cotton makes up 61 percent of its total material usage.

AEO sustainably sourced 90 percent of man-made cellulosic fibers last year, putting it on track to reach its 100-percent goal by 2028. The company uses CanopyStyle’s Green Shirt rating system to track its closed-loop man-made cellulosic fiber production, wherein chemicals used in the manufacturing of tree-based fibers like rayon, viscose, modal and lyocell are captured, recycled and reused, mitigating water pollution.

New to the commitment are goals surrounding recycled and synthetic fibers. AEO said 20 percent of all-natural fiber volume will be derived from recycled materials within the next five years. During the same period, the company aims to see 50 percent of nylon sourced sustainably, and it reached 25 percent in 2022.

The company has also revised its polyester plans. In 2019, it set a goal to sustainably source 50 percent of polyester fibers, reaching 25 percent of its goal last year. It has upped the commitment to 100 percent sustainable sourcing for polyester by 2028. AEO uses Unifi’s Repreve, made from recycled plastic bottles, and also partners with the First Mile initiative to source fibers made from recycled responsibly collected bottles from Taiwan. The company said its overall material-based emissions decreased 3 percent last year due to the increased adoption of recycled polyester and recycled nylon.

“It’s been incredibly gratifying that AEO prioritizes meaningful change across the industry and is passionate about building a better planet,” responsible sourcing and sustainability lead Michelle Tarry wrote. “I love that our products make you feel good, and that we are furthering the ways in which our production has the least amount of impact on the environment. I’m proud of the team and our ongoing efforts to develop practices that are positively influencing the people and communities where our products are made.”