By: Sharon Edelson | Link to article

American Eagle Outfitters Inc. has unveiled its inaugural environment, social and governance report, dubbed “Building a Better World 2021,” which outlines the progress the retailer has made and sets a series of new goals.

For example, the retailer is committing to setting a long-term net-zero target by 2024; reducing water use per jean by 50% by 2025; sourcing 100% renewable energy for all owned and operated facilities by 2030, and sourcing 100% of cotton, 50% of polyester and 100% of man-made cellulosic fibers more sustainably.

The report comes after last month’s quarterly loss of $42 million, which has been attributed to excess inventory, price increases throughout the supply chain and changing consumer shopping patterns.

The Real Good label, which has sustainability in mind for all facets of design and production, encompasses 95 percent of jeans and more than half of American Eagle and Aerie styles. “We’ll continue to elevate our requirements as we increase our Real Good product styles,” said Michael Rempell, chief operations officer. “Real Good was created to be dynamic – evolving as we work to lessen our impact on the environment and in response to what’s most important to our customers.”

The AE brand will require that jeans are made with a majority of sustainable fibers, such as recycled or sustainably-sourced cotton beginning with the 2023 back-to-school season. This is in addition to jeans being made in factories that meet AEO’s water standards.

“Working to build a better world for future generations is an extremely important component to how AEO does business,” said Jay Schottenstein, executive chairman and CEO. “We’ve always led with purpose, optimism and a commitment to doing the right thing for associates, customers and communities. We’re continuing to take bold actions within our operations and are using our influence to help drive meaningful change across our own business and within the retail industry.”

Apparel production is one of the most egregious industries in terms of pollution and negative environmental impact. The global fashion industry generates 20% of all wastewater and over 8% of all greenhouse gasses annually — higher than the combined impact of all international flights and maritime shipping, according to the United Nations.

After several years of environmental action, AEO established comprehensive climate goals in 2019. In 2021, the company formalized its ESG strategy and established a cross-functional ESG working group and steering committee overseen by the board of directors.

AEO established robust water and greenhouse gas reduction goals several years ago. The retailer achieved its water goals two years earlier than planned. “We’re extremely pleased with our progress so far, including surpassing our water goals ahead of schedule,” Schottenstein said.

In 2013, the company created the AEO Wastewater Management Standard to provide factories with guidance on how to properly manage water and launched the Water Leadership Program in 2017 to set water use standards for its jeans factories and mills.”

AEO is focused on its goals for ongoing improvement, while highlighting its progress to date, which includes reducing water usage per jean by 36%. It also recycled 45% of water in denim factories, saved 3.5 billion gallons of water in jeans factories since 2017, and saved 5 billion gallons of water through sourcing with Better Cotton.

The Better Cotton Initiative is a non-profit organization that works with cotton farmers to grow cotton using more sustainable farming techniques, and is one of the programs that makes up a large percentage of AEO’s sustainable cotton. AEO in 2015 joined the group, which helps improve the livelihoods of cotton farmers.

Protecting the planet, caring for employees and maintaining the best business practices has been integrated within the fabric of AEO for decades, Schottenstein said. “Our ESG strategy is intentionally connected to the growth of our industry-leading brands, corporate strategy and culture in order to generate shareholder returns with a purpose,” he said.

AEO is working on sustainable denim washing, the last step in the manufacturing process that gives its jeans their signature look. The company’s laundries have new washing machines that use a fraction of the water used by typical washers. Many of the laundries use environmental impact monitoring software to assess the environmental impact of the garment finishing process in the areas of water consumption, energy consumption, chemical use, and worker health.

AEO also developed a limited denim collection, the AE x Jeans Redesign collection, using guidelines as a part of the Ellen MacArthur Foundation’s Jeans Redesign project. The guidelines were developed by the foundation’s Make Fashion Circular team with more than 80 denim experts. It encompasses the principles of a circular economy where clothes are made with limited impact, are recyclable and are long-lasting to be kept in use.

A set of initiatives dubbed Planet, People and Practices for two decades has touched many aspects of the organization. “Building on them is key to our business success,” Schottenstein said. “We established climate goals several years ago. We continue to take meaningful action to operate more sustainably and preserve our planet. We’ve expanded our environmental targets and will continue to enhance our ESG initiatives in order to successfully meet current and future goals.”

The AEO board of directors is nearly half women and ethnically diverse. Reaching near gender parity in the executive leadership ranks has been a key facet of the company’s strategy. Today, 47% of the board of directors identifies as female.

“Empowering women, investing in women through health, life skills and gender equality training, and increasing women’s access to leadership opportunities are key priorities for AEO,” said Marisa Baldwin, chief human resources officer. “It’s extremely important to us that we maintain near gender parity to ensure diversity of backgrounds, experience and thought.”

Baldwin also cited the active community within AEO and associate engagement with resource groups like Women@AEO, whose goal is to inspire and engage associates to help them reach their full potential and to give back to support women and girls in need within local communities.

AEO is changing the name of its $5 million Real Change Scholarship for Social Justice, which was launched in 2020. The scholarship funds educational opportunities for AEO employees in the areas of anti-racism, equality and social justice initiatives. The name change of the scholarship was revealed in the ESG report. It will be called The Steven A. Davis Scholarship for Social Justice in honor of late AEO board member Steven Davis, who in July died unexpectedly.

The retailer over the past two years has also donated 40 million meals to Feeding America, and more than $46 million since 2012 to organizations that promote mental health, youth empowerment, education and the environment.

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.

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.