AE2 Levi's Ethics and Sustainability

(Levi’s Instagram,2020)

ETHICS AND SUSTAINABILITY MONIKA ZURKOVA

CONTENT PAGE

BUSINESS IDENTIFICATION...................................... 3 PYRAMID MODEL MISSION- STRATEGY- GOALS... 4-5 MARKET DRIVERS PESTEL ANALYSIS....................... 6-7 SUPPLY CHAIN MODEL........................................... 8-9 5PS MODEL...............................................................10-11 SOCIAL CORPORATE RESPONSIBILITY....................12-13 SWOT ANALYSIS...................................................... 14 CONCLUSION......................................................... 15 REFERENCES............................................................ 16-17

(Levi’s Instagram,2020)

This report will analyze Levi’s in a matter of sustainability and ethics. Through the report, the business and its attitude towards sustainability and ethics as well as its supply chain will be identified. Market drivers will be analyzed through PESTEL analysis.

Levi Strauss & Co was founded in 1853 in San Francisco as a wholesale dry goods business until 1873 when they created the first blue jeans. Today it is a global leader in jeanswear sold in 110 countries worldwide. There are around 500 Levi’s retail stores, but name brand products can be also found at other chain retailers, department stores and online sites.

(Levistrauss, 2019) Levi Strauss & Co owns 4 Brands Dockers, Denizen, Signature and Levi’s which have the biggest percentage of revenue share. According to the company annual report 2019, the revenue is $5,8 billion which is a growth of 6% and Levi’s share is 86%.

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PYRAMID MODEL

(Libreshot,2020) (mymodernmet,2020) (fixthephoto,2020) Edit (author’s own,2020)

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MISSON

Levi’s has recognized the urge to become more sustainable to achieve this goal the company has focused on 4 key sustainability areas- water, climate, chemicals and people.

The textile industry is the second biggest user of water (commonobjective,2018) Levi’s has reacted to this issue by introducing a Water action strategy with the vision to only use as much water as replenishes naturally. This strategy also includes using fewer chemicals. Electricity is one of the biggest contributors to Greenhouse emissions (GHG) which causes climate change (EPA, 2018) therefore Levi and Strauss have been also focusing on the reduction of these emissions and renewable electricity.

STRATEGY

To achieve the goal of reducing GHG emissions Levi & Strauss are using renewable electricity in owned facilities. The biggest part of these emissions come from their supply chain.

These factories are not owned by the company, therefore, they have partnered with Cleaner Textile (PaCT) This partnership helps develop a financing model for the suppliers to make changes for renewable energy.

LS&CO developed Water< Less technique which allows using less water in the finishing process. The company is also planning to extend this program into manufacturing. Part of this is Recycled and reuse of water or F.L.X. Laser technology. “ “Care for our a laser-powered technology that digitizes the design and develplanet: wash less, opment of denim finishing”. finishing”. Because a big part of water use also comes from consumer care Levi’s has been adding the “Care tag wash cold, line for the planet” which informs consumers how to reduce water use. dry, donate or

recycle.”

(LS&CO,2019)

GOALS

“90% absolute reduction in GHG emissions in all owned-and-operated facilities” “40% absolute reduction in GHG emissions across our global supply chain” “100% renewable electricity in all owned-and-operated facilities 9” “Water reduction- Reduce our water use in manufacturing by 50% in areas with high water stress.”

“Water<Less suppliers- All key fabric and garments suppliers, which represent 80%of LS&CO production, will meet their new contextual Water< Less targets.”

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PESTEL ANALYSIS POLITICAL “Over a quarter of municipal waste is still landfilled and less than half is recycled or composted.”

(EUparliament,2019)

“The European Commission made four legislative proposals introducing new waste-management targets regarding reuse, recycling and landfilling.” (EUparliament,2019)

ECONOMICAL Government cuts budget Sustainable Clothing Action Plan (SCAP) from £56 million to £10 million The citizens of the UK buy more clothes than any other country, which end up in the general household waste

Because SCAP isn’t adequately funded it does not currently include any commitments to reduce microplastic pollution from synthetic garments.

A charge of one penny per garment on producers could raise £35 million to invest in better clothing collection and sorting in the UK

SOCIAL The pressure on suppliers to offer unrealistically Modern slavery- Because cost must be reduced low prices. factory workers are getting paid under the national living wage. They have poor working conditions and for working long hour. (fixing fashion,2019)

TECHNOLOGICAL Current natural resources are limited.

New textile technologies are helping create textiles from sustainable sources like paper, wood old plastic bottles. (FixingFashion,2019)

LEGAL Weak or absent law enforcement in some countries with the presence of textile factories.

Companies are using the absence of law enforcement by violating the law to maximize profit by not paying national minimum wage to workers. (FashionRevolution,2019)

ENVIROMENTAL Most companies are still working on the base of a linear supply chain and do not have any sustainable programs.

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“93 billion cubic metres of water used in textile production each year” “1.7 billion tonnes of greenhouse gas (GHG) emissions emitted by 2015 textile production” “26% of the global carbon budget will be used by fashion by 2050” (FashionBritishCouncil,2019)

(LS&CO,2020)

This Pestel table analyses the influences on fashion in a matter of ethics and sustainability. The growth of consciousness has changed the view of the fashion industry as well as the impact of Politics, Economics, Society, Technology, Law and Environment.

(LS&CO,2020)

(LS&CO,2020)

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LEVI’S SUPPLY CHAIN ‘Too deadly to wear’ report was published criticizing Levi Strauss for its high GHG emission coming mostly from the supply chain. The report stated that Levi’s to climate change deaths and has taken minimal action. The brand has reacted to this report by setting goals for the reduction of water use by 50% and GHG emissions (by 40% in its supply chain) by 2025.

The biggest change has to be made in the supply chain.

As, Levi Strauss & Co works with over a hundred factories and doesn’t own any of them,

GLOBAL SUPPLY BASE

making the necessary change is challenging. Therefore the company has many collaborations who help to make their supply chain more transparent and sustainable. Levi’s also has “We’re committed to a program Water<Less for its using 100% more susfinishing process which helps tainable cotton from BCI to reduce water usage and growers, organic cotton chemicals. farms, or recycled cotton suppliers by 2020” 91% of products sold in Levi’s (LS&Co,2019) are made from cotton. They do not own the factories where the cotton comes from.

Fashion revolution Transparency index has scored Levi Strauss & Co 48% for Traceability. The brand has provided the list of factories and mills but the supply chain isn’t yet transparent.

LS&Co is collaborating with the Better Cotton Initiative (BCI) to help farmers grow cotton more sustainably.

Levi & Strauss collaborates with third-party factories. Levi’s has provided a list of factories but have not stated the exact number. They cooperate with around 400-600 factories and the biggest part of them is located in China. In a partnership with Fashion Revolution, the company has provided a list of the factories in their supply chain. These

factories are still working on coal and fossil fuels which contributes to climate change and air pollution.

Although LS&Co has also partnerships which help develop programs for employees the company admits they need to improve the programs. There is no evidence the company ensures a fair living wage for factory workers.

8 (Levi’s Instagram,2020)

(Levi’s Instagram,2020)

Although Levi’s supply chain is linear they are trying to tap into the circular economy.

Levi’s has boxes in store where consumers can bring jeans they no longer wear. These jeans can be from any brand as long as they are clean and dry. These jeans are then transformed into industry use or new fibres.

Levi’s Tailor shops offer repairs to customers’ denim goods so

they can be worn for longer.

Levi’s authorized vintage collection offers pre-owned Levi’s denim. This collection can be only found in New York and San Francisco stores.

The company’s tags also encourage the consumer to recycle their jeans at the end of their life.

(123RF,2020) (yawebdesign,2020) (PNGGuru,2020) (Pngtree,2020) (Dreamstime,2020) Edit (author’s own, 2020)

Levi’s can be found in 50 000 retail locations worldwide, where approximately 3 000 are brand dedicated stores shop-in-shops. 64% of sales come from wholesale and 27% from owned and operated stores. One of the goals for 2025 is to have renewable electricity in all owned and operated facilities.

9 (Levi’s Instagram,2020)

5PS MODEL PROMOTION

PROJECT

Although sustainability isn’t Levi’s main Levi Strauss Foundation's Pioneers in marketing strategy, promotion of their Justice program (since 2010) supsustainability goals and collections ports organizations of “next-generappear on social media quite often. ation leaders” in San Francisco (city Levi’s also started ethic campaigns “I of Levi's Head Office) who support shape my word”. They post inspiring social justice movements. stories focused on race and gender The company also provided a comequality or the LQBT+ community. plete list of donations. Levi Strauss Despite this campaign which includes & co supports 3 main purposes of women empowerment report from community investments.

Worker Rights Consortium (2019) has HIV/ AIDS invested over $3 million, reported Social justice over sexual har$4 million and Emassment and ployee well being PRODUCT violence more than $2.5 milLevi’s offers a collection of Waterless against lion. (Grandlist LS&jeans. Water<Less techniques were women in 3 CO,2019) used in the finishing process. factories in In 2019 Levi’s also introduced a new Africa sawcollection, made from sustainably ing jeans for harvested wood,“OUR GOAL: BY 2021, Levi’s. called Tencel. 80% OF LEVIS® JEANS PLANNING Levi’s website Levi Strauss has WILL BE MADE WITH offers a tab taken small steps WATER<LESS® TECHPROCESS called Vegan towards a circuNIQUES.” Some of the accessories.

(LS&CO,2018) lar supply chain programs to by collecting old make Levi’s denim in stores and reusing the fisupply chain more sustainable bres. By offering Levi’s tailor shops are already in use like Water<Less the company encourages the or renewable energy in owned consumer to extend their jeans life facilities. The goal is to extend before recycling them. Making them, especially to the supplier's another step was planned for this part of the supply chain. Levi year (2020) as in partnership with Strauss & Co also has many partsuppliers to make sure fibres will nerships with organizations who be strong enough to be recycled help these factories to switch to and transformed into new ones. a more sustainable way of proAlthough any specific goals to duction. make their economy circular haven’t been set.

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(Leviâ&#x20AC;&#x2122;s Instagram,2020)

(Leviâ&#x20AC;&#x2122;s Instagram,2020)

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CORPORATE SOCIAL RESPONSIBILITY Levi Strauss & Co does not have a full Corporate social report. Short Social responsibility tab can be found on the company’s website.

Sections include People, Profit and Product. Each section has short relevant articles. Fashion Revolution Transparency index has scored LS&CO for its policy and commitments by 83%. This shows that Levi’s is setting up the right goals to improve social and environmental impact.

PEOPLE

Levi Strauss has a factory-based Worker well-being program in partnership with Sustainability and Health Initiative(SHINE).

SHINE was supposed to test workers’ wellbeing surveys. LS&CO stated that they have reached to over 200,000 workers and invested more than $2.5 million into the wellbeing program. Although Levi’s provided a list of factories there is no evidence that workers are paid fair wages. The Ethical Fashion Report graded Levi’s for workers empowerment with D- grade. This result is the outcome of a lack of

commitment or projects supporting workers rights and living wages. In 2019 Worker Rights Consortium has released a report examining sexual insults in three factories Levi’s have been cooperating with. The company does not have an overview of the treatment workers, who are sawing Levi’s jeans, get. Vice president of Sustainability for LS&Co signed an agreement to end sexual violence and stated: “this would not be tolerated the company will develop a corrective action plan."

(Levi’s Instagram,2020)

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(Levi’s Instagram,2020)

PLANET

Levi’s is has taken a part in the Paris agreement to reduce climate change effects.

They introduced strategies to become more sustainable- 2025 WATER ACTION STRATEGY and ACTION CLIMATE STRATEGY 2025. The goal of these strategies is to reduce GHG emissions and water use. Despite these strategies, most of the factories and transportation are running on fossil fuels which produce

climate pollution footprint. Levi’s also developed Water<Less program to reduce water and chemicals in the finishing program. The program should be applied to 80% of all Levi’s denim by 2020. Levi’s provides collection boxes for customers to sustainably dispose their old jeans in stores. Fibres from recycled jeans are used for industry materials or new textiles.

(LS&CO,2020)

PROFIT

From the LS&CO statement is clear the goal of this company is not only to be profitable but also sustainable. The company invested in some sustainable projects and technologies, including installation of F.L.X lasers. Donations for some charities have been also made in the companies name, supporting some social causes. Sustainability is doubtlessly used as a marketing tactic. Many posts on Socia media are related to sustainability or ethics.

(Levi’s Instagram,2020)

“LS&Co. has been on a journey of transformation for the past eight years. Today, we have the right people, strategies and initiatives in place to continue our momentum and deliver profitable, sustainable growth in 2020 and beyond.”

(CHIP BERGH LS&CO President )

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SWOT ANALYSIS This table analyses the position in the market for Levi’s in the matter of sustainability and ethics. it clearly highlights the strengths, weaknesses, opportunities and threats.

STRENGTHS

• Goals to reduce GHG emissions, water and chemical use • Collection boxes and recycling fibres • Authorised vintage- resale of preowned products • Water<Less program for the finishing process • Water<Less and Tencel sustainable collections • Charity donations to social causes • Collaboration with the Better Cotton Initiative to help to produce more sustainable cotton • Informing consumers with Care For our Planet tags how to be more sustainable

OPPORTUNITIES

• Making the supply chain fully transparent • Developing a more sufficient wellbeing program for factory workers • Set guidelines for workers wellbeing and ensuring if they were followed • Setting up goals to ensure fair living wages and control the conditions • Setting up goals towards circular supply chain • Use of recycled fibres from collection boxes on a bigger scale • Completely reveal the supply chain from fibres to consumers

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WEAKNESSES

• A linear supply chain with no specific goals to become circular • High GHG emissions coming from fossil fuel in factories and transportation • Large impact on climate change • Poor overview of factory workers condition • No goals to ensure fair living wages to factory workers • The exact number of factories is not stated

THREATS

• Cotton resources are limited and it would not be possible to produce enough to keep up with the production.

The solution would recycle cotton fibres • Denim requires a lot of chemicals in its dying process • Finishing process • If Levi’s won’t make changes in the supply chain the Global consciences of the consumer could negatively affect profits • Fines for not fair living wages for workers

CONCLUSION Levi Strauss & Co seems to understand the urge to become more sustainable. Set goals corners reducing GHG emissions and water use are definitely a step in the right direction, although because of the fossil fuels used in factories and transportation Levi’s emissions are still high and its supply chain has a negative impact to the climate change. Programs like Water<Less are reducing water and chemical use, but need to be extended and used for every product. Considering raw cotton is the main fibre source Levi’s would benefit by focusing on making their economy circular.

Despite the fact, the company has invested in a workers wellbeing program, it has to be more intense to make a change. Levi Strauss did well in responding to collaborations which are helping to repair the issues in its supply chain. It is a start for Levi’s if the company is able to achieve set goals and make another step to workers wellbeing and circular economy, it can maintain its position as number one leader in jeanswear and set an example to competitors.

(Levi’s Instagram,2020)

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REFERENCES BAPTISTWORLDAID, 2019. The 2019 Ethical Fashion Report. Available from: https://www.business-humanrights.org/sites/default/files/documents/FashionReport_2019_9-April-19-FINAL.pdf BRITISHFASHIONCOUNCIL, 2019. Fashion & Environment. Available from: https://www.britishfashioncouncil.co.uk/uploads/files/1/NEW%20Fashion%20and%20Environment%20White%20Paper.pdf CBS/AP, 2019. Report finds sexual harassment and violence at Levi’s, Wrangler jeans factories in Africa [viewed Apr 26, 2020]. Available from: https://www.cbsnews.com/news/levis-wrangler-jeans-factories-lesotho-south-africa-sexual-harassment-abuse-violence-report/ CHONG, D.A., 2019. A closer look into Levi’s new global water strategy plan [viewed May 1, 2020]. Available from: https://fashionunited.uk/news/fashion/an-closer-look-into-levi-s-new-global-water-strategyplan/2019092045382 DANZIGER, P.N., How Big Is Levi’s ‘Too Dirty To Wear’ PR Problem?[viewed Apr 15, 2020]. Available from: https://www.forbes.com/sites/pamdanziger/2018/05/01/how-big-is-levi-strauss-co-too-dirty-to-wear-pr-problem/ DEUTSCHE WELLE, Levi’s, Wrangler vow to end rape culture in factories | DW | 16.08.2019 [viewed May 1, 2020]. Available from: https://www.dw.com/en/levis-wrangler-vow-to-end-rape-culture-in-factories/a-50045651 EPA, 2018. Sources of Greenhouse Gas Emissions [viewed Apr 24, 2020]. Available from: https://www.epa.gov/ ghgemissions/sources-greenhouse-gas-emissions EUPARLIAMENT, 2019. Environmental impact of the textile and clothing industry.

FASHIONREVOLUTION, 2019. Fashion Transparency Index 2019. [viewed Apr 27, 2020]. Available from: https://issuu.com/fashionrevolution/docs/fashion_transparency_index_2019/1 GOULD, H., 2014. 10 things you need to know about water impacts of the fashion industry. The Guardian, -09-04T13:48:46.000Z Grand List. 2019a. Available from: https://www.levistrauss.com/wp-content/uploads/2019/03/Levi-Strauss-Foundation-Grants-List.pdf HODAL, K., 2019. Bosses force female workers making jeans for Levis and Wrangler into sex. The Guardian, -08-15T16:20:50.000Z HOUSE OF COMMONS, 2019. Fixing fashion . [viewed 29/04/2020]. Available from: https://publications.parliament.uk/pa/cm201719/cmselect/cmenvaud/1952/1952.pdf Levi’s - Sustainability Rating - Good On You 2019b. Available from: https://directory.goodonyou.eco/brand/levis LS&CO, 2016. Open-Source-Water-Innovations . Available from: https://www.levistrauss.com/wp-content/uploads/2016/03/Open-Source-Water-Innovations.pdf

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REFERENCES LS&CO, 2019a. Annual report. Available from: https://s23.q4cdn.com/172692177/files/doc_financials/2019/ ar/873914_007_BMK_WEB_V2-(1).pdf LS&CO, 2019b. Climate_Action_Strategy. Available from: https://www.levistrauss.com/wp-content/uploads/2020/01/2019_LSCO_WATER_STRATEGY_REPORT.pdf LS&CO, 2019c. Levi Strauss Foundation review 2018.

LS&CO, 2019d. Voices, Pioneers in justice. Available from: https://www.levistrauss.com/wp-content/uploads/2019/03/180405_LSF_report_high-res_singles_sml.pdf LS&CO, 2019e. WATER_STRATEGY_REPORT. Available from: https://www.levistrauss.com/wp-content/uploads/2020/01/2019_LSCO_WATER_STRATEGY_REPORT.pdf PEETERS, G., 2010. Levi’s: making water less jeans | Geert Peeters. The Guardian, -12-20T16:12:10.000Z SEGRAN, E. and SEGRAN, E., 2017. Levi’s Is Radically Redefining Sustainability [viewed Apr 25, 2020]. Available from: https://www.fastcompany.com/3067895/levis-is-radically-redefining-sustainability STAND, 2018. Too deadly to wear. Available from: https://fashion.stand.earth/?_ ga=2.139648240.2111577054.1586889061-1939436427.1586889061 UNKNOWN, 2018. Levi’s. [viewed Apr 15, 2020]. Available from: https://fashion.stand.earth/ WRC, 2019a. Worker Rights Consortium report on sexual harassment at Lesotho... [viewed Apr 26, 2020]. Available from: https://www.documentcloud.org/documents/6277516-Worker-Rights-Consortium-report-on-sexual. html WRC, 2019b. Worker Rights Consortium report on sexual harassment at Lesotho... [viewed Apr 14, 2020]. Available from: https://www.documentcloud.org/documents/6277516-Worker-Rights-Consortium-report-on-sexual. html

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