REI and MEC Are Sharing Their Supply Chain Scores, But There’s a Catch

North America’s biggest specialty outdoor retailers are pulling back the curtain on their internal sustainability efforts—but only for those who return the favor.

February 22, 2017

At Outdoor Retailer Winter Market, executives from REI and MEC explained why a mutual exchange of supply chain challenges and best practices is the best—perhaps the only—path forward if our industry wants to lead the sustainability movement. Both retailers have been using the Higg Index tool to assess their own private-label supply chains for a long time. Now they’re asking their largest suppliers—and anyone else who wants in on the ground floor of the industry’s sustainability movement—to do the same.

Didn’t get to attend the hour-long session? Watch it now or read how the four panelists responded to the following industry questions.*

“When you share your scores with us, we share ours with you. You will see how REI is doing with our Higg scores on our private brand, so it’s a two-way share.” —Vik Sahney, REI

*Note: The responses below have been edited and, in some cases, paraphrased for space and readability.

On why REI and MEC have begun asking their key brand vendors to adopt the Higg Index

Vik Sahney, REI: We are a retail co-op representing not only our current members but future members who have strong convictions about sustainability. We’ve been focusing on our private-label brands to get our own house in order. But your brands are also represented in our store. We get the kudos and the risk that goes along with that, so we want to be active in conversations about how to protect the environment.

David Labistour, MEC: My drive is business. I’d like to see the organization thrive for another 45 years. People often say, ‘why should we do this? It doesn’t add value to the consumer.’ If you’re wondering why we should do this, it’s because it makes good business sense from a risk perspective and from a brand-trust perspective.

We know our brand carries huge trust in the marketplace. Our consumers’ belief in what we’re doing is greater than what we are actually doing. We carry huge risk in that. We treat our suppliers as partners, and they contribute to the trust we have as a brand. My ask of you is to please know what’s happening in your supply chain. It’s an ask because if something explodes in your supply chain, it will end up at our desk. It will end up as part of our brand trust as well as yours.

“My ask of you is to please know what’s happening in your supply chain. It’s an ask because if something explodes in your supply chain, it will end up at our desk.” —David Labistour, MEC

This industry pours millions of dollars into conservation of wild places. Everyone is passionate about protecting wild places, and yet we turn a blind eye to the effluence and damage they’re doing through our supply chains in making products. If you don’t take steps toward addressing it, you won’t be able to run your business in the long term. You’ll have shocks from supply interruptions and from social media showing things in the supply chain you don’t want associated with your brand.

A live broadcast of the panel at the Outdoor Retailer was powered by BrandLive.
Watch a recording of the panel here.

On whether it’s reasonable or fair to ask small brands (with fewer resources and manpower than REI and MEC) to reach the same level of maturity in supply chain assessment and impact reduction.

Susan Viscon, REI: We’re not asking you all to be at the same place, we’re asking you to start the journey so you can understand where your opportunities are and you can begin to close gaps. We don’t ever want to say, starting next month, we’re only going to buy this or that. We’re looking at how we can create some urgency but also partnerships. We sent a questionnaire to our top 90 brands. This wasn’t about making a judgement. First, it was about understanding where the industry was as a whole and where we can be a resource to those brands based on what we’ve learned so far through the Higg. Second, it’s about being committed to and being advocates of the resources that are out there, so the whole industry can move forward together. Third, it’s about pointing the direction. Where do we see progress and where do we—as the retailer who presents your brands to consumers—want you leaning in your efforts. Fourth, it’s about aligning the industry on key issues and managing to shared goals. This is about encouraging movement, but we don’t want you to do it alone. We want to facilitate the conversation and support brands.

“Commonalities of needs creates commonality of opportunities for people to fulfill those needs at scale.” —Higg panel attendee who has already been using the tool.

A live broadcast of the panel at the Outdoor Retailer was powered by BrandLive.
Watch a recording of the panel here.

On the importance of shifting to the Higg Index and away from other, perhaps proprietary, assessment tools in which brands have invested significant time and resources. And to what end?

Vik Sahney: The Higg Index creates a common language for brands and retailers and hopefully eventually to customers. In the near term, we’re looking for opportunities to say, ‘look, several brands are having challenges in this particular area or that, now what can we do collaboratively through the OIA SWG or through peer-to-peer interactions to address those challenges?’

Susan Viscon: We shared back some of our findings too, so brands could understand how they compare with their peer set.

Val Presolly, MEC: The Higg is an equalizer. No matter where you are in the journey, there’s something we can all learn from each other by seeing where others are leading and leaning. We don’t want to dictate what you’re going to focus on. Every brand has its own sustainability story to tell, but we think the Higg is a great conversation starter and a great way for all of us who measure our impacts to communicate about them in a consistent way.

“The Higg is an equalizer.”

David Labistour: I know a lot of people want to go customer-facing with their sustainability efforts immediately. But that information only has context and is only useful to customers if its harmonized and consistent across every product and every brand. The more we work in a single tool and have uniformity, the sooner we’ll be able to communicate in a meaningful way to the consumer. If we all have our own programs and standards, it actually means very little, it’s just marketing gook.

A live broadcast of the panel at the Outdoor Retailer was powered by BrandLive.
Watch a recording of the panel here.

On whether a brand’s Higg scores will ultimately affect REI and MEC’s sourcing decisions. Could a low score become a barrier to entry.

Val Presolly: We can’t emphasize enough that it’s not about the score. It’s a self-assessment. Watch the Digg The Higg video by Farm To Feet. It’s about understanding your impact areas and knowing where you can improve.

Watch the Farm to Feet Digg The Higg video

Susan Viscon: We don’t want this to be a bully stick or an obstacle to get past, but as it gets adopted, and as consumers understand what you have access to, they’ll begin to make choices, so you have to decide in the short term and long term how you’ll respond to them.

Vik Sahney: This is core to consumers. Brands will start to understand that it’s about progression. It’s not about “are you there yet,” it’s about “you’re on your way.”

A live broadcast of the panel at the Outdoor Retailer was powered by BrandLive.
Watch a recording of the panel here.

On how a small brand with limited resources and manpower and perhaps without a sustainability lead should get started.

David Labistour: We have one sustainability person and one sourcing person. Outside of that, everything we do from a sustainability standpoint is managed by the people who do the functional roles. They are equally concerned about the order minimums and cost of a fabric as they are with the footprint of the fabric, for example. Our sustainability goals are not owned by a sustainability person. Embed the various components of the Higg Index into the people who do the work; it’s much more effective that way.

Val Presolly: Don’t be afraid to skip questions on the Higg if you don’t know the answer. Just pick one you can answer, and see what you can do to improve your scores. Next year, you can pick another. Just make some progress. We don’t expect you to go from zero to a hundred. Just get the conversation started in your organization, then pick a focus.

A live broadcast of the panel at the Outdoor Retailer was powered by BrandLive.
Watch a recording of the panel here.

On what it will cost a company in the $7 million–$10 million range to begin using the Higg.

Beth Jensen, OIA: Nothing if you sign up now. OIA is subsidizing the cost for members until May 2017. After that, the fee will be reduced for OIA members. This is not just an outdoor industry tool; it’s being adopted by the global apparel and footwear industry. Something like 40 percent of brands are using it through OIA or the Sustainable Apparel Coalition. If you look at SAC’s membership, it’s Gap, Levi’s, etc. They’re the really big guys. OIA’s role is to bring the small to medium enterprises that make up the majority of our industry into the fold by subsidizing the cost until this spring, so that’s not a barrier. Furthermore, we will continue to develop more tools—specifically for the smaller brands—based on your feedback through the work of the OIA Sustainability Working Group.

Join the OIA Sustainability Working Group

But it’s not just about saving individual costs; there are collective cost savings as well. The broader adoption we have of this tool, the more resources will be saved in terms of having to do a bunch of separate audits in factories. All companies are assessing facilities and assessing their own brands against a common set of questions. It’s not many brands going in and asking the same questions in slightly different ways, which is a resource drain. That’s why we’re up here together. We try to collaborate as much as we can by saying, “does it make sense to make this ask together” for efficiency’s sake.

David Labistour: From a bottom-line point of view, I’d point to what Joel Makower said in his presentation. He used the example of organizations that, if they looked at ecological cost of their business, it would wipe out all their profits plus more. We [MEC] have never looked at this as a cost. The biggest cost is time for people in the organization as they get use to the tool. A big mistake in our supply chain will cost us more than the cost of the index tool itself. We see it as the upfront cost of using the tool versus a cost of remediation or brand damage. The former is much easier to justify.

Vik Sahney: There’s no cost associated with doing the assessment. The assessment helps you ask questions to identify a set of risks. Then you determine if you’re comfortable bearing any or all of those risks. From there, you can begin to determine how to reduce your risk profile. You might also find efficiency and productivity movement. You might find you can apply a chemical in a better way to minimize the usage of that chemical and therefore also reduce the cost. There are places whereby devoting the time and resources, you find those win-win opportunities.

A live broadcast of the panel at the Outdoor Retailer was powered by BrandLive.
Watch a recording of the panel here.

On what’s happening now and through the rest of 2017.

Beth Jensen: We’re encouraging companies to submit their Higg scores by March 31, so we can begin compiling them for a benchmarking report that we’re aiming to release in late 2017. No specific companies’ data will be called out, except those who have given us permission to share results. As you do that and try to complete the Higg, reach out to Beth and Nikki.