Rei Sustainability Case

To Council of Exegashive Vice Presidents Date 1th of November, 2012 From Anders F? dder proceeds Evaluation of REIs sustainability goals I am writing in response to your inquiry regarding the plausibility of maintaining the unremitting evolution of the keep company as well as satisfying its sustainability goals. The following sections leave alone address the threesome issues, mentioned by top management, by first describing them, then interpreting them and lastly they leave be evaluated.Conclusion and good words will be based on this. REI focus greatly on the impact that their business has on the environment. They endlessly take in on finding radical and innovative solution that will help strangle these minus effects. Their corporate complaint emphasises this commitment At REI, we inspire, educate and outfit for a lifetime of outdoor contingency and stewardship REIs stewardship priorities * Encourage the active conservation of nature Inspire the responsible use and enj oyment of the out-of-doors * Enhance the essential world and our communities through responsible business practices * Foster opportunities to increase participation in human-powered outdoor recreation * Maintain REI as an employer of choice, where employees be highly engaged in the vision of the company and ar representative of our communities The CEO, Kevin Hagen, excessively stated that these financial and environmental goals and aspiration must be met without sacrificing either. Hagen advocated displacement to a framework of no tradeoffs thus making a paradigm shift Innovation all everyplace compromise.Issue 1 First issue is whether the companys stated sustainability goals and aspirations are consistent with its corporate direction and its stated stewardship objectives that are listed above. REI sustainability goals focus on three areas energy aspiration, greenhouse gas emission (carbon footprint) and decrease of burn outr to landfills. The company plans to add water, toxics, land use and social impact to this list in heartfelt forthcoming. Each of these areas has an aspiration for 2020, a goal for 2015 and a budget for the current year. Energy consumptionREI has taken polar initiatives to increase their energy efficiency by switching to cutting renewable power sources wherever possible. They mission is to keep their energy consumption at a fixed level notwithstanding opening new stores. One the slipway they do this is by investing in self-generation options such as solar technology. Their ways of managing their energy use and increasing efficiency include * Solar technology in many of our stores * inflammation * Elimination of all incandescent bulbs from our retail stores * Installation of highly energy-efficient bulbs and fixtures * Greater reliance on skylights and natural lighting Heating & cooling (HVAC) * Aggressive retrofitting and replacement of outdated HVAC equipment with sophisticated new models * Centralized observe * Energy- saving techniques such as on-demand ventilation and airflow * Measurement of our stores energy efficiency against similar buildings nationwide with the faculty STAR benchmarking tool Greenhouse gas emission (GHG) The aspiration for 2020 c oncerning GHG was to be climate neutral. Their goal for 2015 was to cut GHG by 50 percent compared to 2010 emissions. The budget for each year was a specific target in tons of CO2 that was defined by the 2015 goal.REI looked at many aspects of their business in order to relegate this goal. These were not limited by their own specific action deep down REI. They look beyond themselves and accent to change the way their employees and suppliers act to. The list include employee commuting and travel, travel by customers participating in REI Adventures programs from their homes to the site of program, transportation of products from vendors to the company and shipments to customers. However, they have not include customer transportation to and from t he stores.REI provides meaningful incentives for their employees to reduce the environmental impacts of commuting and corporate travel. These include * A 50 percent transit subsidy * Showers and unafraid bike storage at every REI facility * Telecommuting options at our headquarters spot * mesh conferencing and other(a) technology tools In 2011, REI partnered with The Nature Conservancy to implement an af timberation project on the Bayou Bartholomew property in Louisiana, which will restore forest continuity with the adjacent Chemin-a-Haut State Park.Funding provided voluntarily by REI Adventures will finance the future retirement of carbon offsets from this project. Through this effort, REI supported The Nature Conservancys restoration of this forest ecosystem, as well as the design of a carbon project. This carbon project has been validated and registered through a credible third-party affidavit system (the Verified Carbon Standard). The effort will contribute to long-term sys temic change, benefitting the atmosphere and the forest ecosystem, and has been designed to produce verifiable carbon offsets in the future.Though REI would seek new and innovative solutions to all aspects within the company, there is at least one were they could only offset rather than reduce. REIs largest source of GHG emissions was REI Adventures which generated 31 percent of its total, namely flying members to adventure destinations. This exception was dealt with by purchasing carbon offsets as a part of the travel package, paid by REI. Reduction of waste to landfills REI aspiration for 2020 was to have no waste to landfills and cut waste to landfills by half between 2010 and 2015.In order to achieve this, they strive to ground their furtherance shipping operations as efficient as possible. They work with vendors, shipping companies and industry colleagues to pioneer new approaches to this complex situation. One example of this is how they reinvented the way bicycles were pack aged and shipped. The bikes, shipped in cardboard boxes from china, was packaged in separate and assembled at one location in the US from where they were sent to the stores. The extensive packing, taped and stapled together, held the parts and assembled bikes firm but was difficult to assemble and disassemble.REI revised this process in way that allowed them to reuse the carton everyplace and over again. Essentially, the analogous cartons that was used from the manufacturer in China, was used throughout the supply chain and returned to China, to once again be use. Thereby recycling all the materials rather than sending it to landfills. This decreased the cardboard consumption by more than 60 percent. Additionally they saved more than $1 million in yearbook labour hours due to reduced time required to pack and unpack bikes. Recap REI saw a rise in its net carbon impact during 2010.But the increase was smaller than overall company growth during the year, as measured by sales. Over all, the company used 2. 4% less energy in its facilities, despite adding four new stores and relocating twain retail locations to larger spaces. Other sustainability efforts include purchasing 58. 4% timber Stewardship Council (FSC)-certified paper fiber, and recycling 74% of total operational waste, including more than 95% at REIs two distribution centers. Community efforts include 109,785 volunteer hours committed through 541 REI-hosted conservation projects to plant trees, restore trails, and bonnie parks and streams.The company also funded $3. 7 million in grants provided to 330 nonprofit partners with a focus on conservation and outdoor recreation. However, REI is transferring renewable energy certificates generated by their solar panels. Since they do not claim quotation for reducing carbon when doing so, this is creating a problem in terms of reaching carbon zero. A altercate they must overcome if they intend to reach their aspirations. REI could further reduce their GH G by reevaluating the use of New Zealand as a destination. Many locations on North American (e. g.Alaska, Canada, and the Rocky Mountains) continent have similar location to offer, and seeing that New Zealand is half away around the world, this could be an effective substitution. Exhibit three displays the supercharge of reaching the 2015 goals. Is shows the real(a) status of all three areas in e. g. the first quarter of 2011, the plan for 2011, the flying for 2015 and the goal for 2015. Though the trajectories for 2015 for all three are above the goal, one can see from the actual status for 2011, that they are all fairly close if not under the plan for the same year.So despite the gloom trajectory for 2015 REI is indeed on the right path. Issue 2 The second issue was identifying the authority risks with REI adopting the No Trade-offs approach articulated by the corporate social responsibility group, seen from a managerial mental process measurement perspective. The No trade-of fs approach presents several risks. It can prove be expensive, not only in the solutions required to fulfil but also the hours it take to reach them. As the CEO aspires innovation over comprise, the employees will always have to look for new ways of performing tasks.This takes time and time is money. This is also a very black and white approach leaving none or very microscopical wiggle room. The employees need to stay within the parameters and in some cases they might be looking for solutions that are simply not there. Again, this is time consuming and will undoubtedly make REI miss out on additional earnings lost by looking in other fixed directions. REI has set the forget high and this might also have a negative effect on the people workings to find the solutions. If the goals seem too impossible, it might demotivate rather than inspire thus lowering the morale among the workforce.However, by setting a more reasonable goal for 2015 this is somewhat counteracted. Recap So there are several risks by the No trade-off approach, but REI seems to get around them. The company is still ontogeny and still finding ways to lower their influence on the environment. The Workplace section also notes that REI has been included on Fortune magazines 100 Best Companies to Work for list for 14 resultant years. The company has a 79% employee retention rate. Issue 3 The third issue was to evaluate the hardness of the companys approach to quantity its carbon emission.The goals for environmental sustainability were set by the office of CEO. They were included in the companys non-financial KPIs (Key Performance Indicators). The CSR group is tasked to carry them out, however they also make the recommendation to the office of the CEO on which the goals are based. This could create internal problematic situation as it is the same people who make the recommendations for the goals as well as carrying them, though some tasks are overseen by other departments than CSR.However, REI take a comprehensive view of their environmental impact using a framework that reflects the work of the Outdoor Industry Associations Eco Working Group. They have established key performance metrics for e. g. the three before mentioned areas, and in 2011, they implemented measurement and reporting tools that enables them to forecast, budget and review their progress in these areas. These metrics tie directly into strategic and financial planning for key REI divisions, and results are assessed quarterly by company leadership.REI also became a member of bluesign technologies in 2008. The program requires tight manufacturing controls in mills and factories in order to be certified. This approach will provide greater supply chain transparency in support of REIs goal of reducing the environmental impact of its products. The transparency will also allow them to make a more precise assessment of their impact, as they will have greater access to their suppliers knowledge regarding manufac turing. Recap Based on this I deem the validity of the companys approach to measuring its carbon emission as high.