We estimate there are significant impacts in our supply chain, from the raw material production to the garment manufacturing process. Although we do not directly own or operate these facilities, we have the opportunity to influence improved environmental management.
We recognize our suppliers’ commitments to environmental sustainability and reflect them in our Sourcing Scorecard, a key tool used by the business to influence allocation decisions.
ANN INC. is a member of the Sustainable Apparel Coalition, an industry-wide group of leading global apparel and footwear brands, retailers, suppliers, nonprofits and NGOs working to reduce the environmental and social impacts of the apparel industry. Since 2013, we have been committed to using the Higg Index, which helps to measure the environmental performance of our top strategic apparel suppliers and drives environmental improvements at their facilities. The Higg Index has helped our suppliers to improve in four key focus areas including environmental management systems, energy & GHGs, water and wastewater.
We conduct unannounced, independent third-party audits at factories that produce our branded apparel products. Environmental aspects are also examined in the audits to ensure the factory is in compliance with the local environmental regulations. In addition, we screen the factories in our supply chain annually with publicly available information regarding their environmental performance. We work with our suppliers to develop solutions to address their challenges and encourage them to report their corrective actions.
It is critically important for ANN INC. to know that our products are safe for our client’s end use. We have a restricted substances list (RSL) that communicates to our suppliers what substances may not be used when manufacturing our products. We also regularly review this list to maintain up-to-date information to protect our clients and the environment.
We believe our suppliers can realize numerous business benefits by driving energy efficiency at their facilities. We are committed to working with our suppliers to achieve these efficiencies while reducing the environmental impact of ANN INC.’s supply chain.
Our Supply Chain Sustainability Program incentivizes our suppliers to perform energy audits and make pledges to reduce their energy use. Together, our suppliers have pledged to implement energy saving projects to collectively save over $3 million by 2015. To date, our suppliers have implemented 250 energy savings programs that have saved over $3.5 million in energy costs, which have an average return on investment (ROI) of 1.42 years. Through this program, 18,800 tons of CO2 a year have been saved, which would be equivalent to the CO2 emissions of 1,536 cars circling the globe each year.
We also use the Sustainable Apparel Coalition’s Higg Index to evaluate the management systems and energy efficiency processes that our suppliers have in place at their facilities. The results of their energy efficiency efforts are captured in our Sourcing Scorecard.
We do not just measure performance, but also work to help our suppliers learn best practices and overcome challenges. We use our ANN CONNECTs platform to provide the strategic suppliers from around the world with opportunities to share best practices. We have conducted energy efficiency and carbon footprint webinars. We collaborated with other SAC members to develop the Higg Manual, to help our suppliers understand the actions they can take to drive sustainability in their business. We are committed to helping our suppliers continuously improve in this area.
In 2015, we continued to partner with the SAC in the Clean by Design program with our key mills in Jiangsu Province of China to measure their environmental impact and energy saving opportunities. To learn more of the program, visit http://www.nrdc.org/international/cleanbydesign/.
We understand that water is an important resource, and we are constantly looking for ways to reduce our impact in the places we do business. We are investing in our knowledge to better understand water impacts in our supply chain.
ANN INC. expects our suppliers to meet all environmental laws and regulations in the countries of manufacture. We work closely with our Quality Assurance associates and through our social compliance monitoring program to identify water risks at key laundries and facilities.
We measure supplier performance using the Sustainable Apparel Coalition’s Higg Index’s sections on water use and water discharge and incorporate those scores into our Sourcing Scorecard.