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To: Council of Executive Vice Presidents Particular date: 1th of November, 2012 From: Anders F? dder Subject: Analysis of REI’s sustainability goals I i am writing in answer to your request regarding the plausibility of retaining the ongoing growth of the organization as well as rewarding its sustainability goals. This sections will address the three issues, pointed out by leading management, by first describing them, then interpreting them and finally they will be examined.

Conclusion and recommendations depends on this.

REI focus tremendously on the effect that their very own business is wearing the environment. They continuously work on finding new and ground breaking solution that will aid reduce these negative effects. Their particular corporate objective emphasises this kind of commitment: “At REI, all of us inspire, teach and costume for a lifetime of outside adventure and stewardship REI’s stewardship focus: * Inspire the effective conservation of nature Inspire the dependable use and enjoyment of the outside * Improve the natural community and the communities through responsible organization practices 5. Foster in order to increase engagement in human-powered outdoor excitement * Maintain REI as an employer of preference, where workers are highly involved in the vision of the organization and are representative of our neighborhoods The CEO, Kevin Hagen, also mentioned that these economical and environmental goals and aspiration should be met without sacrificing either. Hagen advocated moving to a framework of “no tradeoffs as a result making a paradigm shift, Innovation more than compromise.

Concern 1 Initially issue is actually the company’s explained sustainability desired goals and aspirations are consistent with its business mission and its stated stewardship objectives which have been listed above. REI sustainability desired goals focus on 3 areas, strength consumption, greenhouse gas release (carbon footprint) and lowering of waster to landfills. The company plans to add normal water, toxics, area use and social effects to this list in forseeable future. Each of these areas has an aspiration for 2020, a goal intended for 2015 and a budget pertaining to the current yr. Energy intake

REI has taken several initiatives to enhance their energy efficiency by simply switching to new renewable power sources wherever possible. They objective is to keep their strength consumption in a fixed level despite beginning new stores. One many ways they do this through investing in self-generation options just like solar technology. Their very own ways of managing their energy use and increasing efficiency include: 2. Solar technology in many of our retailers * Lighting: * Removal of all incandescent bulbs from your retail stores 5. Installation of very energy-efficient light bulbs and fixtures * Better reliance in skylights and natural lighting Heating & cooling (HVAC): * Hostile retrofitting and replacement of out of date HVAC equipment with advanced new versions * Centralized monitoring 5. Energy-saving techniques such as on demand ventilation and airflow * Measurement of our stores’ strength efficiency against similar structures nationwide with the ENERGY CELEBRITY benchmarking instrument Greenhouse gas emission (GHG) The desire for 2020 concerning GHG was to always be climate natural. Their aim for 2015 was to slice GHG by 50 percent when compared with 2010 exhausts. The budget for each year was obviously a specific goal in a lot of CO2 that was defined by the 2015 goal.

REI looked at aspects worth considering of their business in order to reach this aim. These were not really limited by their own specific action within REI. They look beyond themselves trying to change the way their staff and suppliers act to. The list incorporate: employee driving and travel and leisure, travel by simply customers playing REI Journeys programs off their homes towards the site of program, travel of products by vendors to the company and shipments to customers. However , they have not included customer transport to and from the stores.

REI gives meaningful incentives for their staff to reduce the environmental impacts of commuting and corporate travel. These include: * A 50 percent flow subsidy 2. Showers and secure bicycle storage at every REI service * Telecommuting options in our head office location 5. Web meeting and other technology tools This year, REI combined with The Characteristics Conservancy to implement an afforestation job on the Marais Bartholomew real estate in Louisiana, which will restore forest continuity with the adjoining Chemin-a-Haut State Park.

Financing provided under your own accord by REI Adventures will certainly finance the near future retirement of carbon offsets from this project. Through this kind of effort, REI supported The type Conservancy’s refurbishment of this forest ecosystem, and also the design of a carbon job. This carbon dioxide project have been validated and registered through a credible thirdparty certification program (the Validated Carbon Standard). The effort is going to contribute to long term systemic transform, benefitting the atmosphere as well as the forest environment, and have been designed to develop verifiable carbon offsets in the future.

Though REI would seek fresh and ground breaking solutions to all aspects inside the company, there is at least one were they can only offset rather than lessen. REI’s most significant source of GREENHOUSE GAS emissions was REI Adventures which generated 31 percent of its total, namely flying users to excursion destinations. This kind of exception was dealt with getting carbon offsets as a part of the travel bundle, paid simply by REI. Reduction of waste materials to landfills REI aspiration for 2020 was to have no waste to landfills and cut waste to landfills by 50 percent between 2010 and 2015.

In order to accomplish that, they try to make their particular packaging shipping and delivery operations because efficient as possible. They work together with vendors, shipping companies and industry colleagues to leading new approaches to this complicated situation. One example of this is definitely how they reinvented the way bikes were grouped together and transported. The cycles, shipped in cardboard packing containers from china, was packaged in some parts and constructed at 1 location in the US from exactly where they were brought to the stores. The extensive taking, taped and stapled collectively, held the parts and assembled bikes securely but was difficult to build and take apart.

REI revised this process in way that allowed these to reuse the carton over and over again. Essentially, similar cartons that was used in the manufacturer in China, was used throughout the supply chain and returned to China, to once again be use. Thus recycling all the materials rather than sending that to landfills. This decreased the cardboard boxes consumption by simply more than sixty percent. Additionally they saved a lot more than $1 million in annual work hours because of reduced period required to load up and unpack bikes. Recap REI saw a rise in the net carbon dioxide impact during 2010.

However the increase was smaller than overall company expansion during the year, while measured simply by sales. Overall, the company used 2 . 4% less energy in its facilities, despite adding four fresh stores and relocating two retail spots to greater spaces. Other sustainability work include getting 58. 4% Forest Stewardship Council (FSC)-certified paper fibers, and recycling 74% of total detailed waste, including more than 95% at REI’s two syndication centers. Community efforts included 109, 785 volunteer hours committed through 541 REI-hosted conservation jobs to grow trees, restore trails, and clean theme parks and fields.

The company as well funded $3. 7 mil in grants provided to 330 non-profit partners having a focus on conservation and outdoor recreation. However , REI can be transferring power certificates produced by their solar panel systems. Since they will not claim credit rating for reducing carbon when you are performing so , this can be creating a injury in terms of reaching co2 zero. Challenging they must conquer if they will intend to reach their dreams. REI can further decrease their GREENHOUSE GAS by reevaluating the use of New Zealand being a destination. A large number of locations upon North American (e. g.

Ak, Canada, and the Rocky Mountains) continent include similar location to offer, and seeing that Fresh Zealand can be half aside around the world, this might be an effective substitution. Exhibit three displays the progress of reaching the 2015 goals. Is shows you see, the status coming from all three areas in at the. g. the first one fourth of 2011, the plan for 2011, the trajectory to get 2015 as well as the goal to get 2015. Although trajectories intended for 2015 for all three happen to be above the aim, one can discover from the genuine status for 2011, they are all pretty close if not underneath the plan for a similar year.

And so despite the gloom trajectory to get 2015 REI is indeed on the right path. Issue a couple of The second issue was discovering the potential risks with REI adopting the “No Trade-offs strategy articulated by corporate interpersonal responsibility group, seen via a managerial performance measurement perspective. The “No trade-offs approach shows several dangers. It can prove be expensive, with the alternatives required to fulfil but as well the several hours it take to reach them. As the CEO aspires innovation above comprise, the employees will always have to look for innovative ways of performing tasks.

This does take time and period is funds. This is also a really black and white approach departing non-e or perhaps very little wiggle room. Employees need to stay within the parameters and in some cases they could be looking for alternatives that are simply not there. Again, this is time intensive and will undoubtedly make REI miss out on added earnings dropped by looking in other fixed guidelines. REI offers set the line high which might also possess a negative impact on the people trying to find the solutions. If the goals appear too extremely hard, it might demotivate rather than inspire thus decreasing the comfort among the staff.

However , by setting an even more reasonable objective for 2015 this is to some degree counteracted. Summarize So there are lots of risks by the “No trade-off approach, nevertheless REI generally seems to get around all of them. The company continues to grow and still locating ways to reduced their effect on the environment. The Workplace section also records that REI has been bundled with Fortune magazine’s “100 Ideal Companies to Work for list for 14 successive years. The organization has a 79% employee retention rate. Issue 3 The next issue was to evaluate the quality of the company’s approach to testing its co2 emission.

The goals pertaining to environmental sustainability were established by the office of CEO. They were contained in the company’s non-financial KPIs (Key Performance Indicators). The CSR group can be tasked to carry them away, however they likewise make the advice to the office in the CEO which the desired goals are based. This could create internal difficult situation as it is the same people who make the recommendations for the goals as well as having them, nevertheless some responsibilities are overseen by various other departments than CSR.

Nevertheless , REI require a comprehensive watch of their environmental impact using a framework that reflects the effort of the Outdoor Industry Association’s Eco Doing work Group. They have established key performance metrics for e. g. three before pointed out areas, in addition to 2011, they will implemented dimension and credit reporting tools that allows them to outlook, budget and review their very own progress during these areas. These metrics tie up directly into proper and monetary planning for key REI sections, and the desired info is 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 method will provide better supply cycle transparency for REI’s goal of minimizing the environmental impact of its products. The transparency will also allow them make a far more precise assessment of their influence, as they may have greater use of their suppliers’ information relating to manufacturing. Recap Based on this kind of I regard the quality of the company’s approach to computing its carbon emission as high.