Initiating Orvis' Sustainability Strategy Identifying Strategic Priorities & Sustainability Champions Within the Business Masters project submitted in partial fulfillment of the requirements for the Master of Environmental Management degree in the Nicholas School of the Environment of Duke University April 28th, 2017 Proposed to Tiffany Teaford, Commercialization Manager, Orvis Adviser: Deborah Gallagher Barbara Gore, MEM 2017 [email protected] Daniel Hutter, DEL-MEM 2017 [email protected] Lili Pita, MEM 2017 [email protected] Executive Summary Introduction Global consumers deplete 30% more resources annually than our planet can replenish. If every person on Earth consumed like Americans, we would need five planets to keep up with demand1. Globally, this type of consumption pattern places significant strain on Earth’s resources manifested in deforestation, depletion of water resources, and accumulation of greenhouse gases in the atmosphere2. As a result, governments have enacted environmental regulation, consumers incorporate social and environmental performance into purchasing decisions and interest groups have become engaged in holding companies accountable for their actions. The net impact of these developments has led retail companies to adopt new social and environmental business strategies, i.e. sustainability. Project Objective As such, this study seeks to develop and initiate an overarching sustainability strategy for a global outdoor industry retailer, Orvis. Orvis has taken on many sustainability initiatives; however, the company currently does not have an overarching strategy that would allow the company to align various siloed sustainability initiatives with internal business objectives. In order to fill this gap, our research strives to capture an understanding of the perceptions, attitudes, and priorities of Orvis associates, managers, and executives with regard to sustainability initiatives. Insights gathered through the creation and distribution of employee engagement surveys, along with industry best practice research, and an analysis of Orvis’ Higg Index results, will be used to develop key components of a long-term sustainability strategy. The Client: Background & Sustainability at Orvis Orvis is America’s oldest mail-order outfitter and longest continually-operating fly- fishing business; offering more than 5,000 products including men’s and women’s sportswear, fine gifts and home furnishings, luggage and travel accessories, dog beds and more. Orvis was founded on principles of conservation, outdoorsmanship, and an authentic appreciation for nature and continues to embeds these values into its philanthropic endeavors. Recently, Orvis developed a new brand mission that is aligned with strong sustainability values and an appreciation for the outdoors. Further, in 2015, Orvis began making significant efforts in sustainability through 1 Knowles et al., "Consumer Futures 2020," Consumer Futures 2020 | Forum for the Future, accessed March 25, 2017, https://www.forumforthefuture.org/project/consumer-futures-2020/overview. 2 Howard, Emma. "Humans have already used up 2015's supply of Earth's resources – analysis." The Guardian. August 12, 2015. Accessed April 19, 2017. https://www.theguardian.com/environment/2015/aug/12/humans-have-already-used-up- 2015s-supply-of-earths-resources-analysis. 1 development of a new Supplier Code of Conduct and completion of the Higg Index, a powerful suite of self-assessment tools used by textile industry to assess social and environmental performance. The Higg Index The Higg Index, provides a platform for Orvis to institutionalize sustainability across three company business dimensions - brand, products, and manufacturing facilities. Review of Orvis’ Higg Index scores lead to the development of tools and resources that the company can utilize to boost their social and environmental performance scores for three brands: Orvis, Gokey, and Scientific Anglers. Employee Engagement Survey Two company-wide employee engagement surveys were developed to assess Orvis associates, managers, and executives value sets in relation to social and environmental issues and to solicit feedback in regards to future improvements to Orvis sustainability strategy and initiatives. In total the survey reached 1,134 Orvis employees with an average 66% response rate between both surveys. Three of the most significant insights from the employee engagement survey include: 1) Orvis associates, managers and executives alike care strongly and deeply about social and environmental topics and would like to improve the company’s sustainability performance 2) Water was a key area of concern for all regions and 3) Opportunities exist to utilize the Higg as a learning and education tool while also improving the company’s social and environmental performance. In addition to the surveys, onsite conversations with Orvis associate revealed that packaging innovation is also as a key area of interest for the company. Recommendations In conclusion through the development of two employee engagement surveys, an assessment of Orvis Higg Index scores and industry peer review three primary recommendations emerged: 1) Internal Alignment & Strategy Development – Create and execute multi- tiered Sustainability Advisory Council to align sustainability priorities with business operations and elevate sustainability to a strategic business priority 2) Boost Internal Higg Scores –Improve Orvis’, Gokey, and Scientific Anglers Higg Index scores and complete Facility Module for Orvis Rod Shop 3) Strategically Address Water & Packaging – Address Orvis’ top priorities, water conservation and packaging innovation, by aligning initiatives with the Higg Index and leveraging the tools and resources provided 2 Contents Executive Summary ........................................................................................................................... 1 Abstract .................................................................................................................................................. 5 Confidentiality ................................................................................................................................ 5 Acknowledgements ...................................................................................................................... 5 Disclaimers ...................................................................................................................................... 5 Glossary of Terms .............................................................................................................................. 6 The Client: Orvis ................................................................................................................................. 7 Sustainability at Orvis .................................................................................................................. 7 Orvis Founding Principals .......................................................................................................... 8 Orvis Philanthropy - Orvis Commitment & Partnerships .............................................. 8 Brand Mission & Framework .................................................................................................... 8 Care & Repair .................................................................................................................................. 9 Industry Engagement .................................................................................................................. 9 Vendor Onboarding ...................................................................................................................... 9 Higg Index ..................................................................................................................................... 10 Project Objective ............................................................................................................................. 10 Why Should Business Care? ........................................................................................................ 10 Engagement .................................................................................................................................. 13 Competitive Advantage ............................................................................................................ 13 Trends in Industry ..................................................................................................................... 14 Higg Index .......................................................................................................................................... 14 Introduction ................................................................................................................................. 14 Brand Modules ............................................................................................................................ 15 Facility Modules .......................................................................................................................... 17 Product Modules & Tools ........................................................................................................ 17 The Higg & Orvis .............................................................................................................................. 18 What Orvis, Scientific Anglers, & Gokey Do Right.......................................................... 18 Looking