{"id":23985,"date":"2017-11-15T16:26:34","date_gmt":"2017-11-15T21:26:34","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/sustainability-when-doing-good-is-good-for-business\/"},"modified":"2017-11-15T16:26:34","modified_gmt":"2017-11-15T21:26:34","slug":"sustainability-when-doing-good-is-good-for-business","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sustainability-when-doing-good-is-good-for-business\/","title":{"rendered":"Sustainability: When Doing Good Is Good for Business"},"content":{"rendered":"

Sustainability isn\u2019t just good for the environment \u2013 it\u2019s good for business <\/strong><\/p>\n

As countries, corporations and consumers band together to address increasingly severe climate change, several retailers, including Gap, are leading the charge in supply chain sustainability.<\/p>\n

Gap, the namesake brand of ~$16B clothing retailer Gap Inc., has many reasons to care about its contributions to climate change. First among these is economics. Carbon emissions \u2013 a leading contributor to climate change \u2013 are lower in more efficient supply chains, and more efficient supply chains are less costly to operate. As retailers work to make their supply chains \u201cgreener\u201d, they will decrease the costs of producing goods and getting goods to the consumer. [1] Gap has a somewhat unique environmental challenge: it focuses on selling cotton apparel staples, like t-shirts and jeans, that have a particularly high environmental impact compared to many other apparel items. [2] As it reduces the environmental impact of its sourcing and manufacturing, it will save money on natural resources used for production.<\/p>\n

Sustainable retailing also has revenue benefits, as corporate social responsibility is gaining importance in the mind of the consumer. In a survey of apparel shoppers, Morgan Stanley found that \u201cgood ethics\u201d jumped from 53% importance to shoppers in 2010, to 62% in 2016. [3] By implementing and then marketing its sustainability efforts, Gap has the opportunity to retain or win share of wallet among environmentally conscious consumers.<\/p>\n

Finally, there is regulatory uncertainty surrounding environmental allowances and restrictions. Retailers that get ahead of today\u2019s standards reduce their exposure to financial risk from complying with future regulations.<\/p>\n

Gap continues to make efforts to reduce the direct environmental impacts of its supply chain <\/strong><\/p>\n

Gap\u2019s past environmental efforts give it a solid foundation on which to keep building. The retailer has stated standards for its mills regarding environmental impact. It has a clear map of its full supply chain (not all retailers do), dutifully tracks which suppliers are being used, and knows which suppliers give visibility and control to Gap. It requires its cut and sew facilities to self-report data for identifying sustainability opportunities. [4]<\/p>\n

Going forward, Gap is focusing sustainability efforts on product design, sourcing and production. In the near-term, this centers on reducing water usage during production of textiles and finished goods. To that end, this year Gap launched \u201cGap for Good\u201d denim, made with 20% less water and available in all Gap stores. [5] Outside of water consumption, the majority of Gap\u2019s environmental efforts will be realized in the medium-term. Gap has set several environmental goals for the next 5-10 years [5][6]:<\/p>\n