Policies unveiled Monday by the big consumer co-op mean suppliers that can’t or won’t meet REI requirements in areas such as manufacturing labor safety and fairness, chemical usage, environmental impact and animal welfare won’t be considered for its store shelves.
By the fall of 2020, every tent REI sells will be free of harmful flame-retardant chemicals. Sunscreens will not contain coral-reef-bleaching oxybenzone. Wool or down products will come from humanely treated sheep and geese.
Those are some of the wide-ranging new minimum sustainability standards for all of the 1,000-plus brands the outdoor-equipment giant carries, under policies being unveiled Monday that have few analogues among retailers.
The consumer-owned co-op is also reporting a record $2.62 billion in 2017 sales.
REI in 2017 by the numbers
• A record $2.62 billion in sales, up 2.6 percent
• Operating income of $214 million, up 3.9 percent
• More than 70 percent of operating income is distributed to co-op members through dividends and credit card rebates; to employees through profit-sharing and retirement plans; and to support outdoor-recreation locations. The rest is reinvested in new stores, inventory and operations.
• 17 million co-op members, up 1 million from 2016
• 151 stores in 36 states; five new stores planned this year
• 12,000 employees
Companies that can’t or won’t meet REI’s requirements in areas such as manufacturing labor safety and fairness, chemical usage, environmental impact and animal welfare won’t be considered for REI’s store shelves.
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REI’s standards are a new stake in the ground for an outdoor-equipment industry that has been trying, with mixed results, to match its environmental impact to the values espoused by many of its customers.
REI Chief Executive Jerry Stritzke calls the standards “maybe one of the most transformative things” the 80-year-old co-op has done — one he hopes will have a ripple effect beyond its own industry.
“At some point you get to a true tipping point where it’s expected by consumers,” he said.
Andrew Winston, an independent business strategist in New York who advises multinational companies on sustainability practices, said REI’s standards are uncommonly clear, specific and aggressive.
While other retailers also offer guidance to their suppliers on sustainability, it’s often used as a tiebreaker — a way to choose between two otherwise similar products. This represents a next level up, he said, with REI telling suppliers, “You won’t be sold in the store if you don’t meet certain criteria.”
REI’s standards include two tiers: a set of minimums that companies must meet to have their products considered by REI, called “brand expectations”; and a set of “preferred attributes,” such as more rigorous certifications, business practices and material choices “that REI has determined to be most relevant to our product offering and most effective in advancing sustainability.”
REI plans to promote products with these attributes, creating an incentive for companies to continue pursuing more ambitious sustainability goals and maintaining a point of differentiation for brands that have already achieved them.
The co-op also intends to highlight the sustainability certifications themselves. Employees are being trained to explain them to customers in plain language. They will be highlighted in store displays. People will be able to shop online for products with attributes such as “organic cotton” or “fair trade.”
Minimum and preferred standards at REI
Supply chain labor
Minimum: a manufacturing code of conduct meeting practices like those of the International Labour Organization
Preferred: certification from Fair Trade USA or Fairtrade International
Minimum: A restricted-substances list of banned products that meets or exceeds regulatory requirements; no bisphenol A (BPA) in food or beverage containers; no prohibited flame-retardant chemicals in tents; no long-chain per- and polyfluoroalkyl chemicals (used as stain and water repellents) on apparel; no oxybenzone in sunscreens.
Preferred: adherence to the bluesign system for managing environmental impact of textile manufacturing; Leather Working Group certification of hide sources and tannery processes
Minimum: Down feathers and wool must come from ducks, geese and sheep treated humanely.
Preferred: More rigorous Responsible Down and Wool standards
“We’re seeing the role that values play in consumers’ decisions become increasingly important,” Stritzke said.
Winston said this will be a boon for the certifications. While many people may be familiar with labels such as organic, fair trade and recycled, others, such as bluesign — a certification for chemicals management in textiles manufacturing — are not well known.
These certifications, he added, are brands that will benefit from the exposure and education REI is planning, Winston said. If consumers learn to look for more sustainability certifications, it could strengthen those labels and spread the protections they promise to workers and the environment.
“It’s novel [for REI] to say, ‘These are the labels we believe in sharing with consumers,’ ” he said.
It’s difficult to say what these standards will mean for prices at REI. Some things, like raising wages in the supply chain, necessarily increase costs. REI is hoping that encouraging broader adoption of other sustainability practices — the use of organic cotton, say — will lead to lower costs in the long-term.
“We hope that by rolling out these standards we’re actually going to build demand within the supply chain for different materials,” said Greg Gausewitz, REI’s manager of product sustainability.
REI has worked with its suppliers in developing the standards, many of which hew closely to voluntary programs the industry has established in the last decade or more. (REI’s first factory code of conduct was established in 1993.)
The North Face, for example, helped develop the Responsible Down Standard, a “preferred attribute” for products containing animal feathers under REI’s new standards. James Rogers, director of sustainability at The North Face, said that standard, now administered by an industry nonprofit and used by more than 80 brands, illustrates how large players can leverage their size and lead the way.
“The more we adopt and implement programs like the [down standard] and REI’s standards, the better positioned our entire industry is for the future,” Rogers said.
For smaller brands, the new standards are another hurdle to clear as they work to get their goods into one of the premier outdoor retailers. It’s a significant challenge at a10-person company with no corporate sustainability department.
Gausewitz said REI intends to help suppliers, particularly smaller ones, meet the standards.
“We have a huge opportunity to support and engage with them and get them down the right path on sustainability from the beginning,” he said.
One hot-button environmental issue not addressed by the standards is plastic microfibers washing off synthetic fleece and finding their way into the environment.
Microplastics are “an emerging issue” that REI is tracking closely including through a research project with the Vancouver Aquarium in British Columbia, he said.
One of the criteria for the standards is that there be effective, scalable solutions to the various challenges they aim to address — and no such solution exists yet for microplastics, he said. Gausewitz noted that this is the first version of REI’s sustainability standards, and that microplastics could be added in the future.