At PVH, CR is a lot more complicated than altruism.
One of the defining traits of effective CR programs is that they take broader business objectives and translate them into real assurances. This is definitely true of Phillips Van Heusen’s CR efforts, as the company lists “accountability” as a core value, and strives for transparency whenever possible.
The company’s treasurer and senior vice president for business development and investor relations, Dana Perlman, spoke with CR Magazine about PVH’s core values, “source-to-store” approach, corporate storytelling, and commitments to humanitarian and environmental responsibility.
At PVH, the corporate responsibility team takes its direction for CR storytelling from chairman and CEO, Manny Chirico. The team often cites Chirico’s directive that they need to emphasize the importance of understanding the company’s impact on people. Environment, and communities. Chirico, they say, grew up understanding that charity and the giving of oneself were very important—that, “to whom much is given, much is expected.” Since Chirico became CEO in 2006, he has stressed focusing on the people throughout the PVH supply chain as an important priority, one the company began addressing in 1991 in the A Shared Commitment code of conduct. Perlman echoes Chirico’s objectives in her interview with CR.
CR Magazine: Can you give an example of how core values define how you do business?
Dana Perlman: PVH’s leadership on human rights issues within the supply chain illustrates how our core values drive our business practices, particularly in relation to two of PVH’s five core values: integrity and accountability.
One way PVH’s integrity is reflected is through A Shared Commitment: our code of conduct for business partners and vendors. PVH became one of the first companies in the apparel industry to develop a code of conduct more than 25 years ago. Adherence to this code by those who seek to do business with PVH—and by their business partners in our supply chain—is a prerequisite for establishing or continuing a relationship with our company. Our suppliers are evaluated based on this code.
We hold ourselves accountable, in part, by engaging third-parties, such as the Fair Labor Association (FLA). We were a founding member of the FLA and have continuously been reaccredited by them—it’s on our website—most recently in 2016.
CR: Can you give an example of tools and channels you have added to increase transparency?
DP: We are constantly working to enhance our CR reporting and created the CR page of PVH.com to make information on social and environmental performance more accessible to key stakeholders. We recently posted PVH’s CR Supplier Guidelines, PVH’s Chemical Commitment and Action Plan and our Restricted Substances List (RSL), which provide insight into our efforts to remove hazardous chemicals from our supply chain by 2020, are also available on the website. Also, we have started to report CR performance through important external channels such as the Carbon Disclosure Project’s (CDP) Climate Change questionnaire.
CR: Can you talk about your “source-to-store” approach?
DP: Sure. That includes four stages of the value chain—source, make, sell, and (re)use.
“Source” refers to ethical and responsible purchasing and production, from design to sourcing of the raw materials used to make our products. “Make” refers to the design, labor, and manufacturing processes. “Sell” refers to the marketing, packaging, transportation and sale of our products. And “(re)use” refers to the ways our customers care for, maintain, reuse, recycle, or dispose of our products.
CR: Can you provide some examples of this approach in action?
DP: Well, in 2016, we made a commitment to source raw materials more sustainably. Our Tommy Hilfiger business has made a commitment to source 100 percent sustainable cotton by 2020. In 2015, it procured 9.5 million pounds of “Better Cotton,” amounting to approximately 11 percent of its cotton usage globally. In addition, we are requiring that all of the suppliers from which we source comply with our Restricted Substances List by 2020.
On the make side, our code of conduct governs how we approach workers who make our products and communicates our human rights and labor standards to our suppliers. We continue our commitment to the Accord on Fire and Building Safety in Bangladesh, and remediation of Bangladeshi factories producing product for PVH remains above the accord average. As of January 2017, 87 percent of issues have been remediated in Bangladeshi factories.
Last, our sustainable packaging commitment to reduce and send zero waste to landfill relates to how our products are sold and potentially how packaging is reused or recycled. In 2016, we completed a global packaging baseline and held a sustainable packaging summit attended by 90 participants representing all our global businesses. One example involves the Heritage Brand Dress Furnishings Group, which is replacing PVC plastic trims in our dress shirt packaging with trims made with PET. The new trims offer improved recyclability and use 57 percent less water and 51 percent less energy.
Dirk Olin is a contributing editor for CR Magazine.