New Balance: Keeping it Green

Report
Bolstering CSR in Nike
Setting the Pace
for CSR
Team Cool Runnings
Call for Action
◊ Issue at Hand: While New Balance (NB) is
currently utilizing socially responsible practices,
the approach is fragmented.
◊ Mission: “Demonstrating responsible
leadership, we build global brands that athletes
are proud to wear, associates are proud to
create, and communities are proud to host.”
◊ Goal: Create and align an integrated CSR
framework into the NB organization.
3
Why Care About CSR?
◊ “Up to 50 per cent of a company’s value could be
dependent upon reputation and intangibles”1
◊ Company’s citizenship drives 16.3% of a
company’s reputation of products and services2
Company Valuation: $2.9B
Value of Reputation: $1.5B
Value of CSR: $236.4M
1Veleva,
4
Vesela. “New Balance: Developing an Integrated CSR Strategy.” Richard Ivey School of Business, The University of Western Ontario. Page 6.
Institute and Boston College Center for Corporate Citizenship, “Building Reputation Here, There and Everywhere: Worldwide Views on Local
Impact of Corporate Responsibility,” March 2009, http://bcccc.net/document/docWindow.cfm?fuseaction=document.viewDocument&documentid
=1270&documentFormatId=2331, accessed March 29, 2011.
2Reputation
How Do We Get There?
◊ Integrated approach:
Community
Support
Operations
Products &
Services
Joel
Stephanie
Casey
Values
Principles
5
Jackie
Instituting Responsible Leadership
Investing in the
Community
Sustainable
Practices and
Products
Ethical and
Environmental
Decisions
Responsible
Leadership
Alignment
Follow Through
Top Down
Implementation
6
Reflecting Commitment in Structure
◊ We recommend creating a “Corporate Social
Responsibility” Department
Reporting directly to CEO
◊ Establish Executive Vice President Position
◊ Est. Incremental Cost: $250,000 per year
◊ Benefit: Visible, sanctioned new department and
leadership will be crucial to effective company
buy-in, recognition, and incorporation of CSR
program
7
Reflecting Commitment in Structure
Chairman
CEO
8
President
Executive
VP and CFO
VP of CSR
Executive VP
Apparel
VP and
Treasurer
President
and COO
Executive VP
International
VP Finance
VP
Intellectual
Property
Executive VP
Footwear,
Product,
Marketing
Executive VP
Sales, North
America
VP Consumer
Experience
Vice-Chair and
VP
Administration
VP Corporate
HR
A New Type of Accounting
The New Balance Sheet
DESCRIPTION:
Bi-monthly letter from the newly
formed CSR department
COSTS:
>Materials & Publishing
$3,000
BENEFITS:
•Featuring “CSR Wins” in
>Promote Transparency
departments across the
>Improved Internal
company
Communications
>Department Involvement in CSR
•Presenting “Staff Spotlight” to >Employee Empowerment
bolster employee recognition
and new initiatives
9
Aligning Products & Services
Products &
Services
Casey
Values
Principles
10
Green is the New Balance
Responsibility Score Card
Factory Store
40 Life Street, Boston MA
^ LEED Green Building
Certified since 2009
^ 78% of electricity from
solar power
^ Paperless since March 31, 2009
^ Total Carbon Footprint
reduced by 58% since 2007
11
A New Footprint
◊ Position NB as an industry leader in facility
energy efficiency and clean technology
◊ How:
 Invest in cutting edge green innovations for heating, cooling,
ventilation, and waste disposal
 Pursue LEED Green Building Certification for all NB facilities
 Sponsor LEED training for the VP of CSR
◊ Why not green products?
 Green footwear and apparel not yet perceived as high quality
 NB wants to be perceived as an athletic shoe company
 Current green products are painful to look at
12
Green Shoes Everyone Can Love
◊ Collaborate with green designers to build a
pipeline of green products
◊ Beat major brands to fashionable green offering
Current
Wheregreen
we are
offering,
headedthe
070
13
Integrating Efficient Operations
Operations
Products &
Services
Values
Principles
14
Stephanie
Shoring Up Operations
◊ Goal of Operations in CSR context:
Maximize positive impacts on employees,
environment, society while adhering to the
firm’s overall mission
◊ NB is doing the right thing in the U.S. …
… but poorly communicates/recognizes
initiatives and is inconsistent overseas
15
Empowering through Recognition
◊ We recommend launching a
“Kaizen Appreciation
Program” (KAP)
Train each associate in
continuous improvement
Each quarter, 1 associate is
chosen to present
improvement project and
results to management
$1,000 bonus
◊ Communicate green initiatives in
New Balance Sheet newsletter
16
Maintaining a Consistent Approach
◊ NB should be consistent in its standards both in
the U.S. and overseas
◊ We recommend holding temporary workers to the
same hour and compliance standards as full-time
associates
Based on standards within that country
Work with organizations such as Maquila
◊ We suggest enhancing the compliance standards
for apparel and accessories division
17
Boosting Morale and Productivity
KAP -Associate
Recognition
Benefits
Increased
Morale and
Productivity
Communicate
Green
Initiatives in
Newsletter
Hold Temporary
Workers to
Same
Standards
Compliance Apparel &
Accessories
Increased
Morale
Increased
Morale and
Safety
Increased
Morale,
additional
Revenue
Negligible
Compliance
costs
Compliance
costs
~$1M per year
Costs
18
$4,000 per
year
Reaching out to the Community
Community
Support
Operations
Products &
Services
Values
Principles
19
Joel
“Endorsed by No One”
20
Taking Outreach National
21
Launching in a Phased Approach
Phase
Initiative
Structure CSR department
Bi-monthly letter
Launch KAP
I
Enhance Temporary Worker
Compliance
Implement Responsibility Score Card
for shoes
Refocus donation strategy
Work toward LEED Certifications,
Score Card for factories and stores
II
Invest in green product pipeline
Identify and implement additional
green initiatives in Operations
22
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
The Bottom Line
Benefits
Costs
$250,000
$3,000
$1m
-
23
• CSR Department
• New Balance Sheet
• LEED Certification
• Compliance Goals
$236.4m
+
+
$1m
• Current CSR
• Improved Morale &
Productivity
• Reputation
• KAP
Integrated Approach
Operations:
●KAP
●Consistent
standards
Community:
●National
Campaigns
24
Products &
Services:
●Responsibility Score
Card
●LEED Certifications
Boosting
Pride &
Responsible
Leadership
Governance:
●Updated org
structure
●New Balance
Sheet
Questions?
25

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