VF Corporation exploring servitisation to champion circular economy
EXCLUSIVE: Global clothing giant VF Corporation is exploring rental and service-based business models to promote the circular economy to its consumers, as the company pushes ahead with a new corporate strategy that commits to science-based targets and 100% renewable electricity.
VF Corporation is exploring ways for its flagship brands, which include The North Face, Timberland and Vans, to offer rental and service-based business models that appeal to new consumer trends while enhancing the company’s circular economy pillar of its new sustainability strategy.
The company launched its newest sustainability strategy in December 2017, which includes an aspirational goal to “lead the large-scale commercialisation of circular business models through brand-led recommerce and rental initiatives”.
The strategy, which includes a commitment to announce a science-based target for carbon reduction by 2019 and a transition to 100% renewables by 2025, has been described by the VF Corporation’s sustainability and senior director Anna Maria Rugarli as an “evolution” to the way the company views sustainability.
Speaking ahead of her appearance at edie’s Sustainability Leaders Forum next week (scroll down for details), Rugarli said that potential rental schemes were part of VF Corporation’s move to capture new business opportunities while placing sustainability at the forefront of product design.
“One of the new pillars of our strategy is what we call circular business models,” Rugarli told edie. “The main focus is going to be around rental and recommerce business models, together with circular design. The economy and the way we think of using things is linear, we extract, we make, we sell, and we throw away. Recommerce and rental are ways in which we can extract more value from the product.
“We're building these models as we speak. We are shifting from just making products to also providing a service to consumers. The way it will happen will depend on the product and the brand that we are setting them up for.”
Two of the company’s major brands, The North Face and Timberland, have already tested consumer demand for new services and circular models. Both brands have rolled out take-back schemes across European stores to generate a supply of reusable materials. To date, the programmes have collected around 6,500kg of clothing that would otherwise be sent to landfill, or remain unwanted and unused.
Rugarli claimed that feedback from consumers had highlighted an “appetite” for more serviced-based approaches, especially amongst millennials. But, while VF Corporation’s brands begin testing new models, the company is working tirelessly to improve its approach to resource efficiency.
Last May, the company signed the 2020 Circular Fashion Commitment, pledging to increase the quantity of second hand garments and footwear collected by Timberland and The North Face shops in Europe by 10%.
While this commitment is aimed at educating consumers about product end-of-life, the company is also targeting 100% of its European product designers to be trained on circular economy principles by 2020.
The company will also become one of the first major apparel and footwear firms to use the Material Sustainability Index (MSI) publicly as a measurement tool. The MSI was convened through the Sustainable Apparel Coalition (SAC), a global alliance of retailers. The Index scores material use based on impact, covering cultivation, procurement, chemistry and processing.
VF Corporation wants to use the MSI as a guide to improve the average impact of key materials by 35% by 2025. While the Index accounts for issues such as water scarcity, resource depletion and climate change, VF Corporation has also ensured that suppliers are on board with sourcing policies.
The company has moved to minimise its impacts on deforestation with a new set of policies for the company's purchasing preferences and use of sustainable forest materials. For specific brands, The North Face is committed to a responsible chemistry programme, which aims to create significant environmental savings that go beyond compliance, and Timberland will ramp up its circular economy efforts and cotton sourcing initiatives.
“We are committed to using materials that have a lower impact, and we want more recycled alternatives for nylon and polyester,” Rugarli said. “But this also links to the circular economy. We want ways to avoid our products and their materials from being discarded after a few uses.
“The new strategy means we need to go bolder and stronger in this direction. For us, the circular economy is the new way of implementing sustainability.”
On a wider CSR scope, the company’s new sustainability strategy features bold measures that ensure that closed-loop principles aren’t the only focus. The company is expected to announce science-based targets in 2019, while all distribution centres will be zero-waste by 2020.
Alongside commitments to animal welfare and forestry policies, VF Corporation has also pledged to use 100% renewable energy at more than 2,000 owned and operated facilities by 2025. To date, 42% of energy sourced in EMEA (Europe Middle East and Africa) comes from renewable energy.
According to Rugarli, the implementation of science-based targets will be a big milestone for the company, as it provides the necessary framework to hold the company accountable against its targets.
“The new strategy is ambitious, and we need to be if we want to achieve something,” Rugarli added. “But science-based targets are very important. We need to be accountable for what we promise, and this will help our commitments.
“It’s the way that everyone can play fair and have a common reference when we talk about reductions in this area. It will create a common language and allow companies to work together on a common metric. Sustainability is a pre-competitive advantage, and this will help change systems and industries to create positive impact.”
Anna Maria Rugarli at the edie Sustainability Leaders Forum
Anna Maria Rugarli is one of the expert speakers that will appear on stage at edie's Sustainability Leaders Forum in January 2018.
Taking place on 24-25 January, the Sustainability Leaders Forum will bring together more than 600 ambitious professionals moving beyond environmental objectives to deliver transformational change and create brand value every year.
The two-day event, which runs alongside the Sustainability Leaders Awards, will feature interactive workshops and enhanced networking to give you the most comprehensive and immersive experience on the day. For more information and to book your place at the Forum, click here.