Timberland Case Study
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Case Study: How Timberland Used a Smart Sustainability Story to Launch a Hot New Line (Includes Tactics & Lessons Learned)
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For clothing manufacturer and retailer Timberland, creating outdoor products with environmental benefits is a business necessity. “We’ve done a lot of consumer research, and we know that if we put two products side by side, one from our brand and one from a competitor’s, and if they’re comparable in price and quality, the majority of time a customer will choose our product if it’s made with some sort of ‘green’ element,” says Margaret Morey-Reuner, director of Timberland’s strategic partnerships and business development. “They consider the environmental benefit as a true gift of purchase.”
In an exclusive interview with Environmental Leader, Morey-Reuner shared the business case, tactics, challenges, and results from the launch of Thread X, a successful new collection from Timberland that sparks a customer’s interest, engages them with a story, and, ultimately, has an extremely successful sell-through rate.
Timberland’s customers expect the company to be stewards of the environment, and they the story behind the product. In fact, the company’s Earthkeepers line of boots, which set strict design criteria around recycled, organic and renewable material – and shared those design criteria with the public – quickly became one of its bestselling lines when it was released in 2007.
With that in mind, the company set a goal of having 100% of its products feature at least some recyclable, renewable and/or organic material by 2020. In order to reach that goal, the company needed to expand partnerships with providers.
One of the company’s challenges, however, is in knowing – for sure – the true provenance of the material used in its products. Timberland uses a third-party certification process with its suppliers, but Morey-Reuner still didn’t feel they could always track materials to their very source.
Another challenge Morey-Reuner faced is that in the past, Timberland would work with a partner to create a terrific product and grow demand, only to find the partner was not in a position to scale.
Morey-Reuner knew she needed a partnership with a provider that had a good story to tell, a great material to provide as the basis for a new product line, and the ability to scale as the product line – and the partnership – grew.
As Timberland began to research potential partners, they were graced with a bit of serendipity: Morey-Reuner was project lead for Timberland’s efforts with local farmers and communities in Haiti when Ian Rosenberger, the founder of a Haitian start-up company called Thread, reached out to her. Rosenberger, who traveled to Haiti after the earthquake in 2010, noticed “a lot of poverty, and a lot of trash.” He launched Thread to help Haiti turn that trash into money.
Thread creates fabric by hiring Haitians to collect the plastic bottles that litter streets and landfills and sell them to Haitian-owned and operated collection centers, where the plastic is made into a raw material called flake. Flake is sent to US-based factories where it is turned into fiber and woven into fabric. When Morey-Reuner and her team heard the story, learned that Thread monitors and tracks the chain of custody from the time the bottle is picked up off the ground to the time it is made into a product, and found that the PET fabric felt like “the softest organic cotton canvas,” they explored a partnership.
But partnerships are never as simple as they sound. Morey-Reuner had learned lessons from past partnerships. “So I took a different approach,” she says. “We brought our designers, developers and marketing team together with Thread from the beginning. We told them what we expected, and we got both internal and external alignment.”
One key element of the agreement was that Timberland needed to be flexible in its product development. “We feel an accountability to help them succeed,” she says. “That’s a different approach for us. We didn’t want to be a one-and-done marketing story.” With that in mind, Timberland’s design team worked closely with Thread’s development team to design and build the fabrics.
On the other side of the partnership, Thread needed to commit to growth so the Timberland brand could expand as needed. “Thread is looking at expanding in India and Asia to help us with our business at a global scale,” Morey-Reuner says. “If you can scale an idea, the cost will go down in the supply chain and that is of significant value.”
An important element of the partnership is the story. “Storytelling is a valuable marketing tactic, so there is a real benefit into putting resources into these types of partnerships,” she says. Thread communicates the social and economic impacts for Timberland’s website through photographic stories.
Though Timberland doesn’t share specific sales results, Morey-Reuner says that sell-through for the Threads line, across all channels, has been excellent compared to other new programs.
Additionally, Timberland has seen two times the engagement on its social and digital channels with the Thread collection compared to any of its other CSR content. And consumers are spending 33% more time on the Thread page than on other pages of the Timberland site.
“We get to tell a really great story to our consumers and show the true impact of products made with Thread. We know how much water we save, how many pounds of pesticides were avoided, how much revenue was generated for the bottle recyclers and collectors,” she says. “People can meet the people who helped make the product they purchased, and that’s a whole new thing.”
Three Key Lessons Learned:
- When it comes to new partnerships, get alignment with internal stakeholders. “Make sure everyone’s on board with the proposition, because you might have to do things differently from the norm.”
- When dealing with newer companies, both sides must understand the difference in culture between mature brands and startups. “Both companies are rooted in a shared set of values. But they have a lot of young folks on their team, they’re eager, and they’re flexible. A big company like us is like trying to turn an ocean liner, compared to a speedboat.” Understanding this from the beginning will make things run more smoothly.
- Use a tag-team approach so more than one person is involved in decision-making. “We had a few people at Timberland who moved on to other roles, and they were key in the partnership,” Morey-Reuner says. That makes it difficult to move a project forward. “Knowing the pension for that happening, we’ll handle it differently in the future. We’ll make sure more than one person is informed and engaged.”
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To compare and contrast apparel is perhaps the most familiar self-made test for most consumers. The technique of comparison and contrast is one that is useful to us when we speak about product identification and purchasing power. It is our very own expository technique which we use for fuller understanding and expression of an increasingly and more complex intellectual fashion world. It challenges us to relate meaningful what we know about one product to another. In the process of comparison, we are apt to cast more light on both products we are dealing with at point of purchase and to enlarge not only our general understanding of the items but also the intellectual experience as a whole.
In my study of menswear, the ability to compare and contrast items is generally considered a test of our understanding and of insight into them. It is a test which curious consumers almost invariably ask brand representatives to meet or challenge. To fully understand product comparison and contrast one must understand what is involved in the process of making the items that are being compared by organizing a logical test.
Confronted with a typical assignment to compare work-boots, I first sought out to look for purpose and significance in brands out on the market today. Often I begin my research by doing what is undoubtedly essential for this exercise- listing similarities and differences and place them all under reasonable headings for consumers, such as strength, comfort, waterproof and most importantly style. We must keep in mind that the process of comparison and contrast is not merely that of noting similarities and differences, but one of which that notation must lead to a significant and purposeful conclusion. With that said, let's delve into a brief history of the boot. More importantly, work-boots.
Up the broad flight of shallow steps, I proclaim proudly to you that the USA has played a significant role traditionally in the development of the work-boot. What distinguishes the brand masters with a comparative advantage of modern times is, in almost every case, a unique blending of a personal with a collective national vision. The journey of their own brand significance together with a discovery of the products place in the environment. It is tantalizing, nonetheless, that we are witnessing a consumer-centric focus that has been yearning for heritage while demanding modern standards.
Simply stated, a boot is a type of footwear. For the most part, boots mainly cover the foot and the ankle. Boots can extend up the leg, sometimes as far as the knee and even the hip. As fashion forward as we would like to be, it is important to remember that boots are worn both for their functionality and for providing additional ankle support for strenuous activities. In the beginning, boots consisted of separate leggings, soles, and uppers worn together to provide greater ankle protection than sandals or shoes -with little or no support. About 1000 years before Jesus Christ of Nazareth had walked the earth, various components were permanently joined to form a single unit that covered the feet and lower leg, often up to the knee. Even the Nomads, had famously worn a soft leather ankle boot around AD 1200 to about 1500. The workwear and militant style was subsequently passed on to Russia and China. And if you think about the natives of Alaska, I reckon that you wouldn't blink an eye knowing that they had developed traditional winter boots made of caribou skin or sealskin featuring decorative touches of seal intestine and dog hair allowing them to look more appealing. I could only imagine the person who had the discipline of placing seal intestine as a decorative embellishment; yuk.
But it wasn't until the early Dutch Masters who were amongst the first to define the boot in Europe. Most historians agree, that the first codified definition of the boot was entered into law by royal decree during the Hundred Years' War, by the Duke of Wales. As many menswear items, European boots were influenced by military styles, featuring thick soles and turnover tops that were originally designed to protect horse mounted soldiers. And on this side of the pond, in the 1700s), distinctive, thigh-high boots worn by Hessian soldiers fighting in the American Revolutionary War (that's the one with George Washington) influenced the beginning stages of the infamous heeled cowboy boots worn by cattlemen in the American wild wild west.
Steel toe work boots, although traditionally made of steel, the reinforcement can also be made of a composite material, are very important in the construction industry and in many industrial settings. Occupational safety and health legislation or even insurance companies may require the use of such boots in some settings, and many times mandate certification of such boots and the display of such certification directly on the boots. Footwear for use in chemical processing or semiconductor manufacturing can also be rated to dissipate static electricity while still protecting the wearer from electric shock and harm. In a word, A steel-toe boot (also known as a safety boot, steel-capped boot or safety shoe) is a durable boot that has a protective reinforcement in the toe which protects the foot from falling objects or compression, usually combined with a mid sole plate to protect against punctures from below or on the sides. A rougher and more off-key attempt to set some brands of steel-toe footwear to become fashionable within subcultures such as hip-hop and even country music. Correspondence for any style situation covers diverse groups and develops independently from subcultures encountering the product in social settings. It is essentially an invitation for a culture to jump on board.
Thus, every theme of comparison and contrast which deals which menswear must have relevant intention and purpose which will serve to focus and limit discussion of competition which is fundamentally directed toward a brand leader.
By and large, a superior brand leader in the work-boot category is Timberland . With corporate headquarters in Statham, New Hampshire, Timberland LLC is an American manufacturer and retailer of outdoors wear, with a focus on footwear. Timberland footwear is marketed towards people intending outdoor use but has most certainly become a fashion leader as well.
Timberland is a global leader in the design, manufacturing and marketing of premium footwear, apparel and accessories for the urban outdoor lifestyle. It is part of VF Corporation. Best known for its original yellow boot introduced in 1973, Timberland today outfits consumers from toe-to-head (pun intended), with versatile collections that reflect the brand’s rich heritage of utility, craftsmanship and style. Timberland markets lifestyle products under the Timberland ® and Timberland Boot Company ® brands, and industrial footwear and workwear under the Timberland PRO ® brand. The brand's dedication to making quality products is matched by an unwavering commitment to environmental and social responsibility – to make it better with respect to responsible products, protecting and restoring the outdoors, and supporting communities around the globe.
I recently had the privilege to speak with Jim Pisani, Global President, Timberland about the famous yellow boot, the brands social component and about the creative and technical design behind the FW 19 collection.
Joseph DeAcetis: It’s been said before that “Timberland is not just a boot company.” Tell us what that means and how it separates the brand from the competition?
Jim Pisani: While we certainly started as a boot company, Timberland has always been driven by a greater purpose. Back in 1973, we didn’t just create a waterproof leather boot… we equipped outdoor workers to get things done in the harsh New England environment. We even branded that boot “The Timberland,” something that was unheard of at the time. In 1992, we started our Path of Service program, which gives employees paid time to volunteer… again, pretty rare back then.
Today, we define our purpose as a commitment to equip and inspire the world to step outside, work together and make it better. Whether that comes to life as reducing the impact of our products, creating green spaces in cities, or supporting communities around the globe, this underlying purpose will guide us into the future. And it’s not just us doing this on our own; we will focus on engaging our consumers in the journey, and truly building a community around the notion of making it better. In the end, when consumers pull on a pair of our boots – or jacket or backpack – they can feel good about what they’re wearing. As global leader of the Timberland brand, nothing makes me prouder.
An image of the Original 6-Inch Boots as produced by Timberland in the 1970s
JD: Your iconic “Yellow Boot” was introduced in 1973 - what has kept its significance in the modern era?
JP: We’re incredibly fortunate to have a product is loved around the world -- from cities to small outdoor towns, men and women, young and old. I think what has fueled the staying power of the yellow boot is its authenticity. It was born to do one thing: to equip workers for the harsh New England winters. It was waterproof, made with beautiful premium leathers, and built to last for years… and we’ve never wavered from that promise, even as we became a “fashion” staple in the ‘80s and ‘90s.
Today, we constantly seek to innovate and keep our icon fresh – whether it’s new colors, comfort technologies, or collaborations with other brands – but we always stay true to the authentic heritage that started it all. It’s never about fast fashion; it’s about standing the tests of time. And our loyal consumers around the globe recognize and appreciate that.
JD: Talk to us about the brand’s social good component, namely in underserved cities throughout the nation?
One big piece of our commitment to “make it better” is supporting underserved communities – not just here in the U.S. but around the world. I’ve mentioned that Timberland employees get paid time to volunteer (and we’ve served more than one million hours to date, and counting). This often comes to life through service projects in city neighborhoods that need it most. Over the past few years, we’ve restored a community park in the Bronx, created green space at the new Rail Park in Philadelphia, created an urban community garden in Los Angeles to provide access to healthy food, and hosted “shoe fairs” at inner city elementary schools to equip kids with boots and backpacks.
Beyond supporting and strengthening communities, our commitment to service has also proven good for business, in terms of creating a highly engaged and passionate culture. We hear time and again that our culture of service is what often attracts people to join – and stay with – the Timberland brand. In fact, the average tenure at our global corporate headquarters in New Hampshire is 10 years, and we largely attribute this retention rate to the culture we have created through service.
JD: How exactly did the TIMBERLAND x CHRISTOPHER RÆBURN collaboration begin and come to fruition?
JP:The partnership between Timberland and Christopher Raeburn came about quite organically. Chris had done some work with other VF brands, and caught our attention given his focus on responsible design and innovation. From his side, Christopher has been following Timberland since 2007, when we introduced the original Earthkeepers Boot. We decided to take a meeting, and from there it was history. We introduced our first collaboration capsule in Fall 2018, and shortly thereafter announced that Christopher would be taking on the role of global creative director for the Timberland brand.
Timberland x Christopher Raeburn FW19 collection as debuted at London Fashion Week
Christopher Raeburn is recognized worldwide for his responsible design ethos. He also heralds craftsmanship, innovation and utility as central to his design philosophy, again creating a natural and authentic connection to Timberland.
As we look to build the Timberland brand of the future, we will do so through the lens of elevated design, and a Creative Vision that harnesses the power of nature and the energy of fashion. Leveraging this idea, in partnership with Chris, I think we can really push the boundaries of where Timberland can go as a brand, in a very ownable way. I’m incredibly excited at what this will lead to.
JD: Why is sustainable fashion important in today’s society, particularly for Timberland?
JP:Today’s generation is highly engaged in their world. They are not sitting back and waiting for things to happen; they want to be part of the solution. And they expect companies and brands to do the same. For a fashion brand to continue be relevant in today’s marketplace, responsible design and manufacturing is not a nice-to-have… it’s a must. Fortunately for Timberland, we’ve been at this for a long time -- and we’re only getting stronger in our conviction.
Sustainable fashion is also a must from an environmental perspective. Day after day, we witness the depletion our natural resources, the negative effects of climate change and the overall degradation of our environment. It’s incumbent upon those of us who make things, who contribute to some of these environmental challenges, to work hard to innovate, collaborate and tackle the issues head-on. We owe that to ourselves, to our community, and to future generations.
JD: Give me 3 adjectives to describe the classic Premium 6-Inch Boot?
JP: Purposeful. Iconic. Authentic.
JD: Talk to us about the creative and technical design behind the FW 19 collection?
There are two collections we can talk about for FW19 – the core Timberland brand, and our Timberland x Raeburn collection.
When it comes to the core Timberland brand, one big area of focus for fall ’19 is boots. This is our bread and butter, and we constantly need to innovate here. For fall, you’ll see us expanding our boot collection to address a range of wearing occasions – not just workboots but casual boots, more refined styles, sport-influenced silhouettes, across both men’s and women’s. And waterproof is always big for fall, so you’ll see lots of our TimberDry technology.
We’re also significantly expanding the use of our proprietary ReBotl material, which contains at least 40% recycled PET (the stuff plastic bottles are made of). And finally, we’ll introduce new innovations in apparel, including a modern take on insulation made from green materials. In particular, we’re excited about the Ecoriginal Collection of outerwear and sweatshirts, made with 100% recycled fabrics.
For the Timberland x Raeburn collaboration, this fall we’ll expand beyond apparel to also include footwear and accessories. Christopher’s REMADE philosophy began with his fascination for military materials and utilitarian clothing. The fall collab takes inspiration from decommissioned military parachutes that he’s remade into completely new products. Everything in the collection is replicated from these original pieces and made with organic and recycled materials. Chris showed the looks on the runway in London last month, and response was terrific… we’re excited to see how consumers respond come fall.
JD: What would you say is your comparative advantage in a sea of work boot companies?
JP: One key advantage: authenticity. When we introduced our first yellow waterproof boot back in 1973, it literally changed the category overnight. And we’ve remained true to that heritage and craftsmanship ever since. You just can’t replicate that.
Another key factor: innovation. When it comes to the work boot category, we benefit greatly from our industrial Timberland PRO brand. We have a direct connection to the workers who use our boots, day in day out, to get their job done. And we are constantly innovating to meet their needs, whether it’s comfort technologies, slip resistance or waterproof protection – all things that can translate to the core Timberland brand. At the same time, our parent company VF’s footwear innovation center happens to be just up the road from our New Hampshire headquarters, and we have a team there focused on what’s next for Timberland.
I’d say those two things alone – authenticity and innovation – give Timberland a significant edge in the workboot market.
JD: How do you foresee the Timberland brand developing in 5 years with respect to advanced technology?
JP: In five years, we will celebrate the 50th anniversary of the Timberland brand, so whatever we do, you can expect it to be big!
I believe most of what you’ll see will come to life through responsible materials and innovation. What are those innovative materials that can help us minimize our footprint while still delivering on our consumers’ expectations for quality craftsmanship and style? Do these materials exist already, or do we need to invent them? Boots and shoes have been made in the same fundamental way for hundreds of years… perhaps we re-think everything in pursuit of more responsible design. Better yet, instead of just reducing our footprint… let’s think bigger and strive to make a positive impact on the environment.
There are so many paths we can follow, it’s daunting and exciting at the same time.
JD: With high-concentration of the social influencers + market and brand voice on social media, how is the brand addressing these changes to stay relevant and ahead of the curve?
We live in a digital age. Whether you’re in fashion or publishing or medicine, everything is now through the lens of digital. And social media sits at the hub of it all.
When we look at social media for Timberland, we go back to what has given our brand staying power through the years: authenticity. And through that lens, we develop our social and influencer strategies. Are we being true to our brand and purpose? Is there an opportunity for us to effect change, and bring our social community along with us on the journey? How can we connect more meaningfully with our consumers? Of course, sometimes a post will simply be a great new boot or jacket to check out for fall… but we will increasingly seek to build our social campaigns and communications to reflect our greater brand purpose and vision.
JD: What is your growth strategy for the next 5 years?
JP:Timberland is a global brand focused on growth across three regions: the Americas, Asia Pacific, and EMEA. Our long-range growth plan is grounded in a few core strategies.
First, we need to diversify our business. This means growing categories like men’s casual footwear, women’s and work… but not at the expense of our icons. A critical piece of this diversification strategy is continuing to energize our classics, and make them relevant for a new generation of consumers.
The second strategy – and this is not just for Timberland, but for our parent company VF, is to win in direct to consumer, with a focus on digital. Our owned stores and ecomm sites are a powerful opportunity to present our full brand portfolio and story, and engage directly with our consumers. This past fall, we opened a concept store at Fifth Avenue in New York that had everything from living green walls to a digital rain room. We will continue to push for retail innovation so we can create experiences like this and connect with our consumers like never before.
Our final strategy hones in on the importance of building our brand and business in China.
Sitting above all of this – or better yet, at its foundation -- is our brand building framework. Over the past two years we underwent an in-depth, multi-stakeholder project to clearly define and articulate our brand purpose and positioning, creative vision, consumer segments and product architecture. I’ve talked a bit already about our purpose and creative vision, which rise to the top as the beacons that will guide us into the future.
When you take the passion Timberland has for nature, and combine it with the energy of fashion, you end up with something really powerful, and unique in the global marketplace. I think this presents an incredible opportunity for the Timberland brand as we look to the future.
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Case study for Kelli Matthew's Strategic Public Relations Planning and Cases course at the University of Oregon's School of Journalism and Communication. Authors: Jenna Cerruti, Heather Cyrus, Elise Presicci, Cristina Dunning, Lauren Short Presentation design by Lauren Short
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- 1. TIM BER LAND Jenna Cerruti Heather Cyrus Cristina Dunning Elise Presicci Lauren Short Thursday, October 28, 2010
- 2. •Conceived in 1978 •2009 •Employed 5,500 worldwide •Family owned company •Chair: Sidney Swartz •President/CEO: Jeffrey Swartz BAC k gRo UN D Thursday, October 28, 2010
- 3. JeffRey http://bigthink.com/ideas/16693 “Every success that comes from tomorrow is yours, but every failure that trails, a boot that gets returned because it didn’t work, an employee who lost their job, I own every single one of those failures forever. They don’t go away.” Sw A r t Z Thursday, October 28, 2010
- 4. •High Priority •CITY YEAR •70 pairs of boots - $1 million investment •Employee paid service hours Timberland Community Involvement Thursday, October 28, 2010
- 5. •1994 Profits fall •Stock price •1993: $85.00 •1995: $22.00 •Restructuring to cut costs •Two factories closed •500 jobs lost •Outsourcing daSITuaTioN Thursday, October 28, 2010
- 6. During financial trouble, TimberLand continued to give money and service work to CITY YEAR. Thursday, October 28, 2010
- 7. dasITUatioN 2 •Potential Difficulties •Employee backlash •Future potential employees •Current employees •Community response Thursday, October 28, 2010
- 8. InPUTs Thursday, October 28, 2010
- 9. •Tactics and objectives •"Perform Under Extreme Conditions" •Environmental Awareness •"Give Racism the Boot" CAMpaIGnS Thursday, October 28, 2010
- 10. Yo, DiD IT •Effectiveness •Target •Future of Timberland WoRk?Thursday, October 28, 2010
- 11. OutPUTs•Stakeholders • Employees • Consumers • Communities • Investors • Shareholders and Analysts • Suppliers • Non-Governmental Organizations • Media • Government Entities • Business Colleagues &U T CoMeS Thursday, October 28, 2010
- 12. “By actively generating outcome-oriented dialogue with stakeholders, we believe TimberLand can ultimately compete more effectively in the future.” -TimberLand Thursday, October 28, 2010
- 13. CoMmUNicATIon • Biennial CSR reports • Quarterly reports on key performance indicators • Quarterly CSR dialogues with Jeffery Swartz • EarthKeeper • Internal discussions • Share environmental values and products • Problem-solving communication meetings sP e CT RUM Thursday, October 28, 2010
- 14. da • Employee agrees to work voluntarily with option of termination. • Allowed to work 60 hours a week • Paid volunteer time CoDEoF coNdUCT Thursday, October 28, 2010
- 15. "We offer the consumer a company to believe in and get involved with; we offer our employees a set of beliefs that transcend the workplace; we offer the community an active and supportive corporate neighbor; and we offer shareholders a company people want to both buy from and work for." -TimberLand Thursday, October 28, 2010
- 16. wHo da •Consumers •Employees •Community •Shareholders pUbL i cs ? Thursday, October 28, 2010
- 17. REL aTI oN ShiPs •Control mutuality •Trust •Satisfaction •Commitment •Exchange relationship •Communal relationship Thursday, October 28, 2010
- 18. •Assert company values •Explain finances SUg GesTions sUm Thursday, October 28, 2010
- 19. REC om MEN DaTiOnS •Improve communication with employees •Explicitly explain separation between layoffs and City Year donations •Improve internal affairs Thursday, October 28, 2010
- 20. TIM BER LANDThursday, October 28, 2010
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Chapter 11 Case: Accounting for Sustainability: How Does Timberland Do It and Why?
Sustainability reporting is about being radically transparent. That means talking about the bad just as much as the good…we want to be transparent and get feedback from others on how we’re doing, or how we could be doing better. And our hope is to have a dialogue on how we can scale good solutions for our industry and then even broader beyond that.
Betsy Blaisdell, Timberland manager of environmental stewardship
- Discuss Timberland’s approach to sustainability.
- Understand how corporate social responsibility relates to sustainability.
- Discuss what it means to be a leader in sustainability and sustainability reporting and what the challenges and benefits of leadership can involve.
The purpose of this case is to introduce students to the current state of sustainability reporting in business. Timberland provides a leading example of the different ways that sustainability reporting can be performed. The case also discusses what sustainability means to Timberland and how sustainability reporting supports its environmental and social goals and progress.
11.1 Sustainability Reporting at Timberland
- Understand the motivations for sustainability reporting.
- Explain the role of different stakeholders in sustainability reporting efforts.
- Discuss different sustainability reporting methods and reports.
How Did Timberland Get Started on Sustainability Reporting?
As a publically traded company, Timberland was required to report on its financial performance and make disclosures about the business regularly to shareholders and the general public. However, this type of reporting traditionally does little to communicate to stakeholders the sustainability actions that the company undertakes.
Through its efforts in support of employee service and on other areas related to the social responsibility, Timberland developed a strong reputation and following in the national and global corporate social responsibility (CSR) leadership communities. This attracted the attention of the NGO Ceres, which was leading a national coalition of investors, environmental organizations, and other public interest groups working with companies to address sustainability challenges. Ceres’s mission is to “integrate sustainability into business practices for the health of the planet and its people.”
Ceres was one of the first organizations to formally introduce and advocate for the concept of sustainability reporting. Ceres believed that Timberland was a good candidate for publicly disclosing sustainability-related information specifically because of their unique employee service program. In addition to reporting metrics on employee service, the “beyond the traditional reporting” for Ceres also included the compliance area. This included reporting on the Timberland workplace and at the factories of their suppliers around the world, including issues such as child labor and unfair working conditions.
In 2001, Timberland released its first annual corporate social responsibility report. The nineteen-page report focused heavily on service related activities of the organization, including City Year. The following year, a second annual corporate social responsibility report was released. This was a more comprehensive thirty-eight-page report that included a more detailed discussion on environmental and social activities.
Starting in 2004, the annual CSR reports from Timberland began to feature the Global Reporting Initiative (GRI) A network-based organization that pioneered the world’s most widely used sustainability reporting framework. The reporting framework sets out the principles and performance indicators that organizations can use to measure and report their economic, environmental, and social performance. sustainability reporting guidelines and featured sustainable performance indicators (SPIs). A metric that measures an economic, social, or ecological performance area in a business. See Chapter 5 "Entrepreneurship, Innovation, and Sustainable Business" for a more detailed discussion. (See details on GRI and sustainability reporting in Chapter 5 "Entrepreneurship, Innovation, and Sustainable Business" .) Sustainability reporting helped the company become a recognized industry leader on sustainability efforts, and this helped to strengthen the brand’s name, recognition, and value.
Beginning in 2008, Timberland started reporting on key CSR performance indicators on a quarterly basis. The main report is presented in a dashboard format, which contains SPIs in each of the four CSR strategy categories.
Sustainability reporting is a statement to stakeholders and the general public about an organization’s environmental and social impact and what the organization is doing to improve its impact. It is about being accountable for the ecological and social impacts that an entity has and also the solutions the entity develops around sustainability.
What Does Timberland’s Sustainability Reporting Include?
Timberland’s reporting and communications for sustainability includes the following:
- Full CSR reports released every other year that summarize their efforts in sustainability for the previous twenty-four months; their CSR reports are reported on their website http://responsibility.timberland.com
- Quarterly key CSR performance indicator reports and quarterly CSR dialogues
- Stakeholder engagement forums called Voices of Challenge on http://community.timberland.com , a web 2.0 platform that allows all types of stakeholders to interact with Timberland
Timberland also shares its social and environmental values and product attributes with consumers through retail messaging and product information. Their Green Index rating is intended to give consumers clear and easy to understand information about the impact their footwear choices have on the environment.
Source: Image courtesy of the authors.
Timberland quarterly sustainable performance indicators.
The quarterly dashboard is organized around the four Timberland CSR pillar areas: energy, product, workplace, and service. For example, average grams of volatile organic compounds Chemicals that may have short- or long-term health effects. This includes paints, pesticides, and adhesives. per pair of footwear is a sustainable performance indicator in their product category. In each pillar area, there are three category measures and three to six total indicators reported. All together there are fifteen indicators measured between 2007 through the present.
The dashboard provides a consistent and cohesive way to engage internal and external stakeholders on CSR. It enables Timberland to be accountable for progress against stated goals. Internally, it also allows for prioritization of resource allocation against key sustainability initiatives.
In 2006, Timberland introduced an industry-first “nutrition label” on all of its footwear boxes in an effort to provide consumers with greater transparency about the company’s environmental and community footprint and the environmental impact of the specific Timberland products consumers are purchasing.
The Green Index program is the company’s primary mechanism for pursuing “cradle to cradle” product design. This index measures and communicates critical aspects of environmental performance in a format that allows Timberland to guide product design and help consumer choice. The Green Index measures three areas of product impact:
- Climate impact—greenhouse gases produced in making raw materials and during footwear production that contribute to climate change. Timberland’s climate impact rating measures the emissions of greenhouse gases from the production of each material through the manufacturing of the final product.
- Chemical used—chemicals used in material and footwear production.
- Resource consumption—the score decreases as Timberland uses materials that require less land and water and fewer chemicals to produce.
The data are compiled to give a product an index score from ten to zero, with ten being a high impact and zero being no impact at all.
The Timberland CSR Team
Timberland has a team of employees dedicated to CSR in the company. It consists of a vice president of CSR, four managers, a team of fourteen code-of-conduct employees, and two community service employees. The CSR team works closely with senior management, including the CEO.
In December 2006, the company created a formal CSR committee within its board of directors. This group consists of four board members who are responsible for guiding all CSR strategy development. To accomplish this task, the committee meets regularly with the CSR leadership team to help set the strategic agenda and hold the team accountable for their actions.
Two members of the current CSR team are Beth Holzman, the company’s CSR strategy and reporting manager, and Betsy Blaisdell, the manager of environmental stewardship. Beth Holzman was a manager at Ceres before joining Timberland and interacted with Timberland in that capacity. Betsy Blaisdell had previous experience working in the New Hampshire state government and performing environmental research at the University of New Hampshire.
The CSR team’s responsibilities include developing the metrics to report and standardizing the reporting. It also includes collecting information, preparing reports, communicating information to senior management, and interacting with stakeholders.
A key objective is to ensure that the sustainability reports are used and integrated into the other departments at Timberland. As Betsy Blaisdell describes it, “Everybody wants to do the right thing at Timberland. And so for us, it’s taking something that can be a really complex environmental metric, like kilograms of CO 2 for a pair of shoelaces, and translating it into: this is the best choice, this is a good choice, and we really discourage you from using this approach.”
Another key objective is to standardize the reporting method and information in order to make reporting easier and more cost effective within Timberland but also within the industry. The goal is to create standardized sustainability metrics and standardized measures of environmental performance for Timberland’s products. The goal of standardization being that instead of Timberland collecting the information through their own business systems, suppliers would provide the information into a registry that Timberland and other companies could access.
Driving Forces behind Sustainability Reporting
In many respects, former CEO Jeffrey Swartz was the leader on CSR reporting efforts and a driving principle of the company’s sustainability reporting efforts has been radical transparency. For Timberland, radical transparency is about talking about the bad as much as the good. It is about being provocative, sharing information with the intent of receiving a reaction and response from stakeholders. It includes communicating things that are material and important to the company.
For example, Jeffrey Swartz was the champion of Timberland’s “nutrition” labeling for shoes. His view was that if consumers could go into a supermarket and look at a couple different boxes of cereal and know what’s good or bad for them, why couldn’t they do that going into a footwear store or going into a large retailer and see similar information reported?
On their website “Voices of Challenge,” Timberland managers share very difficult challenges and concerns related to sustainability and ask for candid feedback through blogs and social media. And consumers and NGO organizations have asked challenging questions to Timberland through this resource.
As Betsy Blaisdell describes it, “I think we’re always pushed further ahead by external stakeholders. And I’d say we’re largely influenced by requests that we get externally for improving or shifting our reporting. We had a major issue with Greenpeace a couple years ago. It had to do with transparency in our leather supply chain in Brazil and it really pushed us to have an industry dialogue about how can we take our protocol for assessing the environmental performance of our tanneries, and push that further back down the supply chain. That led to more transparency. And that was purely an external push from Greenpeace that led to that.”
For Timberland consumers are always the most important stakeholder group to reach, but the reality, at least for now, is that very few consumers actually read, understand, and act on the sustainability reports.
According to Betsy Blaisdell, “There is evidence that significant numbers of consumers do read the nutrition label on the footwear. But very few probably fully understand what it means…it’s hard for them to really use it because it’s not relative to anything. It’s not like they can compare a Timberland product with a Nike product right now and say, OK, price, performance, and aesthetics alike, I’ll take this shoe over this shoe. So I think it’s nice to do for consumers, but it’s not necessarily impacting their purchasing decisions, which is where we would love to take it.”
Other stakeholder groups that are leading Timberland to expand its sustainability reporting are the investor community, peer businesses, and other companies, including stores and retail outlets that Timberland sells its product to.
Outside the United States, there is more governmental involvement around sustainability reporting. For example, in France the government is moving to pass legislation that would require the nation’s companies to begin measuring the environmental life cycle impacts of their products. France is leveraging what some industry groups in Europe have already developed. The French government recognizes that businesses have been ahead of government on sustainability reporting, and this is the case of Timberland in the United States.
- Unlike financial reporting for publically traded companies, there are limited experience and standards for sustainability reporting.
- The key drivers of sustainability reporting are company values and desire to engage proactively with external groups, senior management personal priorities, and environmental action leadership groups, such as Ceres and Greenspace.
- Timberland’s sustainability reporting includes biannual reports, quarterly performance dashboards, and eco-labels.
- Timberland provides for stakeholder involvement in its sustainability efforts through its “Voices of Challenge” site providing the opportunity for 360-degree feedback.
- Timberland has a separate CSR department of approximately twenty employees with leadership from the board of directors and the CEO.
- Radical transparency and stakeholder engagement are the driving forces for sustainability reporting at Timberland.
- Discuss Timberland’s interpretation of radical transparency. Is radical transparency a requirement of sustainability reporting?
- What do you think of the company using the “Voices of Challenge” as part of its sustainability reporting process? Do you think it is wise to provide the opportunities for stakeholders to have a voice in the direction of the company’s efforts?
- Discuss Timberland’s sustainability reporting choices. Review their most recent biannual report and quarterly performance dashboard at http://responsibility.timberland.com/reporting/report-archive . What recommendations would you make to Timberland about their reporting efforts?
11.2 Business Value of Sustainability Reporting
- Understand the key benefits of sustainability reporting.
- Explain the difficulty of quantifying the benefits of sustainability reporting.
- Discuss the key challenges in sustainability reporting and how they might be overcome.
- Describe the different dimensions or perspectives of sustainability materiality and why they are important.
- Explain the importance of materiality in determining what to report on in sustainability efforts.
Timberland has a goal of being the reference brand for sustainability and sustainability reporting, and they do not limit that to within their own industry. The company wants to be a leader, the brand that’s pushing the edge on transparency and reporting.
There is evidence that the efforts on sustainability and branding around sustainability reporting are affecting Timberland profitability, market share, and customer loyalty. Timberland’s highest-margin products—contributing the most on a dollar of sales basis to profitability—are the company’s Earthkeepers products and this is suggestive that consumers are willing to pay a premium for a low environmental impact product.
There is also anecdotal evidence of sustainability reporting contributing to Timberland’s market performance; however, the company has struggled to put a hard dollar value on this. Timberland’s marketing managers and public relations professional report that sustainability efforts and the various sustainability reports Timberland have released over the last several years has resulted in an increased number of positive media impressions. Timberland receives other kinds of anecdotal evidence in market research and focus groups with consumers that sustainability initiatives generate brand heat Positive feelings when exposed to a brand name. . Brand heat is a marketing term to describe the positive feelings when exposed to a brand name. There is even less evidence that brand heat actually leads to a purchase. A challenge for Timberland is quantifying and linking sustainability to the financial bottom line.
One of the hardest challenges for Timberland was determining the right metrics to report on. Timberland, in part, used the indicators from the Global Reporting Initiative (GRI) as a starting point. However, the GRI has many performance indicators and many were not relevant to Timberland’s stakeholders or material to Timberland.
For Timberland the most important areas to report on, measure, and act on are those that are material to the company. Timberland’s areas of focus for materiality are the environment, consumers, and other stakeholders, including government. Timberland prioritizes measurement and action on the areas that are at the intersection of these three dimensions of materiality.
Dimensions of materiality at Timberland.
For example, Leather and rubber use is highly material to Timberland’s business operations. These two inputs have significantly more impact on the environment than any other inputs because of the volume of leather and rubber used in the manufacturing process and by the very nature of the materials. These manufacturing inputs are material to the environment, to customers, and to stakeholders and as a result are areas of focus and reporting for Timberland.
This strategy helps the company focus on the areas that have the greatest impact. For example, customers might think Timberland should focus on packaging, such as footwear boxes, because it is one of the aspects of the product that they most interact with. The environmental impact of their use of leather and rubber is much more material Having a connection or knowledge of which would affect a business decision or course of action. (significant) to the company’s ecological and social impact than its use of cardboard for shoeboxes, as the boxes come from recycled sources and also can be easily recycled.
Another major challenge for Timberland is the constant tension between measuring more metrics due to demands from different stakeholder groups and the resources required by Timberland to provide those metrics. This was a lesson learned by Timberland as the company started its sustainability reporting efforts. At the beginning, Timberland struggled with trying to provide more and more sustainable performance indicators due to stakeholder requests. The company expended significant resources to collect and report on the different disclosure requests that they received, which distracted the company from undertaking the activities necessary to lead to substantive improvements in its environmental and social impact.
Efforts at Standardization and Integration
Initiating sustainability reporting and developing the appropriate communication methods has been a significant undertaking for the company over the past decade. Sustainability reporting had to be done largely outside of Timberland’s regular business units and systems. A separate reporting software system was developed for storing sustainability performance indicators (SPIs), but, at the time, it was too complex for the corporate social responsibility (CSR) reporting system to be integrated with the company’s accounting and finance system tools or product design systems. They were all developed on different software platforms and did not communicate.
The other reporting and management systems were not designed to include sustainability measures, as it was not part of standard business practice. For example, in designing a new product, there was limited product design reporting system ability to take into consideration the sustainability impacts of different designs, as they were not developed for environmental reporting.
Just recently (2011), business decision software systems companies, such as SAP, and the designers of product life cycle management systems are developing systems software that have environmental modules. This means that what were two or three separate systems before can now become more of one integrated system to include environmental and, eventually, social impact along with product design and financial analysis.
Timberland is moving toward being able to upload CSR metrics into their financial information and product design systems. Their environmental and financial information systems are starting to “talk” to one another. Timberland can take into consideration reductions in energy or material usage reductions from both an environmental and financial perspective.
The benefits include not only being able to better tie environmental efforts with bottom line considerations but also enabling the CSR team to reach and impact key decision makers in finance and product design who were outside the Timberland CSR reporting system. The sharing of information and reporting systems integration allows different business units and functional areas to begin to speak a more common language and take a more systems and full-cost and benefit perspective in their decision making about financial, product design, and sustainability actions.
Timberland is focusing its sustainability reporting efforts increasingly on this integrated systems perspective, using a core set of metrics to help identify problems and then identifying root causes The initiating cause of a causal chain of events, which leads to an outcome or effect of interest. and finding the best solutions. The company can then link the problem and solution to the financial performance of the firm.
As Betsy Blaisdell describes it,
The environment will be embedded in the financial statement. I think we are experiencing the merging of the two right now. I think 20 years from now, the business value will have been demonstrated and that environmental metrics will become a part of the financial statement, the links will have been created, in that CSR will be a part of everybody’s role, versus a distinct stand-alone department.
My hope is that in 20 years, this is just a part of the business—the normal business school program. It’s a part of the normal business acumen. And that folks are educated and have a carve-out, or have distinct responsibilities within their regular business job to make sure that the commerce and the justice piece go hand in hand, versus living in different parts.
- What is most important to track and report out in sustainability reporting are activities with material impact on the environment, consumers, communities at large, and business profits.
- What is not tracked and reported on will be difficult for business managers to act on.
- It is difficult to quantify the benefits of sustainability in general and sustainability reporting in particular.
- Sustainability reporting can enhance business reputation and branding.
- Discuss some of the challenges faced by Timberland in relation to its sustainability reporting. What are some of the benefits they have experienced?
- Do you think sustainability can generate “brand heat”? Why or why not? Go on Facebook and look for an example of a “green” product that is generating positive discussion. Do you see any ways that the company is commercially capturing the value of that discussion (such as a link or app that would lead to a sale of the product)?
11.3 Looking Forward: New Corporate Parent and New Corporate Social Responsibility Leader
On June 13, 2011, V. F. Corporation ( http://www.vfc.com/about ) announced the purchase of Timberland for over $2.2 billion. V. F. already owned and operated several well-known apparel brands such as the North Face, Wrangler, and Lee. In announcing the purchase V. F. CEO Eric Wiseman commented, “The Timberland brand is synonymous with high-quality outdoor footwear and apparel. We believe the unique rugged outdoor positioning of Timberland will perfectly complement the premium, technical positioning of The North Face brand. This acquisition will continue the transformation of VF’s portfolio, propelling VF’s outdoor and action sports businesses to 50% of total revenue.”
V. F. offered $43 for each Timberland share, a premium of 43 percent to Timberland’s closing price the day before the offer. On the announcement day, Timberland shares climbed $13.21, or 44 percent, to $43.20. Timberland stock had traded between $15.07 and $45.72 from June 10, 2010, to June 10, 2011, and was at $30 before the offer. The owners of about three quarters of Timberland’s stock, including Chairman Sidney Swartz and CEO Jeffrey Swartz, entered into a voting agreement and gave written consent for the deal on July 26.
V. F.’s shares rose by 10 percent after the deal was announced, which added about $1 billion to the V. F.’s market capitalization. This was atypical as shares in the buying company usually fall due to stockholders expectations that most acquisitions end up destroying value. V. F. says it intends to both grow Timberland’s sales and increase Timberland’s sales efficiency. In 2010, Timberland’s operating margin was 9 percent, which was considerably lower than V. F.’s operating margin of 20 percent. Marc Gunther, “Timberland’s Jeff Swartz: ‘This Is Hard,’” Marc Gunther (blog), June 14, 2011, http://www.marcgunther.com/2011/06/14/timberlands-jeff-swartz-this-is-hard .
V. F. has not been a recognized leader on corporate social responsibility (CSR) or sustainability. The company is at an early stage of addressing climate change and other issues related to climate change. According to the Climate Counts Company Scorecard on V. F. ( http://www.climatecounts.org/scorecard_score.php?co=58 ), the corporation has started to measure its company-wide impact it has on global warming (i.e., its greenhouse gas emissions or climate footprint) and has made some efforts to reduce its impact on global warming (i.e., its greenhouse gas emissions or climate footprint) through the North Face. It has, however, shown minimal public information that it supports public policy that addresses climate change and provides limited information on its company-wide efforts to address climate change.
On June 28, 2011, after the announcement of V. F.’s purchase of Timberland, the company hired a new vice president for corporate social responsibility, former Dell executive Mark Newton. Newton is joining Timberland following eight years with Dell, most recently as executive director of global sustainability, where he was responsible for balancing the company’s growth strategy to minimize impacts on natural and human resources across the value chain. During his tenure with Dell, he directed global policy development, stakeholder engagements, and corporate strategies on environmental and social issues. Prior to joining Dell, Newton led environmental technology programs at Apple and Motorola. He sits on the advisory boards of Clean Production Action and Carbonfund.org.
Newton will lead the CSR global team. “Timberland Hires CSR Vice President,” Environmental Leader, http://www.environmentalleader.com/2011/06/28/timberland-creates-role-of-csr-vice-president . He will report to Timberland’s CFO Carrie Teffner and be responsible for the following:
- Overseeing Timberland’s effort to demonstrate environmental leadership and reduce the company’s environmental impact as a global brand
- Ensuring that the human rights standards set forth by the company’s code of conduct are adhered to and enforced by all Timberland vendors and suppliers worldwide
- Creating a global standard for community service through innovation, regional relevance, and employee engagement
- Executing against Timberland’s commitment to transparency and reporting by engaging a diverse set of stakeholders
Jeff Swartz’s last day as CEO of Timberland was September 13, 2011. In his final blog post he wrote the following:
Recently, I listened to the acquirer’s CEO addressing Timberland employees, in an open air town hall meeting (we take the 10 minutes of New England summer time seriously here, and so when we can meet outdoors, we do). It tore my guts out, to sit in the community gathering as a listener, watching my colleagues watching the new boss, wondering what changes are in store for our brand, our business, our community…an environmental activist in our ranks rose, way in the back, to ask the new guy, the Boss to Be, about sustainability.
“Tell us, please, why sustainability is important to you.”
And the man with whom I negotiated hard and long for the best possible deal for shareholders stood his ground, and answered, authentically and naturally. “The answer is simple—we believe that sustainability is good for the business and good for the world environmentally.”
He went on; the answer got more detailed and more concrete. But I had stopped listening.
For 30 years, we’ve been trying, fighting, struggling, to choreograph the intricate interaction between shareholder value, consumer demand, and social accountability. I have the scars, and the long list of failed efforts, incomplete outcomes, unrealized dreams and frustrated ambitions before my eyes all the time that reflect this passionate effort. And yet in this poignant moment of transition, from a business run by my family for three generations to a business to be run by relative strangers—here is the CEO of a 10B$ powerhouse, talking about sustainability simply and easily—good for business, good for the earth. And he means what he says. And it strikes me, hard, as I sit there—30 years later, a vitally important conversation has shifted. Maybe, there comes a time to say, “my job here is finished.” Jeff Swartz, “Endings and Beginnings,” The Bootmakers Blog , September 13, 2011, http://blog.timberland.com/jeff-swartz/endings-and-beginnings .
- V.F. Corporation has had limited efforts in sustainability, but the acquisition of Timberland provides it with the opportunity to be a global leader in business sustainability.
- The stock acquisition of Timberland provided great value to the stockholders of V. F. Corporation.
- Prepare a memo for V. F. that summarizes Timberland’s experience with CSR and sustainability reporting. What are the benefits and difficulties of the different activities within reporting? What are the main lessons that have been learned?
- Review V. F.’s corporate website. Prepare a two-page memo to the company’s CEO outlining whether V. F. should more broadly adopt Timberland’s CSR reporting, identifying which of its brands would most likely benefit the most from sustainability reporting.
- Upon reviewing former CEO Jeff Swartz’s final blog post, do you agree or disagree with his finding that the business world has shifted to sustainability?
- Review Timberland’s timeline included at the end of this chapter. Do you think including environmental and social indicators in the timeline paints a fuller picture of the history and actions of the company? Why or why not?
Table 11.1 Timberland Timeline
Sources: “Our History,” Timberland, http://www.timberlandonline.co.uk/timberland-corporate-timeline/about_timberland_corporate_timeline%2Cdefault%2Cpg.html ; “Home Page,” Timberland, http://www.timberland.com/category/index.jsp?categoryId=4089424 ; “About Timberland,” Timberland, http://www.timberlandonline.co.uk/timberland-corporate-timeline/about_timberland_corporate_timeline%2Cdefault%2Cpg.html ; “About Us: Timeline,” Timberland, http://www.timberland.com/category/index.jsp?categoryId=4089424 .
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