As fashion companies have grown to embrace a broader purpose, they’ve had to balance social and environmental goals with the profit imperative that drives corporate America.
But for Scott Roe, chief operating and chief financial officer at Coach parent Tapestry Inc., it’s a useful balance — one that both pushes the company to contribute to the community and zeroes in on just how to unlock those profits.
Tapestry gave its fiscal 2024 profit report this summer, logging adjusted operating income of $1.25 billion. On Wednesday, it offered an update on the purpose side of the equation with its annual corporate social responsibility report.
“We’re trying to be very transparent and very forthright with our commitments — that everything we do is not only good for the planet and people, but also good for business,” Roe said. “That’s always been an imperative.”
Purpose and profit need to go hand in hand, he contended.
“If either one of those get out of balance, you got a problem,” Roe said.
If it focuses on making money in all the wrong ways, Tapestry falls short of its goal. Same thing if it does so much good that it leaves no profits for shareholders.
Getting to the right place isn’t always easy, but Roe said it’s possible, with a little pushing.
He said a merchant or designer might ask him if the company wants to, say, use an innovative sustainable material or “compromise on margin?”
“I say we’re not trying hard enough because — if we’re really delivering what the consumer values in a way in which they understand it and it’s brand appropriate — they’re going to pay for it,” Roe said.
“In order to be commercially viable and profitable, you have to make products and take actions which your stakeholders and consumers value,” he said. “And what’s the best test of, ‘Do they value it? Do they buy it, and will they pay the price?’ And if they won’t, I would argue maybe we trespassed a little bit, maybe we’re kind of pushing our beliefs individually onto the consumer. They get a vote, real time, all the time.”
It’s a stance that has the company leaning in, but looking for purpose-driven approaches that are recognized and rewarded by customers.
“We’re in the business to satisfy and delight our consumers and we have to make money or our shareholders and our owners won’t tolerate us very long, right?” Roe said. “So we always have to keep that natural tension in balance.”
Proclaiming its corporate purpose loudly and proudly is also part of the long game at Tapestry since younger consumers are especially tuned in to topics like sustainability.
“You think about Millennials, Gen Zs, now we’ve got Gen Alphas that are starting to emerge and our research says that these topics are important to consumers,” Roe said.
Corporate social responsibility is a big umbrella at Tapestry, covering the company’s products, communities and people as well as the planet.
Last fiscal year the company:
- Launched its first product made with repurposed denim, which uses up to 95 percent less water and results in as much as an 80 percent reduction in carbon emissions versus first-use denim.
- Completed over 65,000 volunteer hours.
- Introduced its first global employee business resource group, which is called EmpowHER and includes over 600 women and their allies.
- Reduced Scope 1 and 2 greenhouse gas emissions by 84 percent from the company’s 2021 baseline.
Tapestry also looks particularly hard at how it can pursue its social goals in areas where it already has an impact, like leather, which is used in goods that make up 70 to 80 percent of its business.
“We have a voice in leather,” Roe said. “That goes all the way back to working with [the World Wildlife Fund] on deforestation and more responsible cattle raising processes, looking at methane and trying to reduce methane all the way into gold and silver rated tanneries that have better practices in terms of how they process the leather.”
By fiscal 2025, Tapestry seeks to get 90 percent of its leather from tanneries that are Silver- and Gold-rated by the Leather Working Group. And by 2030, Tapestry is aiming to have 10 of its leather come from farms using regenerative agriculture practices or made with recycled inputs or next-generation materials.
Joanne Crevoiserat, chief executive officer, summed up the company’s effort this way in the report: “The challenges we face as an industry and as a global community are significant, as is our resolve. With our values as our compass and our stakeholders as our partners, I am confident that we will continue to drive positive change, build a more resilient business and accelerate growth for our brands.”
