Gender lens investment approaches have expanded in recent years. All asset classes have seen a tremendous increase in the number of funds and assets under management since 2014. Fund strategies range from empowering women and funding women-run businesses to reducing gender violence and poverty for women and children.

At the same time, investors have also been seeking ways in align their activities in support of the United Nations Sustainable Development Goals (SDGs). Cornerstone Capital Group has contributed to this effort by introducing the Access Impact FrameworkTM, which illustrates the alignment of investment strategies to each of the SDGs. We identified the concept of access — the ability of individuals and societies to achieve desired social, economic and environmental outcomes — as a key common denominator of the SDGs and identified 11 “access themes” that translate the SDGs into investable opportunities.

SDG 5 is “Achieve gender equality and empower all women and girls.” For investments to have an impact related to achieving gender equality and empowering women and girls, investors do not have to invest solely in gender lens funds. Our approach to gender lens investing incorporates traditional gender lens themes with an analysis of the access themes that align most closely to SDG 5.

In this report we discuss each of the access themes that underpin SDG 5 in some depth. We also offer examples of investment vehicles that bolster access to these themes for women, their families and communities. Download the full report here.

SDG 14: Life Below Water focuses on the critical role played by oceans, along with coastal and marine resources, in contributing to human well-being as well as economic opportunity. The oceans provide food for the world’s growing population, and our rainwater and drinking water are ultimately provided and regulated by the sea. However, ocean health and marine life are threatened by overfishing, pollution and acidification. SDG 14 is further refined by targets that can be more readily translated into actions. These targets highlight the interconnected nature of the goals: for example, strategies to support Life Below Water are intertwined with strategies that support SDG 3 (Good Health and Well Being), SDG 10 (Reduced Inequalities), and SDG 8 (Decent Work and Economic Growth) – all while tackling climate change and working to preserve our oceans and forests. Below are a series of synergies that can come from providing access to products, services and systems that address Life Below Water.

Invest in Access to Sustainable Sources of Food and Nutrition

More than 3 billion people depend on the oceans as their primary source of protein1 making oceans the world’s largest protein source. Fish accounts for 17% of the global population’s intake of animal protein.2 Sustainable fishing practices, including responsible fisheries and aquaculture, offer opportunities to reduce hunger and improve nutrition. 3 According to the Food and Agriculture Organization (FAO) of the United Nations, aquaculture is the fastest-growing food sector and has the potential to produce the fish needed to help meet the demands of a growing population.4 The FAO forecasts that almost three-quarters of the growth in demand for fish between 2017 and 2026 will come from Asian countries with rapidly growing populations. 5 The global share of marine fish stocks that are within biologically sustainable levels declined from 90% in 1974 to 69% in 2013.6 Marine protected areas need to be effectively managed and well-resourced, and regulations need to be put in place to reduce overfishing.7 As of January 2018, just 16% (or approximately 22 million square kilometers) of the marine waters under national jurisdiction—i.e., 0 to 200 nautical miles from shore—were protected.8

Learn More About Investing in Solutions for Life Below Water

Invest in Access to CleanWater, Sanitation and Hygiene

Our rainwater and drinking water are ultimately provided and regulated by the sea.9 Approximately 70% of Earth’s surface is covered in ocean water. When water at the ocean’s surface is heated by the sun it gains energy. With enough energy, the molecules of liquid water change into water vapor and move into the air. This process is called evaporation. 10 Rising temperatures will intensify the earth’s water cycle, increasing evaporation. Increased evaporation will result in more storms, but also contribute to drying over some land areas. As a result, storm-affected areas are likely to experience increases in precipitation and increased risk of flooding, while areas located far away from storm tracks are likely to experience less precipitation and increased risk of drought. 11

Learn More About Investing in Solutions for Life Below Water

SDG 14: References

1 https://www.un.org/sustainabledevelopment/oceans/
2 http://www.fao.org/news/story/en/item/231522/icode/
3 http://www.fao.org/sustainable-development-goals/overview/fao-and-the-post-2015-development-agenda/fisheries-aquaculture-oceans-seas/en/
4 http://www.fao.org/sustainable-development-goals/goals/goal-14/en/
5 https://www.oecd-ilibrary.org/agriculture-and-food/oecd-fao-agricultural-outlook-2017-2026_agr_outlook-2017-en
6 https://sustainabledevelopment.un.org/sdg14
7 https://www.un.org/sustainabledevelopment/oceans/
8 https://unstats.un.org/sdgs/report/2018/overview/
9 https://www.un.org/sustainabledevelopment/oceans/
10 https://www.acaedu.net/cms/lib3/TX01001550/Centricity/Domain/389/5.8B%20The%20Sun%20and%20Water%20Cycle.pdf
11 https://pmm.nasa.gov/resources/faq/how-does-climate-change-affect-precipitation

 

Clean Water and Sanitation UN Sustainable Development Goal 6: Clean Water and Sanitation recognizes that access to clean water and sanitation can materially improve the living conditions of even the world’s poorest citizens while preventing millions of unnecessary deaths annually. A lack of access to clean water affects people’s lives in myriad ways including their access to nutritious foods, levels of health, and ultimately, their financial well-being. SDG 6 is further refined by targets that can be more readily translated into actions. These targets highlight the interconnected nature of the goals: For example, strategies to support Clean Water and Sanitation also promote progress toward SDG 1 (No Poverty) and SDG 3 (Good Health and Well-Being). Below are a series of synergies that can come from providing access to products, services and systems that address Clean Water and Sanitation.

Invest in Access to Clean Water, Including Sanitation & Hygiene

Water scarcity, poor water quality and inadequate sanitation negatively impact food security, health, housing, and educational opportunities for poor families across the world. At the current time, more than 2 billion people are living with the risk of reduced access to freshwater resources and, by 2050, at least one in four people is likely to live in a country affected by chronic or recurring shortages of fresh water. Drought afflicts some of the world’s poorest countries, worsening hunger and malnutrition.1 Fortunately, there has been great progress made in the past decade regarding drinking sources and sanitation, whereby over 90% of the world’s population now has access to improved sources of drinking water. However, as the negative effects of climate change grow, previously available water sources are becoming scarcer, jeopardizing some of the improvements that have been felt by communities around the world. Women and girls are disproportionately experiencing the impacts from limited water supplies, as they are responsible for water collection in 80% of households without access to water on premises.

Learn More About Investing in Clean Water & Sanitation

Invest in Access to Adequate Housing and Living Conditions

Approximately 2.4 billion people lack access to basic sanitation services, such as toilets.2 In 2015, 892 million people practiced open defecation, and only 27% of the population in less developed countries had basic handwashing facilities.3 Even in densely populated urban areas with run-down housing and high rates of poverty, water piped directly to households and piped sewage systems have been shown to result in significant improvements in the quality of living conditions.4

Learn More About Investing in Clean Water & Sanitation

SDG 6: References

1 https://www.un.org/sustainabledevelopment/water-and-sanitation/
2 https://www.un.org/sustainabledevelopment/water-and-sanitation/
3 https://sustainabledevelopment.un.org/sdg6
4 https://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/9666.pdf

In our recent report Sustainable Protein: Investing for Impact at the Nexus of Environment, Human Health and Animal Welfare, we pointed out that in developed countries, diet-related health concerns and less- or no-meat lifestyles have sharply reduced consumption of red meat.  Flexitarian, vegetarian and vegan preferences have been driven, in part, by animal welfare and climate change concerns.

Today, a flexitarian diet – one that doesn’t adhere to a specific eating style and may combine plant-based and meat-based dishes – is now practiced by 31% of Americans, with another 13% subscribing to a specific eating lifestyle such as veganism or vegetarianism. In the U.K., almost 13% of the population is now vegetarian or vegan, with a further 21% identifying as flexitarian, according to a 2018 survey of British consumers.  Our report also highlighted a preference by consumers for fresh and organic products.

On February 21, Kraft Heinz announced that it was writing down the value of some of its best-known brands by $15.4 billion which, according to a Bloomberg article[1] was “an acknowledgment that changing consumer tastes have destroyed the value of some of the company’s most iconic products.”  Subsequently, the stock price of Kraft Heinz plunged 21%.

Another Bloomberg article[2] observed that “all the old guards of the supermarket aisles are struggling as consumers opt for fresher, less-processed and more on-the-go food items from upstart businesses.”  In our report, we pointed to rapid growth in the organic yogurt, almond milk and protein bar categories in recent years, with many of the leading companies being relatively young start-ups.  While Kraft Heinz attempted to respond to these trends, its efforts haven’t been enough.  As Bloomberg observed, the company “has tried to spruce up a tired suite of brands — from organic Capri Sun to natural Oscar Mayer hot dogs.”

Our report concluded that, reflecting the shift to sustainable protein, opportunities exist in alternative proteins, organic foods, new agricultural technologies, sustainably managed farmland, and sustainable fisheries and aquaculture.

[1] Kraft Heinz Falls Near Record Low on $15.4 Billion Writedown, 2019-02-22

[2] Kraft Heinz’s Financial Recipe Turns Sour, 2019-02-22

Advances in agricultural technology, changes in human diet, and rising awareness of the environmental destruction caused by factory farming are accelerating the rise of sustainable protein.

Investors can target a number of outcomes — access to a sustainable food supply, lower greenhouse gas emissions, more plentiful and cleaner water, and a reduction in animal cruelty — through sustainable protein related investments. Opportunities exist in alternative proteins, organic foods, new agricultural technologies, sustainably managed farmland, and sustainable fisheries and aquaculture.

In this report we outline how a confluence of behavioral, technological, and regulatory changes have fueled the trend toward sustainable protein; identify emerging developments in the “alternative protein” space; and highlight ways to consider sustainable protein investment across asset classes.

Download Sustainable Protein: Investing for Impact at the Nexus of Environment, Human Health and Animal Welfare

Areas with higher exposure to water-related risksSource: Aqueduct Water Risk Atlas

Download the full report here.

Sebastian Vanderzeil is Director, Global Thematic Research Analyst with Cornerstone Capital Group. He holds an MBA from New York University’s Stern School of Business. Previously, Sebastian was an economic consultant with global technical services group AECOM, where he advised on the development and finance of major infrastructure across Asia and Australia. Sebastian also worked with the Queensland State Government on water and climate issues prior to establishing Australia’s first government-owned carbon broker, Ecofund Queensland.

Craig Metrick, CAIA is Managing Director, Institutional Consulting and Research at Cornerstone Capital Group, where he oversees the firm’s manager review process and provides investment advisory services for our foundation, endowment and family office clients. Previously, Craig was Principal and US Head of Responsible Investment at Mercer; for nearly 15 years, he has consulted on implementing responsible investment principles and mandates. Craig serves as the Chair of the Board of the US Forum for Sustainable and Responsible Investment (US SIF).

Jennifer Leonard, CFA is Director, Asset Manager Due Diligence at Cornerstone Capital Group. In a career spanning microfinance, institutional financial services and impact investing, Jennifer has developed a unique skill-set in working to deploy capital for social and financial returns. Previously, she was vice president of impact investing at The CAPROCK Group, where she co-led the firm’s impact practice and helped clients build customized, impact-mandated portfolios. From 2009-13, she was a Latin America equity research analyst at Morgan Stanley.

Emma Currier is a Research Associate at Cornerstone Capital Group. Emma graduated with a Bachelors of Arts degree in Economics from Brown University in May 2016. While at school, she worked with the Socially Responsible Investing Fund and as a teaching assistant for the Public Health and Economics departments. She spent her sophomore summer researching differences between American and Indian educational styles in Arunachal Pradesh, India, and completed a summer investment bank analyst position with Citi in the Media & Telecom group in 2015.

 

We recently had the pleasure of hosting the webinar “Oceans in Peril: What Can Investors Do?”

Craig Metrick, Managing Director, Institutional Consulting & Research for Cornerstone, was joined by ocean health expert Karen Sack of Ocean Unite; Rolando Morillo of Rockefeller & Co, who is responsible for identifying and supporting the management of public equity investments for the Rockefeller Ocean Strategy; and Jason Scott, Co-Managing Partner of Encourage Capital, which specializes in investments to “solve critical environmental and social problems.”

The panelists engaged in a wide-ranging discussion of major ocean health challenges and ways in which investors can deploy their capital toward solutions.

 

Cornerstone Capital recently hosted water expert Will Sarni for a conversation about “The Data-Driven Future of Water.” Sebastian Vanderzeil, Director and Global Thematic Analyst, interviewed Will, covering questions such as:

Will Sarni has been providing consulting services to private and public-sector enterprises for his entire career, with a focus on developing and implementing corporate-wide sustainability and water strategies. He has worked with companies across a range of industry sectors in evaluating the technical viability and market potential of innovative water technologies, market entry strategies and supporting M&A programs.

Sebastian Vanderzeil is a Director and Global Thematic Analyst with Cornerstone Capital Group. Sebastian’s research spans a range of themes including climate, energy, income inequality, automation and technology. Previously, Sebastian was an economic consultant with global technical services group AECOM, where he advised on the development and finance of major infrastructure across Asia and Australia. Sebastian holds an MBA and was a Dean’s Scholar at NYU’s Stern School of Business.

Will Sarni knows water. In 2014 he wrote that the water crises fit the definition of a wicked problem requiring wickedly smart solutions. Increasingly, solutions center on the smart use of data.

On November 9 Cornerstone’s Sebastian Vanderzeil teams up with Will Sarni to explore these questions:

Thursday, November 9, 10 a.m. EDT. Register here

Will Sarni has been providing consulting services to private and public-sector enterprises for his entire career, with a focus on developing and implementing corporate-wide sustainability and water strategies. He has worked with companies across a range of industry sectors in evaluating the technical viability and market potential of innovative water technologies, market entry strategies and supporting M&A programs.

Sebastian Vanderzeil is Director, Global Thematic Research Analyst with Cornerstone Capital Group. Previously, Sebastian was an economic consultant with global technical services group AECOM. He also worked with the Queensland State Government on water and climate issues prior to establishing Australia’s first government-owned carbon broker, Ecofund Queensland.

On March 28, Silver Leaf Partners hosted a symposium titled “Water: an Institutional Investment for the 21st Century.” A series of speakers representing fields ranging from professional services and corporate finance to law discussed water investment. The speakers noted that there is an increasing imbalance between water demand and supply. Speakers also stated that solving this imbalance requires investing in opportunities beyond technology and specifically in industries that have high water usage, including real estate. Finally, private-public partnerships have an important role in expanding water supply.

Lauren Koopman, the director of Sustainable Business Solutions at PriceWaterhouseCooper, opened the event by discussing current water demand and supply. In emerging countries, the growing middle class is set to increase demand for water through changing habits and food preferences that require higher water usage. Many developed countries, including the US, need to replace existing supply infrastructure. The current supply of water will not meet these projected demand increases, and the global demand and supply imbalance is set to worsen.

The investor perspective was offered by Marc Robert, a partner and COO at Water Asset Management. He noted that water is often mispriced due to the monopolistic relationship between utilities and customers and to municipalities’ regulation of the market to keep water prices low. This low price of water results in slow uptake of new technology as customers do not face the real price of supply. Possible opportunities that are not dependent on raising water prices include large water utilities that are well positioned for future demand and data management for high water-usage industries such as agriculture.

Additionally, there are industries other than water that can reduce water usage and offer investable opportunities. Lisa Davis, the Director of Investor Relations and Specialty Investment Originations at Pembrook Capital Management, discussed a novel way to invest in water through urban real estate. Investing in affordable housing, for instance, enables more people to stay in cities, avoiding movement into highly water-intensive suburban living. Also, developers can increase water efficiency through simple upgrades such as low-flush toilets. Savvy investors can identify innovative opportunities for water impact in a range of sectors across the economy.

However, the final speakers noted that public investment will be insufficient to meet the water infrastructure needs of the US, while private investors can benefit from public sector support to manage the risks of long-life water assets. Public-private partnerships (PPPs) enable the merging of the knowledge and capital of the private sector with the resources of the public sector. Daniel Spitzer, a partner at Hodgson Russ LLP, introduced the importance of PPPs. Historically, there has been a lack of commitment from the federal government to boost water spending. PPPs can mobilize private investment and companies to fill this public need. Bar Littlefield, CFO of Poseidon Water, offered an example, describing the company’s PPP with San Diego County Water Authority on the Carlsbad desalination plant. This plant supplies San Diego county with 50 million gallons of desalinated seawater per day. Appropriately developed PPPs can enable effective risk-sharing between private and public entities and create incentives for increased water investment.

The world faces increasing water demand, which current supplies will be unable to meet. Investors can impact the water field through both traditional investment in companies that are directly involved in water delivery as well as those that are improving water efficiency. The private sector can coordinate resources with the public sector in addition to investing privately to avoid future water scarcity. The symposium concluded with a clear message that private investment has a critical role to meet the increasing water imbalance.

Emma Currier is a Research Associate at Cornerstone Capital Group. Emma graduated with a Bachelors of Arts degree in Economics from Brown University in May 2016. While at school, she worked with the Socially Responsible Investing Fund and as a teaching assistant for the Public Health and Economics departments.

Last week at the New York Stock Exchange, Ecolab hosted an event to unveil a new version of its Water Risk Monetizer (WRM) solution. WRM, a financial modeling tool, was developed through Ecolab’s partnership with sustainability data firm Trucost and in collaboration with Microsoft. The event focused on WRM’s new operating features.

Alongside the debut of the technology updates, the event featured a panel discussion amongst corporate leaders who discussed best practices and lessons in implementing water risk management strategies for their businesses. Also present were representatives from the financial sector to discuss the investor’s perspective on water efficiency strategies. Panelist included representatives from Microsoft, Marriott International, Coca-Cola, BASF, S&P Dow Jones Indices, CERES, and Cornerstone Capital’s own Sebastian Vanderzeil.

The opportunity for the WRM arises from regulation (or lack thereof), growing public pressure, and rising demand by investors for disclosure. WRM enables companies to understand the impact of water quality and quantity in their business, turning water risk into an actionable element of their overall strategy. The upgraded WRM can now provide comprehensive monetary analysis of the incoming and outgoing water risks, including the future cost of water, pollution and water treatment costs, the potential revenue at risk, and the enterprise risk.

Several key themes emerged during the panels and concluding remarks:

Water risk management has “arrived” as a strategic issue for corporates. Firms must consider both the operational role of water and the reputational consequences of mismanagement of water strategy.  Creation of a “smart water culture” requires awareness of water efficiency and risk at all levels of the organization and the embrace of water management strategy.

Water risk is a multi-stakeholder issue, with engagement of local communities a key to successful risk management. Companies must understand the social and political issues relevant to water sources and uses and align their strategies accordingly.

Water is already an investment strategy, with both passive and active approaches possible. The creation of investment indices can serve to pressure companies to adopt more proactive water risk management practices. Managers may also face a push from “dark green” investors, who want to understand the material issues and emerging technologies.

Metrics are in the early stage of development. However, existing metrics, such as Global Reporting Initiative (GRI) standards, can help companies prioritize efforts; for instance, by assessing the materiality of water relative to other environmental issues and by providing a framework on how to consider the relevant issues. Sound governance requires companies to demonstrate effective policies and outcomes to stakeholders, including investors. Technology solutions like WRM can help companies deal with the risks.

Alfonso Carrillo is an analyst with Cornerstone Capital Group.  He holds an MBA from Babson College where earned the Dean’s Leadership award. Previously Alfonso worked for a family office focusing on business development opportunities in e-commerce and fin-tech. He is a member of the Guatemalan Bar Association, and prior to 2014, he worked on fraud and insolvency cases, as well as anti-corruption cases against Guatemalan authorities. Outside his professional training, Alfonso helped create, and still holds advisory positions on, various youth and social-impact organizations in Guatemala. 

 

The global ocean covers 71% of the planet and generates USD 2.5 trillion a year of goods and services — making the ocean the 7th largest economy in the world.

Sustainable use development of the dynamic, interconnected global ocean presents unique opportunities and challenges for the private sector. As ocean health and resources decline, ocean industries are being increasingly held responsible for their impacts. As a result, private sector access to ocean resources, services and space — even by companies with the best environmental record — is at risk from the loss of the social license. There are many efforts by responsible companies to differentiate themselves from poor performers and try to do business more sustainably. However, the efforts of one company or even a whole sector are not enough to address collective global impacts by a diverse range of industries in a shared global ecosystem.

The private sector is well placed to develop and deliver solutions in response to society’s demands that marine ecosystem use is responsible and industry impacts are minimized. A cross-sectoral ocean business community of leadership and collaboration is needed to address marine environmental issues, differentiate good performers, create collaboration with like-minded companies within and across sectors, engage ocean stakeholders — and attract investment to those companies leading the way in ocean sustainable development.

Industry leadership is essential to ensuring both the long-term health of ocean and responsible industry use of marine space and resources. Responsible industry performers are well positioned to develop and drive business-oriented solutions to marine environmental challenges and to collaborate with other ocean industries and stakeholders in ensuring the health and continued economic use of the seas. There is business value in ocean industries engaging in a coordinated, systematic approach to addressing the challenges affecting the future of ocean business, creating opportunities for collaboration and economies of scale in developing solutions.

To address ocean sustainability issues and opportunities critical to business, the World Ocean Council (WOC) was established, creating an unprecedented global, cross-sectoral industry alliance for “Corporate Ocean Responsibility.” The WOC brings together the diverse international ocean business community (i.e. shipping, oil and gas, fisheries, aquaculture, offshore renewable energy, seabed mining, etc. — including investment companies) to catalyze leadership and collaboration in addressing ocean sustainable development, science and stewardship. In addition to its 80+ WOC Members, the WOC network includes 35,000+ ocean industry stakeholders around the world.

Many companies do want to address marine environmental issues, differentiate themselves from poor performers, collaborate within and across sectors, and engage other ocean stakeholders. Now, with the World Ocean Council, there is a structure and process for companies to work on complex, intertwined, international ocean sustainable development issues. The WOC is harnessing this potential for global leadership and collaboration in ocean stewardship by responsible ocean companies that are well placed to develop and drive solutions to address cross-cutting issues in support of responsible business, reduced risk, continued access and sustainable development.

Protecting the seas to protect your business makes good business sense, e.g. through the economies of scale that can be achieved in joint research on shared problems. A growing number and range of companies share the WOC vision of a healthy and productive global ocean and its sustainable use and stewardship by responsible companies.

The WOC is creating international multi-sectoral/multi-stakeholder “platforms” to tackle cross-cutting priorities for ocean sustainable development, e.g. ocean governance/policy, marine spatial planning, marine sound, pollution, the Arctic, marine invasive species, marine debris, marine mammal impacts, port reception facilities, the adaptation of ports and coastal infrastructure to sea level rise/extreme weather events, data collection by ocean industries (ships/platforms of opportunity).

Many of the environmental and sustainable development challenges facing the ocean industries can be addressed by innovative solutions. The WOC has been working to create business opportunities for companies that are developing solutions by raising awareness among the large ocean industry operators of these solution providers and bringing the parties together.

The WOC is launching the “Ocean Investment Platform” in 2016 to bring together: 1) Investors, 2) Leadership companies from major ocean use sectors, e.g. fishing, aquaculture, shipping, offshore energy, etc., and 3) Enterprises that provide the solution innovations, technology or services. The global, cross-sectoral Ocean Investment Platform will catalyze interaction among investors, ocean industries and solution providers. The platform will provide a common process to identify, articulate and evaluate ocean industry investment opportunities and risk.

The Ocean Investment Platform will provide 3rd party information that characterizes the issues affecting major ocean users, identify the kinds of technology solutions needed, elaborate and evaluate the investment opportunities, and foster and facilitate investment community interaction with ocean users and the technology developers/providers. Initial investment portfolio areas under consideration for the Platform include: port infrastructure adaptation to climate change, port reception facilities (for shipborne plastics and other wastes), sustainable aquaculture, and offshore renewable energy. Additional areas will be evaluated, e.g. technology for ocean data collection, solutions for biofouling and invasive species.

The WOC is pulling together a growing cadre of individuals from across the investment community to collaborate in the design and setup of the Ocean Investment Platform. We will convene this group of interested parties and begin the work of developing the Platform in 2016. Parties from the investment community interested in the ocean/blue economy and the WOC Ocean Investment Platform are invited to contact the WOC CEO to participate in the group. The Ocean Investment Platform will be a major feature of the 2016 Sustainable Ocean Summit (SOS), Rotterdam, 30 Nov-2 Dec. The SOS is the only global gathering of the multi-sectoral ocean business community around the challenges and opportunities for growing the responsible ocean economy – including investment.

Paul Holthus is founding President and CEO of the World Ocean Council. He works with the private sector and market forces to develop practical solutions for achieving sustainable development and addressing environmental concerns, especially for marine areas and resources. His experience ranges from working with the global industry associations or directors of UN agencies to working with fishers in small island villages. He has been involved in coastal and marine resource sustainable development and conservation work in over 30 countries in Europe, Asia, the Pacific, Central America and Africa.

 

At Levi Strauss & Co., our business depends on water. From cotton to manufacturing to consumer care, this precious resource plays a vital role over the lifetime of our products. We’ve studied this issue in great depth, including two comprehensive life cycle assessments. We know exactly how much water a pair of Levi’s® 501® jeans traditionally uses over its lifetime — and where.

That knowledge helped us make a lot of changes in our business to reduce our own water impact. And it’s helped us educate consumers about the impact of their laundering habits. But for us, that’s not enough. As a leading apparel company we have a responsibility to be a catalyst for change — because time and again we’ve found that where we lead, others follow.

That’s why we took a cue from our neighbors in the tech industry and opened up our innovative Water<Less finishing techniques for anyone to use. The Water<Lessprocess can save up to 96% of the water used in the denim finishing process. Since 2011, we have used the process to save more than 1 billion liters of water in our own manufacturing, and we’ve set a goal to use Water<Lesstechniques for 80% of our products by 2020.

Water scarcity is too important for us to keep these techniques to ourselves. Just as tech companies open their APIs in order to accelerate change, LS&Co. is welcoming our industry partners to build on what we have done to accelerate water conservation. We believe our Water<Less innovations could save the apparel industry at least 50 billion liters of water by 2020 — enough to supply every family in New Orleans for a year.

This isn’t the first time we’ve joined with others to address water issues. In 2009, we were one of the founding members of the Better Cotton Initiative (BCI), aimed at fundamentally changing how cotton is grown. Seventy percent of the water used by a pair of jeans is from cotton agriculture. BCI farmers use up to 18% less water than non-BCI farmers in comparable locations.

We’ve also saved 30 million liters of fresh water through the industry’s first Water Recycling and Reuse Standard, which we piloted with one of our vendors in China; we’re sharing that standard across our industry as well.

We are committed to doing even more in the future. We’ve committed by 2020 to train 100% of LS&Co.’s corporate employees in a water education program we developed in partnership with the Project WET Foundation. The goal is to increase employee awareness of the social and environmental impacts of apparel, and to train our employees to become water conservation ambassadors so they can share what they have learned in their communities.

Lastly, we’re working hard to educate consumers about reducing their impact through care labels, awareness campaigns including the “Are You Ready to Come Clean” consumer quiz and “Don’t Be a Drip” water education program as well as through
e-commerce sales channels.

This sounds like a lot of work, and it is. But it’s absolutely vital to our business, our employees, and workers in our supply chain, their communities – and our entire planet. We want to use our leadership position in the apparel industry to spur even more innovative ways we can all work together to preserve this scarce, vital resource.

Michael Kobori is Vice-President, Sustainability at Levi Strauss & Co. He leads the development of LS&Co.’s environmental vision and strategy, including its efforts to collaborate with other brands on sustainability and to extend its standards throughout the supply chain.