Eileen Fisher: Designing for Change
A business that puts sustainability and human rights at its core
by Sarah Stranahan
Eileen Fisher, Inc., designs women’s clothing. The company, which is 40 percent employee owned and a B Corp, is a leader in its human rights and sustainability practices. We wanted to understand how Eileen Fisher managed to incorporate its values into a successful business strategy, and sat down to talk with Vice President of Social Consciousness Amy Hall as part of our series on employee ownership and environmental sustainability.
Eileen Fisher has a vision of a world in which business is a force for good: not just for her business, but for all businesses. The corporate website proclaims, “We don’t want sustainability to be our edge; we want it to be universal.
“Our vision is for an industry where human rights and sustainability are not the effect of a particular initiative, but the cause of a business well run. Where social and environmental injustices are not unfortunate outcomes, but reasons to do things differently.”
Protecting the Mission through Employee Ownership
One thing that Fisher did differently was to put 40 percent of her company into an Employee Stock Option Plan (ESOP). As she explained in a 2015 video for Inc Magazine, “I thought about going public, so we created a platform to test the viability of the IPO idea. I remember being up on stage and looking out at a roomful of men in suits; no women wearing my clothes, no conversation about clothes. It was all about the numbers, it was really just about the money.”
Fisher also thought about selling to another company: “I sat down with the CEO of Liz Claiborne and asked her why she wanted to buy my company. She said, ‘We can’t meet our mandated target of 10 percent annual growth without buying other companies.’ I realized that most people were interested in what they could get out of the company, not what they could give to it.”
In the end, the ESOP was a perfect fit for the company and for Fisher. “When I first heard about ESOPs it just rang true.” The ESOP ensures that, when Fisher is ready to retire, the company will be owned by “the people who put their blood sweat and tears into it; the people who love it and care about it and think about it every day.” That feels very different from those who see the company only as a way to produce profits.
Business as a Force for Good
Eileen Fisher, Inc., is now living proof that an employee-owned business with 1200 employees and $440 million in revenues can be a powerful force for good. But they aren’t sitting back and bragging about it — they are pushing toward new goals and working to transform the entire textile industry.
“Most clothing companies don’t trace their supply chains back to the farm level,” explains Hall, “but when possible we try to look all the way back to where and how our raw materials are produced.”
They are already pretty darn good. Good as in offsetting 100 percent of their carbon foot print. Good as in being the first U.S. fashion house to pursue a safe chemical certification program for their textiles. Good as in being on track toward a goal of using 100 percent organic cotton and linen by 2020. Good as in reaching out to collaboratively develop more transparency in textile industry supply chains. Good as in launching a new program to buy back and resell their own used garments. And good as in giving $1.4 million to non-profits that support women and girls.
And the amazing thing is, Fisher isn’t even running the day-to-day operations of the company. A “collaborative CEO” group of six team leaders runs the company and has successfully channeled Fisher’s long-standing commitment to the environment, human rights, and women and girls. We asked Vice President of Social Consciousness Amy Hall if employees were involved in the company’s sustainability goals.
Protecting the Earth
“By and large the employees understand and appreciate our environmental commitment. We’ve done many things to actively engage employees. From 2013 to 2017, we had a cross-functional team called the Sustainability Design team, which included leaders and representatives from several key departments, Design, Supply Chain Management, and Production,” says Hall.
This team was created, says Hall, after “Eileen made a trip to China in 2012 to visit some of the company’s suppliers. She was really struck by the impact that the ground water crisis was having on the communities where we source our fabrics. She realized that that almost all of the areas where our fibers are sourced— Mongolia, China, South Africa, South America and the American Southwest — are red zones on a water scarcity map. Eileen was putting it all together and recognized that clean water is a humanitarian crisis and also a business crisis. If farmers and manufacturers don’t have access to water, we can’t produce goods. She came back from her trip and said, ‘We have to do more and we have to do it faster.’” In response, the company developed a new integrated and collaborative approach to their sustainability goals.
Before the Sustainability Design Team, Hall says, “there had been individual champions pushing for more sustainable practices, but each idea had an uphill climb attached getting support from different divisions of the company. Once we got the leadership involved the questions around sustainability shifted from ‘Can we do it?’ to ‘How do we do it?’”
“Our values have unexpectedly made us thought leaders in the clothing industry. We know we can’t do this alone — it will take an industry to change the industry.”
Hall was sitting outside overlooking the Hudson River as we spoke. “Our corporate offices are located right on the Hudson River, 45 minutes north of Manhattan. We collectively created a detailed document called the “Riverbanks,” which outlines our environmental and social goals.”
Among these new goals are 100 percent sustainable materials. Organic fibers are more expensive to grow and process, but “shifting to organic just made sense,” says Hall. “While it doesn’t reduce the amount of water needed to grow a crop, it improves the quality of the water that is going back into the aquifers and lakes by removing pesticides and chemical fertilizers.”
“Most clothing companies don’t trace their supply chains back to the farm level,” explains Hall, “but when possible we try to look all the way back to where and how our raw materials are produced.”
Another goal is to have all the plants that dye Eileen Fisher fabrics (called dyehouses) third party certified to meet strict bluesign® standards for their chemical, water and energy usage. Bluesign® is a Swiss third-party certification program to reduce and replace toxic dyes and chemicals in the textile industry. Eileen Fisher was the first U.S. fashion house to pursue bluesign® certification for its suppliers. Today eight of their dyehouses and mills are bluesign® certified.
Perhaps Eileen Fisher’s most ambitious environmental goal is “to take full responsibility for the lifecycle of our clothing, retaining the beauty and inherent value of our materials through a circular approach.” In pursuit of a circular business model, Eileen Fisher has taken back a million garments since 2009 in it’s “Renew” program that resells, repairs and/or remakes their used clothing. They are also exploring ways to reduce the use of virgin materials by turning waste into fabric.
Caring for People
Eileen Fisher’s concern for their corporate impact carries over into the workplace as well. The company makes clothes for women and 84 percent of their employees are women. Their benefit report states, “We seek to empower women through our business because they are our business.” Eileen Fisher has cultivated a corporate culture of collaboration, care, authenticity and creativity. And sharing: In addition to the ESOP, they have a generous profit-sharing program.
Eileen Fisher has also been a leader on human rights and workers rights in the textile industry. They are very careful and concerned about their global supply chain. In 2017, they developed the first version of a cutting-edge Social Product Score Tool that assesses whether a supplier pays a living wage, has achieved SA8000 or Fair Trade Certification, makes a positive difference in worker’s lives, and promotes Eileen Fisher’s labor standards in their supply chain.
Enterprise Design Lessons
There are limits to what one medium-sized company can accomplish. The firm’s benefit corporation report acknowledges that “to move our work forward, especially in benchmarking living wages, we need to overcome data gaps. Worker-level data is hard to acquire and requires verification, which can contribute to audit fatigue. This is a challenge not only for us, but for the entire fashion industry. We hope to lead the effort to find ways of collecting this data, and bring other brands along with us in the process.”
It takes a business movement to build an ethical, transparent, and sustainable supply chain. One company simply cannot transform the entire industry. But they can try. Eileen Fisher has accepted that challenge: “Our values have unexpectedly made us thought leaders in the clothing industry. We know we can’t do this alone — it will take an industry to change the industry,” says the 2017 benefit corporation report.
Though she didn’t mention it when we spoke, Hall is a global leader in workplace human rights. Her reticence to take personal credit for changes in the industry somehow seems to perfectly embody Eileen Fisher’s understated ethos: first find your authentic values, then fearlessly follow them and when needed, innovate to achieve them, next create tools to measure your impact and invite others to join you. Eventually you can transform an entire industry and perhaps an entire economy.
Sarah Stranahan is senior editorial associate at The Democracy Collaborative and a leading member of its Fifty by Fifty employee ownership team.
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