Green Scene: MEC, a case study in environmental and social responsibility

Ensuring your company, be it retail or manufacturing, takes into account fair labor practices and environmental impacts when making daily business decisions can be a daunting task. But it is something that we, as an industry, need to begin doing -- all of us. While there is often no obvious starting point for sorting through supply chain issues as a manufacturer or retailer, Canada's Mountain Equipment Coop (MEC) has laid the groundwork for others to follow.
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Ensuring your company, be it retail or manufacturing, takes into account fair labor practices and environmental impacts when making daily business decisions can be a daunting task. But it is something that we, as an industry, need to begin doing -- all of us. While there is often no obvious starting point for sorting through supply chain issues as a manufacturer or retailer, Canada's Mountain Equipment Coop (MEC) has laid the groundwork for others to follow.

"It's a long road to hoe," said Denise Taschereau, MEC's manager of social and environmental responsibility. "And we're in a great position to do it."  

MEC is Canada's largest outdoor specialty retailer and the fifth largest democratic institution in the country -- yes, you read that right. Only four other entities in Canada that elect leadership democratically are bigger. MEC has over 2 million members in a country of 30 million people. The company has been in business for over 30 years, and, like REI in the United States, it is a cooperative. While MEC is structured to be a cash positive business, margins are not the company's greatest driving force, so it has more latitude than some businesses to invest in social and environmental programming. And, that latitude has certainly been a boon as MEC pursued a goal of becoming more socially and environmentally responsible.

Initially, MEC's social and environmental programs were informal. Individual buyers, from each department, direct-sourced products in Canada, the United States and offshore. Buyers based decisions on whether or not to buy from a factory on what Taschereau describes as the "gut check," or buyer's intuition on human rights and environmental issues. In the mid-1990s, MEC decided to formalize its corporate values on environment and labor to support and guide the company buyers' sourcing decisions.

Fair Labor
"When we looked into labor practices in our factories, there were no big surprises," Taschereau told SNEWS®. "The endemic issues were working hours and overtime pay both in Canada and offshore. We found we had to look at every factory. Abuses were not just happening in China."

In 1997, MEC introduced a voluntary, self-imposed, self-regulated, factory-specific policy that eschewed discriminatory hiring practices and child labor, but did not link itself to international standards, or create country-specific guidelines.

"They were the right ideas, but we didn't quite hit the nail on the head," said Taschereau. "Our members saw it as us shying away from the bigger conversation about human rights abuses, and our not taking responsibility for the realities of having a global supply chain. We got hammered by our members and by both national and international non-profits."

MEC went back to the drawing board, and in 2000, with the assistance of Businesses for Social Responsibility, developed a supplier code-of-conduct and in-house auditing program it is still using. The program is a 27-page document with 200 questions that buyers take to their factories.

"It is miles ahead of what we had in '97," said Taschereau, who joined MEC in 2000 to help revise this policy. In 2002-03, MEC undertook a huge peer review of that code-of-conduct and in-house auditing system to create the Supplier Team Evaluation Process (STEP) with the same non-profits that had so strongly criticized its first attempts at an environment and social responsibility policy.

At that time, MEC also signed up for third party auditing with U.S.-based Verite. Verite audits three of MEC's factories each year, helping MEC bring assurances and greater transparency to its policies and programs, and to help it ensure that its social and environmental programs remain strong. Verite also audits MEC's auditing methodology, which has helped MEC address outstanding factory issues more directly and effectively.

"It's a new chapter," said Taschereau, "and the next page for us was to join a fair labor association."

MEC chose the Fair Labor Trade Association (FLTA), a coalition of businesses that has helped develop policy and methodology for retailers, factories and brands including Nike and JanSport. According to Taschereau, FLTA's mandate is to help companies succeed in becoming ethical brands.

FLTA conducts sample and random supply chain audits, and publishes the resulting reports in a public forum.

"It's another step in accountability and responsibility," Taschereau said.

While many companies fear not only what this type of audit may reveal, but possible negative publicity, MEC has found that working closely with its factories to bring those factories in line with MEC's business ideals has been beneficial both in the public sector and behind the scenes. The company has developed closer relationships with its supply chain. And, according to Taschereau, MEC receives an enormous amount of favorable media coverage for trying to do better. Internally, MEC social and environmental initiatives have become a huge source of pride for, and connection with and between, the MEC staff.

"Our staff stays longer, and they get their rockstar friends to apply for jobs because we're trying to do things differently," said Taschereau. "Our staff appreciates that we are trying to tackle the complex issues of environment and human rights, and that we're doing it thoughtfully."

Environment
MEC's work does not stop at its factories. The company has won international awards for its green buildings, and innovative approaches to construction like rooftop gardens. In Alberta, two MEC stores are converting to wind power. It has an environmental corporate paper purchasing and green cleaning program. All its stores are built on public transportation corridors, and have bike storage and showers for employees. And MEC gives away a percentage of its revenue to the communities where it has stores.
"We're pushing the envelope," said Taschereau, "But there are always next steps."

On MEC's current to-do list is a plan to dig deeper on product sustainability issues, including fabrics and treatments.

"We need to figure it out on the molecular level," said Taschereau. "Our next big issue will be creating performance products with a reduced ecological footprint."

MEC conducts greenhouse gas emissions audits every two years. The company is investigating its wastewater and how to reduce it. And management is pushing people to think more creatively in product design.

Public Response
MEC was criticized by various environmental and human rights NGOs early in its process, but the company embraced those organizations and invited them to be part of the conversation.

"When we did our policy review, we called the Secretary General of Amnesty International to talk about working with Chinese factories," Taschereau told SNEWS®. "After that conversation, they were supportive of us being there."

NGOs still say they'd like MEC to be more transparent or more stringent with product production, but in general they use MEC as an example of a company that is leading the way on both environmental and humanitarian frontiers. MEC has been pushed by NGOs for full factory disclosure, including factory addresses, but MEC has thus far declined to reveal the specifics of those business relationships.

"When you open your heart to your biggest critics and start having conversations, you might find that you're not as far apart on all points as you thought," said Taschereau, who considers MEC's collaboration with NGOs some of its biggest wins. MEC has even hired individuals from NGOs to help the company communicate better with that sector.

Challenges
MEC has spent a significant amount of money on staff, travel, training and audits, and it can add up. But part of the cost for MEC was baking from scratch, and, at first, doing all of its auditing and policy development alone. The company has reduced its costs by joining organizations like the FLTA, which provides MEC with existing tools and resources. The result is that MEC no longer feels like it has to give up the global supply chain, said Taschereau. "We have the numbers and they are a very useful tool."

"It's harm-reduction that we're working on," said Taschereau. "Changing a corporation is like getting an addict off hard drugs. You crank down the ladder one step at a time from crack to coke to dope to cigarettes, and then finally you come clean. We're looking for the incremental steps we can take to mitigate our environmental impact."

One hidden challenge and opportunity of this process has been organizationally embracing and teaching basic change-management principles, and the concept of organizational learning.

"They don't teach that in business grad school," said Taschereau. "They don't teach you how to change other people's minds."

Her advice to other companies that want to make similar changes, "If you can get 20 percent of people on board who are willing to put in the energy to create change, and if they spend enough time with the middle 60 percent, they can eventually bring them on board. The laggards will either change or leave."

For more information on MEC's Social and Environmental Responsibility programs, including its Energy Conservation, Old Growth Forest, Sustainability, Green Building, Waste Reduction and Product Sourcing Policies, and its Supplier Code of Conduct and Supplier Team Evaluation Process, visit www.mec.ca.

To talk with the Fair Labor Trade Association, visit www.fairlabor.org. To contact Businesses for Social Responsibility, visit www.bsr.org. To learn more about Verite and its auditing programs, contact www.verite.org.

SNEWS® is very committed to further the communication of the green message. Our monthly "Green Scene" column takes a look at what our industry is doing well, what it can do better, and provide inspiration and ideas for establishing our industry position as the leaders in green for both preservation and profit. If you have ideas or issues you would like to see us discuss, send an email to: GreenScene@snewsnet.com.

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