The Challenge
Like any organization, MEC’s future is premised on the need to continue to either grow or evolve in some way. In an effort to ensure the continued delivery and relevance of our value proposition/ business model we spend a good deal of time looking out 10 to 15 years….trying to understand the changes in society and the environment (business and natural) in which we operate.
The only things we know for sure (in the exponential change and complexity of the global landscape) are that the winners will:
- Have learned how to “do more with less”, eliminate waste and have visibility of all of the stakeholders and resources within their supply chain. From primary inputs to customer end use. These are the driving forces behind our “green” initiatives.
- Have an adaptable and flexible culture with robust financial model
Our main objectives are to reduce the footprint in all of our operations, working to do more with less and eliminate waste while remaining relevant and financially healthy. We have approached these objectives by challenging each of our operational departments/ functions. The resulting major areas of focus and initiative have been:
Direct operations:
Buildings:
Objective: MEC operates retail stores across Canada and has a Head office and D.C. in Vancouver. Industrial buildings account for 13% of Canada’s GHG emissions and 14 per cent of all end-use energy consumption. Not only will energy increases add to the cost of doing business but when Carbon costing comes into effect this will add more cost into the system. The less energy we use the lower our future operating expenses will be. While our mid term objective is Carbon Neutral, our long term vision is energy neutrality.
Actions:MEC has a long history of building “green”. In an effort to further reduce all of the construction and operations impacts of our buildings we are finalizing a Green Building Code that guides our store development. This is a living document that considers Best Available Technology (BAT) at the time of building. It covers the footprint and embedded energy of material all the way through to final deconstruction and ensures we build the most energy and materials efficient buildings we can while delivering on a viable business case. Our energy purchases are via Bullfrog power and utilize renewable energy sources.Timing:
Green Building Code: Launch Spring 2010.
Recent buildings:
- Burlington Store. Fall 08. Feeds energy back onto Ontario grid via solar array
- Longeueil Store. 70% more energy efficient than an equivalent facility
Partnerships:
Canadian Green Building Council. ARUP
Results/ Costs/ ROI:
All of our buildings have a positive 12 year NPV and energy use in our newer facilities is 70% lower than an equivalent building. The feed in tariff opportunities offered by the Ontario government have allowed us to develop significant power generation facilities in our new Ontario buildings and feed back onto the grid. Energy expense cost savings reflect these initiatives.
Consumables
Objective: There is a significant waste stream that leaves the back door of a retail operation. Everything associated with this waste has an upfront cost. The elimination or re-purposing of this waste will result in increasingly lower costs as input costs increase. Our target was to cut our diversion rate to 90% by 2010 with a subsequent move to Zero waste in future. This includes end of life product we take back from our Customers/ Members. (Diversion rate is measured as everything that leaves the store. Fuel canisters, batteries, construction materials, staff garbage, food waste etc)
Actions:
We have scrutinized the product and transport packaging (see packaging section) and worked with municipalities and partners to develop re-cycling and composting options. “Dumpster dives” are done to audit waste and specific plans are developed around the regional/ store specific results. Staff have visibility of the audits and best practices and we have increased re-cycling containers and decreased trash bins. Relationships have been developed with recyclers of product from batteries to bicycle tires across the country.
Results/ Costs/ ROI
Our store diversion rate is currently running at 90%
Business travel
Objective: As an organization that sources product from around the Globe and has a nationally based store operation we have people traveling all the time. While air travel is not a significant part of our overall footprint we recognize that it is one of the most significant “per capita” forms of emission.
Actions:
I. The first step to managing travel is to measure one’s mileage. In late 2008 we moved all our travel to a single agent that is able to track all movement. This will be reported on an annual basis and offset.
II. We have moved meetings, where practical to the web via conferencing tools. While this has not replaced the need for travel it has allowed us to reduce mileage
Timing:
I. Our first year of offset will be 2009
II. We have been using web tools for the past 3 years. As the systems improve we gain better traction with their use
Results/ Costs/ ROI
I. Air travel offsetting is one of the few costs that has no direct business payback at this point in time
II. Remote meetings have allowed us to cut back on travel to our stores and one of our 5 annual Board meetings. There are cost savings and in addition improvements in employee quality of life as they need to travel less.
(Note: We are considering investing in the latest technology to improve the interactive nature of remote meetings. Due to the changes in technology and the medium/ small size of our business the financial case is not very attractive at this point in time but we believe it is an investment into the culture of communication of the future)
Indirect operations:
Transportation
Actions:
Inbound freight from Asia is confined to fast container ship. Port of entry moved from Vancouver to Richmond to cut truck distances. A large part of outbound freight to the eastern provinces has moved from truck to rail. We continue to look at such possibilities as pre-allocated vendor direct shipping from product coming from areas closer to our stores than our D.C. This remains an area of challenge for the future.
Timing:
2008
Results/ Costs/ ROI
2008 gross shipments were + 13% on 2007.
Gross GHGs were – 7% on 2007
Staff transport
Many of our staff are active and live in relatively close proximity to our urban situated stores and H.O.
Actions:
We provide showers, change rooms and bike storage in all of our facilities and endeavor to situate all of our facilities close to public transport where possible
Results/ Costs/ ROI
We have a high percentage of staff riding to work across the organization. While it has not yet been formally measured on an annual basis across the country it is the majority of staff in our stores.
Product:
We are aware that the single biggest impact in our business is that of the product itself. More specifically in the extraction/ growing of the fiber feedstock, the processing of the feedstock into yarn, the weaving of the yarn into material and the finishing and dying of the fabrics. Not only is this energy and water intensive but the processing relies on an exceptionally high chemical load to achieve the end product.
Actions:
As this challenge requires scientific and engineering expertise we have partnered with a Swiss based scientific organization (Bluesign) to work with the Chemical companies and Mills to work on input streams and processes to reduce the impact of the product. This process benchmarks chemicals and processes against the best available technology and practices known to limit toxicity, volatile emissions, energy and water waste and effluent. We have been working with like minded partners (Patagonia, Nike, Timberland, OIA, REI) to build a critical mass around acceptance of the Bluesign process with our Mills and the industry at large.
Timing:
We have been working on this since 2006 and believe that 2010 will be the breakthrough year.
Results/ Costs/ ROI
The cost of this for us has been mostly our staff time. The costs for a mill to be screened are significant but most of the mills that have gone through the process have seen significant savings on their input costs and re-process requirements.
Waste
The highest efficiencies we are achieving with our markers (imagine cutting cookies out of cookie dough…the pieces left behind) is 80%. This results in 20% of the materials we buy going to waste. We need to both improve our efficiency and find an alternative to the off-cuts to keep them out of the waste stream/ landfill.
Actions:
A 2010 initiative
Packaging
We have over the last 8 years reduced our packaging (on MEC product) significantly relative to most comparable product. It requires creativity to continuing to work towards 100% diversion rates while ensuring the product travels well and facilitates handing in our D.C. One of the complaints we were getting from the D.C. pickers was that bulk packaged apparel was difficult to pick accurately and was time consuming.
Actions:
Last year we trialed a new form of wrapping. Rather than fold and bag apparel we rolled it and tied it with recyclable ribbon. The trial has worked on many fronts, including space saving. We are “rolling” it out to more factories this year.
Results/ Costs/ ROI
There is a learning curve and slight added cost at the factory due to the custom process but we have also seen: Faster picking times. Reduced outer/ shipping packaging. Greater density per carton. 100% diversion.
Collaboration and Innovation for change
Knowing that we are too insignificant to achieve change on our own we rely heavily on collaboration with like minded partners (including competitors). I believe it is our collaboration that has been our real contribution to the area of footprint reduction. Our Bluesign work (see above) that has seen us engage with a breadth of organizations from the University of British Columbia to Patagonia, from the North Face to Nike. Our ethical sourcing initiatives tapped into collaboration with the OIA and the FLA amongst others. We have worked with transportation businesses and construction companies. Our Green Building code brought ARUP engineering and the Canadian Green Building Council into the fold.
Our latest collaboration is with such companies as Nike, Best Buy, Salesforce.com, Yahoo and others to launch an open exchange for green technology patents, G.X. (GreenXchange). G.X. will be launched at the WEF in Davos later this month and will, we are all hoping, result in an explosion in innovation in the area of consumer product.
