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Sustainable innovations in enterprises
Sustainable innovations in enterprises

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Levi Strauss case study

Levis’ mission and vision describe what they are doing, how they are doing it and where they want to be in the future.

Mission statement: ‘The Mission of Levi Strauss & Co. is to sustain responsible commercial success as a global marketing company of branded apparel. We must balance goals of superior profitability and return on investment, leadership market positions, and superior products and service.’ (Strauss & Co., 2015)

Vision: ‘We are the embodiment of the energy and events of our times, inspiring people with a pioneering spirit.’ (Strauss & Co., 2015)

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Figure 3 Levi Jeans

With sustainability becoming increasingly important, it is essential that companies establish their competitive advantage while justifying the impact of sustainability. For this to happen, the enterprise must both invest in social impact initiatives that generate measurable results, and engage in marketing campaigns that inspire internal and external stakeholders to participate in the process. Levi Strauss & Co. have done this using sustainability in the apparel industry, to bring an innovative lens to environmental and social impact throughout its supply chain, materials and whilst also activating its consumer base. The company has gone beyond labour compliance standards by publicly disclosing its manufacturing supplier locations. It has also led the industry in banning sandblasting, and partnering with non-governmental organisations (NGOs) and key suppliers to support programs that improve workers’ lives.

Levi Strauss’ sustainability goals

Identify cost savings

A common goal of many sustainability projects is to reduce costs. This can be achieved by reducing consumption of costly resources, or by recycling/reusing materials that would previously have been considered waste when manufacturing the product. LCA provides a data-driven approach to identifying potential operational efficiencies through reducing energy use, material use, water consumption, waste generation and emissions. By quantifying environmental impacts through measuring the amounts of water, materials and energy consumed, and the carbon and waste generated at each stage of producing a product or delivering a service, companies can see where those impacts are greatest.

Environmental impacts have associated financial costs – whether it’s a higher energy or water bill, or increasing business risk because of future expected regulation or price volatility. By reducing the impacts, the company can also reap cost savings. In this case Levi Strauss found a way of dramatically reducing costly water consumption and are also going forward by persuading consumers to do the same.

Enhance brand value for competitive differentiation

In many industries, and particularly the fashion and apparel industry, there is a competitive advantage if your product and brand is perceived as environmentally and socially beneficial. Many businesses are embracing sustainability initiatives and Levi Strauss have used their LCA results to promote their brand. The brand revolves around the fact that its products are using less water. The company has also been able to leverage sustainability decisions made primarily for other reasons – cost or regulatory compliance, for example – into positive publicity.

Improve design decisions

LCA is also useful when making design decisions that affect sustainability. By evaluating various possible materials and processes for manufacturing and delivering a new product at the design stage, companies can use environmental, social and economic criteria to reduce the life cycle impact. This helps to answer eternal dilemmas such as ‘which type of fabric is better to use for jeans?’ Levi Strauss have compared different materials and analysed the environmental impact to see which fabric is better when considering the main environmental issues caused by the washing of the jeans. This has informed the choice of materials for their products.

Make better procurement decisions

By engaging multiple suppliers on joint cost and impact reduction efforts, and by encouraging innovation among suppliers, businesses can make procurement decisions that significantly boost their sustainability efforts. LCA can lead the way here. Levi Strauss asks suppliers to assess the environmental footprints of their products and challenges them to continuously improve. In addition, developing these footprints usually results in lower costs. Although this is a sustainability initiative, procuring products from supply chain partners that are proactively and continuously reducing their water or carbon impacts can translate into lower costs for Levi Strauss as a retailer – who can pass them on to consumers and retain its reputation in the price–quality ratio. LCA can also be applied to a related procurement goal: evaluating which supplier out of a large pool of potential partners might be best positioned to contribute to your sustainability objectives. Likewise, LCA can be used to choose the most appropriate product from a supplier’s portfolio. For example, a packaging supplier might offer a range of options based on the percentage of recycled material Levi Strauss prefer.

A recent study by Levi Strauss & Co. (2015) found that 1000 gallons (3800 litres) of water are used over the lifetime of a pair of jeans, with regular care contributing 37 per cent of the roughly 74 pounds of carbon dioxide emitted during the jeans’ use. The company decided to launch a month-long campaign – World Water Day through Earth Day – to promote its campaign Water

The study concluded that:

  • fibre production, which is predominantly cotton, contributes extensively to water consumption.
  • consumer care and fabric production are the most significant phases for climate change impact and energy.
  • by including the leading cotton-producing countries, they have realised that water consumption from cotton cultivation increases to 68 per cent of the total impact.

When they assessed their findings in consumer use, they found that if the jeans are washed every ten times the product is worn, this will reduce energy use, climate change impact and water intake by up to 80 per cent. There were also significant differences in geographic regions noted, as consumers in the UK and France use more hot water to wash their jeans than American or Chinese consumers. Consumers in China tend to use a cold water wash, air dry their jeans and wash them less.

(Strauss & Co, 2015)

Activity 9 Applying the LCA method to the Levi Strauss case study

Timing: Allow about 20 minutes

Having read the case study on Levi Strauss, now answer the questions below.

1. How does Levi Strauss’ mission statement explain what the company wants to achieve?

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2. Which measurement issues outlined in the LCA used by Levi Strauss appear particularly relevant to your specialised area?

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3. How does the discussion about evaluating and measuring the impact of sustainable innovation relate to your specialised area?

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4. What additional issues (if any) are you likely to face in evaluating your specialised area?

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These are a few examples of the LCA used by Levi Strauss. LCA is fast becoming an increasingly effective way for businesses from all industries to prioritise and assess opportunities to create added value across a product’s life cycle. Despite the rigour involved and potential value created, LCA can be a relatively simple and inexpensive process for larger companies that incorporate a sustainability argument into their strategy. An LCA that matches objectives to expected outcomes and involves internal and external stakeholders throughout the process can help to deliver additional value creation, including cost reduction and improved brand identity.