Ian Hepworth Julia Sanders LS&CO Materials Project

The Project: Phases Indicator Development and Matrix Our Materials Materials Analysis – Paper and Toner – Hangers – Corrugated – Letterhead/business cards The Big Finale Strategy

LS&CO and Corporate Social Responsibility “Any successful corporate social responsibility (CSR) campaign has to be embedded in the business throughout the organization. For CSR to be most effective, an organization should take its CSR objectives and fundamentally build them into strategic planning so that everyone considers business decisions through the lens of corporate social responsibility” - Hilary Krane, Senior Vice President and General Counsel for Levi Strauss & Co. (LS&CO.)* *Corporate Social Responsibility: A Fundamental Business Thought Process, Association of Corporate Counsel

Phase 1: Investigate Identify potential target materials Refinement of list with LS&CO team Phase 2: Measure and Reduce Identify Metrics for estimation of impacts Investigate strategies to reduce impact Phase 3: Recommend Present short and long term solutions Develop implementation program Project Scope and Phases

Material Environmental Impact: Research and investigation of current environmental impact based on generally accepted standards Research alternative substances/practices and reduction possibilities Cost Savings Potential: Interviews with key staff members and suppliers Industry benchmarking Predictability of Consumption: Interviews with key staff members across the firm Level of Visibility: Interviews with key staff members across the firm Industry knowledge and benchmarking Indicator Development Methodology

Total Spend 20% Environmental Impact 30% Cost Saving Potential 30% Predictable Consumption 10% Visibility 10% Paper$121,000High Printer Accessories and Cartridges $763,000MediumHigh Medium Fixtures and Brand Elements $8,500,000Medium/Low MediumHigh Size Dividers$175,000Medium/Low HighMedium Hangers$1,000,000MediumHigh Medium Servers$1,400,000Low Stationary/Business Cards $49,840High Wood Pallets$700,000Medium HighMedium/Low Corrugated$5,000,000High Medium/Low 6

Jeans O-Meter 123, BTUs OR kWh of energy Anderson, Stephen. “Energy Consumption Associated with the Production and Distribution of Jeans in the U.K.” December

Paper and Toner

The Size of the Problem 17 Million Sheets $121,000 10%-17% Wasted $15,000 Lost

LS&CO Currently spends $650,000/year on Toner San Francisco Chronicle: Toner: Costly Commodity

Green Print highlights and removes unwanted pages PDF Writer Tracks individual and aggregate pages and dollars saved Green Print: An Integrated Software Solution Average savings with Green Print are upwards of $100 per user per year* *A GreenPrint Technologies White Paper Green Print software eliminates unwanted pages saving paper, ink, and money

NPV Conservative Payback Period: 2.5 years Conservative NPV: $70,000 Standard Payback Period: 1.5 Years Standard NPV: $180,000 Green Print: Financial Analysis Green Print: Potential Savings Year Present Value (thousands)

Currently UsedPotential Savings Wood260 Tons34 Tons CO2490,000 Pounds64,000 Pounds Solid waste200,000 Pounds28,000 Pounds Waste water1.7 Million Gallons215,000 Gallons Energy960,000 kWh125,000 kWh Environmental Savings 3,387 Pairs of Jeans! GreenPrint: Environmental Impact *Environmental Defense Paper Calculator

Recycled Paper Content: 30% to 100% Volume data from Staples invoice:QuantityPriceTotal Spend 50% Recycled Price 100% Recycled Price SPLS 8.5X11 30% REC COPY CS3130$42.99$104,260.30$63.99$51.99 SPLS 8.5X14 30% REC COPY CS153$55.99$8,277.30$94.99 STAPLES 8.5X11 3-HOLE CS117$45.99$5,146.83$79.99 STAPLES 8.5X11 30% REC COPY RM358$5.99$1,399.78$8.79$6.79 SPLS 8.5X14 30% REC COPY RM94$8.79$824.24$10.49 SPLS 8.5X14 COPY RM133$7.79$683.62$10.49 SPLS 11X17 30% REC COPY RM21$18.89$326.34$15.79 PAPER COPY GTWHT 20# 8.5X11 WE24$6.29$177.12$8.79 Paper Total $121,095.53

NPV 100% Recycled Paper Payoff If the switch to 100% recycled paper is adopted in conjunction with Green Print, the net NPV is positive Year Cost Offset: Combine Paper Change with Green Print

Currently UsedPotential Savings Wood162 Tons CO2490,000 Pounds98,400 Pounds Solid waste200,000 Pounds52,300 Pounds Waste water1.7 Million Gallons406,300 Gallons Energy960,000 kwh228,400 kWh 100% Recycled Paper Environmental Savings 6,201 Pairs of Jeans! GreenPrint: Environmental Impact *Environmental Defense Paper Calculator

Option 1: – Adopt Green Print Now Moderate environmental impact NPV positive: $70,000 - $180,000 Option 2: – Adopt Green Print Now – Adopt 100% recycled paper w/ in 2-5 years High environmental impact FSC Certified – Internal and External Communication NPV positive or cost neutral: $0 - $80,000 Paper and Toner Recommendations

Julia P. Sanders Ian A. Hepworth Environmental Consultants Letterhead and Business Cards PHONE: FAX:

Letterhead and Business Card Analysis Alternative 1: Keep current design + $2,000/year in paper cost Alternative 2: Remove script Levi Strauss Cost neutral Alternative 3: Major design change +$2,000/year in paper cost +$7,500 design fee +$34,700 additional purchase to replace stock of outdated design 700 lbs. of discarded letterhead LS&CO. has committed to adopting New Leaf paper, that is 100% PCW and FSC-Certified

Letterhead Keep current design Minimal cost No waste due to discard Can consider design change in future Letterhead and Business Card Recommendation 103 Pairs of Jeans! *Environmental Defense Paper Calculator

Hangers

Hangers: The Lifecycle LS&CO Annual Hanger Spend: $1,000,000 Drivers of cost: Average Hanger Inventory: 8,400,000 Purchase 880,000 new hangers every year Assumption: ship each hanger approximately 500 miles Recently moved to reused hangers

Hangers: Eco-Friendly Substitution Standard 6012 – Average resin content: 36.2 grams – Hook (West Coast): 8.7 grams – Price per 1000: Average $164 Eco 6012 – Resin content: 27.2 grams (25% reduction) – Hook (Nail head): 8.3 grams (4.6% reduction) – Price per 1000: Average $133

NPV Eco-Friendly Hanger Payoff Conservative NPV: $146,000 Observed NPV: $317,000 Savings from Shift to Eco Hanger

MaterialPotential Savings Plastic7.7 Tons CO247,000 Pounds Energy168,000 kWh Hanger Replacement Environmental Savings 4,570 Pairs of Jeans! GreenPrint: Environmental Impact External BenefitsTrendsetting, Externally facing

Corrugated TBD

Annual Potential Impact

199 Tons of Wood 199 Tons of Wood *

211,080 lbs of CO2

80,300 lbs of SOLID WASTE * Environmental Defense Paper Calculator

628,000 gallons of waste water * Environmental Defense Paper Calculator

* 525,000 kWh

Jeans-o-meter 14,261 Pairs of Jeans!!!