Macy’s Elevates Sustainability and D&I Goals

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Macy’s Inc., seeing a world reeling from climate change, has set loftier goals for reducing its impact on the environment.

By 2025 the retailer expects to reduce energy consumption by 10 percent from a 2018 baseline, and reduce water use by third-parties manufacturing Macy’s private brands by 25 percent against a 2019 baseline in areas of “high water stress.”

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Macy’s is developing for the first time restricted substance lists for private brands. One for apparel, footwear and home textiles will be ready next year, and another for non-apparel products will be out in 2024. By 2025, Macy’s intends to have 40 percent of its private brand products made with preferred sustainable fibers.

In addition, a corporate policy laying out key principles for the management and restriction and disclosure of chemicals is being developed.

By 2025, all beauty, baby care, personal care and household cleaning products on Macy’s website will be required to disclose their ingredients.

All that and more is contained in Macy’s “2020 Sustainability Report,” released Friday.

The report also said the company will “prioritize opportunities that extend the life of a product” and help customers find sustainable products by adding an additional 5,000 product pages to the sustainability sitelet, which will include all product categories in Macy’s digital assortment.

The retailer’s greatest opportunity for energy reduction is with lighting. Since 2010, Macy’s has reduced total energy consumption by more than 17.8 percent through LED lighting retrofits at many of its locations.

On solar power, the report stated: “We have more than 100 active solar sites nationwide and approximately 65 million kilowatt hours were produced in 2020, offsetting 46,000 metric tons of CO2e,” which includes CO2 and other greenhouse gas emissions. “We actively continue to evaluate future solar projects and renewable opportunities across the company.”

Through a partnership with Volta Charging, Macy’s has free electric vehicle charging stations at 37 store locations, which last year powered about 1. 7 million electric miles and avoided 763,482 pounds of CO2 emissions.

The retailer also wants to increase in-store recycling rates to 80 percent, and is adopting new policies on cotton, synthetic and wood-based materials that support achieving 100 percent preferred materials in private brands by 2030.

Aside from spelling out accomplishments and goals to help save the environment, the Macy’s report covers the agenda to become more diverse and inclusive in its employee makeup and its matrix of suppliers.

But the report indicates the retailer has a long way to go. Macy’s said that as of 2020, only 24 percent of those at the senior director level and above were ethnically or racially diverse, while 76 percent were White. Of the ethnically or racially diverse, 8 percent were Black; 8 percent were Hispanic or Latinx; 5 percent were Asian, and 3 percent were two or more races.

Even as many companies set aggressive targets to increase racial diversity in their senior management, Macy’s said its goal is simply to reach 25 percent diversity at the senior director level and above this year, and 30 percent by 2025.

In marketing, the goal is to achieve 58 percent diverse representation in casting for gender, size, ethnicity and age, and 33 percent representation across all vendor and partner imagery by 2025.

With suppliers, Macy’s intends to achieve 5 percent spend penetration on diverse suppliers and triple its spend with Black-owned businesses by 2023.

“The guiding principles of our sustainability strategy are managing the environmental impact of our business, promoting positive social impact and continuing to ensure strong governance that holds us accountable,” Macy’s chairman and chief executive officer Jeff Gennette wrote in the report. “These principles apply across our value chain when interacting with our customers, colleagues, brand partners, investors and other groups advocating for a thriving society and environment. We believe operating by these principles will enable us to create long-term value, while addressing the shared needs of society.

In 2020, Macy’s spent $340 million on assortments from minority-owned businesses; $164 million on assortments from women-owned businesses; $1 million on assortments from LGBTQ+ suppliers, and $3 million on products from veteran-owned businesses.

Overall, minority and diverse suppliers accounted for 3.1 percent spend penetration in 2020, with a goal to increase to 4 percent in 2021. “Our progress this year is a building block toward achieving 5 percent spend penetration on diverse suppliers (retail and non-retail) and triple our spend with Black-owned businesses by 2023,” the report indicated. The $25 billion Macy’s purchased only $63 million in products at wholesale from Black-owned businesses in 2020.

As of the fourth quarter of 2020, 51 percent of Macy’s customers were White; 20 percent Hispanic/Latinx; 15 percent African-American/Black; 12 percent were Asian, and 1 percent fell into the “other” category.

At Bloomingdale’s last year, 64 percent of the customers were White; 11 percent, Hispanic/Latinx; 11 percent, African American/Black; 12 percent Asian, and 2 percent, other.