Allbirds founder: Being a sustainable business is 'not that hard'
At a store opening event in Washington, D.C., Joey Zwillinger sat down with Congressman Jared Huffman to talk about business and the environment.
March 06, 2020
WASHINGTON, D.C. — Pairs of cherry blossom-themed shoes hung on one wall, while green, Logan Circle shoe laces stood by the door, and Joey Zwillinger, co-founder of Allbirds, sat on a stool in front of a wall of boxes of shoes. It had all the trappings of a classic store opening event, only the focus wasn't on the store.
Sitting beside Zwillinger in the shoe brand's newest store in Georgetown was U.S. Rep. Jared Huffman, D-California. The collected attendees had been invited to listen in on a conversation that was, in some ways, tangential to retail: environmental legislation.
"B Corps are great, but it's voluntary," Huffman said of the well-known sustainability certification that brands like Allbirds and Athleta tout, "and you still in some ways have some tension between what you're doing on a voluntary level and what corporate law tells you you're supposed to do to maximize profits to your shareholders, especially as you grow and become potentially a publicly traded corporation."
What Huffman was getting at is that B Corp status may not be enough. As a state legislator, Huffman authored a bill creating a new type of corporation, California Benefit Corporations, which allows businesses to define a purpose outside of maximizing shareholder value. Essentially, public benefit corporations sign up to hold themselves accountable for social responsibility.
"Companies face shareholder derivative lawsuits if they're not maximizing profits for their shareholders," Huffman explained. "A benefit corporation, under California law, could face a shareholder derivative lawsuit if they're not doing enough good. Can you imagine?"
Huffman acknowledged that only retailers really willing to hold themselves accountable would sign up for such a distinction. Patagonia was the first to do so.
That retailer has been known for years for its dedication to the environment, ranging from shutting down locations in solidarity with climate strikes, to planning for a carbon-neutral supply chain by 2025 and pushing its efforts in resale further.
Sustainability in general is becoming more important to consumers, especially younger ones who will face more of the future impacts of climate change, but that's also led to fears of greenwashing as brands sometimes jump on the sustainability bandwagon without putting real efforts behind it.
To that end, Zwillinger and Huffman mused on the current political climate and the likelihood of passing legislation. Huffman is also on the Select Committee for the climate crisis, which is finalizing a report with numerous policy recommendations.
"Doing the right thing in the face of this climate challenge is also going to require some government interventions and programs and public investments and these are also things that run counter to the current trends of the Republican Party and the conservative think tanks out there that animate their thinking," Huffman added.
However, he does note some nearer-term legislation for businesses coming down the pipeline. As an example, Huffman pointed to the 45Q tax credit, which rewards businesses for carbon-capturing projects. In theory, it works, but Huffman said in reality some businesses are capturing carbon, getting the tax credit and then using it "to go and do enhanced oil recovery and develop more oil. So it's not helping us meet our climate goal."
In his view, that could be modernized.
Allbirds, for its part, has been a Certified B Corporation since December 2016. What started as a one-product business built around wool runners has grown into a brand that now sells runners made from tree, "breezers," "loungers" and even socks. Zwillinger and co-founder Tim Brown have been outspoken about the environment, and retailers' responsibility for it, calling out Amazon in November for allegedly copying its shoe design in a private label product, but not its sustainable practices.
Zwillinger said on Wednesday that Allbirds counts the carbon emissions of every component of the products it makes and then mitigates them by purchasing carbon offsets.
"We create kind of a financial incentive to drive down the emissions that we make," he told Retail Dive. "I think if you don't measure it, you're never going to be able to reduce it. And if you don't put in place the financial structure to hold yourself accountable, then people will let you get off the hook and you'll devolve to what people generally do, which is just cost and speed."
Asked what retailers should do to self-regulate, Zwillinger said that what Allbirds does is "not that hard" and that between footwear and apparel, footwear is much tougher, due to its many components. Clothing, with just one or two fibers involved, should be "quite easy."
"We're a young company and we're doing it," Zwillinger said. "Any big company can do it, too. Everyone's got excuses."
By: Cara Salpini
Source: Retail Dive