Essay fifteen: ESG in the leather industry
Companies care
There is a rich reservoir of evidence of good practice across the industry when it comes to leather companies’ impact on the environment and on their workers.
When Essay 15 was published in 2015, we looked at corporate social responsibility and how companies were tackling their commitments with in-house standards, targets and practices. Many of the examples were from our Tannery of the Year visits, the reports of which can be found online, and which contain detailed examples of not only sound business practices and environmental stewardship but also show how many go the extra mile to look after their employees and surroundings. CSR is now more commonly referred to as environmental, social and governance (ESG), sometimes used as a measure for outside investors to determine a company’s worth or its strength and growth prospects. Leatherbiz.com and World Leather magazine continually show how leather-sector businesses have set stringent environmental goals, including working towards generating zero waste, dramatically reducing water use or becoming net zero carbon companies. ESG is a vast topic so, for this article, we have selected a few examples of companies’ achievements, with a particular focus on how they improve local communities, look after employees or help people in need.
Tanneries gain recognition
Italian leather manufacturer Gruppo Mastrotto published its second sustainability report at the end of 2022, showing solid results in each aspect covered: environment, economy and society. There were reductions in CO2 emissions and in waste production, and the report confirmed that 100% of the group’s electricity supply is from certified renewable sources. Last autumn, the group won an award from an organisation called Difference In Addition (DNA), which recognises inclusion and diversity projects in Italy. Mastrotto’s winning project involves bringing people with learning difficulties into the workplace to enhance their personal and professional development. People taking part in the project contribute to the company’s productivity by assembling leather colour charts and samples to present to customers all over the world. “These colleagues are following a development path that focuses on building self-esteem, autonomy, skills and practices that will help them feel fulfilled in the workplace and in their personal lives,” Gruppo Mastrotto said.
Turkish tanning group Sepiciler was named Tannery of the Year for Europe in 2013 and since then has continued to improve its processes and products. The company provides free meals and a high level of health insurance for workers and their families. It gives them shopping vouchers at new year and at major festivals, and lays on buses to transport them to the factory. It offers casual work on special projects to people in the village of Caybasi, the Torbali plant’s closest neighbours. Sepiciler also makes donations to the village school and has carried out other acts of charity such as handing out firewood from its supplies to local people in times of exceptionally cold weather.
Less than 10 kilometres from the tannery, Sepiciler has installed a solar energy plant on land the family owns there. When operating at full capacity, it will contribute to Turkey’s national energy supply six times the amount that Sepiciler consumes in making leather. Creating 600% of its own energy consumption through this renewable resource will cut Sepiciler’s carbon footprint by almost 11,500 tonnes of CO2 equivalent per year, the company has calculated. The Sepici family has also converted a family house in Izmir into a school, a joint initiative with Aziz Üstel, one of Turkey’s most famous TV presenters.
Industrial group Tata was praised at the International Association for Volunteer Effort (IAVE) Awards in Germany for its programme of encouraging team members to take part in voluntary community initiatives. The leather and leather products business unit of Tata has contributed to this wider effort. In Dewas, India, where the company runs its main tannery, volunteers have helped run health and hygiene camps at various local schools, helped clean up the Kshipra River, donated a Braille machine to a school for visually impaired children, distributed clothes to people in disadvantaged communities, planted trees and taken part in community sports events. Initiatives in Chennai, where Tata International runs a leathergoods factory, have included donating food and clothing to a local orphanage; mentoring sessions, sports, art and public speaking competitions for local schools; and donating to an eye health clinic for children.
Helping hand
Brazilian packer and tanning group Marfrig launched a programme to offer employment to refugees. It began by offering jobs to 40 people from Haiti, Venezuela, Bolivia and Cuba at its plant in Várzea Grande, in the state of Mato Grosso. Human resources director Jairo Agosta said the presence of people from other countries has allowed Marfrig to construct a multicultural environment, “breaking down prejudice and discrimination, generating a healthy culture for the company, as well as giving dignity and citizenship for people arriving in our country in search of work and a better quality of life”.
Scottish Leather Group is on track to reach its goal of zero waste by 2025, as well as net zero carbon emissions. The group, which runs tanneries in Paisley, Bridge of Weir and Glasgow, has used 100% renewable electricity since 2017 and converts its process waste into energy. It sources water from its own loch – it is then treated, recycled or discharged back to the same river. A further benefit of water recycling is heat recovery, accounting for up to half of its water heating demand. In terms of community involvement, SLG works with local primary schools to promote the leather industry and help students to learn about the tannery; it facilitates work placements and funds scholarships for older children and also donates to local hospices and charities.
Tanning group PrimeAsia launched its Responsibly Raised Initiative in 2020, aimed at engaging suppliers and customers to increase transparency, optimise use of resources, promote good labour conditions and sound animal welfare standards. In 2021 PrimeAsia joined forces with World Wildlife Fund (WWF) to strengthen those efforts. “We believe in collaborative approaches and the idea that complementary abilities have the power to drive positive changes,” commented Jon Clark, PrimeAsia’s CEO. As part of this tie-up, last May it launched its Augmented Sourcing Policy, through which it aims to trace all hides sourced from South America back to the farms. It already has in place a system in which all wet blue hides are physically stamped to give traceability back to the slaughterhouse through its Responsibly Raised Initiative.
Shoemakers shine
Tannery group and leathergoods manufacturer Pittards was established in the UK around 200 years ago and has been dealing with Ethiopia for half that time. With the largest livestock herds in Africa, the country provides access to skins, and in particular hair sheep, prized for gloving leather. Pittards began investing in the country in 2005, buying a tannery – which was the first global winner of World Leather’s Tannery of the Year programme – and subsequently setting up four factories to make gloves, garments and some footwear. But it was a relationship with the Clarks shoe family that eventually led to the formalisation of its shoemaking facilities in 2017, after former head of the company Lance Clark sought Pittards’ help to find workers for his Soul of Africa project. Supplying leather from its tannery, Pittards employs more than 100 people making for Vivobarefoot, co-managed by Lance’s son Galahad and his cousin Asher, alongside some other production.
Both Vivobarefoot and Pittards pump money back into the communities, with Pittards building a new classroom each year at the local school and investing in clinics. Vivo says Soul of Africa has created more than $2 million in wages and helped 18,000 children with their education since its foundation in 2003. Both companies also support Brave Hearts Ethiopia, a non-governmental organisation that helps orphaned and vulnerable children. “Brave Hearts supports families to foster orphans, and they go back to a drop-in centre for education,” says Pittards CEO Reg Hankey. “It works fantastically well.”
Spanish footwear brand Pikolinos launched a collection inspired by social responsibility to add to the Maasai Initiative it launched in 2014 to bring employment to Maasai women in Kenya and Tanzania. Pikolinos Solidarity supports a project much closer to home. Comprising two styles of each of the brand’s Alcudia and Madeira sandals and one style of its Wha handbags, the products in the collection are the work of artisans from Defora, a specialist footwear project founded in Elche by a local shoemaker, María de los Ángeles Brotons. The people who work at Defora are adults with learning difficulties. Pikolinos said it regards its support of Defora’s work with this special collection as “an example of sustainable fashion in its purest form”. Through the Juan Perán-Pikolinos Foundation, the company partners over 70 NGOs and more than 16,000 families benefit from these projects every year.
High-end training
In a similar vein, luxury group Kering recently signed a partnership charter with France’s labour, employment and integration ministry with the aim of giving young people, vulnerable individuals and people with disabilities better access to jobs. Kering said it was committed to recruiting young people, paying particular attention to those from disadvantaged urban areas and those with disabilities. It said it was also committed to recruiting young people on work-study programmes across all of its occupations and offering internships. It plans to establish partnerships with companies specialising in the employment of disabled people across France and will join forces with universities and schools to promote workforce integration, make its recruitment more diverse and improve its training practices.
Kering’s brand Gucci also announced a series of ESG initiatives across Puglia, to coincide with catwalk presentations in the Castell del Monte citadel in Andria in southern Italy. One of the projects will be to support a women’s refuge in Andria; the local municipality runs the refuge to help women who have been victims of abuse create paths to independence. Gucci will also support the work of local environmental non-profit organisation Legambiente Andria, specifically in an urban reforestation initiative and by contributing to the creation of a park that will serve as a memorial to victims of the covid-19 pandemic. In 2019, the Gucci North America Changemakers programme launched with a focus on increasing inclusion and diversity across communities and within the fashion industry. The programme awards scholarships of up to $20,000 dollars and provides mentorship and virtual internship opportunities through Gucci America.
Chemicals targets
Leather chemicals suppliers have also focused on EGS improvements and many now produce detailed reports to show their progress and targets.
Silvateam was among the winners at Italy’s national sustainability awards in 2022. It was named in the top 100 performers for good practice in ESG and came top for governance. Ratings were calculated by a technical partner, specialist Switzerland-based consultancy RepRisk, and by an academic partner, the ALTIS business school of Milan’s Sacred Heart Catholic University.
Netherlands-based Royal Smit & Zoon’s ESG report for 2022 showed it had expanded the number of its products to have secured level-three conformance (the highest level) with the Zero Discharge of Hazardous Chemicals (ZDHC) programme. A first set of Smit & Zoon products achieved this in 2019; by 2022, this expanded to include the whole of its key range of products. All of its facilities have ISO 14001 and 45001 certification in place, confirming them as environmentally and occupationally sound places to work. EcoVadis, the French body that assesses companies’ performance in environmental management, labour and human rights, ethics and sustainable procurement, maintained its gold rating for Smit & Zoon in 2022, putting the leather chemicals group in the top 9% of all the companies EcoVadis has assessed.
Smit & Zoon CEO Marc Smit commented: “ESG is about keeping pace with the constantly evolving ESG landscape, stakeholder expectations and regulatory requirements. For us, it is mostly about making the right choices for the next generation.”
Leather chemicals producer Stahl’s ESG achievements in 2022 included a 3% reduction in CO2e for Scope 1 and Scope 2 emissions, compared with the year before, and Life Cycle Assessment data available for 160 products. Its report also highlighted that 73% of sales revenue was realised through ZDHC level 3 products. The company also improved on its 2021 Ecovadis Gold rating, being awarded a platinum medal in 2022, putting them in the top 1% of companies assessed by the Paris-based platform.
As part of their road map to 2030, the company also established a Diversity, Equity and Inclusion (DEI) steering committee to strengthen these aspects across the business. Stahl’s chief executive, Maarten Heijbroek, said improvements could not have come at a better time as Stahl was now introducing a new purpose, “Touching lives for a better world, because a safer and healthier world is the ultimate goal”.
These examples are just a few that have stood out from many stories that World Leather covers – and strives to uncover – around the world. Proving that, for the leather industry, ESG really matters.
Vivobarefoot, Pittards and Soul of Africa enable workers to earn a good living through shoemaking and have donated money to local schools and charities.
Photo credit: Vivobarefoot
