Identifying Our Most Relevant and Significant Issues
To ensure we are addressing the issues with the most potential to impact our business, society and the environment, we prioritize sustainability issues through a process in which we engage a broad group of internal and external stakeholders for feedback on key environmental, social and governance topics. This includes a detailed assessment every few years, complemented by annual reviews to assess emerging issues and make sure we continue to focus on issues of greatest relevance. We conducted a detailed assessment in 2021 as part of our first sustainability report, and in early 2022, conducted our first annual review.
Desk Research of Frameworks and Standards
In our most recent review, we worked with an independent consultant, GlobeScan, to review our previous sustainability issues prioritization, sustainability strategy documents, key consumer insights and our supplier Sustainability Guidebook. GlobeScan also analyzed the priority issues identified by our peers as well as public reporting organizations and frameworks, such as sustainability ratings agencies, SASB standards, UN SDGs, GRI Standards and issues identified for the apparel industry by peers and others.
Internal and External Validation
We assess sustainability issues through two lenses: their impact on society and the environment, and their impact on our business and success. For our 2022 assessment, a cross-functional group of about 50 internal stakeholders provided direct input, identifying those they view as most critical for us to address in the next five years. All the internal and external data was then scored, standardized and weighted, along with the results of the previous 2021 research, to confirm the priority issues and determine their priority relative to each other. While some issues shifted to a slightly higher priority — such as greenhouse gas emissions and circularity in product design — the assessment confirmed that the most significant issues remain consistent and that overall, LS&Co. is focused on the most important and relevant issues.
Sustainability Issues Matrix
The highest priority issues, shown in the top right three boxes, are in line with the highest priority issues identified by apparel industry peers, NGOs and associations. We know that many of the issues identified in this assessment are interdependent and require a holistic approach. Therefore, while some issues are relatively lower in impact, all remain significant to LS&Co., and we continue managing them through a variety of initiatives. For our priority sustainability issues, we have created time-bound and measurable goals to address the impact on our business and to create transparency around our performance and management approaches.
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Advocacy and public policy practices
Supporting or advancing public policy practices that align with LS&Co. environmental, social and governance practices and values.
Biodiversity and land use
Addressing impacts on biodiversity and ecosystems through transformation of habitats, land use and other business activities; reliance on biodiversity for raw materials (e.g., bees pollinating cotton flowers).
Supplier chemicals management
Managing chemicals used in making materials, products and other substances released to the environment (air and water) that are toxic to humans and ecosystems; robust processes to manage risks and maintain supplier compliance associated with hazardous chemicals.
Circularity in product design
Designing and innovating products, manufacturing processes and materials selection for quality, durability, repair, reuse and recycling.
Climate change risks and adaptation
Building resilience to impacts and risks associated with climate change, including droughts, flooding and inundation and storms; adapting and managing the business to climate change impacts throughout the value chain.
Addressing impacts on local communities from operations and supply chain; programs and practices that assess and manage the impacts on communities; efforts to improve economic well-being and resiliency in local communities; philanthropic efforts and employee volunteering.
Consumer engagement on sustainability and social responsibility
Engaging consumers on sustainability and social responsibility; promoting sustainable actions (clothes washing, reuse, recycling, etc.) through communication, certifications and marketing.
Consumer transparency and safety
Making disclosures to customers and users about products and services; materials transparency; responsible marketing and labeling.
Data privacy and protection
Safeguarding privacy and personal data of customers, employees and business partners.
Employee diversity, equity & inclusion
Providing for fairness of treatment and compensation across all levels of the business; representation of female and underrepresented employees in workforce,
management and board.
Employee engagement and development
Attracting and retaining talent; offering training and development for employees to build capability and career opportunities; ability for employees to be heard, present, focused and energized.
Employee health, safety and well-being
Providing for employee health and safety practices in LS&Co. operations; workplace wellness and engagement initiatives; employee benefits.
Ethical and transparent business practices
Ensuring ethical and transparent corporate behavior by combating dishonest or fraudulent behavior; responsible tax behavior; oversight and accountability for managing ESG risk; compliance with government sanctions, customs import bans and public disclosure requirements.
Identifying operations and suppliers as having significant risk for incidents of forced or compulsory labor; managing and mitigating risks through robust supply chain policies, supply chain mapping, traceability and Code of Conduct compliance.
Gender equity in the supply chain
Promoting women’s advancement to management and representation in worker-management committees; ensuring clear contract and payment terms; encouraging a respectful culture with zero tolerance against all kinds of illegal harassment, including gender-based violence.
Greenhouse gas emissions
Addressing greenhouse gas emissions in LS&Co. operations and supply chain from material sourcing, manufacturing, transportation, workplaces and other business activities.
Health, safety and well-being of workers in the supply chain
Promoting worker health, safety and well-being throughout the supply chain.
Labor rights in the supply chain
Protecting and monitoring labor rights in the supply chain, including a living wage; freedom of association and collective bargaining; independent grievance channels for workers and worker voice; prevention of union-busting.
Considering social and environmental impacts associated with materials used; prioritizing options with lower environmental footprint and third-party certifications; ethical sourcing and traceability of materials such as cotton, leather, wool and conflict minerals.
Packaging design, recycling and waste
Designing packaging material for increased recovery and recyclability and reduced waste and environmental impact.
Product material waste
Managing waste generated throughout LS&Co.’s value chain; activities to reduce, reuse or recycle and responsibly manage/dispose of waste; includes policy engagement on waste, take-back, recycling infrastructure.
Public health and natural disaster risks
Promoting solutions and managing disruptions and impacts in the value chain associated with epidemics, communicable and non-communicable diseases and natural disasters.
Renewables and energy use
Managing energy consumption and efficiency; using renewable energy sources.
Designing and promoting inclusivity through LS&Co. products, services, marketing and public communications to reflect the wide diversity of LS&Co.’s consumer base and LS&Co.’s social values.
Supply chain management and transparency
Implementing transparent processes and systems to enable visibility into deeper supply chain tiers; ensuring suppliers uphold standards on environmental, social and ethical business practice issues; enabling supplier sustainability with longer-term contracts; considering the impacts of automation in supplier selection.
Sustainable workplaces and practices
Addressing impacts on the environment and local communities of LS&Co. employees, buildings and workplace practices.
Addressing water pollution from LS&Co. operations, products and services and supply chain; impacts of wastewater discharge in supply chain, consumer use and end of life.
Water use and replenishment
Managing water used and withdrawn throughout LS&Co.’s value chain; specifically monitoring and mitigating impacts and replenishing in water-stressed regions.