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PVH Ramps up Corporate Responsibility, Emphasizes Ethiopia Plans

PVH plans to move beyond compliance as part of its updated corporate responsibility approach.

Last year was one of execution for PVH, chairman and CEO Manny Chirico said in the company’s 2015 Corporate Responsibility Report, and the focus was on investing in brands and operating platforms, and making responsible, positive impacts.

In building on 2013’s Source to Store initiative centered on driving positive impacts, PVH spent 2015 furthering that goal and focusing on a more comprehensive effort that included focusing on prime areas of concern like building safety and environmental pollution.

“We seek to move beyond compliance in our supply chain by partnering with suppliers to promote safe labor conditions and undertake projects to improve the lives of workers in our supply chain whom we view as an extension of our associate population,” PVH chief risk officer Melanie Steiner said.

Other plans include expanded environmental sustainability, a reduced carbon footprint, and supporting the needs of women and children. For one, PVH started acting as the “lead” brand owner for the Accord on Fire and Building Safety in Bangladesh for all of the 72 suppliers it has in the Southeast Asian nation. The role means PVH has helped create and train worker health and safety committees in 40 factories and is working to support suppliers’ remediation efforts.

The company also procured 4,000 tons of Better Cotton for its Tommy Hilfiger brand, an eight-fold increase over 2014, and partnered with yarn maker Aquafil and Chinese yarn supplier Parawin to make scraps from a nylon factory into its new Speedo PowerFlex Eco swimsuits.

Turning to Ethiopia, where PVH has been an active entrant into the Sub-Saharan African nation, the company said it is “moving the needle.”

“We are at the start of an exciting journey to help build a best-in-class apparel manufacturing industry in Ethiopia,” the report noted.

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PVH helped establish an industrial park in Hawassa in southern Ethiopia and says manufacturing in the country will be a win-win development opportunity.

The reason for its zealousness over the nation are manifold: it’s Africa’s second most populated country, it has an 11 percent annual average GDP growth and a stable government with its sights set on becoming Africa’s leading garment manufacturer.

“We are taking a thoughtful and measured approach to sourcing in East Africa, partnering with suppliers to thoroughly investigate trade prospects across the region and engaging with the national and local governments,” PVH said.

The Hawassa Industrial Park (HIP) is expected to create between 40,000 and 60,000 jobs in the next three years, more jobs than have been generated in the region in the last 50 years, according to PVH. The company is working on establishing a code of conduct for park entrants to ensure the group practices ways of working that are in line with its own values.

“Our long-term vision is to develop a truly integrated vertical supply chain comprising all stages of apparel production, from growing cotton to dyeing fabrics to sewing the final garments,” the report noted. And that vision includes preserving the environment.

By 2017, Ethiopia will be able to draw on the largest hydroelectric supply in Africa—a large region for PVH’s decision to make there. The company will use a blend of hydroelectric and geothermal energy to run its facilities. PVH is also working with the Ethiopian government and other park tenants to build a zero liquid discharge effluent treatment facility to recycle wastewater so that it doesn’t contaminate the community’s water supply.

“With our partners, we are taking a unique approach to investment in the local communities around HIP by addressing potential challenges from the start, rather than retrofitting solutions,” PVH noted.

Ticking required compliance boxes isn’t enough to sustain a business in today’s market—the way forward will have to be a proactive one. For PVH, efforts will be aimed at working with suppliers to improve performance, seeking new levels of efficiency, and working collectively to make progress on human rights.

“We know that moving beyond compliance is a journey requiring ongoing commitment, and we realize there is a long way to go,” PVH noted. “In 2016, we will continue to refine our assessment program, by incorporating more environmental criteria into our assessment tool, conducting a mapping od our level two suppliers (including mills, dye houses and trim suppliers) and starting to pilot assessments with these suppliers in partnership with our global supply chain team.”