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Ralph Lauren Ties Its Sustainability and Diversity Goals to Executive Pay

Ralph Lauren has doubled down on its commitment to the environment, to diversity and to transparency.

“The convergence of the global pandemic, climate crisis and call to action to dismantle systemic racism has been a catalyst for businesses around the world to focus and accelerate their progress toward a more equitable and sustainable future,” Ralph Lauren, executive chairman and chief creative officer, and Patrice Louvet, president and CEO, wrote in the company’s 64-page 2021 Global Citizenship & Sustainability report, released Tuesday. “Amid all the challenges we faced this year emerged a spirit of resilience, dedication and passion that has helped us to not only make progress on our goals and commitments, but accelerate our momentum.”

The company, which has an ongoing commitment to the environment via its “Design the Change” pledge, said it plans to reduce its impact on the environment through its supply chain operations by how it affects water, energy, emissions and waste through strategic partnerships and technology choices.

The company also said that when it makes decisions around compensation, it will consider employee performance against the environmental, social and governance goals stated in the report released Tuesday.

The brand said Tuesday that by 2040, it plans to have net zero greenhouse gas emissions from operations. Ralph Lauren had previously expected to lower emissions by 30% by 2030 from fiscal 2020 levels.

Additionally, Ralph Lauren said that by 2040, it will purchase high-quality, verifiable carbon removals equivalent to its residual greenhouse gas emissions.

To achieve its goals, the company plans that by 2025, it will use 100% renewable electricity in its stores, offices and distribution centers. As well, it plans to reduce emissions in manufacturing facilities and from its raw materials by switching to fibers with lower emissions impacts, launch a circularity strategy, and debut the first phase of Color on Demand, a platform that more sustainably dyes cotton.

Already in 2021, the company said it repurposed 21.9 million plastic bottles through the use of recycled polyester fibers and that 54% of packaging volume was recyclable, reusable or sustainably sourced, putting the company on track to reach its 2025 goal.

“Climate change is one of the most complex and challenging issues of our time — one that will require innovation, collaboration, technology and a fundamental shift in behavior to solve,” said Louvet in a separate statement also released Tuesday. “Our net zero goal and roadmap are anchored in our belief that through deliberate action we can deliver the change required to reduce our climate impact and help create a more sustainable future for generations to come.”

Among the company’s other main goals going forward: Address racial inequity from inside the company “as a voice and leader in our industry” and increase transparency by sharing workforce diversity data, climate impact data and factory disclosures.

For its diversity, equity and inclusion (DEI) strategy, Ralph Lauren said in the report that it is “deeply examining bias — including looking critically at the structures and practices inside our company, how we use our voice as a leader in our industry and the role we play in portraying the American dream.”

To that end, the company committed to various components around employment and recruitment, pay equity, employee wellbeing, and community engagement. Among them, the company said it plans to interview at least one Black candidate and at least one candidate from other underrepresented groups for every open role at the vice president level or above. Ralph Lauren also committed that by 2023, its global leadership team will be at least 10% Black, African or African American and at least 20% people of color.

“We are creating a culture in which all employees feel welcome and can thrive through the celebration of identities, training and by encouraging participation in employee resource groups,” the report said.

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