ASOS is an online fashion retail business aimed at fashion-forward young adults around the world. ASOS offers over 65,000 branded and own-brand products through mobile and web devices.
According to a 2009 Deloitte Green Shopper study, sustainability considerations either drive or influence the buying decisions of more than half the shoppers interviewed.1 The use of sustainable raw materials and the carbon footprint of products is increasingly becoming criteria in consumers’ purchasing decisions. Additionally there are a growing number of regional initiatives aimed at calculating and labelling the environmental footprint of products.
ASOS promotes the purchase of lower impact or ethical products through its “Green Room” platform and has created “signpost” labels to assist customers. By working with WRAP (Waste and Resources Action Programme), a nonprofit recycling and waste organization, ASOS is developing a footprint tool to calculate the company’s water, waste, and carbon impact for its own-brand products. The company is confident this will lessen the environmental footprint of future product designs.
The majority of retail companies, specifically within the apparel sector, outsource production to factories located in developing markets. These factories receive frequent criticism for unjust labor management, poor health and safety standards, and environmental non-compliance.
ASOS’s Founder and CEO is committed to improving working standards across its supply chain. ASOS utilizes a strong supplier Code of Conduct with embedded key performance indicators to evaluate a supplier’s performance. In addition to ongoing monitoring, ASOS also uses on-site coaching and offsite supplier training.
Chemical regulations worldwide continue to evolve and create restrictions on substances used in consumer products. Regulations generally seek to control use of chemicals in the manufacturing process, as well as levels of permissible chemical content in products sold to end users. Currently the European Union’s REACH (Regulation on Registration, Evaluation, Authorization, and Restriction of Chemicals) is the most stringent. It limits 144 substances, with another 440 substances set to undergo assessment before 2020.
ASOS maintains a policy of REACH compliance globally, beyond the European Union region where the regulation is enforced. The company has also created a library of preferable materials that is used by the buying and design teams in the creation of new products.
Two-thirds of ASOS’s carbon emissions are derived from delivery of goods, mainly from air freight. ASOS has purchased offsets for its carbon emissions, but Portfolio 21 has asked the company to actively work to reduce its emissions from air freight.
Portfolio 21 has asked the company to develop and publish a set of carbon, energy, water, waste and recycling targets.
Portfolio 21 has asked the company to develop an information technology strategy focused on minimizing energy use at its data centers.
To the best of our knowledge the above information is accurate and was obtained from sources we believe to be reliable. Neither the information presented above nor any opinion expressed shall be construed as an offer to sell or a solicitation to buy the security. The views expressed are those of portfolio management as of 4/30/14 and may not reflect current opinions or subsequent events.