New Balance is taking significant steps to ensure a healthier planet. We are constantly looking for ways to minimize and prevent negative environmental impacts in our operations and throughout our global supply chain – with an eye towards zero impacts and bringing greater positive change to our local environment.
Since 1906, we have always celebrated bold individuals who are unafraid to take risks and challenge the status quo – not just for themselves but for everyone. As a company and brand, we’ve always lived by those same rules and recognize that we operate within a community greater than our company.
Everything we make has an impact. Our products – and the materials that go into making them – are processed with energy, water, and chemicals in factories around the world. We are working hard to understand and minimize these negative environmental impacts – with an eye towards a future where we leave zero impacts and even bring positive change to the local environment.
Our environmental efforts are focused on different strategic priorities in different levels of our supply chain.
|Tier 1||Tier 2|
Energy & WasteWe monitor basic environmental compliance through our audits and are helping suppliers invest in meaningful energy efficiency and carbon reduction initiatives.
Energy & WasteWe are focused on energy, freshwater use and wastewater discharge at our material suppliers. We enroll suppliers in industry-leading mill improvement programs and require suppliers with wet processing capabilities to test their wastewater discharge according to the ZDHC Wastewater Guidelines developed by the industry leading ZDHC Roadmap to Zero Programme.
|Both Tier 1 and Tier 2 suppliers are screened against the Institute of Public & Environmental Affairs (IPE) database for environmental violations (in China) and undergo broad environmental assessments using the Sustainable Apparel Coalition (SAC)’s Higg Facility Environmental Module (Higg FEM).
New Balance was one of the original six companies to step forward and be featured on the first online map that links brands to their suppliers’ environmental performance in China. The IPE Green Supply Chain Map was launched in January 2018 by the Natural Resources Defense Council (NRDC) in the US and the Institute of Public & Environmental Affairs (IPE) in China.
“These companies that have stepped up to put their names first on the inaugural map are showing new levels of transparency on their manufacturing abroad and are demonstrating real leadership in supply chain responsibility,” said Linda Greer, senior health scientist for NRDC and founder of its Clean by Design green supply chain program.*
Factory pollution data can be viewed in nearly real time by the public. Viewers can click on our brand logo and see how the supplier factories are performing at that moment, as well as 30-day trends of air emissions and wastewater discharge, environmental violation records and factory responses.
In 2020, New Balance ranked 10th of 540 companies in IPE's Corporate Information Transparency Index (CITI) that evaluates brands according to how well they address supply chain environmental responsibility in China. We were previously ranked 11th in 2019 and 2018, and 16th in 2017.
New Balance is proud to be a founding member of the Sustainable Apparel Coalition (SAC), joining the coalition in 2011 as groundbreaking work began on the first industry-wide environmental indexes. Today, the SAC is an alliance of over 200 brands, retailers, manufacturers, academics, NGOs and other affiliates – representing over $500 billion in revenue. The SAC’s collective vision is of an apparel, footwear and textiles industry that produces no unnecessary environmental harm and has a positive impact on the people and communities associated with its activities.
Peers and competitors work together to redefine how the industry is run. Members commit to transparency, the sharing of best practices and making meaningful improvements that can be measured according to a standardized set of tools, called the Higg Index.
The Higg Index is the heart of the SAC, developed by the SAC and its members. The Higg Index is a suite of tools that enable brands, retailers and facilities of all sizes to measure and score various aspects of sustainability performance. Ultimately, the Higg Index empowers organizations across the global supply chain to precisely identify areas requiring improvement and highlight robust actions to take.
New Balance played an active role in developing and testing the Higg Index, and we have implemented the available tools within our company and supply chain. We have been exploring how to use lifecycle data within the Higg Materials Sustainability Index (MSI), and New Balance continues to use the Higg Brand and Retail Module (Higg BRM) for internal planning and benchmarking purposes.
We began using the Higg Facility Environmental Module (Higg FEM) 2.0 to assess our Tier 1 footwear suppliers in 2015 and used those results to inform improvement efforts at the factories. In 2017, four New Balance suppliers participated in the Higg FEM 3.0 pilot, or “pressure test,” and the final version of Higg FEM 3.0 was rolled out to roughly 80 suppliers, including all Tier 1 footwear suppliers, key Tier 1 apparel, and some of our largest Tier 2 material suppliers.
As part of the global community, we have a responsibility to understand, mitigate and adapt to the effects of climate change. We are continuously learning about how climate change will impact our business, how our business impacts climate change, and how we can responsibly contribute to global climate goals. We believe now is the time for action and collaboration to affect positive global change.
New Balance is moving toward a low carbon future. Our climate strategy focuses on four urgent actions:
- Renewable Energy: Increasing energy efficiency and promoting renewable energy within our operations and across our supply chain
- Materials: Prioritizing materials with low climate impact
- Longevity and Circularity: Exploring and supporting more circular business models like repair and post-consumer recycling
- Advocacy: Engaging in climate advocacy and establishing a closer dialogue with our consumers
Two major climate commitments provide the foundation for our climate goals: RE100 and the United Nations (UN) Fashion Industry Charter for Climate Action. As a member of RE100 and a signatory to the UN Fashion Industry Charter for Climate Action, we are addressing some of the biggest environmental impacts at our own facilities and throughout our global supply chain.
RE100: New Balance commits to sourcing 100% of its electricity from renewable sources by 2025 across all global New Balance operations.
UN Fashion Charter: New Balance commits to a 30% reduction in greenhouse gas emissions by 2030, across Scopes 1, 2, and 3, moving toward net zero emissions by 2050.
RE100 is a global initiative that brings together the world’s most influential companies committed to 100% renewable power. The goal is to increase corporate demand for renewable energy and spur greater renewables development, which is critical in transitioning to a net-zero emissions economy.
As of 2019, New Balance’s global electricity load was approximately 50,000 MWh and we sourced 47% of our global electricity as renewable, up from approximately 20% in 2017. New Balance sources renewable electricity and Green-e certified Renewable Energy Certificates (RECs) that cover all of our US-based offices, distribution centers, owned retail stores, and five footwear manufacturing facilities in Maine and Massachusetts.
Rooftop solar provides approximately 30% of the electricity at our Flimby, UK factory. We marked a key milestone in 2019 by generating our one millionth kilowatt hours of solar energy at Flimby. Located on the Solway coast, Flimby also presents an excellent opportunity for wind power. We are currently investigating potential wind turbines that could provide enough energy to meet 100% of the factory demand through on-site generation.
“New Balance has always believed that making things matters, but how they are made matters even more. By taking action across our own global operations, especially in our owned factories, we can demonstrate clear leadership as we pursue even wider adoption of renewables and other measures across our supply chain and industry,” says Joe Preston, New Balance president and CEO. “We recognize that addressing climate change requires innovation and new ways of doing business. We are excited to join with many of the world’s leading companies to amplify our voice, learn from those that have done so much already and help accelerate change at a larger scale.”
Beyond our own operations, New Balance is joined forces with the broader textile, apparel, and footwear industry to move toward a common commitment under the UN Fashion Industry Charter for Climate Action. This Charter encompasses our global footprint, including emissions associated with our global supply chain and the materials used to make our products. As a signatory, New Balance commits to a 30% reduction in greenhouse gas emissions by 2030 and to drive toward net zero greenhouse gas emissions by no later than 2050.
New Balance has been working for several years to improve overall energy performance across footwear suppliers, with the goal of reducing costs and greenhouse gas emissions.
In 2014, we set a goal with our Tier 1 footwear suppliers to reduce energy use per pair by 10% within three years. The goal was modest but achievable, and we believed that it would spark momentum for further action. By the end of 2017, our footwear suppliers collectively reduced their energy use by 21.5% per pair – almost double the original 10% target. Several strategic factories saw reductions over 30%. From 2017 to 2020, we saw energy use per pair drop another 12%.
Our supply chain energy program is built on planning and capacity building and guiding each factory to create its own Energy Efficiency Plan that prioritized energy conservation measures and action plans. New Balance works with suppliers to identify energy champions, create energy teams, undertake trainings, and conduct energy walk-throughs to familiarize the teams with key operations – which included learning about energy tracking, discovering where energy is used most, and finding energy saving opportunities.
We also integrate energy as a regular topic at our supplier workshops in China, Vietnam, and Indonesia and redesigned our Environmental Impact Data (EID) system to allow suppliers to report and track monthly energy use more consistently.
In 2015, one of our New Balance Facility Managers from a New Balance-owned manufacturing facility in Maine visited Vietnam and conducted workshops to teach suppliers how to improve their compressed air systems, which are notorious for leaks and other inefficiencies. Our goal was to heighten the understanding of energy use in factories, share our own experience as a manufacturer, and highlight manufacturing processes and workshops that use the most energy. It was a great learning experience for all sides, and suppliers appreciated the fact that New Balance is tackling the same challenges in our own factories.
Renewable energy in our supply chain is still emerging, but we are seeing positive developments:
- In 2020, New Balance worked closely with suppliers to assess feasibility of rooftop solar in Vietnam, resulting in two new rooftop solar installations, each approximately 1 MWp. Ten more assessments are in process across Tier 1 and Tier 2 suppliers in partnership with International Finance Corporation (IFC) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).
- One of our apparel suppliers in Sri Lanka, Bodyline (Pvt.) Ltd., an affiliate of MAS Group of Companies, is striving to become net positive and aims to use 100% renewable energy by 2025.
Bodyline has already started implementing large-scale solar photovoltaic (PV) systems and is investing heavily in renewable energy sources.
- In Vietnam, we are working with V-LEEP to help steer government policy that can improve access to renewables, and we continue to engage with the International Finance Corporation (IFC) to assess feasibility of rooftop solar at several footwear supplier sites. In 2020, New Balance also signed a joint Declaration of Support for Renewable Energy in Mexico to promote more renewable energy solutions, coordinated by WRI Mexico and the Clean Energy Investment Accelerator.
New Balance collaborates with leading experts to pursue energy efficiency and renewable energy throughout our global supply chain.
INTERNATIONAL FINANCE CORPORATION (IFC)
New Balance became one of the first footwear brands to partner with the International Finance Corporation (IFC)in 2016 to launch the IFC’s Vietnam Improvement Program (VIP) for driving sustainability in the apparel, textile and footwear sector. We continue to work with IFC today on various energy efficiency and renewable energy programs.
Together with other footwear and apparel brands, we are using our collective power to drive behavioral change across the industry and contribute toward Vietnam’s national green growth plans. The VIP program assesses overall resource efficiency and clean energy options at supplier factories through detailed engineering assessments, training, and developing programs that reduce operating costs and improve productivity. IFC’s program is unique in that it also helps factories with access to financing for larger, more complex projects that otherwise might not be available. The goal is to facilitate real action, not just an assessment report that sits on the shelf.
As an Example, one facility identified opportunities that would save 14% of electricity, with potential of up to 31% savings depending on how broadly the measures are adopted throughout all workshops. The second facility identified opportunities to save 12% across eight workshops.
KEY ENERGY SAVING OPPORTUNITIES INCLUDED:
- Repairing compressed air leakage, shutoff/isolation valves, and automatic moisture traps
- Automatic buffing machines and cutting machines
- Variable frequency drives on large motors
- Insulation of hot plates on no-sew pressing machines
- Servo motors on cutting machines and stitching machines
- Infrared heaters and dryers to replace electric
- LED lighting conversion
- Improvement in Right-First-Time lean production processes
In 2020, IFC assessed feasibility of rooftop solar at three New Balance suppliers. The assessment included an overview of system design and components, potential rooftop solar installation options, and financial modeling for various scenarios.
|Example Factory Assessment||Scenario 1||Scenario 2||Scenario 3|
|Energy available for use||kWh/yr||10,755,504||4,235,890||1,095,316|
|Energy for export||kWh/yr||2,200,796||866,750||224,124|
|% of need met||%||53%||21%||5%|
|Annual CO2 savings||MTCO2||11,206||4,413||1,141|
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. IFC is promoting resource efficient production in textile/apparel/footwear sector in Vietnam for sustainable development of an important sector to Vietnam economy.
New Balance works closely with its supplier factories to reduce energy, greenhouse gas (GHG) emissions and costs. We focus our attention on Tier 1 footwear factories and Tier Two mills and tanneries, which represent a significant portion of our Scope 3 emissions. Starting in 2015, we have worked closely with the Clean by Design (CBD) program and the International Finance Corporation’s Vietnam Improvement Program (VIP) to bring essential outside expertise into the factories and mills.
Six of our key textile mills have participated in or are still in process of running the CBD program in China and Taiwan (ROC). Four of those mills that completed the program identified GHG reductions of 4,673 MTCO2 and freshwater savings over 1.3 million cubic meters.
Shinkong Textile is a recent mill participant in the 2019-2020 CBD cohort. After a thorough assessment, the Shinkong team selected eight energy and water conservation measures for implementation. Their top opportunities included condensate water recycling, insulation for steam pipeline and valves, replacement of an obsolete air compressor, improved dyeing volume by unit and a metering system to enable more effective ongoing energy management. All measures were completed by June 2020, half year ahead of schedule.
By participating in the CBD program, Shinkong received valuable assistance and identified annual GHG reductions of 824 MTCO2 (equal to 12% of its total), water savings of 32,455 m3 (equal to 7% of its total consumption), and cost savings of $168,000.
ENVIRONMENTAL DEFENSE FUND (EDF)
New Balance hosted an EDF Climate Corps fellow for five years in a row (2015-2019), in both China and the U.S. EDF expanded their renowned fellowship program into Asia, offering a great opportunity to apply their Climate Corps process to extended supply chains. See the links below for more information on the annual fellows.
|2015||Yien Huang||Supply chain energy efficiency and training||$180,000 NPV
805,000 kWh savings
423 MTCO2 reductions
|2016||Xiu Yujiao||Supply chain energy efficiency implementation||$190,000 NPV
435,000 kWh savings
400 MTCO2 reductions
|2017||Sheng Cao||Smart metering||$140,000 NPV
310,000 kWh savings
170 MTCO2 reductions
|2018||Yookyung Kim||Carbon accounting and strategy||NB’s first Scope 3 GHG emissions inventory|
|2019||Elliott||Renewable energy strategy||RE100 goal and roadmap|
CARBON PERFORMANE IMPROVEMENT INITIATIVE (CPI2)
In 2015, New Balance was one of the first footwear brands to join the Carbon Performance Improvement Initiative (CPI2), providing suppliers with an easy-to-use online energy assessment tool that generates key energy-saving recommendations. This tool provided a foundation for our energy program from 2015 until 2019. The platform provided suppliers a systematic way to approach energy savings without having to hire external consultants (although some do), and we had broad participation across 10 countries including all New Balance footwear suppliers, key apparel suppliers, some equipment suppliers in China, and one of our owned equipment factories in Finland. One of our apparel suppliers, Bodyline (Pvt.) Ltd., an affiliate of MAS Group of Companies, in Sri Lanka, was awarded second place for CPI2’s Top Factory in 2017 by CPI2 and its user community.
New Balance is working with our suppliers to better understand and manage water impacts throughout our supply chain. Collectively, we need to use less freshwater, and we need to ensure that the water we do use is clean when discharged back into the environment.
Leather tanning and textile manufacturing (particularly the dyeing and finishing of fabrics) are often very water- and energy-intensive. We assess water-related risks at our most important material suppliers based on geographic location, volume of water use, regulatory violations, and stringent wastewater discharge requirements.
We assess our top Tier Two supplier locations using The Water Risk Filter maps from the World Wildlife Foundation (WWF) to identify regions where water stress and flooding have the potential to impact our supply chain.
We began collecting water consumption data from strategic tanneries and textile mills in 2016 to assess water use and identify where water was being used the most within our supply chain. Fifteen suppliers comprised our highest water users, reporting water consumption rates higher than 500m3/day. We continue to collect water consumption data and more broadly benchmark supplier performance using Higg FEM v3.0, ZDHC Wastewater Guidelines, and data available within the Leather Working Group audits for tanneries.
In China, we use the Blue Map Database, developed by the Institute of Public & Environmental Affairs (IPE), to screen China-based supplier facilities for any known wastewater violation records.
In 2020, New Balance conducted real-time screening of the environmental compliance of 205 China-based suppliers and pushes them to resolve any violations. This screening now extends beyond Tier 1 and Tier 2 suppliers (where product is made and materials are sourced, respectively) to include suppliers deeper in the supply chain, like centralized wastewater treatment facilities, hazardous waste facilities, chemical suppliers, and some logistics providers. Suppliers found in violation are asked to submit a corrective action plan within 10 days and must resolve issues and remove records within 30 days. Our most proactive Tier 1 suppliers are now conducting their own screenings of Tier 2.
IPE ranked New Balance 10th out of 540 companies operating in China across all industries in its 2020 Green Supply Chain CITI Evaluation report. The annual CITI report, which stands for Corporate Information Transparency Index, ranks the supply chain practices of brands in the areas of transparency, responsiveness, corrective action, energy conservation, emissions reduction, and disclosure.
ZDHC WASTEWATER GUIDELINE
New Balance is a proud member of the ZDHC Roadmap to Zero Programme – a coalition of major apparel and footwear brands and retailers that are committed to leading the industry towards zero discharge of the industry’s most hazardous chemicals.
New Balance played a leading role in developing the ZDHC Wastewater Guidelines, which the organization launched in 2017 to serve as a progressive industry standard to replace the duplicative and conflicting wastewater standards of the past. These Guidelines standardize wastewater testing requirements in the global apparel, textile and footwear supply chain. They define the standard for wastewater discharge. Leading brands, suppliers, academia, laboratories and tech companies were all part of this industry breakthrough.
New Balance adopted the ZDHC Wastewater Guidelines in 2017, and our key suppliers began testing against the Guidelines. Testing takes place twice per year, and suppliers are required to be compliant with “Foundational” performance levels. In 2020, 42 of our mills and tanneries posted testing results; 74% were fully compliant. Antimony is the most prevalent issue among the conventional wastewater parameters, a common issue associated with polyester.
PARTNERSHIP PROGRAM: Clean by Design
NEW BALANCE SUPPLIER: Far Eastern Dyeing & Finishing Ltd. (apparel textile mill)
LOCATION: Suzhou, China
REASON: High-risk location, high water usage
WASTEWATER REDUCTION: 1.3 million m3
ENERGY SAVINGS: 1,058 tons of coal equivalent (TCE)
COST SAVINGS: 4.7 million RMB, or 740,000 USD
OUTCOMES: Wastewater discharge reduced by almost 1.3 million m3, and 1,058 tons of coal equivalent (TCE) saved (4.7 million RMB, or 740,000 USD)
Recent work with one of our strategic textile mills highlights the importance of evaluating and addressing environmental risks with Tier Two materials suppliers.
Far Eastern was our first supplier to participate in the Clean by Design program, and their results highlight the importance of evaluating and addressing environmental risks with Tier Two materials suppliers. As part of the program, Far Eastern underwent extensive water and energy efficiency evaluations and planning. The results were significant.
It is important to note that Far Eastern is not a problematic supplier. In fact, it is quite sophisticated and has been engaged on environmental work with other brands in the past. New Balance represents only a small portion of its total business. However, the importance of Far Eastern lies in its scale: the entire Far Eastern site uses almost the same amount of energy as New Balance’s entire Tier 1 footwear manufacturing base. As such, with its successful participation in the Clean by Design program, Far Eastern was able to generate energy savings in excess of 1,000 TCE, which is roughly equivalent to the entire energy usage of a small- to medium-sized footwear manufacturing facility.