WWD Honors: For Corporate Citizenship, Levi Strauss & Co.
While the notion of having a purpose beyond profit has taken over fashion — and has become something of an organizing principle for modern corporations — it is nothing new for Levi Strauss & Co.
The denim icon integrated its factory workforce in the 1950s, before desegregation was mandated. In 1992, it became the first Fortune 500 company to give health benefits to unmarried domestic partners. And it has helped keep the pressure up in the courts and the court of public opinion on a wide range of social issues, from being early to support same-sex marriage to speaking out on gun violence and instituting paid family leave. The company has also pushed to operate more sustainability and is working toward a more diverse leadership team and workforce.
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Levi’s not only has a long history of social engagement, it has been actively building on that legacy across its business and with vigor — and for that, it is receiving the WWD Honor for Corporate Citizenship.
Chip Bergh, chief executive officer, will virtually accept the Honor on behalf of the company at a ceremony today during the WWD CEO Summit.
Bergh sees himself as part of a long chain of leaders at Levi’s — stretching both into the past and the future — that along with the rest of the company’s employees is guarding a broader vision of what the brand can be.
The CEO described it in an interview as “taking the long-term view and really believing inside of your core of being that my role is first and foremost to make sure that this company is set up to be successful for the next 168 years.”
That has come with some changes that don’t add to the bottom line.
“There are trade-offs that we will face,” Bergh said of balancing purpose and profit. “It may come with some short-term financial impact, but it’s the right thing to do for the long term. It’s better to do the harder right than the easier wrong.”
courtesy shot.
The harder right is sometimes, well, harder.
And while Bergh knows he’s up to it, he’s also helping make sure that the next person in the corner offers is up to it, too.
“It’s a criteria that we’re looking at for CEO succession,” he said. “You need a CEO who has thick skin, who’s not afraid to stick their neck out for the company because it takes thick skin to do it.
“When we decided to weigh in on the gun violence issue, I had unmarked police cars in front of my house for a couple weeks,” he said. “I had death threats, but it was the right thing to weigh in on. It was following an incident where a weapon was accidentally discharged in a [Levi’s] dressing room as a guy was trying on a new pair of jeans and he literally shot himself in the foot. It could have been another shopper, it could have been a child, it could have been one of my employees.”
That’s a dramatic example, but not the only broader social and corporate issue on Levi’s radar that Bergh cast in personal terms.
Another is paid parental leave, which Levi’s instituted in 2016, giving employees eight weeks off during the first year of having a new child in the house.
“My daughter is not even 13; when she was born, I slept on the floor in the hospital with my wife,” Bergh said. “I woke up at 6:30 and went into the office.” And so Bergh missed out on some key bonding time with his recently expanded family.
“I think that is one of the most powerful things I did,” he said.
The effort was extended just before the pandemic hit with paid family leave, giving employees eight weeks to care for an immediate family member with a serious health condition.
Bergh described the leave as both a short-term financial hit and the right thing to do.
“About half of our employees fall into this sandwich generation where they’re taking care of children and elderly parents,” he said. “The stress and that responsibility tends to fall on women.”
The CEO argued that it’s not just the right thing to do but — through a longer lens — the better financial move.
“The cost of replacing a talented employee can sometimes be up to two times the cost of what the employees themselves were and there’s always the risk of failure,” he said. “If we were able to retain highly valuable women…that would pay for itself in huge dividends.”
That’s a theme that recurs regularly in the corporate citizenship conversation — companies can do good not necessarily by wandering off into issues they aren’t connected to, but by figuring out how they can do what they already do in a way that’s better for everyone.
Sustainability offers many examples given how hands-on fashion companies are in the area and how much room for improvement there is in apparel production processes.
Bergh pointed to Levi’s collection using cottonized hemp — hemp that is softened to give it a hand much closer to cotton.
“You can barely tell the difference,” he said.
But there is a difference in the ecological footprint of hemp compared with cotton, he said.
“It doesn’t require a lot of water,” Bergh said. “It doesn’t require a lot of land, you can grow a lot more per square foot. It’s still more expensive than cotton, but from a sustainability standpoint, it is absolutely the right thing to do. We went forward with it anyway, even though it is at a cost premium to cotton.”
And buying into hemp will help scale that part of the supply chain, making it a more viable option for Levi’s and others over time.
Levi’s move into the secondhand market — working with a third party to repair and resell goods it made — is similar in that it helps further a more sustainable alternative to the landfill and also gets the brand in on a hot, growing market.
“It’s not a money-making proposition today, it’s still a relatively small business,” Bergh said. “It’s a P&L hit, today, but it’s the right thing to do for the long term. This is how Gen Z consumers shop, they like going to thrift stores, they like going to secondhand shops. It’s an opportunity for us to take into that zeitgeist while continuing to drive this brand.”
Brand is always important at Levi’s and is an asset the company willingly uses, creating a platform that can be used to help amplify its message.
“It is huge,” Bergh said about that platform. “It’s not about me. This company has such a long track record of not being afraid to take a stand on important issues of the day, not being afraid to stick its neck out. We don’t just speak up, we spend up, too; we support nonprofit organizations that are trying to make a difference. The platform is significant and unlike just about any other company in the world. We punch way above our weight.”
By way of example, he pointed to Levi’s 2017 move to join other companies to denounce then-President Donald Trump’s immigration ban from seven majority Muslim countries.
“We didn’t waste a second,” he said. “That was fundamentally a human rights issue. The next day, the headlines were ‘Apple, Facebook, Google and Levi Strauss oppose the immigration ban.’ Those are trillion-dollar market cap companies [compared with Levi’s $10 billion market cap]. We punch well above our weight. We take a stand on things where we think our voice can contribute to making a difference.”
There is still more work to do — Bergh has been clear-eyed, straightforward and vocal on the need to create a more diverse workforce at Levi’s.
“After the George Floyd murder, I engaged a number of times with our [employee resource group], our Black affinity group,” he said. “They came and talked with the executive team a couple times on their thoughts on what we need to do. We’re not where we need to be. It’s probably my biggest failure up to this point as CEO. We’ve made diversity, equity and inclusion one of our top priorities going forward. It has to be part of my legacy that we make meaningful progress in this area.”
That candor is unusual — and despite talk of legacy and CEO successors, Bergh said he’s still going to be around to keep it up and carry the torch at Levi’s for some time.
“I’m not going anywhere,” he said. “I’m here for a while. I don’t want to leave until I can say to myself, ‘Mission Accomplished.’”
For Bergh, having someone to pick up that torch and continue the Levi’s legacy of corporate citizenship is core to that mission.
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