Our 2005 Footprint
Financial
Global Revenues ($ in millions)
Earnings Per Share
$1,565.70
$2.43
Global Human Rights
Approximate Number of Factory Workers Worldwide Assessment Coverage of Factories
120,000
94.3%
Environmental Stewardship
Total Metric Tons of Carbon Emissions
26,854
Renewable Energy as a Percent of Total Energy Used
6%
Community Involvement
Total Hours Enlisted to Enact Social Change
Percent of Employees Using at Least One Hour of Service 123,000
68%
THE TIMBERLAND COMPANY
2005 CORPORATE SOCIAL RESPONSIBILITY REPORT
the timberland company make it better ™
2005 csr report
Table of Contents
1.0 Letter from the CEO
2
2.0 The Timberland Footprint
3
2.1 Our Business Operations
3
2.2 Our Approach to Corporate Social Responsibility
4
CSR Defined
4
The Importance of CSR
4
Our Focus on CSR
4
Key Performance Indicators
5
2.3 Our Stakeholders
6
Who Our Stakeholders Are
6
How Our Report Was Developed
7
Our Stakeholder Summit 2006
7
3.0 Timberland Profile
8
8
3.1 Who We Are
How We Sell Our Products
8
Our Plans for the Future
8
Making Social Responsibility Part of Our Culture
9
Financial Performance
9
The Difficult Decision to Close a Factory
10
3.2 Growing the Business
11
A New Specialty Line: Miōn Aquatic Footwear
Borrowing from the Past: Timberland Boot Company 11
Our Recent Acquisition: SmartWool
11
11
™
™
3.3 What We Stand For
12
Responding to Issues
12
Responding to World Events
12
3.4 Social Responsibility: It Matters to Customers
Timberland in the News
Voices of Challenge: Seventh Generation, Inc.
13
13
14
4.0 Global Human Rights
15
15
4.1 Protecting Workers’ Rights in our Supply Chain
Our Code of Conduct
15
Our Influence in the Supply Chain
16
4.2 How We Assess Our Suppliers
17
Why We Assess Instead of Audit
17
Changes to the Process
17
How the Assessing Process Has Gone So Far
18
the timberland company make it better ™
2005 csr report
Table of Contents (continued)
4.3 Assessment Results
18
Taking Immediate Action
19
How Our Assessments Were Scored
20
4.4 Analyzing the Results
21
Assessing Our Assessors
21
Looking for Patterns
22
4.5 After Assessments—Partners in Remediation
23
4.6 Our Factories Around the World
25
4.7 How We Tackle Global Issues
26
Finding Local Partners Worldwide
26
A Focus on Working Hours
28
A Special Focus on China
28
4.8 Working Together to Tackle Tough Issues
4.9 Looking Forward
Sharing and Collaborating through the Fair Factory Clearinghouse
29
29
30
Our Goals for 2006
30
Voices of Challenge: Levi Strauss & Co.
31
5.0 Environmental Stewardship
32
5.1 Our Relationship to the Environment
32
5.2 How We’re Coping with Climate Change
33
Our Greenhouse Gas Inventory
33
How We Measure Greenhouse Gas Emissions
33
What We Plan to Do About Greenhouse Gas
34
A Focus on Renewable Energy
35
Impact of Transportation
37
5.3 Collaborating to Minimize Chemical Use
38
Plans to Eliminate PVC
38
Reconciling Commerce and Justice: Water-Based Adhesives
39
Restricting Substances from Our Products
39
5.4 Resource Consumption
40
Recycled Materials
40
The Case for Organic Cotton
40
Working to Save Our Forests
41
Sourcing Leather
42
5.5 Identifying the Ingredients for Social Responsibility
44
About the EcoFacts Label on Miōn Footwear
44
Introducing “Nutritional Labels” on Footwear
44
5.6 How We Measure Environmental Performance in Our Supply Chain
™
Keeping Score of Our Environmental Impact
5.7 Looking Forward
45
45
45
the timberland company make it better ™
2005 csr report
Table of Contents (continued)
Voices of Challenge: Patagonia, Inc.
46
6.0 Community Involvement
47
47
6.1 Working Together for a Strong Community
Making It Better in 2005
6.2 Our Approach to Community Service
47
47
The Case for “Themed” Service Events
47
The Results for 2005
48
Spotlight on Earth Day 2005
50
Spotlight on Serv-a-palooza 2005
51
Spotlight on Our Hurricane Katrina Efforts
52
6.3 Measuring the Impact of Community Service
55
6.4 Investing in the Community
56
Our Community Investments
56
6.5 Looking Forward
57
Voices of Challenge: The Home Depot
58
7.0 Timberland Employees
59
59
7.1 Our People Philosophy
Our Employees
59
Key Workforce Statistics
59
7.2 How We Manage Our Talented Staff
60
7.3 Employee Satisfaction
62
7.4 Diversity
63
7.5 What We’re Doing to Improve Health & Safety
64
New Health & Safety Initiatives for 2005
64
Addressing Health-Related Lost Work Days
64
Voices of Challenge: Harlem Children’s Zone
65
8.0 Report Scope
66
66
8.1 The Scope of this Report
The Basis of this Report
66
How this Report Was Verified
66
9.0 GRI Index
67
“There are a lot
of voices speaking
out about corporate
social responsibility
today.”
Letter from the CEO
There are a lot of voices speaking out about corporate social responsibility today. That’s a
good thing; it indicates a growing awareness of business’s ability to create impact—both
positive and negative—in our world. More good news is the fact that behind the voices there
are real, measurable, laudable efforts being made by companies around the globe to be
better citizens, to increase their positive impact, mitigate the negative and help solve the
problems that plague our society and environment.
Corporate social responsibility has become such an integral part of
In the pages of this report, you’ll hear Timberland’s voice, including
business, in fact, that we’ve all got it down to a science. We know which
information about some of the ways we’re working to take greater risks
standards we’re supposed to follow and what codes we must adhere to
and make a greater impact in our social responsibility efforts. Taking a
in order to earn our label as a “good corporate citizen.” What was once
risk can either result in success or failure, and I’m happy to report we’ve
foreign territory, creating partnerships and developing programs to meet
experienced both in our efforts over the past year. Why does this make
the needs that exist beyond our business walls, is a place we’ve grown
me happy? Success, obviously, means we’re making good progress in our
quite comfortable.
quest to Make it better, and we’ll continue to build on that progress
And there’s the challenge. Too often, with comfort comes complacency.
And while we’re busy being comfortable and complacent, the world
is spinning by us at full throttle with issues that aren’t addressed in
our standards and needs that haven’t yet made it onto our radar screen.
year over year. Failure tells me we’re not being complacent, that we are
stepping out of our comfort zone and applying our innovation and passion
to issues and areas of our world where it’s needed most. With every
failure comes an opportunity, and you’ll see we’ve identified plenty of
opportunities which we’ll pursue in earnest as we move forward.
And so, where it was once a great risk for business to step up and engage
To provide greater perspective
in matters of social justice, environmental stewardship and global
human rights, it’s time to take a greater risk—to step outside our comfort
zones and work to make our impact in these areas in ways that are
stronger, deeper, more powerful and more thoughtful. It’s incumbent
upon us to do this for two reasons:
• We have the ability. If we, as businesses, applied the same level of
innovation, passion and determination to corporate social responsibility
as we do to product development, sales and marketing, the results
In the business
world, “good
enough” rarely
is; we’re always
working to
make it better.
on the challenges we face—or
should be facing—as socially
responsible businesses, we’ve
asked five leaders to lend their
voices and insight to our report.
We asked them simply to provide
their unfiltered, unedited point
of view on the state of CSR—the
would be phenomenal. And why shouldn’t we? In the business world,
results of which you’ll see in the
“good enough” rarely is; we’re always working to make it better. There’s
“Voices of Challenge” sections
no reason why the standards should be any less for our CSR efforts.
• The world desperately needs it. Never before has the notion of
sustainability been so prevalent—the idea that we must consider the
of the report. Their thoughts are
meant to provide just that—a challenge—and to provoke action and
accountability among those of us who call ourselves good corporate citizens.
consequences of our actions not on tomorrow, but on the world we
Your voice matters just as much. If you’d like to weigh in on this CSR
leave behind for generations to come. And while making a conscious
discussion, comment on Timberland’s efforts or present your own
effort to reduce our negative impact on the environment and our
challenge to us, please email me at jswartz@timberland.com.
communities is a good first step, doing “less bad” isn’t enough. We’ve
got to start doing more good—to try to repair some of the damage that
Sincerely,
has already been done and invest in positive, sustainable change.
Jeffrey Swartz
President and CEO
The Timberland Company
the timberland company make it better ™
2005 csr report
2.0 The Timberland Footprint
[2.1] Our Business Operations
Timberland supply chain
table of
resource
suppliers
contents:
extraction
report
highlights
manufacturing distribution customerscorporate
facilitiescenters
retail
facilities
This table connects
the work that we do
in corporate social
responsibility to where
it occurs in our supply
chain. Think of it as
a graphic table of
contents for our 2005
CSR report.
tanneries
footwear
wholesale
distribution
centers
small
non-leather
franchisee
apparel
consumer
distributor
major
non-leather
licensed products
e-commerce
Factory Assessment Results pg. 18–22
Global
List of Factories Worldwide pg. 25
Human
Rights
Working Hours pg. 28
Environmental Assessments pg. 45
Use of Recycled Materials pg. 40
Organic Cotton pg. 40–41
Nutritional Label pg. 44
Climate Change pg. 33–37
Environmental Wood Procurement pg. 41
Stewardship
WBAs pg. 39
Renewable Energy pg. 35
Sourcing Leather pg. 42
Community
Involvement
PVC pg. 38
Impact of Transportation pg. 37
Community Service Statistics pg. 48–51
Service Highlights: Serv-a-Palooza, Earth Day and Hurricane Katrina pg. 50–54
Community Investments pg. 56–57
Employee Statistics pg. 59
Talent Management pg. 60
Employees
Recycled Material pg. 40
Employee Satisfaction pg. 62
Leadership Diversity pg. 63
Health & Safety pg. 64
Wood Procurement pg. 41
Hybrid Vehicles pg. 34
the timberland company make it better ™
2005 csr report
2.0 The Timberland Footprint (continued)
[2.2] Our Approach to Corporate Social Responsibility
Humanity. Humility. Integrity. Excellence. Everything we aspire to, everything we work toward each day is rooted in
our deep commitment to these four core values. They form the cornerstones of our beliefs and inform our strategic
approach to our platforms of Corporate Social Responsibility (CSR): global human rights, environmental stewardship,
community involvement, and employees. But we know that values and passion aren’t enough. Other commitments are
also essential to our mission to create sustained positive change around the world: strategic intent, integrated operating
systems, transparent measurement and industry collaboration. This report will discuss how we use these concepts in
our CSR efforts. But first, let’s begin with a basic understanding of how we see CSR at Timberland.
CSR Defined
Our Focus on CSR
To understand Corporate Social Responsibility at Timberland, it’s important
Using our view of CSR as a foundation—and keeping in mind all the
to understand first how we define it. We think that the Boston College
reasons why CSR is important—we are currently in the process of
Center for Corporate Citizenship did a good job of explaining the term.
refining our focus for our efforts in corporate social responsibility. After
Here is our four-part definition loosely based on the Boston College
internal planning sessions and consultation with our stakeholders, we
description1 of what a responsible corporate citizen will do:
have settled on these areas to concentrate our efforts to make positive
1. Minimize Risk: Reduce negative consequences of business
operations to stakeholders.
environmental and social change:
1. Business: Model Sustainability.
2. Maximize Benefits: Contribute to societal and economic well-being.
2. Community: Build Capacity for Sustained Social Change.
3. Be Accountable to Stakeholders: Build relationships with stakeholders
3. Global: Advocate to Improve the Human Condition.
and be responsive to their concerns.2
Our ultimate goal is to not only
4. Incorporate CSR into Decision-Making: Integrate values into all
operational decisions.
The Importance of CSR
Our efforts to be socially accountable do not exist in a vacuum. Social
accountability is an issue industry-wide…and worldwide. The emerging
importance of CSR in recent years can be seen in these factors:
• Communications: In an interconnected global community, information
is instantly available to every corner of the globe. Information technology
The very survival
of humanity and
our planet will
depend on the
ethical actions
of individuals
and corporations.
limit our footprint as an organization,
but also “Make it better” in places
we directly touch…and beyond.
And because we’re not the largest
organization in the marketplace,
we rely on our partnerships with
other organizations to amplify
our efforts.
This strategy provides a focus
also demands that a company be transparent and accountable in every
for our work. In local communities.
region in which it operates or sells products.
In the environment. In our supply
• Organizational Power: In this day of multinational corporations,
chain. Even in our own offices.
business can often have a greater impact than even local or national
It is a compass that guides our resources in a way that has the greatest
government. With this power—and scrutiny—comes an ethical
impact wherever we do business. We’ll continue to focus on these areas
responsibility to pursue profits in ways that don’t do harm.
as we chart our path towards corporate responsibility.
• Complex Global Needs: Poverty. National disaster. Global conflict.
Issues like these demand action. And accountability.
• Regulation: Corporate scandal and increased legislative and financial
oversight are having a profound effect on corporate behavior and
pushing companies to adopt a policy on corporate social responsibility.
• Legacy: The very survival of humanity and our planet will depend on
the ethical actions of individuals and corporations. That awareness
drives us to act responsibly every day.
1 http://www.bcccc.net/index.cfm?fuseaction=Page.viewPage&pageId=567&parentID=473
2 Timberland stakeholders are defined in section 2.3.
the timberland company make it better ™
2005 csr report
2.0 The Timberland Footprint (continued)
Key Performance Indicators
Visualize your dashboard. There are several gauges that tell you how fast you’re going. How much gas you have left.
Whether there’s a problem in the electrical system. Whether you’ve left the trunk open. Our Key Performance Indicators
are designed to give us exactly that kind of quick picture of how we’re doing in each of the four major functional
CSR areas: Global Human Rights, Environmental Stewardship, Community Involvement and Timberland Employees.
Some of these metrics may change as we further refine our system of CSR reporting. But we have tried to hit on the
indicators that best record Timberland’s efforts to “Make it better.” Explanations for these results are included in the
different sections within the report.
2005 key performance indicators
Indicator
Explanation
2004
2005
2006 Target
Percent of Factories Assessed
94%
94.3%
100%
Global Human Rights 3
Factory Coverage
Environmental Stewardship
Climate Change
Total Metric Tons of Carbon Emissions4 25,084
26,854
Verify
baseline
Resources
Organic Cotton as a Percent of Total Cotton Purchases
2.1%
2.1%
5%
Renewable Energy
Percent of Energy Purchased from a Renewable Source
4.3%
6%
10%
Benefit Utilization Rate (BUR): Percentage of employees 69.7%
68%
70%
Path of Service™
Program
who use at least one hour of service Hours Utilization Rate (HUR): The percentage of hours used for service compared to hours available Community Involvement
28.8%
31.1%
34%
Timberland Employees
Employee Satisfaction
Percent of Employees Satisfied with Position at Timberland
76%
74%
77%
Gender Inclusivity
Percent of Women in Management Roles
31%
35%
42%
Development Hours
Average Number of Training Hours per Employee
39
38
39
3 We are still working to develop more material metrics for our Global Human Rights Key Performance Indicators.
4 We are in the process of verifying a baseline for our greenhouse gas inventory. In the interim, we will report on absolute carbon emissions. For more information, see the section entitled “Our Greenhouse Gas Inventory”.
the timberland company make it better ™
2005 csr report
2.0 The Timberland Footprint (continued)
[2.3] Our Stakeholders
Timberland has a passionate commitment to engagement as a means of building sustainable, transparent and authentic
relationships that inform and enable sustainable social and environmental change. We believe in the power of this type
of engagement as a true vehicle of transformative change and industry leadership.
Who Our Stakeholders Are
Our stakeholders include groups or individuals who either can affect the achievement of Timberland’s business objectives…or are affected by them.
The chart below lists these stakeholders and describes how we work together on our CSR efforts.
Stakeholder Group
Engagement
Report Reference Section
• The Global Employee Survey
Employees
• Civic engagement: Path of Service™ program and Service Sabbatical
• Integrity Line (a 24-hour anonymous hotline)
• Surveys and focus groups
Customers
• Nutritional labels
Environmental Stewardship
• Civic engagement: Serv-a-palooza, Community Builders Tour, Community Involvement
Community Involvement
Timberland Employees
PRO Skills Tour
• Civic engagement: Community Builders Tour, Earth Day
Environmental Stewardship
Communities
• Employee membership on non-profit boards
Community Involvement
• Corporate investment
Global Human Rights
• Annual and quarterly reports
Shareholders
• Annual shareholder meetings
• Quarterly analyst calls, conferences, and regular meetings
• Factory assessments and capacity building
Suppliers and Factory Workers • Human rights initiatives
• Annual supplier summit • Direct collaboration or joint programs on CSR objectives
• Annual planning and review
Non-Governmental Organizations
• Focused feedback on CSR activities
• Meetings and conferences
Media
• Press releases
Government Entities
• Engagement on regulatory issues
• Meetings and briefings
• Adherence to laws where we operate
• Industry alliances and associations
Business Colleagues
• CSR ventures (consumer and community)
• Conferences and trainings
Timberland Profile
Global Human Rights
Environmental Stewardship
Global Human Rights
Community Involvement
Timberland Profile
Timberland Profile
Voices of Challenge
the timberland company make it better ™
2005 csr report
2.0 The Timberland Footprint (continued)
How Our Report Was Developed
Stakeholder input was invaluable in determining the content and focus
of Timberland’s 2005 CSR report. Immediately following the release of
our 2004 report, we reached out to our employees to gather feedback
about the report and how it could be improved. The key advice we
heard was that they wanted a report that was interesting to read with
Through these various methods, we have developed a report that we
hope meets all of these criteria. We’ll continue to refine our reporting
process—and we hope you’ll be a part of that effort. We invite you to
tell us how we can “Make it better” in our reporting by sending your
comments to csrinfo@timberland.com.
more data. At the same time, we also invited others to provide us
Our Stakeholder Summit 2006
with feedback. Business partners. Non-governmental organizations.
In the fall of 2006, we plan to host a one-day stakeholder summit,
Customers. Local communities. Here’s what these stakeholders wanted:
bringing 20 to 30 stakeholders together to tell us how we can “Make it
• A better explanation of Timberland’s business model,
• Information on our public policies, and
• The link between CSR and our bottom line.
better.” We’ll invite these credible, independent and recognized leaders
to join in a candid and informed dialogue based on our 2005 CSR report.
Our goal is to provide an environment that exemplifies Timberland’s
values. Builds community. Provides valuable feedback. Produces new
Timberland also pursued more formal reviews, through our membership
insights. Fosters innovation. And strengthens Timberland’s social and
in Ceres—a national coalition of investors, environmental groups and
environmental accountability, civic leadership and Bold Goal aspirations.
other public interest organizations who work with companies to address
such challenges as global climate change. (For more information, visit
www.ceres.org.) For our 2005 CSR report, a Ceres stakeholder group
reviewed both an outline and several drafts of the report. The critical
issues they identified as needing to be addressed included:
• Our work in Tanneries,
• Forward-looking goals, and
• Clarification of our assessment results.
the timberland company make it better ™
2005 csr report
3.0 Timberland Profile
3.1 Who We Are
Timberland designs, develops, engineers, markets
and distributes premium quality footwear, apparel and
accessories products for men, women and children
under these brand names:
• Timberland®
• Timberland PRO®
• SmartWool®
• Timberland Boot Company™
• Miōn™
Functional performance. Classic styling. Lasting protection from the
elements. We believe these features make our products an outstanding
value. We also think they distinguish us from the competition.
How We Sell Our Products
Our Plans for the Future
Our products are sold throughout the United States, Canada, Europe,
We want to become the brand of outdoor footwear, apparel and accesso-
Asia, Latin America and the Middle East. How? Through independent
ries that men, women and children around the world who are inspired by
retailers, better-grade department stores, athletic stores, licensees
the outdoors choose first. Quite simply, that’s our primary goal. We have
and distributors. We carefully select national retailers we believe can
a simple strategy for achieving it:
reinforce the high level of quality, performance and service that we want
consumers to associate with Timberland.
1. Target our consumers more specifically and enhance our technology
We also do some of our own retailing through Timberland® specialty
2. Increase our worldwide market share in the apparel business by
worldwide to strengthen our core footwear business.
stores, Timberland® factory outlet stores, timberland.com and franchisees
taking advantage of our rugged heritage and continuing to work to
in Europe. All are dedicated exclusively to selling Timberland® products.
earn our customers’ trust.
At the end of 2005, we had 21 specialty stores and 57 factory outlet
stores in the United States and 117 specialty stores and shops and
28 factory outlet stores in Europe and Asia. In 2005, we also launched
the Timberland® brand in China and established a new subsidiary
in Switzerland to offer products directly to customers. Overall, U.S.
Wholesale5 represented 42.1% of 2005 revenue, U.S. Consumer Direct6
represented 13.6%, and International7 was 44.3%.
3. Develop new brands such as SmartWool®, Timberland Boot
Company™ and Miōn™.
4. Expand our geographical reach.
5. Drive operational and financial excellence.
6. Set the standard for service in the communities in which we live
and work.
7. Be a global employer of choice.
5 Includes independent retailers, better-grade department stores, outdoor specialty stores, national athletic accounts, general sporting goods retailers and other national accounts
6 Includes Timberland® specialty stores, Timberland® outlet stores and timberland.com
7 We sell our products internationally through operating divisions in the United Kingdom, Italy, France, Germany, Switzerland, Spain, Japan, Hong Kong, Singapore, Taiwan, Malaysia and Canada. Timberland® products are sold elsewhere
internationally by distributors, franchisees and commissioned agents, some of which also may operate Timberland® specialty and factory outlet stores located in their respective countries.
the timberland company make it better ™
2005 csr report
3.0 Timberland Profile (continued)
Making Social Responsibility Part of Our Culture
Financial Performance
Stakeholders who read our 2004 Corporate Social Responsibility report
Our principal strategic goal is to become the authentic outdoor brand of
wanted to know just what we were doing to integrate corporate social
choice globally. To deliver against our long-term goals, we are focused
responsibility into our culture at Timberland. A successful CSR strategy
on driving progress on key strategic fronts. These include enhancing our
can’t operate at the fringes of the organization. It needs to be part of
leadership position in our core footwear business, capturing the opportunity
every decision we make. And it needs to continuously evolve to keep up
that we see for outdoor-inspired apparel, extending enterprise reach
with the changing business landscape.
through development of new brand platforms and brand building licensing
At Timberland, we think a top-down, bottom-up approach is the best
way to integrate social and environmental awareness into all levels of the
company. At the top of our organization, we have a CEO who is deeply
committed to the concept of “Commerce and Justice”—that is, a
responsibility to generate revenue while at the same time making positive
changes in the communities and environment where employees live and
arrangements, expanding geographically and driving operational and
financial excellence while setting the standard for commitment to the
community and striving to be a global employer of choice. Some high
level views of our financial performance in 2005 are included in the
graphs below. Please see our 2005 annual and 10K report for more
details on our financial performance.
work. This set of values naturally trickles down to influence all company
decisions—major and minor.
Revenue
And from the bottom up? We do everything we can to make sure that
2000
$2,000
Soon after they’re hired, every new employee at our corporate office
performs a day of service so that right away they can understand how
we partner with local communities to “Make it better.” In addition, these
new employees are exposed to our values in the form of employee-initiated
Dollars in Millions
every employee we hire is passionate about corporate social responsibility.
charity drives, volunteer service fairs, environmental “lunch and learns”
1500
1,500
1000
1,000
1,501
1,184
1,566
1,191
100,000
50,000
2001
2002
2003
2004
2005
in our cafeteria. We strive to be the Employer of Choice by attracting
people who want to do well while they are doing good. For the company.
Net Income
2000
1500
1500
1000
1000
200,000
$200,000
200,000
Public Recognition
• Eighth consecutive year on Fortune magazine’s “100 Best Companies
500
500
to Work For” list, ranked #38 and placed
in their first Hall of Fame.
0
• One of the inaugural recipients of Winslow
Management’s “Green2”
0
Dollars in Thousands
2000
For the community. And for the environment.
2.5
150,000 2.0
152,693
150,000
150,000
100,000
100,000
106,741
164,624
1.5
117,879
100,000
95,113
1.0
50,000
50,000
50,000
00
0
0.5
Award for making a positive contribution to the environment as well
2001
2002
2003
0.0
2004
2005
as to shareholders.
• S eventh consecutive year as one of Forbes magazine’s “Best Big
Companies in America.”
2.5
2.0
2.0
1.5
1.5
1.5
• Named one of Business Ethics magazine’s “100 Best Corporate
Citizens” for sixth consecutive year.
• Listed as one of Industry Week magazine’s “50 Best-Managed
Manufacturing Companies” for the second consecutive year.
2.47***
2.14
1.62
1.33
1.0
1.0
1.0
0.5
0.5
0.5
• S econd consecutive year on list of “100 Best Companies for Working
Mothers” by Working Mother magazine.
Diluted EPS*
$2.5
2.5
2.0
0.0
• S elected as one of New Hampshire’s “Best Companies to Work For”
by Business NH magazine.
• Received Clean Air—Cool Planet 2005 Climate Champion Award.
0.0
0.0
150,000
1,342
500
500
00
and the Community Impact Center which highlights recent CSR activities
200,000
2001
1.18**
2002
2003
2004
2005
* EPS have been restated to reflect 2-for-1 stock split in May 2005.
** Before cumulative effect of accounting change of $0.07.
*** Excludes restructuring charge of $0.04.
0
the timberland company make it better ™
2005 csr report
10
3.0 Timberland Profile (continued)
The Difficult Decision to Close a Factory
At Timberland, we believe it’s possible to do well and do good—that is,
Making the Link: Corporate Social
Responsibility and the Bottom Line
create a profit for our shareholders and have a positive impact on local
communities. Sometimes, though, those concepts get out of balance.
Doing well. Doing good. Can both be done at
When they do, it’s simply impossible to avoid making a painful choice.
the same time? In other words, is it possible
That’s exactly what happened at our facility in Isabela, Puerto Rico. For
24 years, the plant had manufactured Timberland® shoes. But when
to run a profitable business and still be
a tax benefit expired, our Puerto Rico production costs were no longer
responsible? To the environment. To employees.
competitive. A strategic decision was made to consolidate operations in
our Dominican Republic-based facility. It was a decision that left 316
To the local community. To the whole notion
hard-working, dedicated members of our team in Isabela without jobs.
of human rights.
For them, the decision was profound, painful and life-changing.
At Timberland, we believe the answer is yes.
Supporting Those Who Were Impacted
In fact, the foundation of our entire operations
Timberland’s CEO, COO, board members and employees made the trip
strategy is based on this premise. Commerce
to Puerto Rico for the plant closing in December 2005. We did our best
to cushion the impact of the facility closure by providing affected members
and Justice. Well and good. And we’re not the
of the Timberland family with a generous severance package that
only ones who believe in the viability of doing
included retirement enhancements for those near retirement age, skills
retraining and access to outplacement and career counseling. While
business in this manner. Innovest Strategic
we’re humbled that other organizations have asked for assistance in
Value Advisors, a New York-based multinational
modeling their programs after our benefits package, we deeply regret
investment research and advisory firm, recently
that such a package was necessary.
conducted a study of the financial performance
Continuing Our Commitment to the Community
of what they called the 2006 Global 100 Most
Outstanding craftsmanship. Service. And dedication. Our Isabela factory
Sustainable Corporations in the World. Using
workers provided that to Timberland for 24 years. In recognition of these
gifts, we have committed ourselves to providing a lasting civic tribute to
the MSCI World Index, which gathers data
our former employees. In 2006, a gift of $250,000 will be used to address
from around the world, Innovest discovered
one of the community’s critical needs: childhood athletics.
something interesting. Over a five-year period,
the socially responsible companies didn’t
just measure up financially. They actually
outperformed the World Index by 7.11%.
As you can imagine, at Timberland we’re happy
whenever we can do both. Well. And good.
the timberland company make it better ™
2005 csr report
11
3.0 Timberland Profile (continued)
[3.2] Growing the Business
The job of any business is to grow. With this as a goal, we think 2005 was a pretty solid year for Timberland. We
delivered record revenue of nearly $1.6 billion, record earnings, strong cash generation and improved returns for our
shareholders. But these are not the only metrics by which we measure ourselves. When the Timberland team speaks to
customers, employees, analysts and NGOs, we never just talk about Commerce. It is always accompanied by Justice.
Commerce and Justice. Meaning that in addition to revenue growth, Timberland has a parallel goal, and that is to
continually “Make it better.” For our employees. For our customers. And for the world we all share.
That’s why, when we start a new business venture, making money is not the sole condition we require. We want to
make sure our partners fit into our social strategy, too. In 2005, we launched three new business ventures we’re pretty
excited about.
A New Specialty Line: Miōn™ Aquatic Footwear
Sailing. Rafting. Fishing. Wet/dry adventures of all natures. That’s what
the Miōn™ brand is all about. This new and distinct brand of footwear is
focused on people who play on and around water.
At the same time, Miōn™ strives to set an
example as a steward of our planet’s
limited resources. By offsetting
100% of the energy used for
manufacturing with Green-E certified
best traditions of the post-industrial age with earlier ideals of craftsmanship.
All wrapped up in a culture of strengthening the local community. How?
Through targeted civic activities and programs at our London store. It’s just
one of the ways that we’re trying to “Make it better” wherever we operate.
Learn more about this new brand from Timberland:
www.timberlandbootcompany.co.uk
Our Recent Acquisition: SmartWool
A focus on making positive change in the world. Brands built on
renewable energy. By using a distribution center 60% powered by the
authentic products. Communities organized around worthwhile missions.
sun. By pursuing innovative clean materials in manufacturing. By
Timberland and SmartWool. They fit together like, well, boots and socks.
leveraging recycled materials in its marketing and selling tools. And
There’s a lot more to our recent acquisition than the natural match-up of
by launching the first EcoFacts label, so that you’ll know exactly how
our products, though. We wanted to grow with a company whose values
Miōn™ works to protect the environment.
fit with us, too.
Did we pique your interest? If so, go to www.mionfootwear.com
Founded only eleven years ago by a couple of ski
for more information.
instructors struggling to keep their feet warm on
New England’s chilly slopes, SmartWool
Borrowing from the Past:
Timberland Boot Company™
Quality. Authenticity. Attention to detail. Classic design that evolves with
the seasons. Think that’s all part of days gone by? Not at Timberland.
A philosophy of remembering our history while keeping an eye on the
future plays an important role in everything we do.
utes socks, apparel and accessories to more than 2,000 better
outdoor specialty stores throughout
the U.S., and to international distributors. First, we began carrying some
of their products. Then we partnered with them to develop Timberland®
performance footwear with SmartWool® linings. Along the way, we got to
know their ethic. We liked what we saw. A lot. For example, 10% of every
Take, for example, a new
brand that we launched called
Timberland Boot Company™—
a line of workwear-inspired
footwear and apparel for younger,
more style-conscious consumers
in London. In developing the
Timberland Boot Company
today designs, develops and distrib-
™
brand, our goal was to blend the
sale on SmartWool’s Web site goes to the SmartPrint Advocacy Fund
which gives to organizations that promote environmental stewardship, healthy
lifestyle choices for youth, and responsible outdoor activity participation.
This is just one of many initiatives to effect positive change in the world
which they live, play and do business. Together, we think we can do
even more toward sharing a vision of sustainable living.
Did we “sock” you in? Learn more at www.smartwool.com.
the timberland company make it better ™
2005 csr report
12
3.0 Timberland Profile (continued)
[3.3] What We Stand For
Current events. Public policy. How we interface with the world around us. The way that we deal with political issues is
important for your understanding of who we are. In a nutshell, we always try to do the right thing and be honest about
who we are and where we stand.
Responding to Issues
Responding to World Events
Our commitment to integrating social responsibility into our business
President John F. Kennedy once said that, when we’re judged by history,
seems to attract employees who have a passion for making things better.
it will be looking at “whether in our brief span of service we fulfilled our
We encourage our people to take a stand on the issues that matter. That
responsibilities.” We believe that there’s no better test of our sense of
affect their lives, here and around the world.
responsibility than a time of crisis. We’re proud of the Timberland employees
Timberland does not make contributions, directly or
indirectly, to any political party or candidate, in any
country, even if such contributions are legal in
that country. In addition, we
do not give contributions to
lobbyists or political action
committees (PACs). We
are members of many trade
associations, such as the
who have stepped up to try to “Make it better” for people in need.
Helping Stem the Genocide in Darfur
Rwanda. Armenia. The Holocaust. History continues to repeat
itself. In Darfur, a region of western Sudan, a tragedy is occurring
that very few people know about. Genocide. Systematic killing on
the basis of race. More than a million people have been driven
from their homes. Their crops ravaged. Their water supplies
poisoned. Their people raped, terrorized and murdered.
Outdoor Industry Association
Although we don’t make or sell our products in this region,
(OIA), the Federation of Euro-
we felt compelled to take action as a member of the global
pean Sports Industries (FESI)
and others.
We neither encourage nor
discourage our employees
community. At Timberland, we’re passionate about making
positive changes…and nowhere is the need for change
more urgent than in Darfur. In this spirit, a dedicated
team of our employees spearheaded an effort to:
from contributing personal
• Design a boot—“Stomp Out
financial support or personal
Genocide”—as a vehicle to
service to any domestic
communicate urgency
or international political
and compassion for
nominee, candidate, party
our brothers and
or non-profit organization.
sisters in Darfur.
However, we will not, under
• Develop a tee-shirt
any circumstances, reimburse
and hang tag to
employees for personal political
raise awareness
contributions.
and funds for Darfur.
• Lead a product seeding
But all that doesn’t mean we’re not politically active. We do
take a stand on political issues that might impact our business.
For example, in 2005 we became active in the European Community’s
leather footwear anti-dumping investigation. While we are disappointed
effort to raise awareness and activism
regarding this issue among policymakers, elected officials, journalists
and socially active entertainers.
by the decision of the European Commission to impose provisional duties
Through actions like these, we hope to mobilize citizens and offer hope
on leather upper footwear imported into Europe from China and Vietnam,
for the oppressed people of Darfur.
we will continue to work with the Commission to put forth our position
with a view to finding a constructive solution.
For a daily monitor of news and opportunities to affect change,
please visit www.savedarfur.org.
the timberland company make it better ™
2005 csr report
13
3.0 Timberland Profile (continued)
Serving the Victims of Katrina
community service. Mobilizing product on behalf of AmeriCares.
Sometimes, emergencies strike closer to home. In 2005, no crisis
And working together to help heal those in need.
facing the U.S. was greater than Hurricane Katrina, which slammed
into the Gulf coast in August. Across the country and around the world,
How We are Coping with Climate Change
the response was far-reaching and immediate. We’re proud of the 11
Climate change is real and alarming. We don’t like it, but we know we
Timberland employees who traveled to the Gulf coast to help others
contribute to greenhouse gas emissions, too. That’s why we’re working to
in need.
reduce these emissions wherever we can by improving energy efficiency
As a result of this experience, we have established mini-sabbaticals
in partnership with the Red Cross, to identify opportunities to support
on-site recovery, clean-up, relocation and long-term efforts through
and increasing the use of renewable energy. We are streamlining the
Timberland transportation network for more environmentally friendly
performance. We also launched a cash incentive program to encourage
employees to use a low-emissions hybrid vehicle when they commute.
[3.4] Social Responsibility: It Matters to Customers
How important is social and environmental responsibility to the consumer? The Natural Marketing Institute recently
conducted a study measuring just that. They found that almost 90% of American consumers agreed that it’s important for
a company to look beyond profits, to consider its impact on the environment and society, too. Just over 70% indicated
that knowing a company is mindful of that impact makes them more likely to buy its products or services. And nearly
half stated that they’re more likely to buy stock in a company that’s responsible than in one that’s not. This research
supports what we’re experiencing in our own business and in our industry: namely, public awareness of—and expectation
for—corporate social responsibility is on the rise. The media has reacted accordingly. With increased coverage of
Corporate Social Responsibility (CSR) leaders, programs and issues.
It’s a story that clearly is resounding with business partners and
consumers alike. The fact that
more mainstream media outlets are
telling the story demonstrates how
much the notion of corporate social
responsibility is finally catching on.
Of course, at Timberland, we don’t
conduct our business responsibly
and ethically just to earn plaudits
from the press. We made a commit-
Timberland in the News
Environmental stewardship. Community investment. Global human
rights. In 2005, roughly 75% of Timberland’s total corporate coverage
was focused on these CSR efforts. The “story” of CSR has long had its
place in niche media and special interest publications. Recently, though,
ment to doing well and doing good
long before the national media
began covering the phenomenon.
It’s as much a part of our business
and our heritage as building boots.
the story of our commitment to being a good corporate citizen was told
We are mentioning it here because we’re glad
in global outlets, such as:
to see that CSR is an idea whose time has come.
• TIME magazine
• The Wall Street Journal
• U.S. News & World Report
• CBS TV
• Fast Company
In the media. And in the marketplace. We’re
hoping that this level of attention will help us
develop a dialogue with our consumers. One
based on shared values and a mutual interest in
the well-being of the world around us.
Voices of Challenge: SEVENTH GENERATION, INC.
Creating New Possibilities
People often ask me what I think a “responsible business” should be. I have a simple
answer: I think it should be about believing in endless possibility and embracing the fact
that tomorrow doesn’t have to be the same as today.
That’s how I lead my own company: With a
belief that anything is possible when we are
thoughtful and inspired.
Why would anyone want to do anything less?
As I survey the landscape of well-meaning organizations from land
conservation and global warming groups to animal rights, health care
With our planet at greater risk today than ever
reform, hunger, and poverty non-profits, I see everyone working from
before, I know that we can harness this attitude
their own disconnected bunker. No common vision unites us. To help
to seize the opportunities to create a better
create that common vision, business needs to get clear that being
future than we’re capable of imagining today.
responsible requires three things:
We must. Because while companies celebrate reduced CO2 emissions
in an effort to slow global warming, reduce reliance on sweatshops, use
a smaller number of toxic chemicals in our products, pay less obscene
wages to CEO’s, or keep retail giants in check—that’s just less of the
same. And quite frankly the world is way too screwed up and in too
much danger for us to aspire to simply do less damage.
1. A commitment to redefining the purpose of business and thinking
about the next 100 years, not the next 100 days.
2. Engaging directly in progressive public policy. Sustainable development
is not just about eliminating environmental impacts. It’s about systemically
ensuring that social justice and equity are made to work for all people.
To accomplish this, progressive businesses must engage directly in
We need a vision of the world we want to create after we reverse global
public policy, something they’ve traditionally left to traditional “old
warming, eliminate toxic chemicals and transform Wal-Mart into the world’s
economy” companies. No more. We must lobby aggressively for publicly
leading creator of lower class wealth. We need to pursue possibilities
financed elections, a health care system that is a right and not a privilege,
that fulfill our highest potential and ensure forever a sane, safe and
a tax code that reverses the flow of wealth from the poor to the rich,
decent place for our children and grandchildren to play. We need to
and full cost accounting that stops the externalization of health and
envision a world yet to be.
environmental costs. Without progress in these areas there will be no
future in which any company can claim it is “responsible.”
And quite frankly the
world is way too screwed
up and in too much danger
for us to aspire to simply
do less damage.
3. Ensuring that everyone who works is provided the opportunity to
reach their highest potential as a human being. This is not about
developing skills or advancement opportunities. This is about creating
a corporate culture that thinks systemically, believes there are no limits,
and educates its team members to see that 99% of what’s possible lies
outside the patterns, systems, and thinking that have gotten us where
we are today. We must foster a culture where everyone is actively
engaged in a process of discovery and growing all the time. For it is
only by making who we were yesterday less important than who we
will become tomorrow that we can we hope to be the change the
world needs us to be.
Jeffrey Hollender,
President & Chief Inspiration Officer
Seventh Generation, Inc.
the timberland company make it better ™
2005 csr report
15
4.0 Global Human Rights
[4.1] Protecting Workers’ Rights in our Supply Chain
Fair. Safe. Non-discriminatory. We strongly believe people everywhere deserve those basic rights in the workplace. It’s
not always easy to accomplish—especially when you’re dealing with more than 120,000 workers in 33 countries worldwide.
Because we own only one of the approximately 227 factories that manufacture Timberland® products, we don’t always
have direct control over the practices of our vendors and suppliers. But we do work hard to choose business partners
who share our beliefs, then work with them to operate under the standards set forth by our Code of Conduct. Protecting
the rights of workers. Improving working conditions. And collaborating with non-governmental organizations and agencies,
to help raise labor standards, one community at a time.
The goals for our Code of Conduct team in 2005 were to (1) Improve lives through innovation, (2) Drive workplace
quality and make sure it can be sustained and (3) Broaden industry collaboration.
Our Code of Conduct
Timberland is known for its casual boots, shoes, clothes and gear. But
there is something we’re very formal about: our Code of Conduct. About
a decade ago, we decided that we needed a Code of Conduct written
into all legal agreements, to make sure our vendors, tanneries and major
suppliers “Make it better” for all workers, by offering employment that:
• Is voluntary and free of harassment and abuse,
• Prohibits child labor, and
• Meets standards for free association, labor hours, compensation,
health and safety, and environmental compliance.
We also monitor our business partners, agents, licensees and distributors
to make sure these standards are being upheld. Language is no barrier.
Our Code of Conduct has been translated into more than 20 languages
and is provided to factories in their local language.
the timberland company make it better ™
2005 csr report
4.0 Global Human Rights (continued)
Our Influence in the Supply Chain
Our stakeholders told us they want Timberland to be more transparent
with regard to our supply chain, and to describe the level of influence our
supply chain: Sphere of influence
supply chain: footwear
resource extractionsuppliersmanufacturing facilities
brand and others have within that channel. We’re using this Corporate
Social Responsibility report to do just that. It’s helpful to understand that
we have three types of relationships in the supply chain: the factory we
major
non-leather
own, direct influence and indirect influence. The graphics to the right
illustrate these relationships as they are found in our Footwear,
DR footwear
distribution
center, then on
tanneries
Apparel and Licensee/Distributor supply chains.
Our Own Factory
The only factory in our supply chain that we own and control is our
to consumer
all other footwear
small
non-leather
footwear factory in the Dominican Republic. The rest of the factories
are contract facilities that have a written agreement with us (or an
intermediary) to manufacture products based on Timberland specifications.
In these relationships, Timberland influences the environmental and
Supply chain: Apparel
resource extractionsuppliersmanufacturing facilities
social impacts of the factories through different methods, either directly
or indirectly.
Direct Influence
major
suppliers
distribution
Direct influence means that we perform periodic assessments and
center, then on
remediation on site to determine workplace safety and environmental
performance.
to consumer
apparel
small
suppliers
Indirect Influence
Indirect influence means that Timberland does not perform an assessment
on the factory, but can influence it through other means. This relationship
often occurs with suppliers to our manufacturing facilities. In this situation,
our contract stipulates that we have the ability to refuse product from any
Supply chain: licensee and distributors
resource extractionsuppliersmanufacturing facilities
organization that is supplied by a company that violates the global human
rights or environmental standards set by our Code of Conduct. Through this
agreement, we can influence the behavior of our suppliers.
distribution
all
suppliers
center, then on
licensee and
distributor factories
to consumer
Timberland owns this facility and has control of decision making
Direct influence through assessments and remediation
Indirect influence through on-site visits (no official assessments performed)
Indirect influence through dialogue and purchasing decisions
16
the timberland company make it better ™
2005 csr report
17
4.0 Global Human Rights (continued)
[4.2] How We Assess Our Suppliers
What do degrees in sociology, public relations, law, mechanical engineering and chemical engineering have in common?
Or what about the ability to speak English, French, Japanese, Turkish, Cantonese, Mandarin, Spanish and Thai?
They’re all part of the skills, talents and experience of the assessor team at Timberland. We believe it is important for
us to structure an assessment process that taps into this endless well of talent. This is one reason why we changed
our audit process in 2005 to engage our workers in a more meaningful way. But it wasn’t the only reason.
Why We Assess Instead of Audit
In 2005, we decided that we wanted to take a new approach to
monitoring our factories. While our process was making improvements
for our workers, we were finding that sometimes the improvements
wouldn’t last. Upon reflection, we realized that nothing necessarily
The shift to assessments has also introduced the concept of “Immediate
Actions.” When specific violations are found, such as forced labor,
harassment, or pregnancy testing, factories are immediately given the
“high priority” designation and an immediate response is required. Additional detail about Immediate Actions is included later in this section.
changes in a factory when an audit takes place—change occurs during
We’ve also formalized the corrective action plan for managers (known
the remediation process. Lasting change was happening when the
as the Management Action Plan [MAP]). Called “Action Planning,” the
factory took ownership of the situation and addressed the root cause of
process provides assessors with step-by-step instructions for working
the problems, not just the symptoms. The best way to create a lasting
with factory managers to achieve lasting improvement. (The chart below
impact was through collaboration. So we made that the focus of our
has further details.)
process. Consulting and partnering with our suppliers, rather than
policing them. Working together with factories to improve workplace
quality. Making sweeping, systemic changes. From the ground up.
Action Planning Process
ACTION PLANNING
That’s why we’ve moved from audits to assessments. Assessments are
of just asking for compliance. We believe our new assessment process is
a much more effective tool for creating positive, sustainable change.
ASSESSOR
about collaboration, worker involvement and providing remedies instead
Step 1
cause of whatever the issue might be. This means our assessors group
individual findings into larger root causes and focus their remediation
efforts on these larger systematic problems at the factory.
Step 2
Finding List
Step 3
Root Causes
1. Procedure/Policies?
Describe Current/Future State
2. Who is involved?
3. Communication/Trainings?
Step 5
FACTORY
process. We’ve revamped our factory evaluation to focus on the root
Step 8
Review and
Approve
Step 4
Changes to the Process
To do this, we had to take a step back and redesign our monitoring
Assessment
Step 6
Step 7
Cause & Effect Analysis
Why is the current state the way
it is? (Brainstorm)
4. Measurement?
1. Corrective
2. Communication
Identify Necessary Actions
3. Resistance
4. Measurement
Timeline/Summary
In addition, we have employed the “participatory approach” to the interviews
5. Celebration
we conduct with factory workers during the assessment process. Using
the participatory approach, our sessions are facilitated, free-flowing
conversations as opposed to formal question and answer interviews.
Whatever changes we make in these processes, though, you may be
Whether in groups or with individuals, facilitation tools/methods are
sure that the foundation of our global human rights work remains rooted
used to create a non-interview atmosphere and spark active dialogue/
in our Code of Conduct.
participation of the workers. Participatory methods involve sets of tools
used for different purposes: issue identification; ranking; causal analysis and
action planning. Such tools engage the workers by having them participate
in role playing or in exercises of mapping, sequencing, listing, comparing,
counting, scoring, sorting and linking matters of concern/interest.
the timberland company make it better ™
2005 csr report
18
4.0 Global Human Rights (continued)
How the Assessing Process Has Gone So Far
We began implementing our new assessment process late last year
and have had some successes…and some failures. One bright spot has
new MAP process on-site. Our assessors now spend two to five days
on-site at the factory (it used to be only one or two). This way, they have
a deeper understanding of the situation at each factory.
been our ability to gather more information directly from workers using
Probably the biggest challenge with the new process is that we can’t
the participatory approach. This method encourages engagement and
compare the new data with data from previous years. And in order to
gets workers involved. This level of comfort helps them to open up—and
measure our impact, we need to be able to identify trends. We are
allows our assessor to learn more about their situation. In fact, these
committed to new process, however, and are confident that we’ll be
discussions have often turned into informal conversations with the assessor
able to report a more concrete analysis in our next Corporate Social
after the session is over.
Responsibility report.
But as in any new process, there’s a learning curve. It took longer than
In the meantime, we continue to shift the focus from reactive to proactive.
we expected to train both our assessors and those who were being as-
From policing to collaboration. And from management to worker.
sessed. It took time to adjust. But we continue to train. To educate. To
Ultimately, placing the worker at the center is what Timberland’s Code
improve. And we’ve adjusted our expectations. We’ve allowed more time
of Conduct is all about.
to introduce the concept to factory management and work through the
[4.3] Assessment Results
Timberland is a multinational company. Last year, our products were made in 33 countries, by more than 120,000
workers — with over 40% of these workers in China and 27% in Southeast Asia (Cambodia, the Philippines, Thailand
and Vietnam). Plus, our supply chain includes approximately 227 factories in five of the seven continents. That’s a
lot of territory to cover, but it’s important that we cover it.
Yet, even given the enormity of the project, we managed to roll out our
Geographic Dispersion of Factory Workers
0.5%
5.4%
new assessment process around the globe in the second half of last
year—to 214 of these factories, or 94% of our active factories. What
3.3%
8.4%
Greater China
East Asia
1.0%
3.7%
40.6%
9.1%
27.1%
1.0%
about the other 13 factories? (Good question—we weren’t satisfied with
that coverage either). It is important for us to have a full understanding
Southeast Asia
why we did not hit our stated goal of 100%. For several of our sched-
Indian Sub-Continent
uled assessments, there was a massive flood that prohibited entry to the
North Africa and Middle East
region where the factory was located. In another situation, there was a
Sub-Saharan Africa
car wreck involving some of our external auditors. (Fortunately, none of
Europe
the assessors was seriously hurt.) For additional detail, please see the
US and Canada
“Missed Assessments in 2005” sidebar below. We are happy to report
Mexico, C. America, Caribbean
that by February 2006, all 13 of the remaining factories had received
South America
their rescheduled assessment.
Missed Assessments in 2005
CountryNumber of Factories
ReasonDate Receiving Assessment?
India
9
Series of assessments missed due to major flooding in the area
8 in January 2006,1 in Feb 2006
Pakistan
3
Series of assessments missed due to major flooding in the area
All in January 2006
USA
1
Assessors traveling to this factory were involved in a car accident January 2006
which caused them to postpone assessment
the timberland company make it better ™
2005 csr report
4.0 Global Human Rights (continued)
Taking Immediate Action
One of the cornerstones of our new assessment process is the identification of “Immediate Actions.” These violations
are the most serious, pose the most risk to the worker and generally cannot be tolerated. They are violations
of basic human rights. To be treated humanely. To be treated equally. And to be treated with respect and honesty.
The list of immediate actions includes:
Frequency of Immediate Actions
3%
2%
2% 1%
3%
4%
17%
49%
19%
Immediate ActionDescription
Working Hours
Total hours exceed 60 hours per week, 12 hours per day, or more than 6 days consecutively
Ethics
Falsification of documents, willful violation of law, unethical business or financial practices
Minimum Wage
Legal minimum wage not being paid
Harassment Verbal, physical, or psychological
Discrimination
Based on race, religion, gender, color, age, or other personal characteristics
Minimum Age
Under the country minimum age or 16, whichever is higher
Forced Labor
Prison or debt-bonded labor
Refuse Assessment
Factories refuse an assessment
Pregnancy Testing
Performed or results used in workplace for employment applications, promotions, etc.
Freedom of Association
Denied the right to freely associate and bargain collectively
19
the timberland company make it better ™
2005 csr report
20
4.0 Global Human Rights (continued)
If an assessor finds one of these violations, the factory receives an
These scores are based on eight factors. For example, the risk associated
automatic “High Priority” designation—alerting Timberland management
with the findings. The skills and capabilities of the suppliers’ management
of the severity of the violation(s). He or she then asks the factory for an
team. And their willingness to go above and beyond what’s expected of
immediate commitment to resolve the problem as quickly as possible. With
them. The results for 2005 are illustrated in the pie chart below. As you
that commitment, the supplier’s remediation activities and progress are
can see, over 50% of our factories fall into the “High Priority” category.
monitored closely by the assessor and the Timberland sourcing manager.
These results are far from acceptable, but they are to be expected as we
Through the remediation process, our assessors aim for sustainable
roll out our new collaborative process. As we put our Management Action
change to improve the lives of the workers. We will invest the necessary
Plans and remediation plans to work in 2006, we expect to see improve-
time, energy and resources to see that the factory’s remediation plan is
ments over last year and will report our findings in the next CSR report.
successful. However, when a factory fails to commit—fails to invest in a
sustainable solution—alternative sourcing is our only choice.
High Level Assessment Results
Assessors identified 176 violations requiring immediate action among
the 214 factories that received an assessment in 2005. In some cases,
25%
assessors found more than one Immediate Action per factory. Three
Partner
issues were consistently found in the assessment results—accounting
for 85% of the “High Risk” violations:
Acceptable
54%
High Priority
• Working Hours
21%
• Ethics
• Wages
In 2006, we’re dedicating extra resources to root out the underlying
We also plan to improve something else—consistency around the globe.
cause of these untenable—and all too frequent—violations. As a
Different regions pose different challenges for our assessors in the field.
start, we have included a deeper analysis on working hours, the most
We feel it’s important to look at absolute results, as well as regional ones.
frequently found violation, later in this section.
The graph below shows the results of our assessments by region. As
you’ll see, the Asian regions received the most consistently low scores,
How Our Assessments Were Scored
while North and South America and the Indian Sub-Continent received
Under the new assessment process, a factory receives a score that
higher scores. (When you look at the Sub-Saharan Africa results, please
places it in one of three categories:
keep in mind that we have only one factory in the region and it received
an acceptable rating.)
• Partner: No Immediate Actions found and infrastructure for continuous
and sustainable workplace improvements exists.
• Acceptable: No Immediate Actions found, but improvements are needed.
• High Priority: Immediate Action violation found in the factory.
Regional Assessment Scores
100%
3.57%
18.18%
32.14%
80%
22.73%
Partner
18.18%
18.18%
45.45
%
37.50%
40.74%
60%
29.17
100
41.67%
%
10.00%
40%
59.09%
63.64%
64.29%
62.50%
40.91%
66.67%
55.56%
40.00%
29.17%
0%
Greater ChinaEast AsiaSoutheast AsiaIndian North Africa &Sub-SaharanEurope
U.S. &Mexico,South
(86)
(11)
(28)Sub-Continent Middle EastAfrica
(27)CanadaC. America &America
(22)
(16)
(1)
(10)Caribbean
(24)
(9)
Region (number of factories)
Acceptable
High Priority
50.00%
3.70%
13.64%
20%
33.33%
%
the timberland company make it better ™
2005 csr report
21
4.0 Global Human Rights (continued)
[4.4] Analyzing the Results
In order to chart a path towards sustainable improvement in our supply chain, we must step back and take a look
at the assessment results from 2005. The better we understand the assessment results, the better we can implement
programs to improve working conditions. This section dives a little deeper into the data.
Assessing Our Assessors
There are several possible explanations for these results:
Of course, when you look at the data, it’s only fair to look at how it was
1. Many of Timberland’s internal assessors have been evaluating factories
collected, too. As we mentioned, we started our new assessment process
based on our Code of Conduct for many years. Because of their experience
mid-year and we needed outside help. We turned to Cal Safety Compliance
with Timberland’s Code of Conduct, they’re generally better equipped
Corporation (CSCC) to help us. CSCC is a global organization that provides
to find violations than CSCC assessors. In addition, the CSCC assessors
auditing services to all market sectors concerned with corporate social
only had limited exposure to the participatory approach required by the
responsibility and accurate information gathering. By the end of the
new assessment process.
year, they had performed 81 assessments, or about 38% of the 214
Solution: We’re including CSCC trainers in all of our internal assessor
assessments that were performed last year.
trainings. As they get up to speed on our approach and Code, we expect
Working with an organization like CSCC allows us to benchmark our
there will be less disparity in the scoring.
assessors against external auditors. Also, CSCC brings additional industry
insight to factory engagements. Finally, we used them for practical
2. Specific violations are more prevalent in some regions than in others.
and cost reasons—to help us perform assessments in places where
For example, we have found that ethics violations are more common in a
Timberland doesn’t have staff or local knowledge.
specific country than in most other countries—and this is a region visited
mainly by Timberland’s internal assessors. Situations like this can skew
Because we relied so heavily on CSCC, we wanted to see how much
the overall results.
difference there was between our internal and external assessments. As
the charts below show, external assessors seemed to be more likely to
Solution: We’ll continue to monitor our results to make sure the assessment
give a factory a partner score (that is, our highest score) than internal
process is being applied equally—among internal or external assessors
assessors. In addition, internal assessors found more instances (on a
alike. We believe that, when our Code of Conduct is followed consistently,
normalized basis) of all top three Immediate Actions. But as we know
we can focus our efforts on addressing the root causes of human rights
from some factory visits, appearances can sometimes be misleading.
abuses in the workplace.
Internal vs. External: Factory Scoring
PartnerAcceptable
High Risk
3. The assessment results represent a relatively brief period of time—
approximately six months. We will be more confident about conclusions
that come from larger samples when more time has been spent on training
and field application of new assessment techniques.
External 42.0%
13.6%
44.4%
Internal
15.0%
25.6%
59.4%
Solution: Timberland commits to report on this data in our 2006 CSR report.
While we have not yet pinpointed the exact reason for the differences between
internal and external assessor results, we continue to work to create an even
Internal vs. External: Number
of Immediate Actions Found 8
Internal
External
Hours
59
46
Ethics
27
10
Wages
19
18
8 We normalized the results from the two groups so that we could compare results.
playing field for our factories during the assessment process.
the timberland company make it better ™
2005 csr report
22
4.0 Global Human Rights (continued)
Looking for Patterns
actions. (Four different regions, with three different assessors, representing
Another way to analyze the results is to look for patterns where Immediate
Actions were found. Did they relate to what the factory was producing?
Or was it tied more to where the factory was located? Here are two charts
that look at these categories:
both internal and external work made the findings, so we think we can
safely come to this conclusion based on the data we received.) However,
specific types of Immediate Actions can be tied to geographic regions.
For more information, please see a deeper analysis of working hours
later in this section.
Geographic Considerations
Operational Considerations
We want to understand where, geographically, we need to focus our
attention. In the “Immediate Actions by Country” chart below, we looked
at how frequently violations requiring immediate action occurred in
countries with more than five factories. (Countries with fewer than five
factories aren’t represented on the chart because they could skew
Another way to get at the root cause of an issue is to see if there are
certain kinds of operations that are susceptible to workplace violations.
In the “Immediate Actions by Business Unit” chart below, you can see
that the findings are pretty consistent across business units and that
working hours are the most frequent violation, no matter what kind of
the overall results.) The idea isn’t to point fingers. We just want to
understand the root causes of the problems. We believe that if we can
business it is. Ethics and wages come in second or third on all counts.
understand the root causes, our assessors will be better equipped to
So we also have to eliminate process as a root cause for actionable
deal with issues on an individual factory level.
violations. But that doesn’t mean it’s any less important to Timberland.
In fact, being able to eliminate geography and operations as root causes
As you can see, on average, Vietnam, Turkey, Tunisia and Taiwan all
help us strategize what we do next. Like working to develop a better
Immediate
Actions
By Country
(Average
Perper
Factory)
average
more than
one Immediate
Action
violation
factory. So we
have to rule out geography as a determinate of frequency of immediate
understanding of working hour violations in our supply chain (see
section 4.7 for more information).
Immediate Actions By Country (Average Per Factory)
Immediate actions by country (AVERAGE PER FACTORY)
2.0
1.91
1.5
1.46
1.43
1.20
1.0
0.92
0.71
0.5
0.67
0.56
0.54
0.44
0.43
0.14
0
0
Immediate Actions By Business Units
VietnamTurkeyTunisiaTaiwanChinaMorroccoThailandBrazilIndia
Hours
Wages
immediate actions
(AVERAGE PER FACTORY)
Ethics by business unit
Harassment
USAPakistanArgentinaItaly
Discrimination
Forced Labor
Pregnancy Test
Child Labor
Refuse Assess
Free Association
.77
0.80.8
.67
0.70.7
Immediate Actions By Business Units
.57
0.60.6
.05
Forced
Labor
Hours
Discrimination
Wages
0.50.5
0.40.4
.35
Ethics
Child Labor
Refuse Assess
Harassment
.31
.29
.27
.27
0.30.3
.25
.21
.20
0.80.2
.18
0.2
.14
.14
.14
.11
.1
.09
.09
0.70.1
.07
0.1
.06
.06
.06
.05
.04 .04
.04
.04
.03
.02 .02 .02
.01
0.0
0.60.0 Asia HeadquartersApparelDistributor
FootwearLicenseeSupplierTannery
AHQ
APP
DIS
FTWR
LIC
SUP
TAN
0.5
0.4
Hours
Wages
Discrimination
ForcedTest
Labor
Pregnancy
Pregnancy Test
Ethics
Free Association
Harassment
Child Labor
.1
Refuse Assess
Free Association
the timberland company make it better ™
2005 csr report
23
4.0 Global Human Rights (continued)
[4.5] After Assessments—Partners in Remediation
In moving from compliance audits to collaborative assessments, the process moves more focus, energy, and resources to
what happens after the assessment is completed. Having spent more time at our factories during the assessment process
engaging with workers and management to better understand the root causes behind the issues, we feel committed
and personally invested to help the factory make sustainable improvements.
Through this partnered remediation process, we seek to improve the ability
In other words, it all boils down to the concept of collaboration. Partnership.
of workers and factory management to take a lead in improving workplace
Letting workers and factory managers lead the way. Becoming personally
conditions, and enhance the sustainability of improvements. How?
involved in finding the root causes behind problems. Then making lasting
• By empowering workers to protect their own rights and take an active
role in improving their working conditions.
• By creating grievance systems, self-monitoring systems and other
procedures to find and fix problems as they arise.
• By finding new ways to move beyond policing factories, and analyzing
the root causes for their individual problems instead.
• By training our business partners in the best practices for addressing
the root causes of issues industry-wide.
improvements. It’ll take time. But we’re committed to investing whatever
it takes to make lasting improvements in the workplace. After all, protecting
workers’ rights is everyone’s responsibility. We’re in this together.
A Day in the Life of a Timberland Assessor
Put yourself in Jorge Guzman’s shoes. You’re in a Guatemalan factory as an assessor for Timberland,
who is a primary partner in something called “Continuous Improvement in the Guatemalan Workplace”
(CIMGUAW). It’s a project that was launched in September 2003 with $500,000 backing from the federal
government. This Global Development Alliance, with Timberland and Gap Inc. as partners, leveraged the
expertise of Social Accountability International (SAI) and the International Textile, Garment, and Leather
Workers Federation (ITG). With Development Alternatives, Inc. (DAI) as the project manager, this initiative
provided training for textile, garment and leather workers and management to improve working conditions.
These trainings covered best practices, improved management systems, self-evaluation tools, and
factory-level action plans. As part of this effort, Timberland involved employees at its New Hampshire
headquarters and field staff, of which Jorge is a part.
More Help Needed
Jorge Guzman during a factory tour in the Dominican Republic.
Jorge started out by clearly communicating Timberland’s role in the
project. He shared his experience and knowledge about being socially
responsible and complying with global workplace standards. Then he
invited the factories to participate in the training programs and motivated
them to see these trainings as an opportunity. To create a culture that
upholds labor rights. Even improves them.
Whatever successes we’ve had in improving working conditions at our
factories, we owe to Jorge and others like him. It’s through our dedicated
field team that we can support programs like the “Continuous Improvement
in the Central American Workplace” (CIMCAW), an ongoing regional project
that helps garment workers and manufacturers in Central America confront
competition in the marketplace while maintaining decent working conditions.
Our goals for these and other partnerships are simple:
• To improve the lives of workers who make Timberland® products.
• To increase their job security.
• To enhance local communities’ well-being and economic growth.
• To guide our sourcing decisions.
• To continue learning about new best practices and improvements
in global labor standards.
“More engagement is
needed by all actors—
buyers, suppliers, and
the public sector—to
implement better business practices in more
efficient, sustainable,
and humane work
environments.”
—Kevin M. Burke,
President and CEO, American Apparel and Footwear Association
To learn how you can participate go to www.cimcaw.org
the timberland company make it better ™
2005 csr report
25
4.0 Global Human Rights (continued)
[4.6] Our Factories Around the World
We’ve tried to give you a picture of who we are. Now we’d like to tell you a little about the organizations we contract
with. As promised in last year’s report, we’re providing you their names, addresses, type of businesses and just what
type of work they do. We believe, along with others in our industry, that full factory disclosure and collaboration can
create common standards and shared solutions and help advance global human rights in all of our factories.
Updated from last year, this list of Timberland contract factories
Why are we telling you this? At Timberland, we understand how important
(active as of May 1, 2006) includes:
it is for us to be completely open and transparent, if we are to be
accountable to our stakeholders. But if we don’t hear from our stakeholders,
• Apparel Factories
how will we know how to improve?
• Footwear Factories
• Distributors
We’re eager to find out from you how this list is being used in the field.
• Tanneries
Are you using it to monitor factories in some way? Is there any critical
• Suppliers
information missing? Questions and comments alike are welcome. If you
Like last year, this list omits our Licensees due to current contractual
have suggestions, please reach out to us at csrinfo@timberland.com.
restrictions. We hope to include these locations in next year’s report. You
can find our list at www.timberland.com/factorylist.
timberland Factories Worldwide
countryfactoriesemployees
countryfactoriesemployees
countryfactoriesemployees
Argentina
7
171
Germany
1
10
Romania
2
720
Bangladesh
1
3521
Guatemala
1
225
South Korea
4
138
16
3854
Honduras
1
532
Sri Lanka
1
175
Bulgaria
2
73
22
11184
Swaziland
1
1200
Cambodia
1
1541
Italy
6
217
Canada
1
35
Japan
2
49
Brazil
China
India
Taiwan
Thailand
5
1030
15
7914
66
51182
Mexico
2
1050
Tunisia
7
2707
DR
4
8122
Morocco
7
1096
Turkey
11
5277
Egypt
2
833
Pakistan
10
2076
USA
10
600
El Salvadore
1
682
Philippines
1
820
Venezuela
France
2
291
Portugal
3
218
Vietnam
1
130
11
23979
the timberland company make it better ™
2005 csr report
26
4.0 Global Human Rights (continued)
[4.7] How We Tackle Global Issues
Timberland’s Code of Conduct assessment team is eight people strong. They’re charged with dealing with the whole
range of human rights issues throughout our global supply chain. That’s 227 factories in 33 countries. While they’re
positioned all around the world, we can’t claim to have the local knowledge we need to be effective in every situation.
We want to participate in making significant changes in the workplace. But even if we start with just a small number
of factories, we’ll be taking resources away from the foundation of our work, assessments and remediation. That’s
why we’ve developed strategic partnerships with local and global organizations to help us make things better in the
lives of our workers.
Finding Local Partners Worldwide
We have an idea of what’s needed, but believe we can achieve powerful
solutions by working with local partnerships. We need local partners,
who know their own local situation, to assess our workers’ needs, help us
design and implement strategies and let us know if we’re investing our
resources where they’re needed most. Partnerships also help make local
organizations self-sufficient, so projects can continue—and workers will
still benefit—after our funding stops.
We like to fund projects that show cooperation between the local
partner and factory management. As you can see on the next page, CARE
launched an initiative at the Pou Yen Factory in Vietnam in which the
factory and the local partner continued to work together—even after the
project was completed. It just shows that local groups often relate better
to the workers than an outsider can. And they have almost instant credibility with the workers, simply because they are local. Local partnerships
also help us commit our limited resources where they’ll do the most good.
We continue to search for the right type of partnership in any given workplace situation, as the “Strategic Initiatives” chart shows. Ultimately, it all
comes down to one thing. Making it better in the lives of the workers who
put our product on the shelf.
Local partnerships
also help us
commit our limited
resources
where they’ll do
the most good.
the timberland company make it better ™
2005 csr report
27
4.0 Global Human Rights (continued)
timberland strategic consulting
Name of Project
CountryNGO Year ProjectTBL Scope of Work
Workers
(Partner)
was Initiated ContributionAffected
Food Assistance Dominican
Program
Republic
PISANO
2005
1 Year
Physically Challenged Dominican
Patronato Cibao de
Employment Program
Republic
Rehabilitación, Inc
“Promoting a Healthy Vietnam
CARE
2005
2004
1 Year
2 Years
Workplace and Cohesive and the ability to pay for it with credit
Integrate physically challenged
the capacity of local stakeholders and enhance the
knowledge and practices of workers about safe working
environments.
China
SAI, ITGLWF, CWN,
ICO, Toys “R” Us,
Eileen Fisher
2004
1.5 Years
awareness of workplace conditions, and build capacity
locally in China.
Continious Improvement Central
SAI, DAI, USAID,
Improve working conditions and management systems
in the Central American America
ITGLWF, GAP
3 Years
growing global demands for social compliance and
increase their competitiveness in areas such as quallity
and productivity.
Life Skills Training
Improve the workers’ employability through increased and Verite
2003
1 Year
enhanced skills. Skills training included: computer literacy,
tailoring/sewing, beauty culture, and Cantonese language
(for migrant workers).
Integration of the China, Turkey,
Integrate the Timberland Code of Conduct into the supplier
Timberland Code of and India
company’s internal system; definition of roles and function;
Conduct into the commitment building among the different groups involved;
Verite
2002
2 Years
112,500
in order to increase garment factories’ ability to meet
Workplace (CIMCAW)
China
650
Promote worker participation and participatory
management systems, raise manager and worker
2003
2,500
Improve the capacity of the factories’ management
to sustain workers’ development programs, strengthen
Program for China
4
employees to Timberland work force.
Community” Social Accountability 900
Provide employees access to low cost food Factory’s Internal team building; and effective communication and interpersonal
Management System
skills training.
Verité Mobile China
Verite
2002
2 Years
province, China, aimed at promoting social compliance
awareness among workers, educate workers on general
health issues, develop leadership skills of factory
supervisors/managers and interpersonal relationship skills
of workers.
Vietnam
CARE
2001
1.5 Years
4,663
Implement the Verité Mobile Training program in Guangdong 10,000
Training program
“Enhancing The Quality 550
Improve the quality of life through a focus on improving Of Life For Pou Yuen management and workers’ skills, ensuring safer working
Factory Workers Assigned environments, and improving worker health status.
1,700
To Timberland® Products”
CEPZ Corp Pilot Project
Bangladesh
CARE, MAMATA
2001
4 Years
Enhance awareness of women’s legal rights, labor laws and 15,000
trafficking, improved nutritional intake practices, enhanced
awareness of common diseases and of referral services, and
access to flexible micro savings and credit facilities.
Continuing Education Dominican
Provide continuing education for Timberland workers by and Job Skills Training
Republic
Secretaria de
1999
7 Years
Estado de
85
using local teachers and professors.
Education
Total Workers Affected: 148,552
the timberland company make it better ™
2005 csr report
28
4.0 Global Human Rights (continued)
A Focus on Working Hours
Excessive overtime. Employees working a total of more than 60 hours
per week. Twelve hours per day. Or more than six days consecutively.
In 2005, of the 176 violations we found that required immediate action,
87 involved working-hour violations. That’s 49% of the total. When we
saw these results in our supply chain, we knew we needed to do some
further analysis.
What We Plan to Do about It
When we see results like these, we want to do something about it. Based
on our research, it was apparent that we should look at a footwear factory
in China to begin to understand the root causes of excessive overtime.
Then we can try to develop actions to eliminate the problem. Actions we
hope can be transferred to factories throughout our supply chain.
A three-month pilot program was launched in March 2006 to focus on a
Chinese footwear factory’s production and support functions. The project
How We Did the Research
When we wanted more information, we asked our eight assessors
was broken down into these three phases:
and external auditors these general questions about the working-hour
Phase 1: Analyzing a factory’s capacity and expanding our monitoring of
violations they found in our supply chain:
its working hours. The number of workers employed. Production output.
Delays in materials or production. How many times violations occur.
• What country is the factory located in?
During this phase of the project, we asked the factory for this kind of
• What’s the factory name?
input, so that we could gain a fuller understanding of the working-hour
• How many workers are at that factory?
violation. As the project continues, we will analyze the factory’s production
• What does it manufacture?
capacity over different construction types.
• What’s its overall assessment score?
Then, we drilled down a little deeper, with questions like these:
• How many workers are affected?
• How many hours are worked above 60 per week, on average?
• Is local law stricter than Timberland’s Code of Conduct?
• Are workers expected to work seven days in a row?
Phase 2: Analyzing the impact of capacity, while continuing to search
for other causes. Timberland® will work with the factory to evaluate how
capacity issues impact excessive overtime. At the same time, we’ll continue to push to understand what else might be causing working-hour
violations. Our goal is to define and prioritize everything that can cause
excessive overtime.
• How many days does the violation last?
Phase 3: Action planning. Timberland Code of Conduct specialists
• What department does it occur in?
will use what we learn from Phases 1 and 2 to work with the factory to
develop action plans to address these issues.
What We Found
Here are some of the statistics we compiled from the information
provided by our assessors:
• 37% of the violations occurred in China.
Once we have a better understanding of the situation within this particular
Chinese footwear factory, we’ll set targets for reducing working-hour
violations there. You’ll find the results and goals in our 2006 Corporate
Social Responsibility report.
• 77% of our footwear factories reported working hours violations.
• The average violation was for a 70-hour work week.
• The average number of workers affected was 593, with the median
around 220.
• 87% of working-hour violations were in the production area of the
factory.
• 27% of the violations lasted less than one month, while 38% were
between one and two months long.
A Special Focus on China
China houses approximately 30% of our factories and 40% of the
workers that make Timberland® products. Because of this, we thought we
should take a closer look at the issues that workers face in this region.
We asked our employees in China to tell us about the issues they face
on a day-to-day basis working in our Chinese factories. The following is
a compilation of some of the responses we heard.
Building a Transparent Relationship
Fluctuating demand, forecasting pitfalls and overall market forces
make it difficult enough for factories to prepare for business. Adding
well-intentioned socially responsible mandates can create impossible
situations for them. Especially if the choice is to do business based on
Timberland’s Code of Conduct—or not do business at all. The factory
wants our business. But if they can’t possibly manufacture the entire
order, on time, within the working-hour restrictions outlined in the
the timberland company make it better ™
2005 csr report
29
4.0 Global Human Rights (continued)
Code of Conduct…well, it becomes an issue. By building collaborative,
safety issues that were never even considered in their hometowns.
transparent relationships with these factories, we hope to better understand
We believe that providing education and opportunities for these migrant
the actual situation. It’s a lofty goal. And one we are confident we can
workers to make their lives better is an ongoing opportunity for us.
achieve over time.
Hearing Directly from Workers
Helping Workers who Work Far from Home
A vital part of any successful Corporate Social Responsibility program
The Pearl River Delta is a manufacturing mecca for China. Most of the
is input from the workers themselves. After all, the whole reason for our
work force (usually women, ages 18–24) come from faraway provinces.
Code of Conduct is to ensure a safe, fair and non-discriminatory working
If these workers are lucky, they’ll have the chance to travel home once a
environment them. In China, though, the term “freedom of association”
year, during the Chinese Lunar New Year Festival in January or February.
implies a pro-union bent, and they have laws about that. There are
You can only try to imagine the challenges these young women face.
avenues for workers to express their needs, concerns and issues. But
Working for the first time. Living away from home, probably in a much
working to improve workers’ rights while not violating China Law remains
more industrialized area than they’re used to. Confronting personal
a delicate balance for us.
[4.8] Working Together to Tackle Tough Issues
A spirit of collaboration. Sharing ideas. Speaking together with one voice. Some global issues are simply more important
than corporate competition. At Timberland, we know that we don’t have all the answers. That’s why we’re working with
like-minded companies within our industry, to work together to make positive changes in the issues that really matter.
Sharing and Collaborating through the
Fair Factory Clearinghouse
One of the ways we’re working to “Make it better” for workers every-
Why not share information?
Share lessons learned?
where is by monitoring what conditions are like in the workplace. For our
suppliers’ employees. For our own factory employees. In short, everyone
involved in the production process—from the buying of the materials to
By using the FFC’s sharing platform, Timberland will be afforded the
the actual manufacturing process.
opportunity not only to use a global data management system to track
its social compliance audits but to also:
The industry has been engaging in social compliance audits for over a
decade, yet improvements in workplace conditions across the globe have
been slow. In revisiting the approach to social compliance audits, one
of the things that Timberland identified as missing was coordination or
collaboration with brands sharing our suppliers. Why not share information?
• Improve the availability, comprehensiveness, and standardization of
factory social compliance audits.
• Access other brands’ social compliance audits of factories currently
shared and of potential new suppliers.
Share lessons learned?
• Understand what other companies are doing to improve workplace
To facilitate the process of collaborating with other brands, Timberland
• Identify opportunities to eliminate the duplication of audits.
joined the Fair Factory Clearinghouse, Inc. (FFC). The FFC, a not-
• Identify opportunities to advance and promote education and
conditions.
for-profit collaborative industry effort supported by a grant by the U.S.
knowledge sharing.
Department of State, is developing an information management system
that will provide a platform for companies around the world to share non-
By helping companies like Timberland effectively and efficiently share
competitive information about the social and environmental conditions of
information with other brands, the FFC will help Timberland make
their suppliers. Timberland intends to be active on this system by the end
informed and independent decisions about third-party vendors and
of 2006.
“Make it better” for factory workers around the world.
the timberland company make it better ™
2005 csr report
4.0 Global Human Rights (continued)
[4.9] Looking Forward
The bulk of this Corporate Social Responsibility report recaps our initiatives and results for 2005. We also think,
though, that it’s important to talk a little bit about what our plans are for the future. Read on to see what we’ve
identified as our major goals for Global Human Rights in 2006 and beyond.
Our Goals for 2006
1. Expand Our Assessment Collaborations: In our small way, we want to do all we can to create lasting change,
and we’ve learned that the best way to do that is through collaboration. Going forward, we’d like to collaborate
with selected brands in footwear and apparel factories during our factory assessments. Sharing knowledge.
Improving efficiency. And reducing audit fatigue in the factories. By conducting our assessments at the same
time and conducting a joint closing meeting, we could work together to effect positive change in the workplace
through education and guidance.
2. Improve Workplace Conditions: Our new collaborative assessment process entered its second year in 2006.
Last year, one-quarter of the factories we assessed achieved a Partner rating, the highest rank. Our hope is
that factories that routinely achieve a Partner-level score can eventually assess themselves. That will allow us
to focus our scarce resources on improving workplace quality, rather than on the assessment process. After all,
its not the assessment that will “Make it better” in the workplace—it’s the actions taken afterwards to remedy
whatever’s wrong.
3. Form Strategic Partner Relationships: Getting workers involved. Making them full partners in assessing,
maintaining, and improving the working conditions of the factories they work in. That’s the idea beyond a pilot
program aimed at making lasting improvements in human rights in the factories we work with. We’ve begun a
project like this in China with Verite. We want to expand the program into other factories in Asia. Then share the
results with other brands.
4. Focus Our Community Efforts: There are certain countries that are our strategic sources for the manufacture
of footwear and apparel. One of our goals for 2006 is to implement community-based projects with our partners
in these countries, to complement factory-based initiatives that address the needs of our workers.
30
Voices of Challenge: Levi Strauss & Co.
I am deeply honored and humbled by the invitation to be a contributor to Timberland’s
2005 Corporate Social Responsibility Report. I have long admired the risks Jeff Swartz
has taken in seeking to link commerce and justice as the CEO of Timberland. I was asked
to share my perspective on the issue of global human rights in the apparel and footwear
sector. I accepted the challenge knowing that some may question whether a corporate
perspective on human rights adds value.
Many apparel and footwear companies seem to reduce human rights
to a code of conduct to be applied to suppliers and audited or assessed
to ensure compliance. A few companies engage in human rights work
beyond the factory walls in efforts like Timberland’s to partner with
non-governmental organizations (NGOs) that focus on educating workers
and providing opportunities to increase their income through microbusiness and savings.
What continues to elude many players in our industry is that human
rights is more than a code of conduct or a set of violations in a factory.
in Puerto Rico demonstrates, codes and auditing do not guarantee jobs
We must begin to look at all of our supply chain practices through a
or the competitiveness of factories. There is great value in supporting
human rights lens and on a much broader scale to identify and prioritize
capacity-building in local communities, forging relationships between
issues, resources, potential partners, and areas where we can have the
NGOs and contractors and working with governments to help them
greatest impact. Commitment to a human rights approach encompasses
promoting civil, political, economic, social and cultural rights and
working at the factory, community and policy levels to prohibit all forms
of discrimination.
frame competitiveness in the context of their human rights records.
• Expanding environmental programs to include water, the looming
human rights issue of this decade. The focus on water should not only
include wastewater effluent standards but also water conservation efforts.
• Advocating and lobbying governments to link human rights protections
I challenge our industry to
think about human rights
as a lens, a tool that can
help identify where progress
can be made.
Applying a human rights lens to global sourcing, our industry
might consider:
and enforcement mechanisms with trade liberalization and to devote
resources toward building the capacity of governments to frame
competitiveness in this way.
The apparel and footwear sector is highly competitive and price sensitive.
The challenges that come with globalization have not been easy to
navigate—especially when it comes to the issue of human rights. Developing
practical solutions to address these challenges can be a daunting task
as we and others are discovering. However, the key to progress must be
a focus on partnership and innovation through the lens of human rights.
I challenge our industry to think about human rights as a lens, a tool
that can help identify where progress can be made, where strategic
partnerships can be developed, and where brands and retailers can use
their power and influence to improve working and living conditions in
apparel- and footwear-manufacturing communities.
• Focusing not just on workers, generally, but on understanding the
unique needs and issues facing women, migrants, immigrants and
ethnic or cultural minorities in factories.
• Comparing types of violations by country against their record on
human rights.
• Recognizing that systemic change cannot be accomplished by focusing
Theresa Fay-Bustillos
Vice President of Community Affairs
efforts solely within the four walls of the factory. For sustainable
Executive Director of the Levi Strauss Foundation
change to occur, the focus must include change at the community and
Levi Strauss & Co.
country level as well. As Timberland’s experience closing their factory
the timberland company make it better ™
2005 csr report
32
5.0 Environmental Stewardship
[5.1] Our Relationship to the Environment
No matter what all of us do—at home, at play, or at the office—we’re going to have an impact on the environment.
From climate change to natural resource consumption, some of today’s biggest ecological challenges have been linked
to our industry. As a company with a passion for the outdoors, we believe that doing our best to “Make it better” for
our planet is at the core of our business. Through our environmental stewardship program, we’re committed to doing
our part to address these challenges. We’re minimizing our environmental footprint—in the way we design our stores,
package and design our products, and select our resources. We’re also exploring the processes and behaviors that
prevent us from being environmentally effective from the start. In 2005, our efforts were concentrated in three major
focus areas: Energy, Chemical, and Natural Resource Consumption.
The Carden Welsh
Environmentalist Award
2005 Winner: Tim Davis
On February 9, 2006, Tim Davis became the fourth person to win Timberland’s annual Carden Welsh Environmental
Award. This award was created to honor an individual or team of employees who have improved Timberland’s
environmental footprint in a lasting way.
Known affectionately as the “crazy gringo” in our Dominican Republic footwear factory,
Tim is a native Mainer with a combination of Yankee ingenuity and passion for environmental
conservation. He personifies the “Make it better” culture of Timberland by constantly
challenging the way we make our product.
Here are a few of his major accomplishments for 2005 alone:
• Installed a 10kW wind tower in the Dominican Republic factory that generates approximately 30,000 kilowatt hours
of electricity per year for our footwear manufacturing. The tower was a demonstration project for renewable energy
in a place where power quality is poor and the price of electricity is high. Beyond clean power generation, it serves
as a point of inspiration and pride for the more than 1,600 workers who walk past it to work every day.
• Placed a solar heating panel on the roof of our factory to heat all of the water used in the hand-stitching line
for our boat shoes.
• Helped Timberland convert our footwear outsole assembly line from solvent-based cements to more
environmentally friendly water-based adhesives.
Tim Davis, the 2005 Carden Welsh
Environmentalist Award winner,
getting up close and personal with
his latest project.
So what does someone like Tim do for an encore in 2006? “We have been able to reduce some of our solid waste to landfills by recycling our waste foam.
What an awesome achievement it would be to eliminate landfill wastes while generating electricity and thereby reducing a portion of our dependency on
fossil fuels,” says Tim. “That is why I am now focusing on a gasification technique that would turn the ubiquitous leather scraps and other waste in our
factories into usable energy.”
For a more detailed look at our Dominican Republic factory, be on the lookout for the Facility Reporting Project due in fall of 2006. This document
will report on all the environmental and social indicators for our Dominican Republic Factory (like a mini-CSR report for this one facility).
the timberland company make it better ™
2005 csr report
33
5.0 Environmental Stewardship (continued)
[5.2] How We’re Coping with Climate Change
At Timberland, we like to head out and enjoy the outdoors. So if climate affects the way we recreate, it’s personal.
But…what if we are helping to create the problem? We believe that human activity is changing our climate. And
we’re contributing by utilizing energy that generates greenhouse gases. At our corporate offices. In our retail stores.
At our Caribbean manufacturing facilities and Distribution Centers. And whenever our employees travel.
Our Greenhouse Gas Inventory
How We Measure Greenhouse Gas Emissions
We have been collecting data for our greenhouse gas inventory since
Timberland uses The World Resources Institute (WRI) protocol for
2002. Over time, we have seen our ability to collect and process data
measuring greenhouse gas emissions. It’s a widely accepted and utilized
improve. This is a good thing. Our increased knowledge of this process
methodology for businesses like ours that voluntarily choose to report
has highlighted some mistakes we made in the past. Specifically, we came
emissions. WRI’s tools allow us to take electricity, gas, and oil bills as well
across what we believe to be minor inaccuracies in how we calculated our
as airline, car and public transit mileage, and calculate our contribution to
2002 baseline and that impacts how we set targets for the coming year.
climate change. Specifically the model tells us our direct emissions (the
So, instead of hastily setting a new baseline, we have decided to commit
to involving a third-party in verifying our greenhouse gas inventory in
2006 (including our baseline) and report on it in our next CSR report. In
the meantime, we will share with you the results for 2005.
As you see in the following graphs, we saw increases across the majority
of the segments in our greenhouse gas inventory. These increases can
emissions from fossil fuels burned for power or transportation) and our
indirect emissions (emissions from purchased electricity.) Our inventory
reports the emissions from the facilities and vehicles we own and operate,
as well as the emissions from air mileage.
The system isn’t perfect. We haven’t yet found a good way to estimate
the direct emissions from leased spaces where heat is included in our
lease agreements. Sometimes, we don’t have enough stores in a single
be attributed to the growth of our business, increased employee travel,
and the delay in bringing the Ontario solar array online. Unfortunately, as
our business and proficiency with data collection grows, we mask what
otherwise would be considered significant emissions reductions. Nobody
said this was going to be easy. In 2006, we will make absolute reductions
(reductions not tied to business growth) in our carbon emissions that
climate regime to make good assumptions. We’ve also been challenged
to find a way to calculate the emissions produced by the third-parties
that ship our product in the US and in Asia. That’s why we’ve partnered
with groups like Clean Air-Cool Planet, The Climate Group, and Businesses
for Social Responsibility’s Clean Cargo initiative to develop tools for
building our 2006 inventory.
realign us with our emissions goals.
direct ghg emissions
Metric tons of carbon
2004
2005
6,000
5,000
4,943.38
4,000
5,275.12
3,000
2,000
1,000
303.42
0
359.92
HeadquartersDistribution
269.03
91
U.S. 0
0
426.93
1,704.36
151.24
0
0
0
2,262.46
0
U.S. ManufacturingInternationalInternational International Offices
CentersRetailShowroomsRetailShowrooms
indirect ghg emissions
Metric tons of carbon
2004
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2005
7,327.56
4,989.2
1,865
5,442.78
4,548.4
2,483.45 2,707.56
2,158.46 2,270.81
1,290
90.61
58.08
11.64
16.24
395.74
495.52
HeadquartersDistribution
U.S. U.S. ManufacturingInternationalInternational International Offices
CentersRetailShowroomsRetailShowrooms
the timberland company make it better ™
2005 csr report
34
5.0 Environmental Stewardship (continued)
Metric tons of carbon
total ghg emissions
2004
2005
10,000
8,000
10,218
6,000
4,000
7,479
6,809
5,258
2,000
2,462
0
5,870
4,639
2,631
91
2,483
58
2,708
12
16
2,100
2,758
HeadquartersDistribution
U.S. U.S. ManufacturingInternationalInternational International Offices
CentersRetailShowroomsRetailShowrooms
Metric tons of carbon
Regional ghg emissions for 2005
Direct
Indirect
10,000
18,714
8,000
15,442.42
6,000
4,000
8,140
2,000
597
0
2,086
1,992
1,183.41
AsiaEurope
5,551
U.S. and CarribeanTotal
What We Plan to Do about Greenhouse Gas
We created our first greenhouse gas inventory back in 2002 to help
us gain an understanding of our contribution to climate change. We’ve
updated it annually to analyze our emission sources and trends, and
map out our path to carbon neutrality (the point where our business
does not impact climate). While the tool we have employed has not
been exact, it has turned out to be useful for benchmarking other facilities
and identifying areas where we can improve the efficiency of our business.
Our plan for reducing carbon emissions, summarized in the five steps
below, involves first minimizing our emissions of greenhouse gas as
much as possible. While reducing our pollution, we look to source
locally generated renewable energy—either off the grid or produced
on-site. Whatever emissions we can’t reduce through these efforts we’ll
offset with the purchase of renewable energy credits that promote the
development of clean energy sources.
Our process to reduce our carbon footprint:
Step 1: Verify our greenhouse gas inventory with a third-party vendor.
Step 2: Reduce energy demand through energy efficiency improvements.
Step 3: Purchase whatever clean, renewable energy we can from
electric utilities.
Step 4: Generate our own renewable energy on-site where we can’t
purchase clean energy from the electric grid.
Step 5: Purchase renewable energy credits to offset emissions and
help develop local renewable energy projects, if no options are
available to us.
We hope that the combination of these five actions will help us achieve
our ultimate goal of becoming carbon neutral by 2010.
The Bonus of Driving a Hybrid Vehicle
Suppose it’s 7:00 in the morning. You are leaving
your house on the way to work. There are no buses.
No trains. And no one nearby to carpool with. Chances
are, like millions of other workers across America,
you’ll hop in your car, by yourself, and hit the road. It’s
easy to believe that nothing can be done about that…
but we’ve tried to make environmentally responsible
living just a little bit easier for Timberland employees.
$3,000 easier. That’s the size of the bonus we began
offering in 2004 to qualified employees who purchased
a hybrid vehicle.* To make commuting a little more
eco-friendly. Then we sweetened the deal. You think
the early bird gets the worm? At Timberland, it doesn’t
matter how early you arrive. Only the fuel-efficient
commuters (hybrid drivers and carpoolers) get the
best parking spots.
*To date, 16 employees have taken us up on our offer.
Nine of them made their purchases in 2005.
the timberland company make it better ™
2005 csr report
35
5.0 Environmental Stewardship (continued)
A Focus on Renewable Energy
In the world of environmental stewardship there are few better ways to
demonstrate “doing well by doing good” than by investing in renewable
energy sources. No matter where you live these days there’s likely a
technology or natural resource that can provide power in a clean and
sustainable way. Renewable energy offers power reliability, cost savings,
fewer emissions, and local jobs. Listed below are a few initiatives that
we’ve launched to generate clean, renewable energy:
• Installing a wind turbine and a solar water heater at our Dominican
Republic factories.
• Using 100% renewable energy in our Enschede, Holland distribution
center.
• Installing solar panels at our New Hampshire headquarters.
• Installing solar panels in our Ontario, California, distribution center.
(For more on that, read on.)
• Building a solar panel system for a local middle school in Stratham, NH.
We’ve also begun voluntarily purchasing T-RECs: Tradable Renewable
Energy Credits. These renewable energy credits—or “green tags”— fund
One payback we never counted on was the creative payback. Building
such a visible symbol of our commitment to environmental stewardship
ignited our employee’s imagination for identifying additional ways we
could do better. Projects that have spun off from this include green building
work in our new retail spaces, carbon offset projects for our corporate
events, and the introduction of more environmentally friendly materials
in our product.
Update: The Ontario solar array did not produce power in 2005. It
just recently passed its final inspection on March 15, 2006 and is now
up and running. Just another reason to be happy on a sunny day.
Renewable Energy Breakdown
In 2005, renewable energy accounted for approximately 6% of our total
energy usage. With the delay of the Ontario solar array in 2005, this was
lower than we were hoping, but we did hit our stated goal for 2005. The
chart below provides the statistics.
Renewable Energy Breakdown
Total Timberland Energy Use
emissions from our facilities where we cannot purchase or generate our
Stratham, NH Solar Array
own clean power.
Enschede Wind and Hydro Power
Dominican Republic Wind Turbine*
If you’re sold on the benefits of renewable energy, like we are at Timberland,
Renewable Energy from the Grid
you would cringe if you flew into sunny Ontario, CA and witnessed a sea
Total Renewable Energy Used
the creation of renewable power sources. We’re using them to offset
Solar Panels: Commitment Made Visible
of warehouses with bare roofs. With an average 312 days of sunshine per
year it’s seems a shame that there is so much roof space without any
solar panels providing energy.
Two years ago this thought prompted us to build one of our most ambitious
renewable energy projects to date: a 400kW solar power system. Towards
the end of 2005, we began installing 1,932 solar panels at this facility. That
made it one of the ten largest corporate installations in California—and one
of the 60 largest installations anywhere in the world. Over the next 25 years,
the panels will produce 60% of the facility’s electricity needs—emission-free.
They’ll save 4,000 tons of greenhouse gases from being produced by
traditional electric power. And the energy they provide will be virtually
cost-free.9 For 30 to 40 years.
It pays to be socially responsible, in a lot of ways. For the energy savings.
For the protection against fluctuations in the cost of electricity. For the
protection against rolling blackouts that are caused by the over-constrained
electric infrastructure in Southern California. And for the financial incentive
that our electric utility, Southern California Edison, provides with a rebate
for businesses that generate clean power.
9 Energy is cost free after the initial investment to install the array.
Renewable Energy as Percent of Total Energy Used
* Modeled power rating of turbine.
37,089,047
3,000
1,518,292
30,000
692,173
2,243,465
6.0%
“We’re
working to
reduce
emissions
wherever
we can.”
the timberland company make it better ™
2005 csr report
37
5.0 Environmental Stewardship (continued)
Impact of Transportation
While this is good progress, we consider it just the beginning. In 2006,
Transportation efficiency is evaluated at every level of Timberland’s
business, from the way we ship our product to our employees’ commute.
In particular, we have an initiative at our European distribution center to
analyze and streamline the shipping process both on inbound (coming
we will be focusing on how to collect similar data at our U.S. and Asian
distribution facilities, so that we may begin incorporating third-party
shipping emissions and emission reduction initiatives, similar to the ones
listed above, into our greenhouse gas emissions inventory.
from the factory to the distribution center) and outbound (leaving the
Meanwhile, our group in Europe continues to search for new ways to
distribution center for retail outlets) shipments. In the past four years,
find efficiency in the process. There are many new initiatives that our
we have been able to eliminate 3.6M kilometers of travel, resulting in a
team is looking at for the near and long-term future. A continued focus
reduction of approximately 11,700 metric tons of carbon, through the
on improving utilization per carton shipped (fewer cartons shipped =
following efficiency measures:
fewer trucks). Adjusting shipping frequency from daily to weekly when
appropriate. Implementing more direct shipments to our customers.
1,500,000
2,500,000
• Increasing
the number of packages per barge
1,200,000
• Reducing packaging requirements
900,000
Use of railroad transportation for line hauls to Italy. The list goes on. We
2,000,000
1,500,000
will continue to evolve and search to find greater efficiency in our supply
1,000,000
chain and ultimately see improvements in both the environment and the
600,000
• Streamlining
the order management process
300,000
• Reducing the number of shipments per week
0
bottom line.
500,000
Making the Link:
Outbound Transportation
Total Carbon Reduction: Inbound and Outbound Efficiencies
Total Carbon Reduction: Inbound and Outbound Efficiencies
12,000
12,000
Metric tons of carbon
11,699
10,000
10,000
8,000
8,000
7,777
6,000
6,000
4,000
4,000
2,241
YearAvg Cost Kilometers of Fuel10Avoided
Cost Savings
$993,856.50
2005
4,710
2,000
2,000
2002
2003
2004
2005
Inbound Efficiency: Cumulative Miles Avoided
1,500,000
1,500,000
2,500,000
miles
1,200,000
1,200,000
1,218,590
900,000
900,000
2,000,000
1,500,000
863,032
600,000
600,000
300,000
300,000
112,772
1,000,000
397,032
00
500,000
2002
2003
2004
2005
outbound Efficiency: Cumulative Miles Avoided
2,500,000
2,500,000
2,465,678
miles
2,000,000
2,000,000
1,500,000
1,500,000
1,616,228
Total Carbon Reduction: Inbound
and Outbound Efficiencies
12,000
1,000,000
1,000,000
500,000
500,000
10,000
8,000
1,116,228
564,228
2002
2003
2004
10 This chart assumes an estimated cost of $1.17 per driven kilometer in Europe in 2005.
6,000
2005
$1.17 849,450
the timberland company make it better ™
2005 csr report
38
5.0 Environmental Stewardship (continued)
[5.3] Collaborating to Minimize Chemical Use
These days it seems the sky is the limit to what you can design and produce. Modern chemistry and manufacturing
eliminate the need to choose between fashion and function. And shorter lead time and production time means quicker
turnaround for riding fashion trends. With the rapid pace of innovation, however, how do you make sure that what’s
being innovated isn’t harmful?
Our industry, like just about every other industry out there, relies on chemicals to produce our product. We wish we
could get pink leather hides from pink cows, but in reality we need to treat and process all our raw materials to make
products that people want to buy. We’re constantly challenged to make sure the products we design, the materials we
source, and the processes our factories use to manufacture our product are efficient in their use of resources and do
not incorporate chemicals that could harm a factory worker or end up in a product that harms a customer.
Our work in this area has focused on designing product that minimizes chemical solvents and favors water-based adhesives,
substituting compounds in footwear components for more sustainable alternatives, and implementing a restricted
substance program with our factories and suppliers. We are at the very beginning of this process and recognize how
important collaboration is for driving progress. By aligning with other footwear and apparel companies, we’re starting
to create a strong demand for non-hazardous alternatives that protect workers and the environment.
Plans to Eliminate PVC
Polyvinyl chloride. PVC. A plastic used to manufacture everything from
beanbags to concrete. It’s also used to make apparel and boots. Large
quantities are widely used in the manufacture of Timberland footwear.
®
Unfortunately, it has also been linked to human and environmental health
concerns. Cancer-causing dioxins can be released during production
or when shoes are burned after they’re thrown away. Softeners called
phthalates don’t bond well with PVC and can cause health issues. The
European Union has even banned six phthalates from children’s goods.
In terms of environmental health, phthalates can damage soil and water
supplies, and burning PVC can contribute to air pollution.
Activist groups like Greenpeace are already boycotting PVC-based
products, and other footwear brands like adidas, Asics, Nike and Puma
have also taken a stand. We want to do the right thing for ourselves, for
our customers and for those who look to us as a model of commitment
to corporate sustainability.
Timberland has volunteered to do its best to eliminate PVC from product,
where alternatives are available, by 2008. There are two challenges
to this phaseout. At present, we do not have alternatives for PVC outsoles
and Timberland PRO® midsoles that meet our performance standards.
Our Research and Development team and suppliers have been working
on solutions. In the meantime, we are making progress and, with proper
manufacturing, we can help eliminate the environmental risks of PVC.
We’re working with our suppliers and manufacturers to do just that.
By aligning with other
footwear and apparel
companies, we’re starting
to create a strong
demand for non-hazardous
alternatives that
protect workers and
the environment.
the timberland company make it better ™
2005 csr report
39
5.0 Environmental Stewardship (continued)
Reconciling Commerce and Justice:
Water-Based Adhesives
Restricting Substances from Our Products
Timberland is proud to be using water-based adhesives (WBA)—a
manufacturing that could pose human health and environmental risks for
more environmentally and worker-friendly adhesive than solvent-
factory workers and for people who wear our product. We had suppliers
based adhesives (SBA)—in many of our shoes. This past year, while
sign statements pledging that banned substances were not present in
progressing towards our goal of eliminating solvents in our footwear by
the products we manufacture. Sometimes we even packed certificates
substituting solvent-based adhesives with water-based alternatives, we
guaranteeing it into our boot boxes. In 2000, we decided to take more
hit a stumbling block. We discovered that some more complicated shoe
decisive action with our suppliers and factories by introducing a restricted
constructions are not suitable for WBA, therefore further research and
substance list (RSL) that they were legally obligated to comply with. Our
development is needed to convert those to WBA.
progress since is summarized below.
We first conducted studies at our Dominican Republic manufacturing
2001: Our first RSL was developed as a short list of substances we had
facility and found WBA to still be cost neutral. Then we engaged our
banned from production since our effort began. There was no formal
laboratory partner, SATRA, to determine whether adhesive application
auditing of the effort on-site, however.
standards could be created and taught to factory workers to ensure
2003: We became involved in a project aimed at creating a more
that adhesive costs remained predictable. This testing will be completed
comprehensive RSL list. This became our unofficial guide for restricted
in 2006.
substances.
About a decade ago, we began our drive to ban substances from
We halted the expensive transition process where both SBA and WBA
were applied in production. We now rely on laboratory testing and
production trialing for making decisions about switching to WBA for new
constructions.
2005: Timberland joined AFIRM (Apparel, Footwear International RSL
Management), a cross-brand group geared toward sharing best practices
with regard to RSL. We also began drafting a comprehensive restricted
substance policy, testing protocol, as well as new restricted substance
lists for our apparel and footwear manufacturing.
Despite the real challenges to our assumptions about WBA, we were able
to produce 11.8 million pairs in 2005 using this environmentally friendly
adhesive. The commitment to drive WBA to 100% of Timberland®
footwear was not lost, but production realities did require a revisit on our
execution and was a primer for other material substitutions we might
make on our path to becoming a more sustainable enterprise.
Timberland is one of several brands that have been developing a restricted
substance program over the years. In general, we all have similar missions,
principles and approaches on this issue. Due to the different markets
in which we operate, our policies, lists, and requirements will always be
slightly different. In July of 2004, a group of the brands began discussing
how valuable it would be for our workers and our consumers to share
best practices and resources. AFIRM was formed with the goal of
contributing to product safety in these three ways:
water-based adhesives used in Timberland® footwear production11
1. Ensure that chemical product safety is understood as an integrated
whole, from workplace to consumer, throughout the world.
30
29.8
2. Help achieve a partnership in chemical product safety among retailers,
29.2
suppliers and manufacturers.
millions of pairs
25
3. Encourage our suppliers and manufacturers to oversee chemical
20
product safety within their own spheres.
15
In 2005, we met to share best practices and develop tools to strengthen
8.4
10
our ability to manage restricted substances. We created a lab-auditing
7
3.4
5
0
2004
Total Footwear Production
WBA-Stockfit
2005
WBA-Assembly
11 Assembly includes when WBAs are used in the production of the “upper” portion of the shoe. Stockfit includes
the production of the midsole to the outsole. Total Production is the total amount of footwear produced by
Timberland in 2005.
protocol that will allow brands to verify that the labs they use to test
product against restricted substances are qualified to accurately test for
1.4
the chemicals and concentrations of concern. In 2006, the group will
focus on sharing updates on chemical legislation and conducting a joint
training for our suppliers on restricted substance list management.
the timberland company make it better ™
2005 csr report
40
5.0 Environmental Stewardship (continued)
[5.4] Resource Consumption
Recycled content materials. Organic fibers. Footwear and apparel manufactured with less energy, less water and
fewer chemicals. From boot to box to store shelf, we’re focused on making our products from materials that minimize
our environmental footprint. In 2003, we began blending cotton fiber grown without harmful pesticides or herbicides
into our apparel line. Since then, about 50,000 T-shirts used for promotional events have been made from 100% organic
cotton. And we’ve introduced a line of 100% organic cotton products. But we didn’t stop there. We’re also using renewable
and recycled materials in our stores, from floors and countertops made from recycled pine boards to store fixtures made
with repurposed materials. Even our paints and floor finishes meet green building criteria for low volatile organic content.
It’s all part of our commitment to using more sustainable materials in manufacturing. Expanding our use of “green”
building techniques. Improving our recycling practices. And helping to make sure there will always be trees.
Recycled Materials
Clearly, organic farming provides a cleaner, healthier environment for
Thanks to a big push from our materials team and a few outstanding
footwear suppliers, we’ve been able to incorporate recycled materials
into our shoes. Of the new products developed at the end of 2005,
nearly 95% of them incorporated at least one material with recycled
content. Hard to tell from the looks of your new shoes that there are
recycled contents inside. Where’s it hiding? See chart below.
everyone. Yet, organic cotton fiber accounts for only one-tenth of one
percent of the overall supply. Demand is steadily growing, but supply
of organic cotton remains increasingly tight. Why? Because of lack of
market for the rotation crops. Because of the relatively difficult production
of cotton crop compared to other organic crops. And because low
conventional fiber prices adversely affect organic fiber prices and discourage
farmers entering into this market.
The Case for Organic Cotton
What We’re Doing to Plan Ahead.
What’s so great about organic cotton? It’s true that organic farming is
Our goal last year was to convert 5% of our cotton usage (or 540,000
more labor-intensive than conventional farming. But just look at some
pounds) to organic cotton. We didn’t make it. We actually used only
of the benefits:
around 227,000 pounds, or 2.1% of our total cotton supply. While we fell
short of our target, it still represented a 36% increase in overall organic
• Healthier soil, due to organic plantings, crop rotation and tilling,
cotton purchases12. While this is an improvement, it is not good enough.
which retain soil nutrients
• Decreased water use, since the soil retains more moisture
We needed a better strategy. A tight supply of organic cotton and high
• No chemical pollutants
costs for the raw material translated into eye-popping price tags for
• Protection of wildlife (especially birds, insects and healthy soil-organisms)
finished organic cotton apparel. Without a clear merchandising and
marketing plan to attract the right consumers and sell the product, we
Conventional cotton cultivation, on the other hand, takes up about 5% of
had very little interest from our buyers. On the supply side we needed
agricultural land—but consumes roughly 22.5% of the world’s insecticides
to solicit more farmers to convert their land into certified organic cotton
and 10% of its pesticides. To put that into perspective: with conventional
fields. That generally takes about three years. Enter Timberland’s Cotton
farming, it takes about 1/3 of a pound of chemicals to grow the cotton for
Club and the Organic Exchange.
a single T-shirt. Scary, isn’t it?
Footwear Components
Footwear ComponentTotal lbs. of material purchased
Recycled contentTotal lbs. of material saved from landfills
Lining materials
93,984
25%
23,496
Insoles: what your foot rests on
1,610,672
35% to 44%
573,696
Counters and box toes: the structural 2,190,570
21%
456,249
components of the shoe’s upper
12 167,000 lbs in 2004 to 227,000 lbs in 2005 represents a 36% increase in overall cotton purchases
the timberland company make it better ™
2005 csr report
41
5.0 Environmental Stewardship (continued)
The Cotton Club is an internal cross-functional team comprised of
While our creative, catalog, and purchasing teams have been proactive
merchandising, apparel design, environmental stewardship, marketing,
at doing better than 30% PCR with their procurement, we recognized
and continuous improvement employees who strategize on how to increase
the need to create a formal policy with some metrics for tracking our
our volumes of organic cotton. In 2005, we identified a quick bullet list
purchases, and targets for encouraging better practices. We created a
of tasks to get us back on target for our 5% organic cotton commitment:
forest product procurement working group comprised of all the Timberland
• Blend organic cotton into all of our organic apparel. This weans us
from conventional cotton without adversely affecting the price point of
our product.
• Establish “Earthkeepers” hang tags and point of purchase communication for organic cotton apparel to consumers about the benefits of
organic cotton.
• Develop educational materials with Organic Exchange to train our
retail store associates on the benefits of organic cotton.
• Analyze market trends for organic merchandise. Are our own retail
stores the only outlet where we should be selling 100% organic cotton
product or are there additional opportunities through wholesale to outlets?
individuals responsible for the procurement of forest products. The
group, with input from our suppliers and environmental partners, began
drafting a forest product procurement policy and identifying metrics. In
2006, we’ll be introducing the policy to our U.S. and international teams
and we’ll begin tracking our global consumption of forest products. Our
objectives are to continually increase the recycled content of our paper
purchases, give preference to Forest Stewardship Council (FSC) certified
wood products, and work to ensure that we do not source any products
from endangered or threatened forests. Given the complex chain of
custody associated with the various paper products that we use, we have
a long path ahead of us. Stakeholder engagement will be a key component
for driving achievable and sustainable progress in this area.
The Organic Exchange, a non-profit organization committed to expanding
organic agriculture, worked with us on the supply side of the equation.
We learned that many farmers looking for organic certification operate
small farms and cannot afford the certification fee. The Organic Exchange
is working with farmers to organize cooperatives that divide the cost of
certification. They’re also soliciting organic cotton purchase commitments
Making the Link: Environmental
Effect of Purchasing Paper with
Recycled Content
from brands, like Timberland, to provide incentives for farmers to convert
all their land to organic agriculture. With big brands like Wal-Mart coming
on board, we hope to see the supply grow in upcoming years.
Working to Save Our Forests
Total Paper Purchases*
102,123 lbs.
Total Post-Consumer Recycled Content
31,254 lbs.
30.60%
Average post-consumer recycled content
Greenhouse gas emission reduced (CO2)
32,941 lbs.
For us, some of our happiest moments are spent hiking in the forest.
Equivalent number of average US cars not 2.99
So we really hate to see our forests unnecessarily logged. That’s why we
driven per year
began requiring post-consumer recycled content in our paper several
Water saved
136,735 gallons
Trees saved
375 trees
Wood resources saved
93,761 BTUs
As part of our agreement with our office product supplier, this paper has
Total Energy Saved
265,659,000 BTUs
a minimum of 30% post-consumer recycled content. What does that
1,898 gallons
mean to the environment? See the sidebar for a breakdown of the
Equivalent number of Average US homes 6.83
heated per year
years ago, and it’s why we’ve always favored the use of reclaimed wood
for our building and store fixtures.
In 2005, we purchased over 100,000 lbs of paper for our corporate office.
environmental savings. In addition, our shoeboxes were made from 98%
post consumer recycled material, which saved over 200,000 trees from
being forested!
Energy Equivalent to Oil Saved
Energy Equivalent to electricity saved
75,642 kWh
Equivalent number of average US homes 6.67
powered per year
* This represents paper purchases at our corporate headquarters.
the timberland company make it better ™
2005 csr report
42
5.0 Environmental Stewardship (continued)
Sourcing Leather
Tannery Environmental Forum
Performance. Ruggedness. Heritage. These are the reasons why
leather is crucial to the business of Timberland. When we talk about
our environmental footprint, nothing is more important than this
quintessential ingredient of our boots and shoes. To get the uniform
appearance our customers want, the hide undergoes several processing
steps that are chemical-, energy- and water-intensive. A life-cycle
analysis performed on Timberland’s classic yellow boot found that leather
accounts for 8% of the energy, 78% of the Greenhouse gas emissions,
70% of the water, and 77% of the waste associated with the product
over its life. Reducing our environmental impact means working closely
with our tanneries on their environmental management systems.
The Tanning Process in a Nutshell
Leather is a waste product of the meat-packing industry. There are three
main technologies used to turn a raw hide into the finished leather that
makes it into your shoes: Chrome-tanned leather represents the majority
of leather we purchase because is the only leather capable of making
lasted (or heat-shaped) shoes as well as waterproof shoes.
As you can see in the chart below, a look at the lifecycle analysis for these
different tannages shows that there are pros and cons to each process and
no clear winner. Currently the best way to reduce the environmental impact
associated with leather tanning is to purchase leather from well-managed
tanneries.
A developing industry trend in supplier auditing is to create and implement
cross-brand audits. Timberland is participating in a multi-brand group
that is expanding upon the scope of individual brand audits to create
a more comprehensive environmental audit for tanneries. The group’s
objective is to make the multi-brand auditing protocol the common
environmental assessment process for brands and tanners. The new audit
is being tested in tanneries and will officially be launched in late spring
of 2006. Cross-brand groups are being developed to apply the same
model to apparel factories. Eventually, Timberland could move all of its
environmental audits in this direction.
Tannery Innovations We Support
In addition to assessing our tanneries, we’re also doing our best to look
ahead at new technologies and processes that can help us use leather
that’s good for the planet, too:
• Vegetable-Based Tanned Leather: Featured in a Timberland line
called Earthkeepers™, this material has potential if water baths can
be recycled and energy is derived from cleaner sources.
• Wet-white: Also featured in the Earthkeepers™ line, this leather has
benefits if it’s produced in a tannery with a certified, well-developed
chemical management program, as the chemicals are easier to treat
and sort out in waste water.
• Recycled content projects: One example is leather board, which is
ground up factory waste leather scrap that is bonded with adhesives
What We’re Doing about Leather Tanning
Timberland performs annual on-site assessment of all of our tanneries,
to evaluate how well their environmental practices conform to our
standards. We explore chemical, waste, water, and energy management,
the presence of environmental hazards such as asbestos, PCBs and
restricted substances; we require compliance with local permits; and we
and molded into shape to make welts and midsoles.
• Gasification of leather waste: This technology, currently being explored
in our Dominican Republic factory and with some of our tannery
partners, has the potential to convert waste leather into energy. This
process also separates the chrome from leather, allowing the chrome
to be recycled.
score tanners on how far above and beyond the requirements they go to
reduce their environmental footprint when it comes to energy use, solid
waste and water recycling.
Tanning MethodDefinitionPros
Cons
Vegetable-based
Uses more water and energy
Uses vegetable extracts to dye leather in a series of concentrated dye-baths
Uses more environmentally friendly chemicals
Chrome
Uses chromium (inert Chrome 3) to seal the pores of The most energy- and the leather and allow bonding of the chemical dyes
water-efficient method
Produces product, and sometimes
waste water, that can convert to a
carcinogen if incinerated at end of life
Aldehyde, or wet-white
Uses the aldehyde family of chemicals to tan leather Produces heavy-metal-free, instead of chrome
biodegradable leather
Relies on chemicals that must be
carefully managed to ensure worker
safety
“We think that open
dialogue leads to
improvements, from
products to processes to
market share. Our latest
initiative for increasing
our transparency is
labeling our product in
a manner more familiar
to you with food than
with footwear.”
the timberland company make it better ™
2005 csr report
44
5.0 Environmental Stewardship (continued)
[5.5] Identifying the Ingredients for Social Responsibility
At Timberland, we think it’s important for you to know what you’re buying. It’s the only way you can make an informed
choice. Besides, we think we have a great product, so we’re happy for you to know all about it. We have nothing
to hide, which is not to imply we don’t have our problems. We do believe in being honest in our annual reports, in
this Corporate Social Responsibility Report, and even in our packaging. Open dialogue leads to improvements, from
products to processes to market share. Our latest initiative for increasing our transparency is labeling our product in
a manner more familiar to you with food than with footwear. Read on to see what we mean.
Introducing “Nutritional Labels” on Footwear
We think Miōn set a pretty darn good example. Beginning this year, retail
consumers will see something they’ve never seen before: “nutritional
labels” on footwear boxes. This new initiative—the first in our industry—is
designed to give you an informative picture of that product. Including
where it was manufactured and how our business impacts the environment
and communities we live in.
Our new labels are just a part of a whole new packaging initiative for
Timberland. Here are some other highlights:
• Footwear boxes made of 100% recycled fiber
• Labels printed with soy-based inks
• Communication about our company’s social and environmental
values,
• Dual purpose box liners. For example, each Outdoor Performance
shoe comes in reusable, biodegradable bag that describes the Leave
no Trace principal for outdoor recreation. You can take on the trail
with you to carry out your garbage. Children’s footwear boxes include
tissue wrap with a key for tracking animal footprints. Miōn™ sandals
come in a dunk bag for carrying supplies for your water sports.
Our Footprint Notre Empreinte
Environmental Impact Impact sur l’environnement
Energy to Produce: (per pair)*
Énergie utilisée (par paire)*
3.1 kWh
3.1 kWh
Renewable energy (Timberland-owned facilities):
L’énergie renouvelable (sites appartenant à Timberland) :
5%
5%
Community Impact Impact sur la communauté
About the EcoFacts Label on Miōn Footwear
Hours served in our communities:
Nombre total d’heures données :
Our distinctive new brand of Miōn™ footwear is all about people who love
% of factories assessed against code of conduct:*
% d’usines évaluées pour leur conformité au code de conduite :*
™
to play in water. It’s also about setting an example as a steward of our
planet’s limited resources. When you pick up a box, you’ll see exactly
how Miōn™ footwear is designed with the environment in mind. By its
EcoFacts label, a first for Timberland. With one glance you see that Miōn
offsets 100% of the energy used to manufacture the sandals with Green-E
certified renewable energy. That its distribution center is 60% powered
by the sun. That Miōn™ sandals are manufactured in a way that produces
very little waste and uses very little energy (less than 1/3 the amount of
electricity that it typically takes to manufacture a pair of shoes).
119,776
119,776
Child labor:*
Main-d’oeuvre enfantine :*
Manufactured Fabriqué à
Young One, Bangladesh Young One, Bangladesh
*metrics based on global footwear production for 2005
*informations fondées sur production totale de chaussures en 2005
FOR MORE INFORMaTION vIsIT WWW.TIMBERLaNd.COM/CsRREPORT
POuR PLus d’INFORMaTIONs : WWW.TIMBERLaNd.COM/CsRREPORT
100%
100%
0%
0%
the timberland company make it better ™
2005 csr report
5.0 Environmental Stewardship (continued)
[5.6] How We Measure Environmental Performance in Our Supply Chain
At Timberland we don’t just say we care about the environment, we’re keeping score on how we’re treating it. At
footwear factories. Tanneries. Apparel factories. We’re constantly developing systems that help us track and manage
high-priority environmental issues.
Keeping Score of Our Environmental Impact
About a decade ago, we decided that we needed a Code of Conduct
written into all legal agreements, to make sure our vendors, tanneries
and major suppliers “Make it better” for all workers, by meeting certain
standards in the workplace. We’ve since expanded our assessment
process to include environmental performance.
What happens is this. A Timberland Code of Conduct team trained in
our environmental standards interviews apparel and footwear factories,
tanneries, and large material suppliers. The idea is to make sure
environmental management are encouraged. As we’ve done with
tanneries, we search for environmental hazards such as asbestos
and PCBs, look at chemical, water, waste and energy management
systems, and score factories based on how far above and beyond
compliance they go with their environmental measures.
We’re a long way away from the old days of auditing—which is akin to
policing our factory base. Today we take a collaborative approach with
our suppliers. Our assessors act as consultants, helping our factories
find innovative and economical ways to make things better.
human and environmental health are protected and best practices in
[5.7] Looking Forward
OUR GOALS FOR 2006
1. Climate Change: Verify greenhouse gas emissions inventory and progress towards bold goal of becoming carbon neutral by 2010. Climate
change is one of the most pressing environmental issues of our time, but it’s an issue we can tackle with continued reductions in our energy
demand, efficiencies in shipping, investments in renewable energy and carbon offsets, and through service, such as tree planting, which
sequesters carbon from the atmosphere.
2. E
nvironmental Assessments: Expand the scope of environmental assessments and develop incentives for factories and suppliers to reduce
their footprint. Key to this effort will be developing our cross-brand initiatives and training.
3. Product: Improve the environmental performance of our products. Through our water-based adhesive initiative and restricted substance
program we will reduce solvent use in our footwear and ensure that our product is kept free and clear of dangerous chemicals. We will also
continue the phaseout of PVC. Organic cotton and other sustainable fibers such as bamboo and hemp will grow in our apparel line. We are
excited to pilot a material rating system that will score our materials based on their environmental impact over their life cycle. The goal is to
get this tool into the hands of our designers so that they can make informed material choices from the start.
4. S
ystems: Develop systems for tracking and improving our procurement and waste management practices. In 2005 we created internal
working groups to establish baselines and identify targets to achieve annual reductions in natural resource consumption. Some of these goals
were submitted as part of our annual U.S. EPA Waste Wise report. We look forward to making progress against our goals and engaging more
external stakeholders in our working groups and goal setting during 2006.
45
Voices of Challenge: Patagonia, inc.
I am a total pessimist about the fate of the natural world. In my lifetime I have seen nothing
but a constant deterioration of all the processes that are essential to sustaining life on
Planet Earth. I agree with E.O. Wilson who described the time that we live in as “nature’s
last stand.” We are the last generation that can experience true wilderness.
I am a pessimist because I see no will in society to do enough about impending doom.
But I am a happy person, because I have discovered that the cure for depression is action.
Patagonia exists as a company to inspire and implement solutions to the environmental
crisis. What follows is a summary of our environmental philosophy.
1. Lead an examined life. Most of the damage we cause to the planet
is a result of our own ignorance. And it’s hard to find real answers.
Asking one or two questions might just lead to a false sense of
security. The first step on the path is to truly understand the issues
at stake, as well as your own culpability.
2. Clean up our own act. In 1994, after a detailed environmental
audit, we made a commitment to use only organic cotton. It was a
decision that increased the cost of our fabric by three or four times
and required us to reduce our entire cotton line from 91 to 66 styles.
But in the long run, not only was this the right thing to do for the
environment, it was the right thing to do for the bottom line. Every
time we’ve elected to do the right thing, even when it costs twice as
much, it’s turned out to be more profitable.
3. Do our penance. No matter how hard we try, everything we do
causes some waste or pollution. So the next step is to pay for our sins.
Patagonia has given more than $25 million to environmental causes
over the years, but the most important thing that we have ever done
4. Support civil democracy. Activists are the most powerful agents
of change in our society. This was true when John Muir helped inspire
Teddy Roosevelt to create Yosemite National Park. It was true when
Rachel Carson helped launch the modern-day environmental movement.
And it still holds true today.
5. Influence other companies. One of the main reasons that we
continue as a company is to demonstrate to others that it’s possible to
run a successful business under the constraints of our environmental
philosophy. It’s promising to see companies like Nike and Timberland
using organic cotton. But it will take much more collaboration to
reverse the course that we’re on.
as a business was to help start an organization called One Percent
If reading these words inspires one action, let it be supporting One
For The Planet. One Percent is a network of companies that give at
Percent For The Planet. One Percent is a movement that every one of
least one percent of their sales to environmental causes. As of May,
us can join. As a consumer, check the list of members before you make
2006 there were more than 300 corporate members of 1% across 14
a purchase from a non-member and encourage non-member companies
countries and in just about every industry imaginable.
to join. If you work for a business, consider becoming a part of the
network. Together, we can inspire a revolution.
...it will take much more
collaboration to reverse
the course that we’re on.
Yvon Chouinard
Founder and Owner
Patagonia, Inc.
the timberland company make it better ™
2005 csr report
47
6.0 Community Involvement
[6.1] Working Together for a Strong Community
Making communities strong. Healthy. Environmentally sustainable. We want to engage our stakeholders in this vision
of community. At Timberland, we are committed to the connection of commerce and justice and its ability to improve
the quality of life for employees and the communities in which they live. We are passionate about driving civic
engagement through global service initiatives and strategic investments with the end goal, always, to “Make it better.”
Making It Better in 2005
In order to help our employees make a difference in the world, we
focused on a number of key strategies in 2005:
• Share stories of how employees have affected social justice by living
out our values.
• Engage our stakeholders in our Path of Service™ program (more on
that below.)
• Invest resources where we think they’ll have the most impact, worldwide.
• Communicate our corporate values and encourage employees to
embrace them.
• Lead the development of the Global Stewards Program13.
We believe that communicating functions like these is essential to
achieving our own goals for community service—for our own brand,
and for peer organizations, too.
[6.2] Our Approach to Community Service
Employees. Customers and consumers. Business partners. Other socially responsible organizations. These are four
key stakeholders. And we want to do our part to keep them active in social service throughout the year. Attending
meetings, conferences and other events. Keeping them informed, inspired and engaged. And building civic leadership.
One way we want our approximately 5,500 employees to impact their communities is through a benefit we call the Path
of Service™ program. This program enables full-time employees to contribute up to 40 paid volunteer hours per year.
It’s more than charitable giving. It’s a way of supporting an ethic of citizen service to the community. Making it stronger,
healthier and safer. We also encourage activities to protect the natural environment, to promote sustaining it for future
generations to enjoy.
The Case for “Themed” Service Events
At Timberland, we’re doing our best to become the company you think of
for community service. We believe that in order to accomplish this goal,
we need to be innovative. Larger companies are reporting the number of
hours employees devote to corporate-sponsored service in the hundreds
of thousands. We couldn’t be happier that other organizations have
embraced the idea of service as vital to the organization’s relationship
with its community. But as a medium-sized company, we will never be
able to report as many hours as our larger counterparts. While service
sponsored by an organization is vital to a local community, we realize the
need to be pragmatic about our approach. When you come right down
It used to be that our employees would serve any way they wished, for
any cause they wished. We applaud that effort, of course. And we’ve
tried to boost its effect by developing specific objectives best suited to
the partner organization. By being able to report back on how many
play spaces were built or how many trees were planted, for example,
we’re better able to measure the impact of our employees’ efforts. And
that gets to the crux of the matter: activity versus impact. We want to
push our efforts and analysis past the activities and really drill down on
the impact of our service events. Still wonder what we mean by this? A
perfect example is the “Community Revitalization” theme for our annual
Serv-a-palooza event.
to it, what really matters to a community isn’t how many hours were
spent in service—it’s how much actually got done. That’s what led us to
develop “service themes” for our community events.
13 The Global Stewards Program extends the reach and impact of our CSR team through a network of 24 Stewards, located around the world, who will ensure that our CSR initiatives play out with consistency and impact worldwide.
This program was rolled out in 2006.
the timberland company make it better ™
2005 csr report
48
6.0 Community Involvement (continued)
2005 Serv-a-palooza Service Theme: Community Revitalization
Serv-a-palooza is Timberland’s premier showcase of civic engagement. In 2005, it marked its 8th year with a focus on “Community Revitalization.”
The chart below highlights the three focus areas for Community Revitalization and the types of service that align under each theme.
Environmental Sustainability: • Expand/beautify public green spaces
Revitalize the natural environments • Protect conservation land
where we live and work
• Extend reach of organic/local farming
• Protect local habitats
Hunger & Housing: • Expand, clean or paint facilities
Improve the physical capacity of organizations • Sort, organize food
addressing hunger and housing
• Build new homes
• Refurbish old homes
• Extend reach of agencies by building new
systems to better meet needs of clientele
Play Spaces, Learning Spaces for Kids: • Expand and beautify schools and school yards
Build and beautify places where children learn and play
• Refurbish public parks and ball fields
• Expand, clean, paint or organize libraries, after-school
program facilities, or other places where children congregate
In 2006, Timberland will repeat this theme and will measure year over year results of our service in the community. Just another way we
can drill down to understand the impact of our service activities. Look for an in-depth discussion of these results in our 2006 CSR report.
Timberland Employee Service Hours
The Results for 2005
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
In 2005, Timberland employees served more than 65,000 hours in
the community. The number of volunteer hours served by Timberland
employees increased by 18% over last year, and engagement with
external partners in service increased by approximately 45%.
65,139
55,008
46,219
38,700
30,600
2005
Employee Engagement
2001
2002
2003
2004
2005
External Engagement
Region
End of Year TotalsYr/Yr Increase
Employee Hours
HURNon-TBLYR/YR Increase
(Hours Utilization Rate)
Volunteer HoursNon-TBL hours
North America
35,699
24%
50%
39,605
28%
EMEA/CASA
12,516
16%
36%
11,136
156%
Asia
5,408
18%
18%
4,585
-1%
Caribbean
11,516
4%
16%
3,408
481%
Total Hours
65,139
18%
31%
58,734
45%
the timberland company make it better ™
2005 csr report
49
6.0 Community Involvement (continued)
Hours Utilization Rate
2005 a little tricky. Up until now, we have done our best to approximate
Every year, we make 40 hours available to Timberland employees for
this number. To solve this problem, we’re currently working with our IT
community service through our Path of Service program. Worldwide,
department to come up a system that will capture this data more accurately.
™
our Hours Utilization Rate (HUR) increased from 28.8% in 2004 to
31.3% in 2005. While we were delighted to see a year-over-year increase,
Challenges and Opportunities
we realize there is a lot of room for improvement. In other words, less
Based on our results, we’ve set a number of goals for ourselves in the
than one-third of the time available was used to “Make it better” in the
form of challenges to meet our ultimate goal of a 20% increase in hours
world. That’s a lot of hours left unused.
(to approximately 78,000 hours) in 2006:
As a company, we pride ourselves on the ethic of service. So, we know
• The challenge: Raise the percentage of employees engaged
we have work to do. Our first step is to try to understand better what
in Serv-a-palooza this year (up from the 39% of North America
motivates employees to serve in the first place. To accomplish that,
employees involved in 2005).
we’re looking first to see where volunteering occurs within Timberland’s
The opportunity: Find ways to communicate our strategy better
operations in North America. We hope that what we learn will help us
and encourage involvement.
to focus our service recruitment efforts in the future. We plan to include
our results in our 2006 Corporate Social Responsibility report.
• The challenge: Help our regions in Asia and Europe become less
dependent on Serv-a-palooza and Earth Day to reach the regional
Benefit Utilization Rate
The other metric we use to gauge our service is the Benefit Utilization
Rate (BUR). This metric tracks the number of Timberland employees
engaged in service, rather than the number of hours served. More specifically, it counts how many employees gave at least one hour of service
in a given year. In 2005, the answer was 68% of our global workforce.
That made us feel better. But we have come to realize that our method
for determining the indicator is a little rough. After all, every year, some
people leave the company, and others join us. Not only that, but people
change jobs within the company, and many of our employees are temporary
or part-time. All these variations make determining a headcount for
goal of increasing service hours by 20%.
The opportunity: Find common interests to link departments or
subsidiary offices, using an “adopt-an-agency” model.
• The challenge: Find ways to reduce the budget restraints that are
inhibiting employees from becoming more socially involved in the
Dominican Republic.
The opportunity: If production is slow, engage employees in service
activities, rather than sending them home.
Spotlight on Earth Day 2005
On April 22, 1970, the first Earth Day was held to address concerns about the growing
environmental crisis. Thousands of schools and communities nationwide participated in this
grassroots event. Today, it is an annual international event, dedicated to seeking solutions to
pollution and poverty, promoting peace and appreciating the wonder of life and the potential
of the human spirit.
Earth Day is an important date on the
Timberland service calendar. All employees
are encouraged to join in its mission, with
these results last year:
• Employee Leadership: 253 employees around the world (that’s
10% of our participating 2,521 employees) led projects on Earth Day,
either directly or indirectly.
• Growth Rates: All regions significantly increased the number of service
hours volunteered over the previous year’s total—with Asia leading the
way at 100% growth!
• Newcomers to the Effort: Our Global Supply Chain increased its
involvement in 2005, with the Danville, Ontario and Dominican
Republic teams joining Puerto Rico for a combined total of 2,742
service hours. Plus, 5 new stores in Europe observed Earth Day,
including first-time partners from Sweden and Switzerland.
• Milestones: Not only did Team Timberland surpass the 30,000-hour
mark for the first time, but the 6,202 volunteers who served for Earth
Day made this our single largest service event to date.
2005 earth day historical growth chart
YearTotal Volunteers
% TBL Employee/Total Hours ServedAnnual % Growth***
% TBL Consumer
1998
1,379
29% / 71%
6,197
—
1999
919
37% / 63%
4,433
(28%)
2000*
1,058
38% / 62%
5,085
15%
2001
1,112
41% / 59%
5,772
14%
2002
980
38% / 62%
7,600
32%
2003**
3,300
30% / 70%
15,824
108%
2004
4,712
30% / 70%
23,304
47%
2005
5,809
40% / 60%
34,012
46%
* First year Asia involved
** First year US, Asia and Europe all involved
*** Growth measured in hours, not volunteers.
Spotlight on Serv-a-Palooza 2005
Serv-a-palooza is Timberland’s premier showcase of employee leadership
and civic entrepreneurship. In 27 countries, hundreds of team members
dedicate their time, passion and skills to “Make it better” for their local
communities—and the world. Let’s take a look at how successful this
initiative was in 2005:
REGIONAL RESULTS
• Global Growth: Serv-a-palooza ’05
generated our largest number of volunteer
Region
Rate of Increase:
hours to date—17,000 hours more than
Volunteer HoursNumber of 2004’s event. That’s a growth rate of 64%
Volunteers
North America
146%
EMEA/CASA in volunteer hours and 46% in the total
number of volunteers.
• Regional Growth: With the exception of
Asia, in 2005 all regions met or surpassed
their growth target of 20% over the previous
of Projects
of Countries
111%
91
2
31%
25%
38
22
Asia -6%
-12%
9
8
Caribbean
32%
20%
35
2
year. These are a few of the key results; see
the chart to the right for more details.
2005 Serv-a-Palooza Historical Growth Chart
YearTotal Total Total Annual
1998*
1999
2000
2001
2002
2003
2004
2005
Rate of Increase: Number Number
VolunteersProjects
Hours Served
% Growth**
1,000
25
11,000
—
650
12
5,200
(35%)
700
15
5,600
8%
1,100
17
8,800
57%
2,200
61
17,600
100%
4,099
158
29,765
69%
3,669
108
27,061
(9%)
5,363
173
44,246
64%
* Launched in 1998 as part of 25th anniversary of the company **Annual % growth in number of hours served
Spotlight on Our
hurricane katrina efforts
Like so many others in this interconnected mosaic spanning states, regions and
coastlines we call America, all of us at Timberland felt pain, grief and frustration
as we watched our brothers and sisters in the South in despair and in need of
our help in the wake of Hurricane Katrina last August. Individual employees across
the country and around the world immediately mobilized to assist the massive
relief effort. Training for the American Red Cross. Pooling funds to donate to
disaster relief. Offering prayers and support. As a company, as new details emerged,
we immediately evaluated how we could increase our commitment to those most
gravely affected. As our efforts evolved, these are the areas we focused on to
“Make it better”:
• Cash Donations and In-Store Fundraising: In addition to Timberland’s corporate donation, employees expressed their generosity through a
one-time payroll deduction. A combined total of $38,027 cash was donated to the American Red Cross. All U.S. retail stores were also equipped
to accept and direct customer donations to the organization.
• Employee Sabbatical: In response to the emergency, we established a mini-sabbatical to provide for on-site recovery, clean-up, relocation and
long-term efforts through community service. Eleven employees from our Stratham, New Hampshire headquarters signed up for the three-week
sabbatical, receiving Red Cross disaster relief training and venturing to the Gulf Coast region to lend support.
• Product Donations: As evacuees from the devastated Gulf Coast area were transferred out of the region, we arranged to donate products valued
at $60,000 to various organizations. Additionally, employees were encouraged to donate personal goods to their local Salvation Army.
Spotlight on Our hurricane katrina efforts (continued)
You really see what you’re
made of and what you’re capable
of in situations like these
Helping to staff an
inventive relief center
In an emergency such as the aftermath of
Voice of the Employee: Hurricane Katrina
Dottie Dawson, Customer Service
Impressions from the Gulf Coast
Talking with, crying with, mothers and grandmothers—hearing their
heart-wrenching stories. Playing with the children to ease the anxious,
Katrina, sometimes the toughest problem is
fearful look in their eyes and then having to watch them return to who-
getting help to those who need it—fast. On
knows-what may be left of their homes. To tell this story is one thing, to
actually experience this disaster has been life changing.
September 28, 2005, five Timberland employees
volunteering in the Gulf Coast helped the
Troy Brown, Senior Director of Ecommerce
American Red Cross launch an innovative
Recalling the impact of the experience
program: a drive-through service center in
My experience working in Slidell was emotionally, physically, and mentally
Slidell, Louisiana. Created out of the need to
intense. Every day, I witnessed extreme examples of the best of humanity
supplement a fund-request hotline that had been
line fell out due to heat exhaustion, mental stress, or other reasons.
overwhelmed by evacuees, the drive-through site
Almost every day, the volunteers slept in different places (I slept in 8
was designed to register survivors and disburse
and the worst. Every day, volunteers and hurricane survivors on our
different places in 19 days). You really see what you’re made of and what
you’re capable of in situations like these. I also learned to keep what’s
funds to those in urgent need.
important. My family now takes a higher priority. In retrospect, the fact
Six traffic lanes at an abandoned retail outlet
a gift not just to the victims of Hurricane Katrina, but it was also a gift to
that Timberland would allow me to take a 3 week service sabbatical was
me and my family for which I’ll be forever grateful.
mall were set up, enabling some 70 volunteers
to process up to 170 emergency financial
Raymond Mark, Point of Sale Analyst
assistance applications an hour, serving multiple
Reflections on the role of community in community service
families simultaneously. The center processed
Although the most obvious service was what we did down in Louisiana,
an average of 1,300 cars daily during the first
so much of the work was done by others elsewhere: from my Timberland
nine days of its two-week operation. In all,
company staff members who organized our service, to the local Louisiana
more than 55,000 survivors were served by
volunteers who showed amazing hospitality and looked out for our
the drive-through site, which distributed over
$19 million. Timberland was proud to send
employee volunteers to the site to “Make it
better” for those in need.
teammates who encouraged me to go and covered my work, to the
safety. Yes, community service is about giving service to a community
(even if the community is over 1500 miles away from where you are!),
but it’s also about a community enabling that service to happen. And
for that I’m thankful.
Spotlight on Our hurricane katrina efforts (continued)
Katrina’s Impact: Expanding of Service Sabbaticals
When the Timberland volunteers returned from serving in the Gulf Coast, Timberland’s CEO asked them to drive an effort to expand our sabbatical
offerings. The team created a proposal and worked with Social Enterprise and Human Resources to finalize it. The result was two additional options
to the traditional service sabbatical.
Like our flexible work options, Timberland now offers all eligible employees15 a choice of service sabbatical opportunities. All three models provide
employees with an opportunity to serve while receiving full salary and benefits. A chance for professional development while working on projects that
reflect their individual passions. So out of our response to a national disaster came the development of a program that will help “Make it better” in
communities around the world for years to come.
SERVICE SABBATICAL PROGRAMS
Work and ServeMini Sabbatical
Service Sabbatical
Description
Flexible service schedule enables Employees serve full time for up Employees serve full time for up to six
employee to serve part time with to three weeks to meet a defined months to complete a defined capacity
short term need in an NPO / NGO
building project in an NPO / NGO.
an NPO / NGO while maintaining Timberland work responsibilities Expected Impact
Build capacity in the long term
Meet pressing needs in the short term Build capacity in the long term
and build capacity in the long term
Work at Timberland
Part-time
None
None
Term
Up to six months part time (up to Up to three weeks full time
Three–six months full time.
2 days per week for up to 52 weeks)
Examples
An employee works part time with Skills Sabbaticals: employees match An employee works full time with an
an NPO / NGO to develop a new their skill sets with a specific short term NPO / NGO to develop a new and
training program.
need of an organization.
independent revenue stream to fund
Disaster Response: employees respond
programs.
to an external call to provide relief
services in the wake of a disaster.
Partnering in the Gulf Coast
Share Our Strength (SOS). AmeriCares. The Red Cross. Here’s how Timberland worked with each
of these outstanding service organizations in the Gulf Coast:
Share Our Strength (SOS)
AmeriCares
The Red Cross
www.strength.org
www.americares.org
www.redcross.org
has a strong network in the Gulf Coast region
is a worldwide humanitarian relief
is a first responder organization that provides
that provides critical resources to people in
organization. Following both the Tsunami
on-the-ground emergency relief in the form
need. That network was devastated by Katrina
and Hurricane disasters of 2005, we
of food and shelter immediately following
and needed to be rebuilt quickly. Timberland
followed AmeriCares expert advice about
a disaster. We sent employees on a “mini-
did what we could to help. We sent a small
what was needed on the ground in those
sabbatical” in the Gulf to support the Red
group of employees to Washington, D.C. to
communities. Working through their
Cross when the need was the greatest,
help organize and plan SOS’s “Restaurants
well-established network of local non-profit
handing out debit benefit cards, and
for Relief” event, through which
organizations we were able to distribute
serving food.
participating restaurants could donate a
our product where it was needed most.
portion of one day’s proceeds to a Hurricane
Katrina relief fund that enabled SOS to
rebuild its network in the region.
15 To be eligible, employees must have 12 months’ continuous employment at Timberland, a satisfactory work record and a manager’s approval.
the timberland company make it better ™
2005 csr report
55
6.0 Community Involvement (continued)
[6.3] Measuring the Impact of Community Service
How do you know whether your efforts are having any effect? In our effort to find an answer to that question,
we decided to look at one of our own community partners: City Year. Our 15-year association with City
Year is a strong illustration of how we do our best to “Make it better” in our local communities. We recently
learned about a study that was performed on City Year Alumni that analyzed what types of leaders this
program creates.
A Case in Point: City Year
Founded in 1988 by two Harvard Law School students, City Year
(www.cityyear.org) is an international organization whose mission is to
build democracy through citizen service, civic leadership and social
entrepreneurship. A critical element of the mission of City Year is to
Making the Link: Community Service
and Employee Retention
train youths to become citizen leaders, with a lifelong commitment
to leading active, thoughtful and effective civic lives.
A leading research firm, Policy Studies Associates (PSA), recently
conducted a historic study of the men and women who serve as City
Year corps members16. A surprisingly high number (2,100) of City
Year alumni responded to a mail survey sent by PSA. The goal was to
compare City Year alumni with other members of the community. What
they found is that:
• City Year alumni are 45% more likely to vote than other 18 to 40-year-olds
nationwide.
• City Year alumni are 65% more likely to engage in volunteer activities,
with nearly 70% volunteering 10 hours a month.
• At least 90% of alumni gained leadership skills through their City Year
experience.
Total Employees (annual average)
5,448
For the average company, the annual percentage of employees that leave a
company that the company wanted to
retain*
1%
Average number of valuable employees lost for a company Timberland’s size
54
Based on the 2005 Employee Survey, the percentage of employees who say our
commitment to the community and our Path of Service™ program play a strong role
in their decision to stay at Timberland
70%
• Working as a team and working with people from diverse backgrounds
were part of the City Year experience, according to over 90% of alumni
surveyed.
• 75% of City Year alumni are involved in problem-solving within their
own communities.
• More than 75% of City Year alumni belong to civic organizations, a
significant increase over the national average of 29%.
• Although 83% of alumni came to City Year without a high school
Number of employees retained due to Timberland community service work
Average cost of losing and replacing one good employee**
Annual savings from investing in community service programs
diploma or GED, fully 81% of alumni continued their education after
City Year.
In other words, no matter what yardstick you use to measure civic
engagement, PSA’s analysis reveals that City Year alumni excel. It’s these
kinds of results that make us humbled—and proud—to be a City Year
community partner.
16 http://www.cityyear.org/about/pressroom/NatEnews.cfm?Date=01-06&v=1&i=6&Article=s3
* The Sustainability Advantage, Bob Willard
** U.S. Department of Labor
38
$30,000
$1,144,080
the timberland company make it better ™
2005 csr report
56
6.0 Community Involvement (continued)
[6.4] Investing in the Community
City Year. Share Our Strength. Earthwatch. These were among our major community partners last year. There were other
community-based organizations we supported, too. We don’t give to our local partners because we want applause from
the community. We give because we’re part of the community. The chart below shows a few of the 40-plus organizations
to whom we distributed donations to in 2005, through our Community Investment Competitive Grants Program.
Building with Books
ETVA (Escuela Timberland de Vela Adaptada)
Sustainable south bronx
(www.buildingwithbooks.org)
(www.advela/net/etva/default/htm)
(www.ssbx.org)
Our grant funded the construction (by volunteers)
Founded in 1998 in Barcelona, Spain and supported
Our grant funded an education project to train
of a primary school in Mali, West Africa.
by Timberland since 2000, ETVA teaches sailing to
low-income community residents in ecological
disabled people to help increase their social integra-
restoration skills, so they can obtain employment
tion, self-esteem and independence.
in horticulture, landscaping and bioremediation.
Our Community Investments
While we are challenged to assess a monetary value of this comprehensive
At Timberland, we believe in strengthening communities through service
and through the actions and beliefs of individuals committed to the
common good. We also know that sustained change is advanced through
strategic investments in partnerships, innovative non-profits and high-impact
programs. To forge locally based solutions to critical needs, we assess our
portfolio of options—transformational service events, financial resources,
commitment, we are mindful that corporate donations—both cash and
in-kind—is one indicator with precise measures. Each year, we track
donations as a percentage of income and as one of the inputs against
our holistic approach to community involvement. It is important to note
that we will never decrease our contributions based on a decline in profits.
Our commitment to communities and to our strategic partners is steadfast.
in-kind donations, loaned executives through Service Sabbaticals,
Our annual financial support varies based on several factors including
capital investments, strategic partnerships and board leadership. Working
natural disasters and the growth of our service events. Community
collaboratively with stakeholders and across our company, we make
investments represent requests by employees and partners to resource
informed decisions for powerful change.
defined opportunities for impact and transformation against defined
giving criteria. These donations are focused in the areas of citizen
service, environmental stewardship and disaster relief.
Timberland Investments 2004 –2005
Year
Charitable Contributions*Previous Year’s Operating Income**
Giving as a % of Operating Income
2004***
$3,931
$184,302
2.10%
2005
$3,813
$233,900
1.60%
Notes: * Company-wide charitable contribution figures are consistent with figures reported to the IRS
** Operating Income figures derived from Timberland Annual Reports *** Contributions reported are subjected to change as they become finalized with the filing of the corporate tax return
the timberland company make it better ™
2005 csr report
57
6.0 Community Involvement (continued)
In 2005, community investments totaled 1.6% of operating income—a
will also endeavor to measure this portfolio in a manner that provides
decline from 2.1% in 2004. This drop off can be attributed to a decrease
greater transparency and accuracy against our investments and impact
in incremental giving from our business units. The combined value of our
in our stated CSR priorities. As we continue to improve our efforts, our
product and cash donations went from $3,931,800 in 2004 to $3,813,463
commitment to our employees and to our stakeholders remains to create
in 2005. Additionally, 63% of our investments in 2005 took the form of
the most sustainable and positive impact in the communities in which
cash, down from 70% in 2004.
we live and work.
Going forward, we will continue to invest a complement of human,
financial and in-kind resources in non-profit organizations and community
priorities whose missions are consistent with our vision and values. We
[6.5] Looking Forward
Looking forward into 2006, we have designated three key areas to focus our efforts as we continue to
innovate in the area of community service and engagement.
OUR GOALS FOR 2006
1. Leverage service events to inspire, engage and transform communities in which we live and work: We can accomplish this through
many different avenues such as building awareness in our pillar events (i.e. Earth Day and Serv-a-palooza), leverage our Global Stewards program17 to inspire and engage stakeholders, and using our Community Investment program to broaden stakeholder reach.
2. Continue to optimize Path of Service™ program: One way to accomplish this is through a focus on values integration at team meetings, sales
meetings, and tradeshows to raise awareness and inspire participation. In addition, we will communicate enhanced sabbatical opportunities to
drive NGO capacity building. Finally, we will focus on the valuation of volunteer hours to support impact “beyond checkbook philanthropy.”
3. Strategically allocate corporate investments to increase global impact: We will look to balance investments globally. We will also encourage
the utilization of employee grants to strengthen NPO/NGO relationships—offering greater individual service opportunities.
17 More on this program in our 2006 CSR report.
Voices of Challenge: the home depot
The Power of One—Multiplied by the Passion
of Many
When CEO Jeff Swartz asked for my thoughts on The Home Depot’s efforts outside of our
stores for Timberland’s 2006 Corporate Social Responsibility Report, he was really asking
a unique favor: “Challenge me to do better!” In such a call for suggestions from other
companies and organizations, he has displayed a confidence and fierce commitment to
improvement that are inspiring.
Both Timberland and The Home Depot
believe that a fundamental commitment
to improvement transcends the
boundaries of the business out into the
community. In other words, we’re not
simply focused on how to make our
businesses more profitable. We’re also
interested in how to make them more
responsible. The goal is to build more
than commercial enterprises. It’s to help build stronger communities to
improve our world.
These are certainly bold claims on the surface, but they are actually fairly
pragmatic ones too. If the private sector and its resources—relative to
employee skill and deep sense of service—isn’t part of making our society
better, then the effort is deprived of a vital, perhaps even decisive, force.
Of course, for a company like Timberland, already deeply involved in
corporate social and environmental responsibility, there is actually little to
suggest beyond this: Keep doing what you’re doing. But for the sake of the
“challenge,” here’s my other suggestion: Do more—and use the power of your
leadership and brand to convene and collaborate with more corporations.
Now, that’s unique. It’s also creative, brave and unconventional.
Instead of aiming ourselves at the largest, most pressing problems and
attacking them with only resources available to our individual companies
and partner nonprofits, why not aggressively go after impact and create
transformational change by aligning together? We too often settle for
convenient, smaller, often localized targets of opportunity and simply
throw money and volunteerism at needs looking for one-day solutions.
That approach is no longer sustainable. But what if we didn’t worry about
brand differentiation and instead united on behalf of a common cause or
community need to increase volunteerism among corporate Americans?
Timberland’s well-known statement of corporate purpose says it all: Make
it better. Those three words don’t place limits on what problems can be
tackled or how high to aim. They simply declare an imperative—make it
better. Period.
Not only do I love the fact that three words capture the soul of the
company, I cannot help but note the similarity to The Home Depot’s core
purpose: Improve Everything We Touch. The central idea is the same in
both: unceasing and unrelenting improvement, both in the business and
in the community.
The statements demand that we must leave this community, this society
and this planet better than we found it. When you combine the freedom
to dream with the courage to change, sparks fly. When you aim that revved
up sense of possibility at social problems or people and communities in
need, you get fireworks—not only more effective action, but action of a
much more profound scale and scope.
When you combine the freedom
to dream with the courage to
change, sparks fly. When you aim
that revved up sense of possibility
at social problems or people and
communities in need, you get
fireworks.
This spirit was the motivation for our Month of Service, a collaborative
volunteerism effort last fall that resulted in the completion of
approximately 2,000 projects harnessed by more than 850,000 volunteer
hours in just 30 magical days. It is why we joined with 29 companies
across North America driven by the vision and leadership of Michelle
Nunn at the Hands On Network. The vision—increase volunteerism in
America by 10 percent, or by 6.4 million new volunteers, in two years.
Yes, those commitments—and achievements—are huge. None of them
were, or will be, easy. But our core purposes don’t guide us to shortcuts.
They challenge us to confront each other and ourselves to undertake
uncompromising improvement.
In order to fulfill a vision of that magnitude, you need allies. You need the
extraordinary multiplier of corporations and nonprofits banding together
and sharing a dream. You need a team, with all members focused on a
simple, crystal clear objective: Make it better, together. Precisely.
Bob Nardelli
Chairman, President & CEO
The Home Depot
the timberland company make it better
2005 csr report
59
7.0 Timberland Employees
[7.1] Our People Philosophy
Passion. Purpose. These are two things that make Timberland unique. We invite and invest in people who share our
values and passion to make a difference by doing well as a business and doing good in the community. Our people—and
the ways we engage them on our journey—are of utmost importance in our aspiration to be an employer of choice. The
task of balancing the development of organizational capability to support the dynamic growth of our business, while
keeping our employees effectively engaged, continued to be key areas of focus in 2005. We are pleased with the results
of our people-plan metrics which reflect the good progress we’ve made and the ground yet to be covered.
Our Employees
Distribution of Timberland Employees
Overall, Timberland employed an average of 5,448
full-time employees worldwide in 2005. Our workplace
28%
employment grew by 7% in 2005 with 14% growth in
31%
our manufacturing sector (growth rate excludes 286
employees at our manufacturing location in Puerto Rico
Office
which was closed in December 2005)18.
Retail
Distribution
As we continue to grow as business, we continue to
Manufacturing
evolve our people programs and strengthen our metrics
7%
to measure them.
34%
Key Workforce Statistics
Employment
Average Tenure (in years) Across Business Segment
Global Employment: 5,448
2005 Workforce Growth
288
Number of Global Leaders: 199
6
5
5.3
4
19
5.1
4.2
3
2
2.3
1
0
OfficeManufacturingDistributionRetail
CenterStore
Average Age
GroupingFull-TimePart-TimeTotal
Office
38
40
38
Distribution Center
38
43
39
Manufacturing
32
0
32
Retail Store
29
24
27
Average
34
26
33
Global Composition of Leadership 20
35%
Men
Women
65%
18 If you include the loss of Puerto Rico factory workers, our workforce remained flat year over year.
19 Our 2004 CSR report listed number of employees at 5,600, which included temporary workers. The 2005 data does not include temporary workers. The growth statistic is based on full-time employee count for the past two years.
20 Leaders are defined as senior managers (grade 7) and above.
the timberland company make it better ™
2005 csr report
60
7.0 Timberland Employees (continued)
[7.2] How We Manage Our Talented Staff
Talent management continued to be a focus in 2005. Building organizational capability in a complex, global business
environment requires both depth and breadth of experience. We continued our focus on developing leaders from within
through our global Leadership and Talent Review process—a cross-functional global review process of leadership levels
and jobs that feed into our leadership positions.
Our leadership development strategy reflects our belief that growth occurs as much through meaningful business
experiences that provide opportunity to stretch skills in a supportive environment as through formal training. We
realize this belief through a balance of training and business experiences tailored to the specific needs of the
individual—individual development plans (IDPs). Currently, we have 255 active IDPs worldwide. In 2005, our Internal
Hire Rate declined slightly from 48% in 2004 to 47%. This indicates we hired more leadership talent from outside our
community than we would have hoped. In 2006, we will continue our focus on developing leaders from within.
Reflecting our belief that development is not always “up,” lateral moves within
the leadership levels of our organization rose from 6 to 21 positions last year,
providing those affected with opportunities to expand their knowledge of the
business. And consistent with our diversity goals, two-thirds of our internal job
changes involved moving women into leadership roles.
Of course, talent exists at all levels in our organization—not just in our leadership.
That’s why the individual development plan process is available to everyone, so
that all our employees can keep pace with our business and help it grow. And,
at the same time, work toward their own long-term career goals.
Our focus will
be internal
development
opportunities
in 2006.
In 2005, our U.S. employees received an average of 38 hours of training—down
slightly from 2004’s total. The decrease of training hours was a result of
employees not attending external training courses at the same rate as last year. One reason for this decrease is the
focus of business experiences to drive development through IDP planning. We will continue to provide opportunities to
develop through many vehicles internally and externally. Our focus will be internal development opportunities in 2006.
Community service and business-related activities were equally the focus of two-thirds of the skill-building opportunities
offered last year. We also introduced our New Manager Assimilation Program in the U.S. so that teams can quickly
clarify expectations, establish a work style that suits everyone in the team, improve working relationships, and get
the most productive start on critical business challenges. We plan to roll out this new program to our international
locations this year.
Spotlight Career Path at Timberland
Kim Krummell; Director of the Asia Footwear Supply Chain Team; Zhuhai, China
I started my journey at Timberland in 2000. I had been
working for another apparel/footwear brand when I was recruited by a
former colleague to join Timberland. At that time, I hadn’t heard much
about Timberland, but the prospective job was an opportunity I couldn’t
resist. I started out as the Apparel Sourcing Manager for the Americas.
I didn’t even have a designated office space at Timberland HQ because
I spent the majority of my time on the road. In my previous jobs I had
done a lot of domestic travelling. One of the lures of this new position
“Timberland gave
me a fantastic
opportunity to expand
my experience and
my exposure”
was the opportunity to expand my horizons to Latin America. Within the
roughly two years that I held this position at Timberland I had traversed
many new landscapes, including 12 different countries in Latin America/
The Caribbean. Through the course of my travels, I sourced factories
to produce Timberland® apparel and monitored them for adherence to
TBL Code of Conduct standards as well as to TBL quality requirements.
I was also able to brush the dust off my high school Spanish and learn to
communicate enough to get around.
The next chapter of my career path at Timberland brought me
these environments. Manufacturing is the pulse of the business and
into headquarters as a more permanent fixture while at the same time
every time I walk into a factory, I learn something new. I expressed to
expanding the breadth of my travel experiences and my exposure to
my boss my desire to live and work abroad and even interviewed for
various other aspects of the business. As Category Manager for Apparel
possible opportunities within Timberland. I have a degree in Apparel
Woven Tops and Bottoms, I was exposed to managing the business, on
Manufacturing and at this point I had spent nine years in the apparel
the supply chain side, from soup to nuts. The designers still designed the
industry, working in various capacities involving the development and
product but as soon as the product brief was handed off to my team,
production of apparel and could speak Spanish to some degree. When
we were responsible for everything else, delivering the right product
I was approached to pursue an upcoming opportunity abroad...I was
at the right price and on time. I loved this job because I participated in
surprised to find out that it involved moving to China and working in
and learned about the business side, which was something new to me. I
Timberland’s Footwear Office! The rest is history. While I have been
was able to focus on developing my management skills and learned a lot
able to apply my experience in the production of apparel to footwear
about leading a team. I also had the opportunity to include Asia, Africa
manufacturing, I’ve also had to learn a completely new vocabulary and
and India in my trip itineraries. Being a resident at headquarters also
of course try my best to learn enough Mandarin to get around in China.
opened a lot of doors for me to be a part of something bigger. I partici-
Timberland gave me a fantastic opportunity to expand my experience
pated in large-scale community service events (ie: Serv-a-palooza) and
and my exposure. At the same time, the cross-pollinization of my ap-
one year was fortunate to be able to dedicate the time to being a team
parel experience in a footwear world has, I believe, added value on an
leader at this incredible event.
operational level. As I am writing this, I have been on assignment in
While I felt that I still had a lot to learn and a lot to do as Category
Manager, I was very interested in an opportunity to live abroad and
work for Timberland in another country. I enjoyed working closely
with factories and learning about other cultures. Being based in
Stratham, New Hampshire only allowed for intermittent exposure to
China for 1½ years. The former colleague who recruited me to come
to work for Timberland told me that while being on assignment I would
learn more than I would actually at the time...he was so right and I’ve only
just begun!
the timberland company make it better ™
2005 csr report
7.0 Timberland Employees (continued)
[7.3] Employee Satisfaction
Partnering for Changes in Asia
Last year, Timberland was included among Fortune’s
Finding root causes. Making things better. Those are the
“100 Best Companies to Work for” in the United States,
an honor we have received for the past eight years. We
were also named to Working Mother Magazine’s “Best
Companies for Working Mothers” in the U.S. for the
second year. While we humbly appreciate our external
things we looked for when our 2004 Employee Survey pointed
out areas for concern for our employees in Asia. Business
unit leaders collaborated with Human Resources to develop
an action plan. By getting employees involved.
To start, focus groups were organized in business-critical markets,
such as Hong Kong and Tokyo. These gatherings involved a diverse
accolades, it is equally important to hear how we are
group of employees from retail store associates to office-based
doing on our quest for a common values-based culture
managers. Employees who simply wanted to make a difference.
from our own community—our people. In 2005, we
Outside facilitators led the discussions and helped make employees
marked the fifth year we have sought input on the
state of our community directly from our employees.
Well-understood expectations. Community impact. Ethics. Safety.
Authenticity. These are the hallmarks of our culture as told to us—by
feel comfortable about sharing not just the strengths of Timberland,
but also their concerns. The discussions centered on the “onboarding” process, compensation, individual development and
communication. Ideas and actions were developed and presented
to business leaders and Human Resources.
our people. These areas represent the dimensions with the highest
Here’s what we’ve done in 2005 as a result of focus group
satisfaction across the globe. These scores reflect the continued
feedback, to address the on-boarding, compensation and
strength of our social responsibility priorities and our core values—
communication issues:
humanity, humility, integrity and excellence—and how our employees
feel them on a day-to-day basis.
• A global orientation on-boarding process was developed,
which will be rolled out to all Asian markets for new and
In 2005, survey participation increased from 70% in 2004 to
current employees alike. The goal is to ensure a consistent
75% in 2005 with 15 locations achieving 100% participation and 10
global culture and to educate Asian employees on what is
that reached over 90%. While participation increased, employee
expected of members of the Timberland community.
engagement—as measured by our bellwether questions21—dipped
• In Japan, a retail step-up program was introduced to improve
slightly from 76% to 74%. Results also showed differences among
skills and individual career development. The goal is to reduce
our geographic regions with some business units reporting increases
turnover at the retail level. Regional Human Resources also
in satisfaction scores and some showing slightly weaker responses.
partnered closely with Corporate Human Resources to address
Progress is being made—albeit not consistently across the globe.
• Solid progress was made in the areas of development and
issues of individual development and compensation.
• As part of a global effort to improve communication with
employees, Timberland rolled out an intranet site so that employees
communications in the Dominican Republic and Europe.
throughout the company could access corporate information
• In Asia, where we concentrated on focus groups and action
more efficiently. Through this tool, new product, business and
planning in 2004, consistent improvement was revealed across
community news is shared. As a supplement, quarterly “rallies”
all factors.
In 2006, we will continue our work on employee engagement by
identifying TBL’s best-practice culture leaders and developing
mechanisms to conduct best-practice sharing utilizing our leaders
as teachers.
share with employees business results from the previous quarter.
As a result of this partnership with employees, employee responses
improved on 11 of the 16 factories measured in our survey. And
voluntary turnover in this region is down 1% (from 25% in 2004
to 24% in 2005).
We’re pleased with this outcome, but we know our work isn’t over.
We hope that additional employee focus groups this year will
keep us on the path of actively involving our employees in finding
solutions that enhance their own level of job satisfaction.
21 “Overall I am satisfied with Timberland as a place to work” and “I would choose to work here again if were looking for work.”
62
the timberland company make it better ™
2005 csr report
63
7.0 Timberland Employees (continued)
[7.4] Diversity
At Timberland, community is a way of life. We are passionate
about fostering an inclusive community that respects
Diversity of Our Workforce
individual differences and encourages our employees to
13%
make a difference in the communities where they live and
work. Change starts at the top—so did we. In 2005, minority
15%
representation on our Board of Directors increased from
Black
Hispanic
9% to 27%. Supported by programs such as our Women’s
Asian/Pacific Islander
Network, which sponsored multiple networking and career
development opportunities in the U.S., gender diversity in
leadership positions increased 18%. In 2006, in support
of our inclusivity aspirations, Timberland will report EEO
diversity statistics for our U.S. locations along with our
gender inclusivity reporting.
White
3%
69%
the timberland company make it better ™
2005 csr report
64
7.0 Timberland Employees (continued)
[7.5] What We’re Doing to Improve Health & Safety
As an overall policy, we are committed to making it better for all Timberland employees around the world by providing
a safe and healthy workplace. How? By taking steps to prevent incidents before they even occur. To do this, our Corporate
Health and Safety team works directly with employees, both individually and in groups, to identify health and safety issues
in the workplace and to develop solutions. Should an incident occur, we report it promptly. Then we assess its root
cause and take action to prevent it from happening again. For example, we’ve improved employee and supervisor training.
Bought new equipment. Hired professional safety consultants. And designed workstations ergonomically—that is, to
maximize comfort and minimize physical stress.
New Health & Safety Initiatives for 2005
In 2005, we began to redesign our Health and Safety programs worldwide,
starting with the United Kingdom. The project is being spearheaded by a
cross-functional team including Human Resources, Facilities and Retail.
Their task is to identify needs and recommend regulations that can be
adapted to multiple locations. We plan to report results from our efforts
in our 2006 Corporate Social Responsibility report.
U.S. LWDII
4.0
3.5
3.7
3.0
2.5
2.4
2.0
2.5
2.3
1.9
1.5
1.5
1.0
0.5
0
Addressing Health-Related Lost Work Days
2000
2001
2002
2003
2004
2005
Human beings need sick days. As an employer, even as we sympathize,
we have to assess how lost work days caused by injury or illness impact
U.S. & Caribbean LWDII
our business. In the U.S. in 2005, the rate of “lost work days due to injury
8
or illness” occurrences (LWDII) was 1.5—or, in other words, an average
7
of 1.5 lost or restricted workdays for every 100 employees. This statistic
represents all U.S. operations, including retail, corporate headquarters
and the Ontario and Danville distribution centers.
6.8
6
5
4.7
4
3.8
3
2
You may be wondering how we fared in the rest of the world. We weren’t
able to provide a statistic for our global operations (including our Dominican
4.4
3.3
3.2
1
0
2000
2001
2002
2003
2004
2005
Republic and Puerto Rico factories) in last year’s Corporate Social Responsibility report, because of inconsistencies in how LWDII was reported.
We addressed this gap in our reporting by providing factories with clearer
guidelines on just exactly what a LWDII occurrence is. Thanks to this
effort, we’re able to get current LWDII data and correct the inaccuracies
in historical data. As a result, Timberland reported a LWDII rate of 3.2
incidents per 100 employees in our global operations. See chart for details.
Now, you may be wondering why there’s such a difference between our
global and domestic results. It all boils down to the nature of the work
performed in our manufacturing facilities abroad. We recognize that we
need to reduce our international rate in particular, to narrow this gap.
Plus, we want to reduce the severity of injuries, not just their frequency.
To do that, we are continuing to work to identify and eliminate the
sources of injuries and illnesses. It’s all part of a proactive approach to
“Make it better” in the workplace.
Voices of Challenge: Harlem children’s zone
Lemonade or vinegar—the choice is ours
I often tell people that if you show me a child who will choose a glass of lemonade over
one of vinegar, I can educate that boy or girl. If a child chooses vinegar over lemonade, one
has to question whether the child can make choices that are predictable and with which we
would agree. If the child makes predictable choices and responds to positive reinforcement,
I can build an education plan around that.
But when I look at how our country chooses to raise its children—
All of us for whom school is a distant
particularly poor children of color—I see a society that continues to
memory may wonder “what’s wrong
choose vinegar over lemonade. We will spend billions to incarcerate young
with kids today?” But kids today—par-
men, yet we balk at raising lesser amounts of money for educating them so
ticularly in poor neighborhoods—live
they can become productive members of society.
in a vastly different world than the one
in which we grew up.
For those of us in the trenches of the war against poverty, the choice
couldn’t be clearer and recent statistics confirm what we see daily—
Drugs, guns, disintegrating families, and
education makes a critical difference in the outcomes of young lives.
a toxic culture celebrating sexuality and
violence have all escalated, while our
Today the high-school dropout rate among African-Americans is almost 50
percent. In 2004, 72 percent of black males in their 20s who dropped out
of high school were jobless. By their mid-30s, 6 in 10 black male dropouts
have spent time in prison.The cost to society is just astronomical: in New
education system has not risen to the
challenge. In fact, large sections of the education establishment have succeeded in putting their own interests before those of failing children.
York City, the annual cost per inmate is over $60,000 and there are about
While the kids fail in our schools, the people who are charged with operat-
13,500 African-American or Latino inmates.
ing those schools simply carry on as if nothing were wrong. Ask yourself:
if Timberland produced boots with a 30-50 percent failure rate year after
If Timberland produced boots
with a 30-50 percent failure
rate year after year, would
workers and management
simply accept that?
year, would workers and management simply accept that?
As dire as the picture currently is, I believe things will change for the better
and I’m committed to making that change happen. What I need are allies.
When our society and the country’s corporations recognize that today’s
poor children are tomorrow’s work force, the political climate will change.
Ultimately, there is no way around it: these kids are our kids—all of ours.
The numbers may be worse in places like Harlem, but the national dropout
rate among all high-school students is about 30 percent.
These children will either help fuel our economy through their labor and
fund our government through their taxes, or they will be endless drains
on our resources. Lemonade or vinegar. It’s a pretty clear choice, even if
Why do we as a society continue to choose the vinegar of incarceration
the sweeter rewards are not instantaneous. We may need to squeeze some
rather than the lemonade of education? First, the sour taste is experienced
lemons and stir things up a bit, but the other option is unpalatable.
most keenly in poor communities, where voices are muffled, if heard at all.
Misinformation has blurred the picture too, so that people think these
terrible outcomes in poor communities are inevitable. Undoubtedly,
the challenges are extraordinarily tough, but these children can succeed
just like their middle-class peers. I have seen that every day of my professional life for over 20 years.
Geoffrey Canada
The picture is distorted even further by the fact that our current education
President and CEO
system is a disaster, particularly in regard to boys.
Harlem Children’s Zone
the timberland company make it better ™
2005 csr report
66
8.0 Report Scope
[8.1] The Scope of this Report
Our last report was published on November 1, 2005 and covered Timberland’s global Corporate Social Responsibility
(CSR) activities in 2004. This report covers these actions for the calendar year 2005. Most of the data included is
from that year, with the notable exception of our factory list, which catalogs our active factories as of May 1, 2006.
Instances when we report only on U.S.-based activities are clearly indicated.
The Basis of this Report
How this Report Was Verified
This report was developed based on the Global Reporting Initiative (GRI)
Every data point in this report was verified internally, as was the way
and guided by the draft version of the G3 indicators. While we attempted
it was characterized. As we go forward, we’ll explore the viability of
to create a comprehensive report, there are some GRI indicators not
an external verification program. After all, such programs enhance the
included in this report. There are several reasons for these omissions.
credibility of our CSR reports and make them easier to audit. We hope
Our impact may have been immaterial, or we might have lacked enough
to receive guidance on this issue during conversations with our stakeholders.
internal data to provide a report. In the future, our goal is to narrow that
gap as we continue to report on social and environmental impacts that
are both relevant and strategically important.
If you have any questions about this report,
please direct them to Alex Hausman at
ahausman@timberland.com.
the timberland company make it better ™
2005 csr report
67
9.0 GRI Index
GRI
Indicator Description
SectionPage
Indicator
GRI
Indicator Description
SectionPage
Indicator
1. Vision and Strategy
5. Economic Perfomance Indicators
1.1
Vision and Strategy
Timberland Footprint
4
EC1
Net Sales (in millions)
Timberland Profile
9
1.2
CEO Statement
CEO Letter
2
EC2
Geographic market breakdown
Timberland Profile
8
EC3
Costs of good, materials, services
10-k
EC4
% of contracts paid by agreed terms
Not material
EC5
Total payroll and benefits by region
10-k
2. Profile
2.1
Name of reporting organization
Timberland Profile
8
EC6
Distribution to providers of capital
10-k
2.2
Major products, services, brands
Timberland Profile
8
EC7
Change in retained earnings
10-k
2.3
Operational structure
10-k
EC8
Taxes paid by country (in millions)
10-k
2.4
Description of major divisions
10-k
EC9
Subsidies by country
Not material
2.5
Global operations
Timberland Profile
EC10
Donations, in-kind and cash (in millions) Community Involvement
56-57
2.6
Nature of ownership
10-k
EC11
Supplier breakdown, by organization 25
2.7
Nature of markets served
10-k
and country
2.8
Scale of organization
Timberland Profile
8
EC12
Spending on non-core infrastructure 2.9
List of stakeholders
The Timberland Footprint
6
development
2.10
Contact person for report
GRI Index
68
EC13
Indirect economic impacts
2.11
Reporting period
Report Scope
66
2.12
Date of previous report
Report Scope
66
2.13
Boundaries of the report
Report Scope
66
2.14
Significant business changes
Timberland Profile
10-11
EN1
Total material use (except water)
Environmental Stewardship
40
2.15
Basis for reporting on joint ventures
Not Applicable
EN2
% of materials used that are wastes
Environmental Stewardship
40
2.16
Restatements
10-k
EN3
Energy use by primary source
Environmental Stewardship
33-35
2.17
Decisions not to apply GRI principles
Report Scope
EN4
Indirect energy use
Environmental Stewardship
33-35
2.18
Criteria/definitions used for Not Applicable
EN5
Total water use
Not Reported
non-financial accounting
2.19
Changes in measurement methods
2.20
Internal assurance policies and practices Report Scope
2.21
Policy for independent assurance
Not Applicable
2.22
Obtaining additional information
GRI Index
Global Human Rights
8
66
Global Human Rights
Not material
Not material
6. Environmental Performance Indicators
EN6
Land owned, leased or managed Not Material
17
EN7
Major impacts on biodiversity
Not Material
66
EN8
Greenhouse gas emissions
Environmental Stewardship
EN9
Ozone-depleting substances
Not Material
EN10
NOX, SOX and other air emissions
Not Material
EN11
Total amount of waste
Environmental Stewardship
EN12
Significant discharges to water
Not Material
68
3. Governance Structure and Management Systems
3.1
Governance structure
33-34
40-41
EN13
Significant spills
Not Material
Corporate Governance section,
EN14
Environmental impacts of products Environmental Stewardship
2004 CSR Report
and services 3.2
% of independent Directors
Proxy Statement
EN15
Reclaimable products after useful life
Not Reported
3.3
Process of determining strategic Not Reported
EN16
Incidents and fines
Not Material
expertise of Board
EN17
Renewable energy/efficiency initiatives
Environmental Stewardship
35
3.4
Governance Process
Not Reported
EN18
Energy consumption footprint
Environmental Stewardship
33-37
3.5
Executive Compensation
Proxy Statement
EN19
Other indirect energy use
Not Reported
3.6
Organizational structure for CSR, Timberland Profile
EN20
Water sources significantly affected
Not Material
key individuals
EN21
Annual ground, surface water Not Material
3.7
Mission, values, codes related to CSR
The Timberland Footprint
withdrawals
3.8
Mechanism for shareholder dialogue
10-k
EN22
Recycling/reuse of water
Not Reported
3.9
Identification and selection of The Timberland Footprint
EN23
Land owned, leased or managed Not Material
major stakeholders
(Production/extractive use)
3.10
Stakeholder consultation methods
The Timberland Footprint
6
EN24
Impermeable surfaces as % of land 3.11
Information generated by stakeholders
The Timberland Footprint
7
purchased
3.12
Use of stakeholder information
The Timberland Footprint
7
EN25
Impact on protected or sensitive areas
Not Material
3.13
Precautionary principle
Not Reported
EN26
Changes to natural habitats
Not Material
3.14
Endorsed principles, voluntary charters
Corporate Governance section,
EN27
Objectives for restoring native Not Material
2004 CSR Report
ecosystems, species
3.15
Industry and business association Timberland Profile
EN28
Number of IUCN Red List memberships
species affected
3.16
Systems for managing upstream/
EN29
Business units in sensitive areas
Not Material
downstream impacts
EN30
Other relevant indirect greenhouse Environmental Stewardship
3.17
Systems for managing indirect impacts
gas emissions
3.18
Major decisions on operational changes Timberland Profile
11
EN31
Hazardous waste use (Basel 3.19
Performance programs and procedures
The Timberland Footprint
4
Convention rated)
3.20
Certification pertaining to management Not material
EN32
Water discharge, runoff effects
systems
EN33
Environmental performance of suppliers Environmental Stewardship
45
EN34
Environmental impacts of transportation Environmental Stewardship
37
EN35
Environmental expenditures by type
Global Human Rights
9
4
6
12
15-30
Not Reported
4. GRI Content Index
4.1
GRI Content Index
GRI Index
67-68
32-45
Not Material
Not Material
33-34
Not Material
Not Material
Not Material
the timberland company make it better ™
2005 csr report
68
9.0 GRI Index (continued)
GRI
Indicator Description
SectionPage
Indicator
GRI
Indicator Description
SectionPage
Indicator
7.0 Social Performance Indicators: Labor Practices and Decent Work
10.0 Social Performance Indicators: Product Responsibility
LA1
Workforce breakdown
Timberland Employees
59
PR1
Policies for preserving customer LA2
Net employment creation
Timberland Employees
59
health and safety
LA3
Employees represented by trade unions Not Reported
PR2
Policies relating to product information LA4
Policies, procedures related to and labeling
consultation with employees
PR3
Policies relating to consumer privacy
LA5
Notification of occupational accidents, diseases
LA6
Joint health and safety committees
Timberland Employees
LA7
Injury, lost day and absentee rates
Timberland Employees
LA8
Policies, programs on HIV/AIDS
Not Reported
LA9
Average hours of training per year
Timberland Employees
LA10
LA11
Timberland Employees
59-64
Timberland Employees
64
Timberland Employees
64
Environmental Stewardship
44
Code of Ethics – Timberland Web site
PR4
Number of non-compliance issues
Not material
64
PR5
Health and safety complaints upheld Not material
64
by regulatory body
PR6
Voluntary code compliance
Global Human Rights
60
PR7
Instances of non-compliance—product
Not material
Equal opportunity policies and programs Timberland Employees
59-64
information and labeling
Composition of senior management
Timberland Employees
59
PR8
Customer satisfaction
Not material
LA12
Employee benefits beyond Timberland Employee Section,
PR9
Advertising—adherence to standards
Not material
legal mandates
2004 Report
PR10
Advertising and marketing Not material
LA13
Formal worker representation in Not Reported
regulation breaches
decision-making
PR11
Consumer privacy—breaches complaints Not material
LA14
Evidence of compliance with ILO guidelines LA15
Formal agreements on health and safety Not Reported
LA16
Continued employability programs
Timberland Profile
10
For more information the GRI and its reporting principles,
LA17
Lifelong learning programs
Global Human Rights
27
please visit www.globalreporting.org.
8.0 Social Performance Indicators: Human Rights
Want to learn more about Timberland’s activities in the
HR1
Human rights policies and procedures
Global Human Rights
15-30
area of corporate social responsibility? Please log on to
HR2
Consideration of human rights as part Global Human Rights
15-30
of decision-making
www.timberlandserve.com.
HR3
Policies to evaluate, address human Global Human Rights
15-30
rights in supply chain
HR4
Policies, programs to prevent Global Human Rights
15-30
in Code of Conduct at: ahausman@timberland.com.
discrimination
HR5
Freedom of association policies
Global Human Rights
15-30
HR6
Policy excluding child labor Global Human Rights
15-30
The Timberland Company
(ILO Convention 138)
HR7
Policy to prevent forced and Global Human Rights
15-30
compulsory labor
HR8
Employee training on human rights
HR9
Appeal practices related to human rights Not Reported
HR10
Non-retaliation, employee grievance policies
HR11
Human rights training for security personnel
HR12
Indigenous peoples policy
Not material
their behalf.
HR13
Community grievance mechanisms
Not material
Community Involvement
• Peace and Justice Center (www.pjcvt.org)
15-30
Not Reported
200 Domain Drive
Stratham, NH 03885
603-772-9500
Not Reported
Global Human Rights
For information about this report, please contact Alex Hausman
csrinfo@timberland.com
15-30
In gratitude for each company’s participation in the “Voices of
Not material
Challenge,” Timberland donated to the following organizations on
HR14
Share of operating revenues redistributed to local communities
56-57
9.0 Social Performance Indicators: Society
SO1
Policies to manage impacts on communities
SO2
Policies to address bribery and corruption
SO3
Policies to address political lobbying and contributions
SO4
Awards received relevant to CSR performance
SO5
Contributions made to political parties and candidates
SO6
Court decisions—Antitrust
Not Reported
SO7
Policies to prevent anti-competitive Code of Ethics –
behavior
Timberland Web site
Community Involvement
47-57
Timberland Profile
12
Timberland Profile
12
Timberland Profile
9
Timberland Profile
12
• Center for Reflection, Education and Action (www.crea-inc.org)
• One Percent for the Planet (www.onepercentfortheplanet.org)
• El Puente (www.elpuente.org)
• Hands On Network (www.handsonnetwork.org)
Timberland,
, Make it Better, Timberland Boot Company, Timberland PRO, Earthkeepers
and Path of Service are trademarks or registered trademarks of The Timberland Company.
©2006 The Timberland Company. Miōn is a trademark or registered trademark of Timberland
Switzerland GMBH. SmartWool is a trademark or registered trademark of SmartWool Corporation.
All other trademarks or logos used in this copy are the property of their respective owners.
All rights reserved. COR32746