Introduction

REI employees work every day to awaken a lifelong love of the outdoors for everyone. Our long-term health as a co-op is inextricably linked with the planet’s long-term health. This mindset forces us to operate with a total view of our environmental impact, and that’s why we are mindful in all our business activities, striving to do the right thing and to live up to our members' expectations.

Our business operations include everything from how we move products to how we recruit and retain a diverse workforce, as well as how we operate our stores and facilities. Each of our important stakeholders—our members, employees, vendor partners and nonprofit partners—has expectations for how REI should prioritize its efforts in these areas. We prioritize by focusing on the things that have the greatest impact while staying true to our values.

We must run a strong business. A healthy business allows us to support our employees, our members and our nonprofit partners far into the future. And running a strong business to us means that we meet our traditional business objectives while doing the right thing for the planet. The core practices described in this section are the foundation on which we build an environmentally responsible business.

We appreciate hearing from our members about their values and how the co-op can continue to reflect those values in our core practices. Please feel free to drop us a note at stewardship@rei.com.


Diversity

As a different kind of company, REI fosters a vibrant community of employees who love the outdoors and work to make it more accessible for people across the country. We believe that when we do this well, we succeed as a business. People love working at REI because it's a place where you can be yourself, be heard and be respected—working alongside people who share values and passion for the outdoors. Employee engagement at REI is very high. We measure engagement yearly and trend well over industry benchmarks. For example, in our annual employee survey, 96% of survey participants say they “fully support the values for which REI stands.” We’re tremendously proud of that. We also enjoy one of the lowest employee turnover rates in the retail industry (32%).

We’re proud to be a nationally-recognized employer with competitive pay and benefits programs. Here are just a few examples:

  • Employees are eligible for high quality, affordable health care benefits if they work an average of 20 hours.
  • We have a generous retirement plan, and every employee is eligible for bonus pay when the co-op performs well via our Summit Incentive Plan.
  • Time away from work promotes a balanced life. That’s why our benefits include paid holidays, vacations and sabbaticals. Plus, every employee receives two “Yay Days”—a paid day off to get outside.

Our commitment to our employees and our work environment have helped make us one of FORTUNE magazine’s “100 Best Companies to Work For” in 2017 for 21 years in a row—one of only a handful of companies to do so.

For All

At the co-op, we understand that workforce representation matters, and requires continued focus over time. Our progress to-date is built on a long legacy of women’s leadership throughout our 80 year history, going back to our co-founder, Mary Anderson. Building on that strong foundation, we’ve focused over the past few years on improving gender equity in our employee base and our broader community. In particular, we’ve focused on improving the presence of women retail leaders in stores, and we’ve made significant headway there. From 2014 to 2017, we saw a 7% jump in the percentage of retail leaders who are women, going from 35% to 42%.

In 2018, we will continue our focus on gender equity. As we work to attract, recruit and retain a diverse employee base, we will also create a baseline of shared understanding around inclusion and cultural competence across the co-op. From 2016 to 2017, we increased the racial diversity of our board of directors from 25 to roughly 30 percent people of color, and we see opportunity at every other level of the co-op to continue to improve. Moving forward, we are committed to diversifying the places where we look for talent and to making the connection between the diversity in our communities and the employees in our workforce. See our percentages of women and people of color in the workforce here.

Force of Nature

In spring 2017 REI launched Force of Nature - our stake in the ground to declare gender equity in the outdoors. In many ways, it is a disruption of the status quo. It claimed the outdoors as a place to opt out of cultural pressures to conform—the “supposed-tos” and “shoulds” that underpin outdated stereotypes—especially for women.

First, we committed to changing the narrative by putting women—of all ages, races, sizes and gender expressions— first in all of our marketing and communications. That includes everything from social media and the stories featured on the REI Co-op Journal, to our advertising.

Second, we built community through events and experiences designed specifically for women. When we were preparing to launch Force of Nature, one of the primary things women told us is that they were looking for other women to get outside with. We responded with 2,700 women-focused events in 2017 (double what we did the year before), and nearly 48,000 women joined in.

Third, we focused on closing the gear gap. As women have known for years, there’s more depth and breadth in outdoor assortments for men. In 2017, we redoubled our decades-long effort to source great women’s gear, and used our marketing channels to drive visibility for great women’s gear already on the market.

Finally, we invested in creating more opportunities for women and girls to get outside. For the first time ever, we issued an open call for grant applications to organizations that focus specifically on getting more women and girls outside. We received more than 500 requests. We read every single one, looking for innovation, diversity and impact. Ultimately, we awarded grants to 26 incredible efforts supporting everything from garden programs in women’s prisons to boatbuilding and sailing in the Bronx.

When we set out with an intent to declare the outdoors “the largest level playing field on earth,” we knew we were entering a long game. In 2018, we will continue dedicated work in each of our four areas. We’ve moved from a women-only takeover of our marketing channels to what we call the “new normal”: a commitment to highlighting women at least half of the time from now on. We are committed to shining a light on women’s stories inclusive of race, age, gender expression and size. We are dedicated to not reinforcing the negative stereotypes and obstacles that hold women back in the outdoors. REI has plans to assort a much broader range of sizes from the REI Co-op brand and many of the brands we carry. We also have committed to increasing our events, classes and experiences designed for women year over year by 10 percent, and we will continue to invest in opportunities for women and girls through our partner organization.

Beyond REI

Partnerships are at the core of being a co-op and are integral to our belief that a life outdoors is a life well lived – for all. We strive to be a connector, a convener and a facilitator for everyone who has or aspires to have a connection outside.

Philanthropic Partnerships
In 2017, we began asking our 200+ local philanthropic partners how they support gender and racial equity. We asked some specific questions: Does your organization have a diversity, equity and inclusion plan in place? How many people does your organization have on staff? Of the total number of people on staff, how many identify as people of color and how many identify as a woman? How many people serve on your organization’s board of directors? Of the total number of board members, how many identify as people of color and how many identify as a woman?

We’re actively looking at ways to support our nonprofit partners’ efforts to increase diversity in their own operations. And we were happy to see an increase in the number of Force of Nature Fund grantees that were focused on racial and gender diversity.

National Marketing Partnerships
Since 2008, we have also built marketing partnerships with organizations that encourage outdoor participation in multicultural communities. REI is proud to partner with organizations like Outdoor Afro, Latino Outdoors, Black Girls RUN, Unlikely Hikers, LatinXHikers, Brown Girls Climb, The Outdoor Journal Tour, 52 Hike Challenge and others who strive to make the outdoors more inclusive.

By partnering with these multicultural organizations, REI:

  • Supported 250 local partner experiences across the country, reaching more than 3,500 participants,
  • Through partner social media, REI is able to engage with a broader and more multicultural audience. In 2017, we reached more than 465,000 people through partners’ social media accounts with compelling storytelling and REI content.
  • Provided resources and trainings to partner organizations, including two risk management trainings of trainers for nearly 100 network leaders offering local experiences outdoors.

Through these partnerships, we strive to build authentic relationships with those enjoying the outdoors – today and in the future.

#OutsideWithPride - Supporting the LGBTQ Community

In 2017, REI participated in pride parades across country where employees, friends and family came together to march in support of equality and to represent REI’s core belief in the outdoors for all. REI continues to support the work of the Human Rights Campaign (HRC), America's largest civil rights organization working to achieve lesbian, gay, bisexual, transgender and queer equality.

In the 16th edition of the HRC Foundation’s Corporate Equality Index (CEI), REI received a 95% ranking. The CEI is a tool developed and used by the HRC to rate companies based on their treatment of and policies regarding GLBT employees, consumers and clients. The CEI rating criteria have four key pillars:

  • Non-discrimination policies across business entities;
  • Equitable benefits for LGBTQ workers and their families;
  • Internal education and accountability metrics to promote LGBTQ inclusion competency; and,
  • Public commitment to LGBTQ equality.

We also include gender identity and expression in our equal employment opportunity policies to create an atmosphere where employees feel comfortable living and sharing their gender identity. We have transgender guidelines to help our managers and employees create the most welcoming and supportive environment possible for transitioning teammates, and transgender reassignment surgery as a covered benefit under all of REI’s medical plans.


Operations

Green Building

Green building aspiration: Create buildings that reflect REI's values and minimize environmental impact.

REI's built environment—our stores, headquarters and distribution centers—is an important connection point to members, customers and employees. Even though we run our stores, distribution centers and headquarters on 100% renewable power, our buildings still account for one of our largest and longest-lasting environmental impacts, and they offer rich opportunities to shrink our environmental footprint.

We strive to reflect REI's core purpose and values by integrating sustainable design elements into our new stores and existing buildings. Whether we're retrofitting an existing facility or building from the ground up, energy efficiency is our goal, and we design and operate all of our buildings to reduce environmental impact and operating cost.

From our Seattle flagship store to our most recent distribution center in Goodyear, Arizona, REI has been at the forefront of the green building movement. In 1993, we began designing and constructing our Seattle flagship store, which opened three years later. Our process started with community and member involvement, which helped identify and prioritize the green design elements developed for the store. Many of these features became part of the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) evaluation criteria.

Since 1996, we've built on the work done for our Seattle store and enhanced the use of green design elements in all of our new store construction projects. We currently have seven LEED-certified facilities, with a combined total size of more than 1.1 million square feet.

  • In 2004, our Portland, Oregon, location became the first retail store in the country to earn LEED Commercial Interior (CI)® Gold.
  • In 2008, REI's distribution center in Bedford, Pennsylvania, received LEED Silver certification for new construction.
  • As part of the LEED for Retail pilot program, REI’s Boulder, Colorado store —as well as the co-op's second prototype in Round Rock, Texas—received LEED-CI Gold certification.
  • Our Lincoln Park, Illinois, store received LEED Gold certification in 2009, and our Pittsburgh, Pennsylvania, store received LEED Silver.
  • Our new distribution center in Goodyear, Arizona, received LEED Platinum certification in 2016. It is also net-zero energy, meaning that it produces as much energy as it consumes annually.

Greenhouse Gas Emissions and Climate Change

Greenhouse gas emissions aspiration: Become climate-neutral in our operations by 2020.

As a community of people who have built our lives around our outdoor passions, we are uniquely aware that the global climate is rapidly changing. The speed of this change is human-driven, and we believe that as individuals, and as a member-owned co-op, we can make a difference in the long term health of the planet collectively. Our efforts range from running a cleaner business to connecting people to the outdoors so that they care as deeply as we do about the wild outdoor places under threat. We also support smart public policy that advances sustainability, on our own and through our nonprofit partners. Across this work, our sights are set on supporting large scale societal changes that ensure the outdoors remains a transformative place for future generations.

As part of our commitment to being climate-neutral by 2020, we've implemented a comprehensive effort to identify, track, report and reduce our greenhouse gas emissions.

As the co-op succeeds and we grow, our members expect the co-op to play a larger role in the effort to make renewable energy more available and affordable in our own operations, as well as in the communities where we operate. We recognize the effects of climate change, and we're acting on behalf of our members. We're one of more than 100 businesses in the state of Washington that signed the 2015 Washington Business Climate Declaration, calling for strong action on climate change in our home state to protect our growing economy and the outdoor places people enjoy. In 2010, REI partnered with Climate Counts Industry Innovators to address global climate change and gain a better understanding of what motivates consumers and the marketplace to view climate change as a chance to improve the retail environment. We engage in the right conversations where it matters most and will continue to do what's right for our members, our environment, our business and the outdoor community.

One example of work that impacts the climate is our installation of electric vehicle fast-charging stations at our stores to support cleaner transportation to the outdoor places where our members recreate. Currently, we host chargers in Seattle, Salt Lake City, and three Denver-area stores with active work to expand our hosting of chargers as opportunities arise.

See our greenhouse gas performance here.

Energy

Energy aspiration: Grow our business while managing our total energy use.

Like many businesses that operate across the country, energy use is one of the largest contributors to REI's climate impact. By actively managing our energy consumption and expenses, we gain insight into fundamental risks and opportunities and minimize our exposure to financial and business continuity risks. The energy choices we make now will have impacts for decades to come, which is why we committed in 2013 to using 100% renewable energy for our operations.

Sustainable energy use is part of protecting the outdoors. We take a straightforward approach:

  • Seek to use less energy through good building design and energy-efficiency measures
  • Generate our own energy (e.g., rooftop solar panels)
  • Contract directly with utilities for long-term renewable energy
  • If needed, commit to purchasing renewable energy certificates for the remainder of our purchases from the grid

This strategy includes steps to decrease costs and increase energy efficiency, which both make good business sense. Our 100% green power commitment is just one example of how we translate our values into action and how we strive to have a positive impact on the world. It ensures that renewable energy powers REI.

We take a variety of approaches to manage our energy use and increase our efficiency:

  • Solar: We have 26 REI locations equipped with solar technology. We first installed solar panels on 11 REI stores in 2008 and increased our investment in 2011 to 12 additional stores and our distribution center in Bedford, Pennsylvania. In 2016, we added a 2.2 megawatt solar array on our Goodyear, Arizona, distribution center—by far our largest installation. With solar rooftop panels in place, a store can generate 10–100% of its own electricity. This investment makes great sense for REI because it reduces greenhouse gas emissions, reduces operating costs and mitigates our exposure to the volatile energy markets.

  • Renewable Energy Buyers Alliance: In 2014, we became one of 12 original signatories of the Buyers' Principles, a joint statement on renewable energy by a coalition convened by the World Wildlife Fund and the World Resources Institute. In 2014, the U.S. Environmental Protection Agency named us a Green Power Leader.

  • Green power contracts: When we do purchase electricity from the grid, we do it wisely. Long-term power contracts from renewable power sources provide environmental benefits along with a financial hedge against expense volatility. Seven of our stores are currently on green power contracts. Unfortunately, we are limited in many locations by a lack of offerings that meet our criteria. We actively look for long-term power purchase agreements that meet our financial and environmental criteria.

  • Partnering with utilities: For many years, we have partnered with aligned businesses, governments, and Puget Sound Energy to develop their Green Direct renewable energy tariff that maximizes environmental benefit and provides long-term price stability. As this new wind farm comes online in early 2019, it will provide renewable energy to our headquarters and five of our local stores.

  • Data center retrofit: REI's data center houses servers and backup systems for computers, software systems, REI.com and point of sale for more than 130 stores. Completed in 2013, our retrofit added “free cooling” via a rooftop evaporative cooling tower that keeps our servers at optimal temperatures. We also have improved efficiencies that increase business resiliency and stability in the event of a regional power outage. Overall, this retrofit has resulted in a 93% reduction in the cooling energy used to operate the facility. This saves enough to power six REI stores—2.2 million kilowatt hours each year.

  • Lighting: We eliminated incandescent bulbs from our retail stores and replaced them with more efficient and longer-lasting lights. We are shifting much of our lighting to efficient and long-lasting LED bulbs. Most of our stores are built with skylights that offer natural illumination. Occupancy sensors and a centralized energy management system also help minimize the amount of time each day that our lights are in use.

  • Heating, ventilating and air conditioning (HVAC): We're in the process of retrofitting the HVAC systems in our stores and are on track to eliminate units that use freon, a substance harmful to the ozone, by 2020. We are replacing outdated units with safer, more efficient equipment. The new HVAC units are all connected to a sophisticated energy management system that optimizes their use.

  • In 2017, we partnered with the Rocky Mountain Institute to pioneer a rigorous and deep energy efficiency assessment of our retail stores. This Portfolio Energy Optimization process has shown us significant additional efficiency opportunities for our stores, and will help other owners of large real estate portfolios identify significant opportunities in their buildings.

See our energy performance here.

Methodology: Greenhouse Gas Emissions, Energy and Climate Change

Product Transportation

One of the ways we help scale our impact on sustainability is by looking at how products get to our distribution centers, stores and customers. To create our greenhouse gas (GHG) inventory, we account for the carbon impacts of the shipment of goods that we own. We take responsibility when a vendor ships products from its location to our distribution centers because we control the method and timing of deliveries. We also include the emissions that result from sending products by truck from our distribution centers to our stores or from fulfilling a direct-to-consumer order by shipping a package via a carrier, such as UPS.

This approach means that REI assumes responsibility for emissions in three areas:

  • Goods inbound—from vendors or factories to our distribution centers or stores
  • Intracompany transfers—shipments to/from our distribution centers to our stores and between stores
  • Direct fulfillment—sales shipped directly to customers

Increases in REI's GHG impact can result from the growth of our business, such as increasing the number of stores we operate or the factories that supply our goods, and by using additional air transport to fulfill direct, next-day customer orders.

Corporate Travel and Employee Commuting

To measure the climate impact of corporate travel, we count the impact of transportation, such as air flights and rental car usage. We do not currently include indirect impacts, such as the energy used in the hotel where the employee stays. For air travel, we use an emissions factor per passenger mile that includes a multiplier to account for the increased climate change impact of radiative forcing. We do not calculate CO2 based on flight segment length, carrier or class of air travel (economy versus business or first class). We continue to seek rigorous flight and carrier level CO2 factors so that we can more accurately measure our impact and shift our business to the most efficient carriers. To calculate CO2 for rental cars, we measure the number of rental days booked by REI employees and use industry averages for average miles per day and fuel mileage for the classes of cars we rent.

Miscellaneous Greenhouse Gas Emissions

A portion of REI's climate footprint comes from small sources. Miscellaneous emissions include the climate impact of fuel for fleet vehicles and the leakage of refrigerants from HVAC systems at our facilities where we control maintenance. These are tracked through invoices, vehicle logs and bills.

REI Adventures

To more fully account for the GHG associated with our travel business, we estimate the GHG impact of our customers' door-to-door travel, including flights—even if REI did not include the flights in the trip package. We add the in-country impact of our trips to the travel impact to show the total climate impact of our REI Adventures business. This level of transparency goes beyond typical disclosure of climate impact in the adventure travel industry.

Waste

Waste aspiration: Become a zero waste-to-landfill organization by 2020.

REI is working to become a zero waste-to-landfill organization by 2020. This aspiration drives us toward more efficient business and environmental practices as we seek ways to reduce solid waste and the costs associated with it, such as packaging, disposal and shipping. Eliminating waste is good for our business and good for the environment.

We think beyond the traditional "reduce, reuse, recycle" model to eliminate waste at the front end of the manufacturing process. And we examine and re-engineer practices attached with waste generation throughout our operations, from manufacturing to product placement in our stores to our work with local waste utilities and haulers.

Here are a few ways we're working toward our aspiration of zero waste to landfill by 2020:

  • Increasing recycling and recovery options for materials in our waste stream by partnering with waste vendors and other retailers in markets around the country
  • Piloting additional strategies to maximize waste diversion in a subset of stores, bringing them to scale starting in 2018
  • Composting food waste and paper towels at our headquarters location
  • Working with our suppliers to design out waste materials that affect our business operations
  • Eliminating excess packaging, such as plastic bags destined for the landfill
  • Working with the Outdoor Industry Association's Sustainable Working Group initiative to identify shared industry solutions to reduce packaging waste throughout the supply chain

See our waste performance here.

Methodology: Waste

REI counts waste to landfill from all of our owned and leased facilities, including waste generated in regular operations and waste from one-time and one-off projects, such as new store construction and major remodels. In our largest facilities, we pay for waste to landfill based on weight, which allows us to track our progress. For the majority of our facilities, however, our waste is not measured by weight and our dumpsters are picked up whether they are full or empty. We quantify waste in tons, using direct weights (from compactors, etc.) when possible, and industry density estimates when not.

For standard “roll-off” dumpsters picked up on a regular schedule at our retail stores, and sometimes at our support facilities, we count the dumpster as full in volume regardless of its actual fill percentage, and then we convert this volume to tons using a standard density conversion. We also count the occasional additional pickup that our stores call for at times of heavy volume. For stores where waste disposal is shared with other tenants (often in shopping malls), we estimate waste to landfill by assuming that the waste to landfill per sales dollar is the same as in the stores where we control waste disposal. This approach gives us a clear, simple methodology that aligns our reduction in waste with direct expense savings from reducing landfill service.

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Paper and Sustainable Forestry

Paper aspiration: Align our use of paper with our values through efficient use and strategic sourcing.

Access to healthy forests is essential for people to enjoy the outdoors. It’s also essential to REI’s business. We use fiber and the resulting paper products throughout our operations—flyers, cardboard, shopping bags, hangtags and more. As a co-op that inspires our members to spend more time outside, sustainable forestry is a natural focus for us. Part of our approach is the responsible use of resources and leveraging our purchasing power to help motivate sustainable practices within our supply chain. We are also committed to mitigating negative environmental impacts from the harvest and processing of paper products that we purchase. REI fully supports practices that promote forest sustainability, biodiversity and long-term shared environmental, social and economic benefits.

Our paper and paper products purchasing policy is a direct reflection of our values. It's designed to positively influence paper supply chains well beyond our immediate sphere. We also intend our policy to support sustainable forestry systems. We believe that forestry products can be a much-preferred alternative to other materials—if sourced and produced by sustainable methods.

When we purchase paper products, we strongly prefer post-consumer waste or virgin fiber harvested from Forest Stewardship Council-certified forests. We avoid buying products where the fiber comes from unknown or unwanted sources.

Our paper buyers continually work on innovative solutions to reduce waste paper. For example, we resize print pieces to match the width of stock paper. We have also redesigned the packaging of our REI-brand gear and apparel to minimize the amount of paper it contains.

See our paper performance here.

Paper Policy

REI has established the following policy commitments:

  • Responsible and efficient use of forest products: Wood and paper are renewable natural resources that, when sourced under a responsible program, can represent a sustainable material choice. We will create and maintain purchase specifications for the responsible sourcing of each category of paper products, and we will always strive to use paper products responsibly. Recycled content and alternative fiber sources will be evaluated on a total life-cycle-assessment basis.

  • Known origins (chain of custody): REI will strive to know with reasonable, verifiable certainty the source of our paper, including the source of all virgin wood fiber we purchase. This will be accomplished through contractual supply chain agreements, audits and oversight of suppliers. The most desirable assurance is a credible, third-party-certified chain of custody.

  • Sources of fiber: REI aims to ensure that all paper and wood fiber is legally harvested and traded and is not obtained from controversial sources, such as:

    • Harvesting and processing areas that violate human rights
    • Areas where the timber trade is driving armed conflict
    • Areas that are being actively converted from natural forests to plantations
    • Nonforest uses or that use timber from genetically modified trees

    We also strive to eliminate wood or fiber harvested in ways that promote environmental degradation, and we will not knowingly source from high conservation value forests (HCVFs) unless such forests are certified under a credible certification program.

  • Environmental and social performance of supply chain partners: REI is committed to sourcing from supply partners, sub-tier suppliers and mills that demonstrate a high level of environmental and social performance. Compliance with applicable regulations is a minimum, but we give preference to suppliers that demonstrate a commitment to sustainable operations and have a track record of continuous improvement through a formal environmental management system.

  • Commitment to recycling at REI: REI is committed to the principle of “closing the loop” for paper and paper products. We strive to ensure that the paper and wood products used in our operations are recycled or reused.

Definitions

Unknown: Paper and wood fiber that does not have a traceable chain of custody.

Undesirable: Paper and wood fiber that is the product of illegal logging or is obtained from controversial sources in areas that:

  • Contribute to human rights violations
  • Drive armed conflict from timber operations
  • Actively convert natural forests to plantations or nonforest uses
  • Use timber that is from genetically modified trees or sourced from HCVFs—unless the source is certified under a credible certification program

Recycled: The amount of post-consumer recycled content in our paper products.

Acceptable: Sources of fiber that are not undesirable but have not been formally certified.

Certified: Sources of fiber that have received certification by a credible certification program.