The company, which offers consumers a subscription plan that lets them borrow designer clothes, announced on January 14, 2020, that it will create a line of clothes made from recycled materials in an effort to be more sustainable and climate-conscious. 

Rent the Runway, based in New York, is currently valued at $1 billion. It claims to reduce waste by allowing customers to share clothes rather than own them. The fashion industry generated 11.2 million tons of textile waste in 2017 alone.

Rent the Runway is the latest spin on the “sharing economy.” The sharing economy allows consumers to pay for access to a service, ideally at a more affordable price by sharing with other consumers. Uber, Lyft, and Airbnb are other examples of sharing economy companies. 

It has also inspired traditional brick-and-mortar retailers such as Urban Outfitters and Bloomingdale’s to try their hand at rentals, which could transform the industry. 

How does renting clothes work?

Rent the Runway was co-founded by Jennifer Hyman, the company’s chief executive officer, while she attended Harvard Business School in 2008. The business began as a way for women to rent designer pieces for events, in the way that a man might rent a tuxedo for an event, according to The New Yorker. 

Since its founding, Rent the Runway has evolved into a subscription business that allows customers to pay a monthly fee of $159 to rent four pieces at a time and return them when they choose. This service has attracted 100,000 paying subscribers. (The company reportedly has more than ten million members, defined as people who have created an account.)

The largely millennial customer base wants access to designer clothes without having to own those clothes and eventually dispose of them, according to Hyman. 

Rent the Runway has allegedly been sustainability-minded in the way it operates as a company since its founding. The company ships clothes in a patented, reusable garment bag rather than plastic packaging or cardboard boxes, according to Rent the Runway’s website. The company also sells or donates items that have exceeded their shelf lives. 

Waste in the Fashion Industry

“Fast fashion” clothing items are the cheap but disposable items that you can find at stores such as Forever 21, H&M, and Zara. These companies produce more and more clothing and sell that clothing at cheap prices, typically by using poor quality materials and hiring inexpensive labor abroad.

The idea behind fast fashion is that consumers buy more cheap clothing and then dispose of it after wearing it a few times, according to Town & Country. In 2018, consumers on average purchased 68 items of clothing and wore each piece of clothing an average of 7 times.

Fast fashion is increasingly contributing to waste in the fashion industry. The fashion industry emits 10% of the total global greenhouse gas emissions, according to World Bank. The fashion industry also uses 93 million cubic meters of water each year, which is enough water for 5 million people.

Shoppers today buy 60% more clothing than they did in 2000. Of the clothing that is manufactured, less than one percent of it is recycled, according to the World Bank.

Other clothing companies in the sharing economy

Rent the Runway has inspired other clothing companies to get into the sharing economy and attempt to decrease the waste of the “fast fashion” industry.

Urban Outfitters, which owns Anthropologie and Free People, started its own $88 a month subscription service called Nuuly which allows customers to rent six pieces at a time. Meanwhile, Macy’s, Bloomingdale’s, and Banana Republic have also announced clothing rental options of their own.

Companies such as Frank & Oak, Stitch Fix, and Trunk Club charge a fee to send users a curated box of clothing, from which customers can choose what they want to keep and what they want to return. 

Sustainable Investing

If sustainability is important to you, Stash offers climate-conscious ETFs and single stocks for you to invest in. 

Additionally, Stash offers single stocks and ETFs in the retail sector. Investing in different sectors, like the retail sector, is one way to diversify your portfolio. Diversifying is part of the Stash Way. When you’ve diversified your portfolio, it will hold a variety of investments that are not all subject to the same market risks, including stocks, bonds, and cash, as well as mutual funds and exchange-traded funds (ETFs).

The post Why Rent the Runway is Dressing for Less Excess appeared first on Stash Learn.

But perhaps not anymore.

The chief executives of the leading corporations in the U.S. released a new set of standards, through an organization called the Business Roundtable, about how they propose to operate their businesses in the future. And from now on, people, suppliers, communities, and the environment will allegedly come first.

“The American dream is alive, but fraying,” Jamie Dimon, chairman and CEO of JPMorgan Chase, and chairman of the Business Roundtable, said in a press release. “Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans.”

Why is this important?

• The new goals are the opposite of established business norms that prioritize profits.
• For the last 50 years, the stated objectives of big corporations has been reportedly to make money, increase profits for the owners and shareholders, i.e., the people who own the company and its stock.
• A top proponent of the profits over people mindset was Milton Friedman, a leading economist who wrote in 1970 that “the social responsibility of business is to increase its profits.”
• In its 1997 mission statement, the Roundtables said it “wishes to emphasize that the principal objective of a business enterprise is to generate economic returns to its owners…In The Business Roundtable’s view, the paramount duty of management and of boards of directors is to the corporation’s stockholders.”

What’s different this time?

• The Business Roundtable says it wishes to be more inclusive of workers and other non-owners who participate in business.
• The Roundtable’s new statement says: “Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity. We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.”
• Sustainability and the environment are also key.

What is the Business Roundtable?

Founded in 1972, the Business Roundtable is a pro-business public policy and lobbying group that represents the interests of the largest U.S. corporations, which collectively employ 15 million people, and produce $7 trillion in annual revenue, according to the group.

Who signed the statement?

Nearly 200 CEOs, including:

• Tim Cook, CEO of Apple
• Jeff Bezos, founder and CEO of Amazon, and
• Mary Barra, the chief executive of General Motors
• Michael Dell, founder and CEO of Dell computers.
• Doug McMillon, CEO of Walmart.
• Here’s the full list.

Why now?

The heads of the largest U.S. companies may realize that times are changing, and they need to be more inclusive of people beyond shareholders and other owners, according to experts.

For example, executive pay and the increasing wealth gap between the richest and poorest U.S. citizens has been the topic of conversation from pundits to politicians in recent years, and particularly as the country gears up for the next presidential election.

Since 1978, the average CEO salary has increased 940%, according to the Economic Policy Institute, a labor think tank. Over the same time period, the wages of average U.S. workers have increased only 12%. The average CEO pay at a large company was $17.2 million compared to $56,000 for the average worker nationally.

Companies have also grown more sensitive about how the products they produce actually get made, and have grown more aware of the potential mistreatment of workers, particularly in emerging economies.

There is a growing realization that supply chains must be transparent, and that in order for capitalism to be sustainable, treatment of people matters, according to experts.

Additionally, global warming, and the role of business in producing carbon emissions that contribute to the heating of the planet, has become a top issue.

The post What’s the Business Roundtable and Why Does It Want to Change Capitalism? appeared first on Stash Learn.

Do you want your investments to support companies with an eye on the greater good as well as their bottom lines? You might want to consider them in your investment portfolio.

Buzzwords: ESG, SRI, and screens

Investing strategies and investments that consider factors like sustainability, workplace equality, and political impact are often called ESG (environmental, social, and governance) or SRI (sustainable, responsible, and impact).

Both of these categories focus on similar factors. The main distinction is that ESG investing is often based on inclusionary screens, while SRI investing is based on exclusionary screens.

Survey: 71% of all investors surveyed were interested in some form of sustainable investing

Screens are how an investment is included or excluded from a portfolio or fund. If a company is creating an index, they can chose to include and exclude certain investments based on a number of factors.

If an investment or index wants to focus on sustainability? That’s an inclusionary screen. If it wants to avoid companies that have a bad track record with workplace equality? That’s an exclusionary screen.

Some factors that are considered in order for something to qualify as an ESG investment:

Environmental: Resource utilization, sustainability office, environmental impact
Social: Corporate philanthropy, working conditions, progressive and inclusive HR policies
Governance: Reporting and disclosure, product recalls, balance of powers

Who is ESG investing for?

In 2015, Forbes partnered with the news site Elite Daily to conduct a Millennial Consumer Study. The data revealed that 75% of Millennials think that “it’s either fairly or very important that a company gives back to society instead of just making a profit.”

A 2015 TIAA Survey found that 90% of Millennials agreed that “I’d like my investments to deliver competitive returns while promoting positive social and environmental outcomes.”

The survey also indicated that 76% of Millennials care more about having a positive impact on society than doing well financially. (Only 42% of non-Millennials felt similarly.)

A recent Morgan Stanley survey found that 84% of millennial investors are interested in sustainable investing. It also stated that, “female investors are more likely to factor sustainability into their investment decisions and are more likely to see the advantages of doing so.”

But it’s not only Millennials that seem to prioritize these factors.

While the aforementioned survey made it clear that almost all Millennials are down with ESG, it also found that 71% of all investors surveyed were interested in some form of sustainable investing.

Interestingly, Europe is leading the charge when it comes to ESG investing. In 2014, “58.8% of European invested assets already are invested in a sustainable way, compared to 31.3% in Canada and 17.9% in the United States*.”

Do I have to sacrifice returns?

While every fund is different and has risks that must be weighed on a case-by-case basis, many leaders in the investment field are optimistic about ESG investing.

“Over time, high ESG scores tend to result in positive effects on investment performance,” Sharon French, head of Beta Solutions of OppenheimerFunds, wrote on the company’s blog last month  “It’s not only about changing the world, it’s about understanding how the world is changing.”

Morningstar, a provider of independent investment research, dedicated their entire December/January issue to sustainable investing: “Sustainable Investing Takes Off.”

“I believe that investing itself is a socially conscious act. It means deferring gratification today for greater security and opportunity for yourself and your loved ones tomorrow,” says Don Phillips, managing director for Morningstar.

ESG investing on Stash

Excited about investments that focus on sustainability and social responsibility? There are options available to you on Stash. Explore more here. 

The post Do You Know About ESG Investments? Investing as Social Activism appeared first on Stash Learn.

Why should you feel good about investing in Apple?

They’re all about the green

With a high caliber of corporate sustainability, Apple is nearly unbeatable in their dedication and results. 100% of their US data and operations centers run on 100% renewable energy (and a growing 87% of global data centers do as well).

Apple remains the most aggressive among major internet companies in deploying renewable energy.

How? Apple has taken that extra-impressive step and built three separate solar farms and on-site fuel cells in order to secure a trusted renewable electricity supply. As a result, Apple prevented 13.8K metric tons of carbon emissions in 2015 and saved 3.8 B gallons of freshwater since 2013, according to their 2016 Supplier Responsibility Report. Apple remains the most aggressive among major internet companies in deploying renewable energy.

They (really) don’t like to waste

From the office to the product, Apple refuses to waste resources. They recycle used Apple devices that their customers drop off at any Apple store.  But Apple doesn’t just depend on their consumers for reducing waste. They’ve ensured that 99% of the paper in their packaging is recycled or sustainable.

Apple is a technology company, but one with an uncommon commitment to sustainability. The plan for their new data center in Viborg, Denmark includes capturing excess heat from the data center, piping it into the town’s district heating system and heating other buildings in the town.

They’re recognized

Just how impressive is their dedication to sustainability? Apple was named the top manufacturer among all brands by the Institute of Public and Environmental Affairs (IPE) in 2015. Furthermore, Apple is the only company awarded a Clean Energy Index of 100%, according to Greenpeace’s Clicking Green Report.

They have a hand in charity

With all the paper that they do use, Apple wanted to give back. In order to reduce the company’s “virgin paper footprint” (virgin paper = paper that has never been recycled before), Apple purchased two forests, one in North Carolina (3,600 acres) and one in Maine (32,400 acres). With the company’s 100% sustainability goal, the purpose of the forest is to plant half as many trees as it’s cutting down each year.

They help employees have a hand in it, too

Apple doesn’t stop at coloring everything green. They highly encourage charitable giving and volunteering. When an Apple employee donates money to a non-profit 501(c)(3), Apple matches the gift, dollar-for-dollar, up to $10,000 annually. And when an employee volunteers, the company donates $25 per hour to the organization.

They know kids are the future

As part of the company’s own charitable activities, they also bring an innovative approach to education across the country. In joining forces with President Obama in the ConnectED initiative, Apple pledged $100M to improve teaching and learning solutions within underserved schools nationwide. They’ve donated iPads, Macs and Apple TVs to improve both the teaching and learning experience.

The post Is Apple More Responsible Than You? Why You Want to Invest appeared first on Stash Learn.