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Inditex - ST

The document discusses Inditex's Strategic Environmental Plan from 2007-2010 which includes five projects, one being the Pro-Kyoto Project focused on reducing greenhouse gas emissions from logistics operations by 20%. The plan establishes initiatives like using bio-diesel in trucks and electric vehicles, and installing renewable energy sources at facilities.

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30 views5 pages

Inditex - ST

The document discusses Inditex's Strategic Environmental Plan from 2007-2010 which includes five projects, one being the Pro-Kyoto Project focused on reducing greenhouse gas emissions from logistics operations by 20%. The plan establishes initiatives like using bio-diesel in trucks and electric vehicles, and installing renewable energy sources at facilities.

Uploaded by

Ilyas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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9.

1 Strategic Environmental Plan: INDITEX –


Pro-Kyoto Project

Sonia Guerola Pérez

INDITEX is developing a Strategic Environmental Plan 2007–2010 which is


divided into five specific projects:
– INDITEX Pro-Kyoto Project
– Sustainable Store Project
– Energy and Environmental Integration Project
– The Carbon Footprint Project
– The Terra Project
We will focus in the Pro-Kyoto Project later in this case study because the
sustainability of logistics operations is one of INDITEX’s key business values. The
group’s commitment to sustainability, climate change mitigation and the Kyoto
Agreement is specifically focused on the reduction of greenhouse gases generated
by transportation.

9.1.1 Problem Description

INDITEX is one of the world largest fashion distributors, with eight brands – Zara,
Pull and Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and
Kiddy’s Class.
The Spanish government and European Commission have increased fines for
excess CO2 emissions. INDITEX’s own CO2 emissions were considerable. INDI-
TEX also realises the importance of brand image to consumers, especially

191
192 9 Markets and Strategies Cases

nowadays in terms of sustainability and environmental responsibility. Moreover the


Spanish government is funding companies’ efforts to become more sustainable.
With these factors in mind, INDITEX is developing a Strategic Environmental
Plan 2007–2010, which is divided into five specific projects: the Sustainable Store
Project, INDITEX Pro-Kyoto Project, Energy and Environmental Integration Pro-
ject, The Carbon Footprint Project and The Terra Project.
The Pro-Kyoto Project is focused on logistics operations, whose sustainability is
one of INDITEX’s pre-eminent business values. The Group’s commitment to
sustainability, climatic change and the Kyoto agreement is specifically focused on
a targeted 20% reduction of greenhouse gases generated by transportation.

9.1.2 The Solution

The main goal for the Pro-Kyoto project is to reduce transportation greenhouse gas
emissions. To achieve this goal, INDITEX has established four initiatives that have
already been implemented, and will be developed until 2010:
– A Bio-Diesel Programme: Zara’s entire fleet of transportation vehicles will run
on bio-diesel, for which a supply network will be set up at loading points and
along trucking routes. The vehicles concerned are operated by third party
logistics contractors.
– Fleet driver training courses on fuel-efficient driving form part of a plan
implemented in conjunction with logistic suppliers. It also stipulates that all
vehicles in the Zara fleet must comply with the European Commission’s EURO
5 NOx vehicle emissions standard two years ahead of EURO 5 coming into
effect in 2009.
– Zero-emissions electric vehicles will be used in factories and logistics centres to
replace an older petrol-fuelled fleet.
The second project is the Sustainable Store project. It has involved developing
criteria for sustainability and the efficient use of energy in retail outlets, through
three main strategies:
– Eco-efficient store model: INDITEX, in conjunction with the University of
Vigo, is designing an ecological energy management model for retail outlets.
Lighting equipment will be changed to equipment that offers high efficiency and
low energy consumption.
– Sustainability of packaging and wrapping materials: Work in this area includes
eco-certification for all plastic and paper bags used by the Group, (using
international standards such as FSC or PEFC) and the use of biodegradable
materials in all plastic bags. It also covers all store waste management, which is
carried out by authorized agents, and the re-use and recycling of materials such
as cardboard boxes, hangers and computer-generated waste.
– Training for all store personnel to raise awareness of environmental impacts.
9 Markets and Strategies Cases 193

The third objective is to integrate Environmental and Energy actions in the


production facilities. The aim of the Energy and Environmental Integration Project
is to introduce renewable energy sources, such as wind, solar and solar-photovoltaic
energy in the Group’s logistics facilities.
INDITEX’s facilities at Arteixo (A Coruña) house the headquarters of the Group
itself as well as those of the Zara, Zara Home and Kiddy’s Class brand operations,
the Group logistics centre and 11 textile factories.
Inditex has implanted a new integrated energy system at Arteixo that includes
a 5,000 kW cogeneration plant, a 1,500 sq ft solar installation and a 850 kW wind-
turbine. This system covers more than 50% of the Arteixo site’s energy requirements.
The Group aims to install similar energy systems in its other main facilities. The
plan involves implementing the following actions:
– Solar photovoltaic installations in the logistics centres located at Meco
(Madrid), Zaragoza and León, and in the Group’s headquarters in Tordera
(Barcelona) and Elche (Alicante).
– Minimise carbon monoxide emissions by replacing oil with natural gas for
heating and for the production of steam for ironing equipment at Arteixo and
Sallent (Barcelona).
– A new cogeneration plant in Tordera.
The Carbon Footprint Project objective is the fourth element of the plan; Inditex
will measure the carbon footprint of each of their manufacturing processes and
adopt strategies to reduce it.
The Terra Project is the final element in the Strategic Environmental Plan 2007–
2010. INDITEX considers tree planting as one effective way of closing the energy/
CO2 loop. The objective is to create the forest mass needed to absorb 100% of the
emissions generated by the consumption of electricity at the central office in
Arteixo. (A site for this forestation project has yet to be selected).
INDITEX will achieve a reduction in greenhouse gas emissions and increase the
proportion of its energy demand supplied by renewable energy sources. It will
maximize the efficient use of energy in manufacturing, train staff in environmental
management issues and raise their awareness of sustainability.
INDITEX considers it should integrate a set of sustainable development criteria
in its working practices, to ensure effective, responsible resource management and
the protection of the environment to satisfy society’s requirements.

9.1.3 Challenges

Challenge 1: To achieve a 20% reduction of CO2 emissions. This is an important


objective, because to achieve this the Group had to initiate change in several
activities, including some of its logistic strategies.
Challenge 2: No commercial availability of biofuels in Spain.
194 9 Markets and Strategies Cases

Challenge 3: Scepticism of personnel and fear of technology change (vehicles


running on biofuels and electrical vehicles).

9.1.4 Lessons Learnt and Success Factors

– Lesson 1: Logistics and environmental efficiency go together hand in hand.


Thus if they are both managed in an integrated way, economic, social and
environmental benefits will result simultaneously.
– Lesson 2: Sustainable corporate investment decisions on technological and
productivity improvements must value and account for environmental variables.
– Lesson 3: When staff are fully involved in projects of this type, success is more
easily won.
– Success factor 1: INDITEX has aligned its logistics strategy with sustainability
criteria to realize environmental improvements which can enhance the image of
the company communicated by media.
– Success factor 2: Truck drivers have been trained in efficient driving techniques
and other employees have taken part in training to make them aware of the new
strategy and to encourage their participation.

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