Inside Neiman Marcus’s first ESG report

With Neiman Marcus releasing its first ESG report in March, the company is set to stir up change within the U.S. retailer space. This year, specifically, the company plans to prioritize resale and refurbishment at larger stores, creating new stores with a smaller carbon footprint and giving more attention to the way stores function in line with sustainability measures. 

Last year, the retailer started several related programs, including measuring its carbon footprint, offsetting its impact with renewable energy contracts and establishing science-based targets. In addition, it’s established a dedicated ESG team from within the company and a committee to drive its progress in the area.

In a call with Glossy, Eric Severson, Neiman Marcus’s chief people and belonging officer, and Ali Mize, director of ESG, belonging and corporate philanthropy, discussed the company’s focus on using renewable energy in stores, reducing scope one and two emissions (with scope three to come at a later date), and promoting sustainable products, among other goals. The company’s full list of objectives, according to its ESG report, are listed below. According to Neiman Marcus, the progress of each will be reviewed quarterly, along with the company’s financial reports.

Advancing Sustainable Products & Services

• Extending the useful life of 1,000,000 luxury items through circular services.
• Increasing revenue from sustainable and ethical products.
• Reducing Scope 1 and 2 emissions by 50% from a 2019 baseline.
• Ensuring NMG protects human rights by developing and implementing a new Supplier Code of Conduct.

Cultivating a Culture of Belonging

• Advancing workplace equity in line with prominent external standards.
• Increasing racial diversity in leadership roles from vice president level and above to 21%.
• Providing Belonging training for 100% of NMG associates.
• Championing inclusive marketplaces by increasing spending with diverse suppliers.

Leading with Love in their Communities

• Partnering with customers to raise $3,000,000 for charity through The Heart of Neiman Marcus Foundation.
• Increasing associate giving and volunteerism in NMG’s All Heart Program.
• Supporting disaster preparedness and relief

Below, we’ve outlined the key points across the first two sections of the report, adding context and supplemental comments from the Neiman Marcus executives interviewed for this story. The corporate giving objectives are very standard and not as applicable to the fashion industry. 

A deeper look into: Extending the useful life of 1,000,000 luxury items through circular services.

Neiman Marcus has committed to keeping its luxury items in rotation for as long as possible through several different programs. Firstly, it’s invested in female-owned Fashionphile, a fashion resale platform. The partnership resulted in 40,000 resale items sold at Neiman Marcus stores since it began in 2019. Fashionphile is also pursuing B Corp certification. 

Resale has been a growing area for luxury brands. 2021 was a key year with investment from luxury players like Kering. Resale can be particularly lucrative for luxury brands and retailers whose offering increases in value over time.

Second, Neiman Marcus was the first luxury retailer to join with nonprofit Textile Exchange in Nov. 2021. The nonprofit develops and promotes industry standards for preferred fibers, encouraging the adoption of sustainable materials. Its goal is to reduce CO2 emissions from textile fiber and material production by 45% by 2030.

Third, the retailer formed a partnership with Give Back Box, also in Nov. 2021, so customers can extend the life of their purchases. Rather than put them in a landfill, they can put them back in a delivery box with paid shipping. The items are donated to local charities within the U.S.

Last, Neiman Marcus is expanding its in-store mending and alteration services for garments customers already own. For example, customers can bring in a pair of Louboutin heels to have them resoled for $75, or they canchange the silhouette of a Christian Dior jacket to get more use out of it. 

Mending garments, rather than throwing them away, is a valuable investment for customers, especially those with luxury goods. However, accessibility to mending and alteration services has not been a priority for retailers or brands. This is changing. Retailers like U.K.-based Farfetch, Harrods, Selfridges, Browns and Harvey Nichols have all partnered with aftercare service The Restory to give consumers access to end-of-life care for their products. Burberry has also launched a luxury aftercare offering, ushering in a new service area for brands. 

Talking about the initiative, Severson said: “One of the things at the heart of our report and our strategy is that, by definition, because we’re in the luxury business, our products are made to last from the beginning. In some cases, they are made to last a lifetime. What we’re doing with this complement of services, whether it’s the Give Back Box or alterations or Fashionphile, is extending the life of those items further by either allowing our consumers to pass them on to someone else or repairing them.”

A deeper look into: Increasing racial diversity in leadership roles of vice president level and above to 21%.

The retailer has a solid record of championing and supporting women in the workplace. However, leadership positions still do not reflect the diversity of its customer pool or the average U.S. population. 

After the BLM protests in 2020 and the ensuing outpouring of support from fashion brands, many companies did not carry their support through to 2022. With leadership positions, Neiman Marcus states that at the vp level currently, only 1.7% of its workforce is Black or African American, 3.5% are Hispanic or Latino, and 13% are Asian. 

Neiman Marcus is advancing this goal by requiring the pool of candidates for leadership roles to include candidates of color. It will also require that there be at least one female interviewer and one interviewer of color on the panels for jobs at director level and above. In addition, it’s encouraging the involvement of interviewers representing diversity in their sexual orientation, gender identity or ability, for example.

The retailer is also diversifying the sources from which it recruits. It’s developing new relationships with organizations like Hispanic non-profit Prospanica. It’s also reaching out to the MBA and LGBTQ organization McKinsey Connected Leaders Academy, as well as diversity.com. The company has integrated its diversity pledge into succession planning and development so that it can identify high potential talent of color and ensure the accelerated growth of those leaders.

This support of diverse groups extends to suppliers. It’s dedicating a larger potion of its marketplace to diverse suppliers and investing in the Supplier.io platform that tracks diverse suppliers across multiple categories. 

The company has also launched a new initiative called the associate community network, where it can access feedback from the digital communities formed within its network during the pandemic. It extends across the corporation and offers peer-to-peer connections and support. 

Talking about the initiative, Severson said: “The bottom line on diversity, equity and inclusion is that we believe the only way you affect change anywhere in the business is by setting appropriate targets that are appropriately benchmarked and then building an operating plan to achieve them. Our point of view is that we want the leadership of our organization to reflect the very broad diversity of our associate population and ultimately our customers. Part of that is understanding that leaders in the organization have the greatest impact on the culture and material issues of equity with employees. Leaders in the organization ultimately determine who gets hired, who gets promoted, how much people get paid. We were very intentional when setting these targets. We are going to work on achieving those targets through proven evidence-based practices like diverse hiring slate requirements.”