2011 CSR Report
table of
CONTENTS
Leaving it Better
05
Caring for Our People
11
Supporting Communities
15
Sustaining the Environment
29
Protecting Human Rights 41
from the
CEO’S NOTE
We started to experience positive momentum during the second half of 2009, which continued during the first half of 2010. This was a result of our ongoing efforts in the areas of multi-channel execution, merchandising and inventory management, new store and other growth opportunities and, most importantly, improving customer service. During the third quarter of 2010, these positive trends continued to favorably impact our business, as we marked thirteen consecutive months of total company same-store sales increases, with accelerating sales growth on a two-year basis, and five consecutive quarters of earnings improvement. We strive to offer an outstanding customer experience, regardless of channel, with compelling fashion merchandise and high quality customer experience. This effort has contributed to our recent performance, including sales growth and gross margin expansion. By managing our inventories effectively and flowing new merchandise into our stores more quickly, we have been able to improve regular priced sales, gross profit and inventory turnover. Our multi-channel capabilities allow us to better serve our customers by offering greater access to our inventory and enabling them to shop with us however and whenever they choose. We are continuing to invest in these capabilities as part of our commitment to improving the customer experience. Our strong financial position enables us to continue to invest in our business through store growth and remodels, technology, merchandising systems and other opportunities. During the nine months ended October 30, 2010, we opened three full-line stores and sixteen Nordstrom Rack stores, and relocated one full-line store and one Nordstrom Rack store. We have been encouraged by the results from
our store openings thus far this year. We are also working to improve the online and multi-channel shopping experience by investing in areas such as online marketing, social media, a web site redesign and updated merchandise allocation and assortment systems in order to evolve with our customers’ changing needs. Our credit business continues to improve. Customer payment rates have returned to pre-recession levels, resulting in improved delinquency and write-off trends. These benefits have been partially offset by lower than planned finance charge revenue. We continue to open accounts with high credit quality. While we remained focused on growing our business, we believe there is still uncertainty in the current economic environment and we do not anticipate any meaningful change in overall consumer spending over the near term. We expect to take advantage of opportunities to continue to improve our execution and gain market share, as a result of our customer-focused strategy, ongoing efforts to improve service, compelling fashion merchandise and financial flexibility.
Sincerely,
Blake W. Nordstrom President, Nordstrom, Inc.
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nordstrom’s
SOCIAL
EFFORTS
Making ethical business decisions that benefit our customers, employees, and communities is something we’ve done for a long time. We’ve always followed a simple philosophy when it comes to running our business: Leave it better than you found it. This also describes Nordstrom’s commitment to social responsibility. Since our early days, we’ve focused on doing the right thing for our employees and our customers. We continue to make every effort to be an ethical company where people want to work and shop. We’re working to leave it better than we found it.
Our Culture Just as we always strive to offer our customers the best possible service and products, we also make every effort to run an ethical business where people want to work and shop. We’ve made this a priority since we began as a single shoe store in Seattle and continue to do so today. Our employees and customers have told us that they expect Nordstrom to be the type of company that incorporates social responsibility across all aspects of our business. Therefore, we work hard to reduce our environmental impact, contribute to the communities we serve, and provide opportunities and support for our employees. Our commitment to running a socially and environmentally responsible company is something we take pride in ensuring every day through our actions and philosophy.
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Our Strategy Making ethical business decisions that benefit our staff, customers and communities is something we’ve done for a long time. For example, we’ve been working with United Way for nearly 60 years, and we began our profit-sharing program with employees in 1952. We’ve also been recycling corrugated cardboard, office paper, mixed paper, metals, lamps, and pallets/wood in our Distribution and Fulfillment Centers since 1999. In the past, our various efforts were not organized under a single program. Instead, we simply tried to do the right thing, relying on our great employees to make choices that would support our social responsibility efforts. And though that worked for us and produced some good results, we realized that we needed to focus our efforts and develop a more strategic approach. In 2007, we began the process of speaking with employees and customers to learn more about what matters most to them when it comes to social responsibility. Based on their input, we brought together a group of leaders from all areas of our business to help build a comprehensive strategy. We decided to narrow our focus to four key areas as they pertain to our business. We call them our “pillars”: Supporting Communities, Sustaining the Environment, Protecting Human Rights, and Caring for Our People.
Since then, we’ve broadened our efforts to develop innovative programs around recycling, packaging reduction and sustainable products, just to name a few. We’ve worked with fantastic vendors who support social and environmental initiatives, and we have empowered our employees to turn their ideas for doing great things to reduce our environmental footprint or support the community into realities. We’ve made great progress—but we know we still have much more to do.
what we’ve set out to do, but we also realize that we’re not perfect. Through reporting what we’ve learned over the years, we will hold ourselves accountable for our actions and determine ways to make improvements into the future.
Our Efforts With our efforts concentrated on our four social responsibility pillars, we have created a number of programs and initiatives that are currently in place or part of our future plans. As we look ahead, we still have much we hope to accomplish. We plan to continue working with our employees to turn their great ideas into positive change, while also looking for ways to develop new products so we can provide our customers with sustainable options. We will seek out more opportunities to help communities around the world and partner with organizations and vendors who share that commitment. And we will continue to look for innovative ways to reduce our environmental footprint. We also believe that being transparent—sharing both our successes and our opportunities—is an important part of telling our continuing social responsibility story. That is why each year we set goals (an important part of every aspect of our business) within our four social responsibility pillar areas and report on the progress we’ve made toward each of them. Of course, we always hope that we’ll accomplish
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we have the
GREATEST EMPLOYEES
Our people are our greatest asset, and we believe social responsibility includes a commitment to creating a workplace that offers great benefits, fosters growth, and upholds diversity. Diversity Commitment We value the richness that diversity brings to our workforce —it makes our company better and the communities we serve stronger. We are proud of our efforts to maintain a workforce that represents many backgrounds, and are deeply committed to cultivating an environment where the contributions of every employee, customer and vendor are respected. We believe each of our employees has the opportunity to realize their potential and contribute to the success of our company. This commitment is reinforced by our ongoing efforts in the areas of employment and promotion, training, marketing and advertising, as well as through our community relations and Supplier Diversity Program.
Wellness Program We believe that no matter what the season, staying focused on three basics—what we eat, what we do and how we live—gives us all a better sense of balance. The Nordstrom Wellness Program helps our employees put those elements front and center. The goal is simple: support our people in making smart decisions and positive changes about their well-being. Through on-site health screenings, online resources, coaching support and fun events in our stores, we strive to provide an environment that supports and inspires
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our employees to live a healthy life. We also have Wellness Ambassadors: employees with a passion for wellness who volunteer to promote the program among their coworkers. We know that gaining new friends and having fun makes it even easier to adopt good habits and build healthy behaviors year after year.
Nordstrom Cares Heroes At Nordstrom, our people are our greatest asset; without their support we wouldn’t be able to make progress in our social responsibility goals. Our employees are at the heart of our efforts and are helping us make a positive difference across our company and in the world around us. Nordstrom Cares Heroes highlights those employees who have taken initiative to identify and come forward with opportunities to help create positive change. Their ideas and efforts span many stores and regions. They range from finding ways to become more environmentally conscientious within our store operations to helping support and make a difference in the neighborhoods that support us. Any Nordstrom employee can become a Nordstrom Cares Hero, and we look forward to sharing our people’s stories, creative thinking and more about what they’re contributing to our social responsibility program.
nordstrom Employ ment D i v ersit y Statistics Total Employees
Managerial Staff
Board of Directors
% Female Employees % Employees of Ethnic Minority
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we proudly
ENCOURAGE
EDUCATION
Giving back to the diverse communities where we do business is inherent to our culture. We believe it’s the right thing to do—we simply support those who support us. Nordstrom Scholarship Program Nordstrom is committed to the communities where we do business. Helping students achieve their dreams of higher education is a meaningful way for us to show that commitment. Since 1994, we’ve selected hard-working high school students to receive $10,000 college scholarships. Today, with educational funding becoming an even greater challenge than ever, we have expanded our scholarship program and are pleased to help 80 outstanding students across the country take the next step toward achieving their goals. To qualify for the Nordstrom Scholarship, applicants must be in their junior year of high school with a minimum gradepoint average of 2.7. Each applicantmust submit an essay on one of three topics, along with a personal statement, financial information, a list of community activities and a certified transcript from their school. Finalists are then forwarded to a selection committee of local business leaders, community partners, and representatives from Nordstrom, who help select the winners.
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In 2011, students in the 28 states where Nordstrom currently has an operating full-line store will be eligible to apply for a Nordstrom Scholarship. Eighty scholarships will be awarded. Each scholarship will be paid out in equal installments of $2,500 over four years to the selected student’s college of choice.
2010 N ordstrom scho l arship winners
Linda Chen Mill Creek High School Metropolitan Atlanta “When I walked into my principal’s office Monday morning and saw all those I loved there, I was moved beyond comprehension. I do not think I will ever forget my mother’s smiling face and my father’s tears as I embraced them both. Thank you so much for this incredible opportunity and know that the scholarship money will not be wasted. I hope to share with others the fortunes I have received in life. I cannot say this enough: thank you.”
Esther Owolabi Fenwich High School Illinois “I really don’t know what to say! Thank you, once again, for this amazing opportunity. I got home and saw the check again and started crying. Haha! This has been such a blessing and I’m truly honored, and still a little shocked! Thank you and thanks to the entire Nordstrom Corporation for such a wonderful scholarship program.”
Thomas Wilson Pope John XXIII High School New Jersey “I cannot thank you enough for the Nordstrom Scholarship Program. By your generosity, you have eased the tremendous burden of having our family handle the expense of a college education. This incredible gift allows me to fulfill the chance of a lifetime, giving me the opportunity to improve myself and become an asset to my community, which I could not have realized without your kindness.”
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we annually
DONATE TO CHARITIES
In 2010, Nordstrom and nearly three-quarters of its employees, donated more than $4.4 million to local United Way campaigns across the country. Nordstrom has been a strong supporter of the United Way for almost six decades. In addition to donations and volunteerism on behalf of our employees, our corporate gift to United Way is the single largest contribution we make to one organization or group of organizations.
Our United Way History Our relationship with the United Way began nearly 60 years ago, when Nordstrom was a small business with just a few shoe stores and the United Way was known as “Community Chest” in Washington State’s King County. We became involved with the organization because we believed it offered our employees the best opportunity to give their hard-earned dollars and know that, as a team, they could make a difference. Today we continue to support the United Way because we believe it impacts our communities in ways no single agency, individual, or government program can. Dollar for dollar, the United Way does one of the best jobs of making sure our contributions are used to maximum benefit. It has evolved into an organization focused on solving complex social problems by directing resources to individual communities.
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Day of Caring Company-wide, our stores and headquarter employees also participate in the United Way’s Day of Caring, a day dedicated to local service activities designed to help community organizations in need.
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volunteering Each year, Nordstrom employees volunteer their time and effort for United Way’s Day of Caring.
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Nonprofits Each year we donate millions of dollars to nonprofits across the country. This map shows the number of non profits we suport by state. 30+ Nonprofits 20-29 Nonprofits 10-19 Nonprofits 1-9 Nonprofits
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working to
IMPROVE
LIVES “We want to have a positive impact on workers’ lives that extends beyond the four walls of the factory.” — Laura Hodgson, Nordstrom Social Responsibility We recognize that a meaningful social responsibility program includes initiatives that ensure the well-being of the factory workers who craft our products. By empowering these workers with the knowledge and skills to make informed decisions about their health, careers, and work environments, we do our best to strengthen the communities from which our products and materials are sourced. Our partnerships with industry organizations, service providers, and other retailers also help make a positive, sustainable impact through a variety of innovative programs.
the gap between factory workers seeking enhanced career skills—but without access to relevant training—and managers who wish to attract and retain skilled employees—but whose primary focus is on survival in the ultra-competitive business environment.
herproject: Improved hiv/aids pre vention
Worker Empowerment HERproject In coordination with Business for Social Responsibility (BSR), we provide funding for HERproject (Health Enables Returns), a program that educates factory workers on general and reproductive health issues, with a focus on HIV/ AIDS prevention in China. HERproject participants have shown significant improvements in their knowledge of HIV/ AIDS infection and prevention. Factory Worker Professional Development Factory Worker Professional Development acknowledges the evolution of the Chinese labor force. The program bridges
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82% of women who participated in HerProject said they attained enough knowledge to protect themselves against infection
99% of women who participated in HerProject said they will share what they learned with others
Canteen Project
Helping farmers grow sustainable fibers
Over time, we have observed that many complaints from factory workers relate in some way to their factory’s canteen operation. The Canteen Project gives workers a voice in the selection and preparation of their food, provides education on nutrition, and introduces the concept of increased worker participation in factory administration.
Textile Exchange
Verité Van Training Nordstrom partners with Verité, an independent auditing, training and research organization, to raise awareness on the practical concerns of big-city living for young factory workers from rural hometowns. We’ve facilitated mobile training sessions with Verité to provide workers in China and India basic education on life skills, women’s health, HIV/ AIDS, and sexual harassment. The training ensures that workers acquire skills to help them in their everyday lives while improving factory morale.
Our support of organic cotton organizations is part of our goal to increase the percentage of organic cotton used in our private-label merchandise and available for use by our branded vendors. We are currently partnering with the Textile Exchange (formerly Organic Exchange) to aid farmers in Africa who grow organic cotton. The Textile Exchange is a non-profit organization committed to expanding the global market for sustainable fibers—with a core focus on organic cotton. Part of the Textile Exchange’s— and our—long-term goal is to reduce the negative impact of textile production on people and the environment.
Highlighting factory workers’ role Human Connection From concept to sale, we recognize that many hands touch our products. The Human Connection is an initiative that highlights the critical role factory workers play in the development of our products. Through visual media, this initiative makes a positive connection between each factory worker’s efforts and a consumer across the globe who ultimatelyfeels beautiful as a result of that hard work.
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actively promoting
SUPPLIER DIVERSITY
We launched our Supplier Diversity Program more than 20 years ago to help attract qualified women-and minority-owned vendors who might not otherwise consider Nordstrom. Since our Supplier Diversity Program began in 1989, we have formed hundreds of partnerships with different minorityand women-owned businesses that provide merchandise, supplies, services and construction to Nordstrom and have purchased more than $9 billion worth of products and services from those businesses.
course, highly competitive and managed by buyers in their particular department. Supplies and services make up the day-to-day support needs that help create a comfortable and inviting shopping experience for our customers. Each of these specialized areas offers us numerous opportunities to partner with vendors within your community.
Nordstrom in Your City
For construction vendors, our initial outreach into a community is the Project Preview. These represent the first steps in our diversity program and are conducted about one year prior to the opening of a new store or the remodel of an existing store. This is an open invitation for all minority and women construction vendors and subcontractors to meet our general contractor and representatives from Nordstrom.
One important indicator of success for Nordstrom is how well we reflect the communities we serve. Recognizing that diversity is vital to our business, we launched our Supplier Diversity Program in 1989. This program actively promotes Nordstrom to qualified businesses that might not otherwise have considered Nordstrom as a potential client. In each of the relationships with our thousands of business partners worldwide, we see the potential for success. Our business decisions are focused toward the future, yet still based on John W. Nordstrom’s founding philosophy: Offer the customer the best possible service, selection, quality and value.
Building Relationships The Nordstrom Supplier Diversity Program recruits vendors from a wide range of businesses including merchandise, supplies and services, and construction. Merchandise is, of
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Nordstrom and You We’ve found that our Supplier Diversity Program helps form community contacts with a wide range of business and civic leaders. Our hope is that the resulting opportunities will not only benefit Nordstrom and its business partners, but aid in boosting the economic vitality of the communities we serve.
S U PPL I ER D I V ER I ST Y PR O G R A M TOTA L E X PEN D I T U R ES
700
TOTA L E X PE N D I T U R ES ( I N H U N D R E D M I L L I O N S)
600
500
400
300
200
100
0 1998
1999
2000
2001
2002
2003
2004
2005
2006
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A N N UA L TOTA L PE R Y E A R
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conserving the
EARTH’S RESOURCES
We realize that virtually every aspect of our business affects the environment, and that’s why we are committed to reducing or eliminating those impacts wherever possible Paper and Packaging
Catalog
When it comes to protecting forests, our goal is to implement paper-use solutions that conserve forest resources, maintain our quality standards and continue to meet our business goals. We’re making great progress. Between 2006 and 2007, we decreased our use of office paper by seven tons. Mailings from Nordstrom stores dropped by 74 tons, and catalog paper requirements alone fell by 145.5 tons due to smarter and more focused mailings.
We strive to deliver catalogs to our customers that highlight great fashion and trends, while also doing our best to consider the environmental impacts producing catalogs can have. Today, all the catalog paper we purchase is certified by the Forest Stewardship Council (FSC), recognized for setting responsible forestry environmental standards. Nordstrom is a leader in this category, setting a standard for all catalog paper to be FSC-certified with a goal of 30% PCW content.
Energy and Water
PA PER PR O D U CTS U S AG E 3.018
3.330
3.146
39%
46%
48%
Energy efficiency and water conservation are key areas of focus for us. We’ve reduced our per-square-foot energy use by 4.1% during the past year alone and our goal is to continue decreasing energy demand across our operations over the next five years. Water use at Nordstrom has also dropped due to our successful conservation efforts. Some of the tools and methods we’re using are included below. Responsible Water Use
2009 GOAL
2009 RESULTS
2010 GOAL
Tonnage of Packaging per $1 Million of Sales Percent of Recycled content
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We believe responsible water use applies to conserving water and protecting water quality. At Nordstrom, water conservation means careful watering practices in our landscaping, and regulated flow toilets and waterless urinals in our newer facilities and stores.
R ED U C ED EN ER GY U S AG E -4.3% -3.5%
2009 GOAL
-3.5%
2009 RESULTS
2010 GOAL
Lighting Upgrades Our energy use has dropped significantly over the past two years due to lighting upgrades. We’ve installed newer, more efficient technologies that conserve energy and provide higher-quality lighting. Through a combination of new occupancy sensors and enhanced lighting fixtures, we decreased electrical usage by an estimated 3.2 million kilowatt hours in 2009.
Our Carbon Footprint Getting merchandise from our distribution centers to our stores and customers is critical. We believe product delivery can occur efficiently and on schedule while simultaneously reducing our carbon footprint, and we have several initiatives in place to help. One example is speedometer controls on delivery trucks to improve fuel mileage as merchandise is moved from our distribution centers to Nordstrom stores. The trucks’ maximum speed is electronically set to 65 mph and an on-board computer system monitors driver behaviors that affect fuel efficiency, such as rapid acceleration or hard braking.
I N C R E A S ED F U EL EF F I C I EN CY 7.25
7.25 6.63
Heating, Cooling and Other Systems We pilot energy-efficient heating, cooling and other systems designed to reduce energy. For example, at our Ala Moana store in Honolulu we installed an air conditioning system that cools the store in the daytime by using stored ice, without running the mechanical cooling element. In Hawaii— where energy costs are often some of the highest in the nation—Nordstrom is committed to being a responsible community partner by not pulling electricity off the grid during peak demand daytime hours.
2009 GOAL
2009 RESULTS
2010 GOAL
AVERAGE DELIVERY MPG
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doing our part to
RECYCLE
WASTE
“Lessening our environmental impacts as we grow as a business is an important priority for Nordstrom.” — Keli Stosich, Nordstrom Energy Specialist
Recycling Programs
Organic Waste Recycling in Stores
From paper and plastic to glass, aluminum, computer hard drives and organic waste, we’re looking for ways to recycle wherever we can.
We currently have approximately 45 stores and four support facilities involved in organic recycling programs. For example, in our Scottsdale Fashion Square store, partner Singh Farms works closely with our team to use composted material as fertilizer on landscaped areas around the store.
Comprehensive Recycling Company-Wide Recycling bins for customer and employee use are available in all of our stores. Our recycling program began in 2008 and now captures aluminum, paper, cardboard, plastic, glass and compostable materials. While there is still plenty to do in this area, we are continuing to make steady progress.
I N C R E A S ED O R G A N I C R ECYC L I N G +4%
Technology Recycling Through our IT Asset Recycling Program, we’re working with a third party to reuse, sell and properly dispose of old computers. All hard drives leaving a Nordstrom location for recycling are reformatted or password protected to ensure the information they hold remains secure. We also work with office supply partners to recycle used printer and copier toner cartridges.
+3.1% +2%
2009 GOAL
2009 RESULTS
2010 GOAL
Percentage of total organic (food) waste from our restaurants recycled into composting programs.
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I N C R E A S ED R ECYC L I N G R AT ES 90% 80%
82%
Reducing Harmful Chemicals Whenever we can, we use alternative, sustainable options rather than harmful chemicals. Since 1996, we’ve been testing our products for banned and limited-use chemicals. In 2008, this list was expanded when we adopted the American Apparel and Footwear Association’s Restricted Substance List. We also transitioned all of our cleaning supplies to low- and non-toxic products in 2009.
Organic Cotton
2009 GOAL
2009 RESULTS
2010 GOAL
The use of organic cotton helps Nordstrom minimize the environmental effects of agrochemicals and lessens exposure to harmful chemicals for farm workers and people living in farming communities. We’re dedicated to increasing our use of organic cotton and supporting global organizations that provide aid and education to organic cotton farmers, such as the Textile Exchange.
Percentage of total waste diverted from landfills and/or incinerators, and into recycling streams.
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innovations for
PRODUCT PACKAGING
Our goal is to make a difference up and down the supply chain by reducing waste, using recycled materials, supporting eco friendly products, and offering customers responsible choices. Where do our products and packaging come from? Where do they go after they leave our stores? These are not always easy questions to answer—our stores are just one link in a complex supply chain that connects communities across the globe. While we don’t always have direct control over how goods are made or what happens after the sale, we do have influence to make positive change happen. Our goal is to make a difference up and down the supply chain by reducing waste, using recycled materials, supporting eco friendly products, and offering customers responsible choices.
Sustainable Products Well Beauty Find hundreds of natural, organic, or chemical-free products at our Well Beauty cosmetic boutiques in 25 stores and on Nordstrom.com. Every Well Beauty product is paraben and petro-chemical free and sold in recycled packages. Organic Cotton Organic farming methods replenish soil and reduce the use of toxic pesticides and fertilizers. We offer a wide selection of popular brands that use organic cotton.
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Eco-Conscious Style For just about everything you’re looking for, we offer a brand made from environmentally friendly materials.
Packaging, Bags, and Boxes Recycling is just one part of the sustainable packaging cycle. Reducing and reusing are just as critical. All bags and boxes at Nordstrom are now recyclable, and we’re also using less packaging and choosing products made of recycled content and material. • 1 00%-recyclable bags and boxes. If it came from us, you can put it in the recycle bin. • R educed packaging at Nordstrom.com. More box sizes means a better fit for merchandise and less waste. • N ordstrom Rack shopping bags. Made of 80% recycled content, Nordstrom Rack shopping bags also have an additive that helps them decompose in landfills—just in case some don’t make it into a recycle bin. • R eusing shipping boxes. Our Distribution Centers also reuse corrugated shipping boxes when possible to help cut down the amount of packaging we use.
Eco-Friendly Nordstrom is proud to offer apparel, shoes and accessoreis that are made with environmentally friendly material. This reusable tote is made from recycled water bottles.
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supporting
ORGANIC
COTTON
“We are committed to using organic cotton as part of a broader eco focused strategy, and our goals include increased usage each year.”
While cotton is a beloved fabric, it is also one of the most environmentally damaging materials to produce. At Nordstrom, we considered this dilemma as we developed our social responsibility strategy around sustaining the environment. Organic cotton development was an obvious choice when considering all of the ways we could make an impact and difference, given it connects directly to our business.
Limiting Pesticides and Fertilizer Cotton accounts for only 3% of the world’s agricultural crops, yet it requires more pesticides—25% of all agricultural chemicals used on the planet—than any other single crop to grow. By using organic cotton, we help to reduce chemical pesticide and fertilizer use. This has helped limit exposure to harmful chemicals for the farmers involved in growing organic cotton.
Industry Support As we continue to increase the amount of organic cotton in our merchandise, we want to support the organic-cottongrowing community. We now support organizations like the Textile Exchange (formerly the Organic Exchange) which provides aid and education to organic-cotton farmers, while working to increase the global market for sustainable fibers including organic-cotton, bio-based and recycled fibers.
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— Matthew Tracy, Nordstrom Product Group
One of the goals of this organization is to help farmers create a long-term, sustainable program that influences trade, builds strong communities, provides sustainable training, and enriches the lives of cotton-growing farmers.
In Our Merchandise We use organic cotton as a standard raw material in much of our Nordstrom label merchandise. The “Eco-Conscious Style” sections of our website feature merchandise made with organic cotton and other environmentally friendly elements.
y ear ly organic cotton usage
900
P O U N D S O F C OT TO N ( I N H U N D R E D T H O U S A N D S)
800
700
600
500
400
300
200
100
0 2006
2007
2008 Y E A R LY U S AG E
2009
2010 Total as of November
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our coffee bars and
RESTAURANTS
We take pride in providing fresh, delicious options while partnering with vendors that produce healthy foods. Sharing information about what we serve helps our customers make wise choices. Organic and Sustainable
Healthy Choices
Just as we strive to provide sustainably produced apparel and goods in our stores, we are equally committed to offering sustainably produced foods and beverages in our restaurants and coffee bars. We know our customers—just like us—want food choices that are the result of environmentally and socially responsible practices.
Just as we aspire to offer food and beverages that are better for the planet, we also work hard to provide customers with choices that are better for their health. We search for food products without unhealthy additives, and strive to provide nutritious, delicious options for Nordstrom shoppers.
• F rom a fresh mix of baby lettuce, spinach and arugula to vine-ripened tomatoes, we source local and organic market produce whenever possible. This supports local farmers and minimizes greenhouse-gas emissions during transport from farm to table, and provides our customers with the freshest choices. • A ll of our eggs are cage free and organic. • W hen possible, we are committed to sourcing from suppliers who use the most humane processing methods commercially available. As of October 2010, all the turkey we use comes from suppliers utilizing CAK—considered the most animal-friendly poultry processing method. • W e offer organic iced tea, and our specialty coffee bars offer fair-trade coffee that is also organic.
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• W e do not use liquid dairy products produced with bovine growth hormone (rBGH). • W e have eliminated hydrogenated and partially hydrogenated fats and oils—the root source of unhealthy trans fats —from all menu options. We support the federal government’s standards for food-content reporting, but our goal is to share even more information with our customers about the foods we offer whenever possible. • P hamphlets with nutritional information for all of our menu items are available in every restaurant and specialty coffee bar in our company.
F O O D I N D E X R AT I N G 25
20
Waste Reduction The packaging we use and the way we manage waste from our restaurants and coffee bars are as important as the food itself. We continually seek more environmentally responsible packaging, along with new ways to reduce the amount of packaging we use in our restaurants and coffee bars. • A ll menus and other printed materials in our restaurants and coffee bars contain a minimum of 30% post-consumer waste.
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• W e’ve transitioned to an environmentally friendly disposable cup called the EcoTainer. • A n organic recycling program in our restaurants—where local composting facilities exist—helps us convert waste to compost, resulting in nutrient-rich soil.
2009 GOAL
2009 RESULTS
2010 GOAL
We created the Nordstrom Food Index Rating, a zero to 25 point weighted system, to measure our progress when it comes to providing healthier food choices that are also produced with greater social and environmental benefits in mind. Scoring for each of the four priority food categories (use of rBGH-free dairy, organics, trans fat-free food, 100% Fair Trade tea and coffee offerings) is based on the percentage of all stores that have the option in place.
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making sure we
MANUFACTURE
RESPONSIBLY
We value the many people around the world who help us manufacture highquality Nordstrom products, and we strive to ensure that their rights as workers are protected. Conducting supplier training
Factory Remediation
For many years, we have conducted a comprehensive training program for the partners who produce our private-label merchandise. Each of our suppliers learns about the Nordstrom Code of Conduct, Nordstrom Partnership Guidelines, our Social Responsibility audit process, and the general Nordstrom compliance guidelines. We also provide partner training on issues such as worker retention, productivity and efficiency, the environment, and management systems.
We believe compliance is an ongoing process—and we begin the process with an extensive assessment to identify potential labor, health and safety, and environmental issues. From these findings, we create a corrective action plan and assist our factory partners in addressing any challenges. Transparency and continuous improvement is our goal. We work hard to achieve that goal by tapping the expertise of factory management and taking into account operational realities.
Routine auditing
We partner with leading industry organizations and consultants to provide in-depth training and planning for factory management to address complex compliance issues. Our team has addressed a broad range of remediation projects, including production and efficiency, wages, overtime reduction, management systems and worker retention and safety. We focus on working with key suppliers who have demonstrated a commitment to transparency and continuous improvement.
Our team takes routine audits of partners seriously and works to ensure that our Partnership Guidelines are followed. During an audit, we join with independent, thirdparty monitoring companies to review and assess physical surroundings, compensation, and working-hour documentation. We also gather input from workers and managers. New vendors are reviewed and compliance levels are assessed before we approve any facility for production of Nordstrom labeled merchandise. Once the auditors have reported their findings, our program managers and partners work together to address any compliance issues.
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Terminating Relationships If we are unable to successfully remediate any unethical and unlawful labor practices with a vendor, we consider terminating the business relationship.
Business for Social Responsibility Our efforts to ensure the health and safety of factory workers are supported by several third-party organizations, including Business for Social Responsibility (BSR). Through our partnership with BSR, we collaborate to improve conditions in factories, to create sustainable sources of clean water, and to develop long-term solutions for fair and safe factory conditions that exceed basic compliance monitoring. Improving Working Conditions Nordstrom has been a member of the Business for Social Responsibility (BSR) since 1998. During that time we have partnered on a number of projects. One of these is HERproject—an initiative that strives to improve women’s general and reproductive health by providing health education and services to female workers in our contracted factories. We also support a professional development program for factories in China through BSR’s China Training Institute. Participation in BSR allows us to collaborate with people and businesses across many industries and around the world, with the mutual goal of improving social responsibility. In addition to HERproject, we are actively working with BSR on the following programs: Apparel Mills and Sundries Working Group We have partnered with other leading retail companies and apparel manufacturers to form BSR’s Mills and Sundries Working Group. The Group’s purpose is to establish consistent expectations that help apparel and sundry suppliers
achieve fair, healthy and environmentally safe working conditions in their factories. Key to this partnership is an effort to move away from a top-down audit approach and toward practices promoting transparency, knowledge sharing, and collaboration between buyers and suppliers. We believe that the Mills and Sundries Working Group is creating a sustainable model to benefit workers and the environment. At the same time, the Group is improving economic performance through shared sustainability principles, diagnostic tools and reporting mechanisms. Beyond Monitoring Working Group Since 2002, we have participated in BSR’s Beyond Monitoring Working Group to provide a platform for creating truly sustainable supply chains. The Group helps buyers and suppliers integrate sustainable labor and environmental practices into their supply chains. We’ve found embracing BSR’s Beyond Monitoring approach—with its four key components—to be the most effective way of improving global working and environmental conditions. These four key components include: • I nternal alignment between the commercial and sustainability objectives of buyers • Supplier ownership of environmental conditions and labor • E mpowering workers to be informed and participatory constituents • P ublic policy frameworks that foster public-private dialogue, partnerships, and local solutions
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Partnership Guidelines Our Guidelines: Standards for our business suppliers
Wages and Benefits
At Nordstrom, we recognize that our success is based on the quality of our relationships with customers, employees, agents, suppliers, and communities. To maintain the high caliber of these relationships and to achieve our goal of always providing the best product in the most equitable manner, we have established standards for our business suppliers. In communicating these guidelines, we hope to identify potential supplie,rs who share our commitment to quality products, business principles and community relationships. We will only engage business suppliers who demonstrate a commitment to contribute to the improvement of working conditions and strive to meet our requirements stated in the Nordstrom Partnership Guidelines.
Suppliers shall set wages, overtime pay and legally mandated benefits and allowances in compliance with all applicable laws. Workers shall be paid at least the minimum legal wage or a wage that meets local industry standards, whichever is the greater amount.
Legal Requirements
Health and Safety
Nordstrom expects all of its business suppliers (“Suppliers” as used in these Partnership Guidelines includes all agents, vendors, manufacturers, factories and subcontractors) to comply with the applicable laws and regulations of the U.S, and those of the respective country of manufacture or exportation. All products must be accurately labeled and clearly identified as to their country of origin and content. The language to be used for purposes of notice and interpreting the meaning of these guidelines shall be English.
Nordstrom seeks Suppliers who provide written standards for safe and healthy work environment for their workers, including adequate facilities and protections from exposure to hazardous conditions or materials. These provisions must include safe and healthy conditions for dormitories and residential facilities, and they must comply with local health and safety laws and standards.
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Forced Labor Nordstrom will not conduct business with any Supplier that uses involuntary labor of any kind, including prison labor, indentured labor, or forced labor. Employees shall not be required to lodge “deposits” or identity papers upon commencing employment with the company.
Freedom of Association Suppliers will respect workers rights to freedom of association and collective bargaining.
Nondiscrimination
U.S. Customs
Nordstrom firmly believes people are entitled to equal opportunity in employment. Although the company recognizes that cultural differences exist, Nordstrom will not pursue business relationships with Suppliers who discriminate in employment, including hiring, salary, benefits, advancement, discipline, termination or retirement on the basis of gender, race, religion, age, disability, sexual orientation, nationality, marital or maternity status, work or personal affiliations, political opinion, or social or ethnic origin.
Suppliers will comply with applicable U.S. Customs importing laws and, in particular, will establish and maintain programs and documentation to support country-of origin production verification, to avoid illegal transshipping. Suppliers shall seek ongoing education regarding Customs-Trade Partnership Against Terrorism (C-TPAT) supply chain security requirements, establish an action plan for compliance, be prepared for supply-chain security audits by Nordstrom and/or third-party auditor, and maintain standards set therein.
Child Labor Suppliers will not employ anyone under the age of 15, and/or younger than the age of completing compulsory education, or under the minimum ages established by applicable law in the country of manufacture, if higher than the age of 15. Furthermore, Suppliers of any kind will not expose anyone under the age of 18 to situations in or outside of the workplace that are hazardous, unsafe or unhealthy, and will provide adequate protection from exposure to hazardous conditions or materials.
Hours of Work/Overtime While permitting flexibility in scheduling, we will identify local legal limits on work hours and seek Suppliers who do not exceed them except for appropriately compensated overtime. While we favor Suppliers who utilize less than 60 hours per week, we will not, require in excess of 48 hours per week and 12 hours overtime per week, or as permitted by applicable law, whichever is lower. Employees should be allowed one day off in seven.
Subcontracting and Changes in Manufacturers, Factories, and Vendors Suppliers will not utilize subcontractors for the production of Nordstrom products or components without written approval and authorization from Nordstrom, and only after the subcontractor has agreed to comply with the Partnership Guidelines. Suppliers will not change manufacturers, factories, subcontractors or vendors for the production of Nordstrom products without written approval and authorization from Nordstrom, and only after the new factory, subcontractor, or vendor has agreed in writing to comply with the Partnership Guidelines.
Environment Suppliers must demonstrate a regard for the environment, as well as compliance with applicable environmental laws. Further, Nordstrom actively seeks Suppliers who demonstrate a commitment to progressive environmental practices and to preserving the earth’s resources.
Documentation and Inspection Nordstrom intends to monitor compliance with our Partnership Guidelines and to under-take on-site inspections of Suppliers’ facilities. Suppliers will maintain on file all accurate documentation necessary to demonstrate compliance and will authorize Nordstrom and its designated agents to engage in announced and unannounced monitoring activities to ensure compliance, including confidential employee interviews. Nordstrom will review and may terminate its relationship with any Supplier found to be in violation of the Partnership Guidelines.
Animal Welfare Nordstrom promotes strict adherence to codes of practice that meet or exceed International, National and State Government standards for animal welfare. We strive to do business with Suppliers who source leathers, furs and any other animal by-product from entities who use fair and humane animal-welfare practices.
The Kimberly Process Nordstrom expects all of its business Suppliers to purchase all diamonds from legitimate sources not involved in funding conflict, and in compliance with United Nations resolutions. This shall also be stated as such on all invoices, wherein the seller guarantees that all diamonds are conflict-free, based on personal knowledge and/or written guarantees provided by the supplier of the diamonds.
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For more information on our Corporate Social Responsibility initiatives, please visit www.nordstromcares.com
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