IMPACT REPORT 2017
OUR VISION
To return fashion to what it once was: about people, art, and valuing the producer and the planet just as much as the consumer.
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c u rren t s t a t e of t h e f a s h ion in d u s t ry
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h ow w e m ea s u re im p a c t
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im p a c t h ig h l ig h t s
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not e f rom t h e CE O
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m od es of p rod u c t ion
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o ur f a c t ory
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pa rt n er f a c t ories
ind ep en d en t a rt is a n s
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e x t rem e p ov ert y
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e n v iron m en t a l s u s t a in a bil it y
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d e f y in g g en d er n orm s
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e d u c a t ion
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c on c l u s ion
Current state of the fashion industry
We are increasingly disconnected from the people who make our clothing, as 97% of items we consume in the US are now made overseas. There are roughly 65 million garment workers in the world today; many of whom do not share the same rights or protections that many people in the West do. They are some of the lowest paid workers in the world, and roughly 85% of all garment workers are women. The human factor of the fashion industry is too big to ignore, as we consistently see the exploitation of cheap labor and the violation of workers’, women’s, and human rights in many developing countries across the world. -Andrew Morgan, The True Cost
How we measure impact
We measure the direct impact on the lives of our producers in the factory we own and operate in Peru by undergoing comprehensive bi-annual interviews and comparing results to our previous and original baseline assessments. We use a hybrid impact assessment that we built with 3rd party experts that include relevant elements of the Progress Out of Poverty and Human Development Index assessments. We track changes in the following areas: home/land ownership and living conditions, economic well-being (household income, assets, net worth, conditions pre-Nisolo, etc.), savings and debt levels and access to the formal banking sector, education access for producers and family members, professional development, healthcare access and health level, social and psychological wellness, etc. To date, we’ve spent over 400 hours conducting interviews with producers. Additionally, we measure our direct impact by tracking the number of 3rd party suppliers we support through the sourcing of raw materials in the local economies we operate in. We also track the amount of money we invest into suppliers’ businesses.
full time,
lives impacted
above fair trade
sustainable jobs
across our supply
wage is what our
created
chain
average producer earns
of producers are
invested into local
of producers’
18 years or older
Peruvian economy
children in our
where our main
factory are
factory is located
in school
Co-founders Zoe Cleary and Patrick Woodyard in Nisolo’s Nashville HQ
Letter from the CEO
I
studied Global Economics and Business as a
Cleary who was ready to leave her job working with
student. Shortly after graduation, knowing
a multibillion dollar fashion brand because of how
I wanted to do something that merged the
little they valued the people making their products.
worlds of business and impact, I moved to Peru where
Together, Zoe and I dug deep into this three trillion
I took a job in Microfinance. My primary focus in
dollar industry that employs over 500 million workers
Peru was helping women grow their small businesses.
across the globe.
I started working with a woman named Doris who
We learned there’s a wide disconnect between
ran a small convenient store out of her home. While
consumers and producers. As a result, low wages and
I was visiting one day, helping Doris with her books,
poor working conditions are widespread. The last few
I heard a loud and consistent pounding coming
years have been some of the deadliest years in the
from the back room of her home. She recognized my
history of the industry. 2013 saw the greatest garment
interest and brought me back to where her husband
factory disaster to date. Over a thousand people were
Willam was working as a shoemaker. I was stunned
killed in a factory in Bangladesh and more than two
to see Willam sitting there, making some of the most
thousand injured. Those years were also some of the
beautiful handmade shoes I had ever seen. This was
most profitable, and most consumers are completely
an artist creating a masterpiece right in front of me.
unaware of this irony.
My life changed the day I met Doris and Willam.
In addition to the fashion industry’s lack of
I learned their dream was to make a living creating
transparency when it comes to factory conditions
beautiful products they could be proud of while
and workers’ rights, it’s also the 2nd most pollutive
providing an education for their children and creating
industry in the world.
more jobs and opportunity in their community. A
Our vision with Nisolo is to value both the
dream no different from my own, but exponentially
planet and the producer as much as we do the end
harder for Doris and Willam to reach due to their
consumer. By providing impoverished artisans and
economic situation and lack of opportunity. He wasn’t
entrepreneurs access to capital, training, knowledge,
able to buy quality goods and materials or travel to
and well-established markets, we can connect them
different markets to sell his goods. How do we have
in an ethical and sustainable way to one of the world’s
people making designer quality products with their
largest industries. We couldn’t do this work without
hands yet struggling to provide for their families?
you. Thank you for using your voice and purchasing
I soon found out I wasn’t the only one asking this question. I was introduced to my co-founder Zoe
power to help us build a more sustainable fashion industry.
P at r i c k W o o d ya r d Co-founder & CEO
MODES OF PRODUCTION The next sections will show you how we’ve set up our production at Nisolo. From building our own factory to championing other ethical factories, and employing independent artisans, we’ll give you an inside look into what we’re doing to challenge the status quo of the fashion industry.
OUR FACTORY We built our own facility from the ground up where all producers receive above fair trade wages, benefits, and a healthy working environment.
PARTNER FACTORIES We champion other ethical factories that uphold the Nisolo standard of ethics.
INDEPENDENT ARTISANS We work closely with small, independent artisans to help scale their businesses and support their entrepreneurial efforts to ignite change and opportunity within their own communities.
OUR FACTORY Trujillo is Peru’s shoemaking capital and third largest city. Shoemaking has been passed down from past generations to the present, and we take pride in sustaining long held traditions and sharing high quality products with people all over the world.
Trujillo, Peru Peru’s shoemaking capital and third largest city.
TRUJILLO, PERU
PRODUCERS
LIVES IMPACTED
WAGES SHOES
ACCESSORIES
The average salary of Nisolo producers is 27% higher than fair trade wage requirements. The annual income increase for all producers has risen to 140% on average. Women, in particular, have felt a significant impact, reporting an annual income increase of 173% since joining Nisolo.
Our factory
Bank ACCOUNTS 100% of employees now have a bank account due to Nisolo trainings on how to open and manage an account. The majority of employees had never had a bank account prior to working for Nisolo. Through having an account, employees have access to banking services they had never had before and can save in a more secure location.
Savings Producers are more likely to start saving as a result of working with Nisolo. 42% of employees are currently contributing monthly income to long term savings.
Salary Advance Program All producers can solicit a salary advance for costs related to health, education, and other emergencies. Did you know the average interest rate for a bank loan in Peru is 20%? Loan sharks charge even more. Offering salary advances helps producers with an immediate need and reduces the risk of accumulating debt.
ON CONTRACT EMPLOYMENT
local economy
All employees work on contract, guaranteeing a stable
By sourcing raw materials locally and working
salary with benefits and consistent work. Where we
with nearby tanneries, we’ve invested $3M back
work, 75% of employment takes place in the informal
into the local economy. If fact, one of our prima-
economic sector (i.e. selling goods in the marketplace,
ry suppliers has been able to triple their annual
working project to project for different employers, paid
income as a result of Nisolo’s orders.
informally in cash with negotiated rates.) More than half of Nisolo producers had never previously held a job in the formal economic sector.
H E A LT H C A R E
PAID VACATION
All producers and their dependants have access to
In compliance with Peruvian governmental policies, all
government provided healthcare. The level of care is
producers receive a minimum of 15 days of paid vacation
not near where we’d like it to be and after assessing
per year. This is why providing our producers formal
the need for additional coverage with our producers,
employment
we’re researching private plans for supplemental care.
Trainings + Programs
is important. Without it, they wouldn’t
necessarily have access to these types of benefits.
Working C o n d i t i o n s + C u lt u r e
We offer free, weekly livelihood trainings that range
All producers are 18 years old or older. We work with
from personal financial management and physical and
a 3rd party consultant to assess our factory’s working
psychological health to interpersonal skills such as con-
conditions and assist in implementing solutions to im-
flict resolution and team building communication. We
prove everyone’s work experience. Employees receive
also offer free, weekly English classes to all employees
appropriate protection (gloves, eyewear, masks, etc.)
and their family members. Trainings and programs are
for their role in the production process. Improving the
typically taught by community professionals or internal
conditions of our factory is an ongoing priority which is
staff with relevant experience.
why we regularly seek out feedback from producers to assess needs and strategize solutions.
FERNANDO LASTING MACHINE OPERATOR My experience with Nisolo has
felt alone. A year ago I came
totally changed my life. I used to
back to see my family and was
work 12, 14, even 16-hour days
thinking about returning to
making shoes. I rarely saw my
Argentina until a neighbor told
family. After 5 years of marriage
me about Nisolo… My job here
and with a 2 year old son, I had
has improved every area of my
to migrate to Argentina since
life. Now my family has health
my job in Peru didn’t provide
care and my son is receiving a
me with consistent work and a
better education than he was
stable salary. I worked abroad
before. I also get to spend more
for 4 years without seeing my
time with my family. It’s great
family. It was the hardest thing
to work with a company that
I have ever done and I often
values family.
PARTNER FACTORIES We employ a strict set of standards all partner factories must meet for work to begin. All producers must be 18 years or older, receive beyond fair trade wages, have access to benefits including healthcare, and work in a healthy working environment. We conduct routine factory visits and are committed to establishing strong working relationships to ensure these standards are being met.
LEON, MEXICO is home to our partner factories.
LEÓN, MEXICO
PRODUCERS
PRODUCERS
SHOES
Why León? León is located in the heart of Mexico, with centuries old ties to leatherworking and shoemaking. Its arti-
ACCESSORIES
sans are known around the world for making some of the highest quality leather goods on the planet. After our first visit, we knew we wanted to play our part in elevating the craftsmanship of its community members who have been perfecting the art of leatherworking for generations.
Our goal For the fashion industry to change, it’s going to take collaboration and mutual interest in sharing knowledge and best practices between businesses and factories. In the next year, we’re excited to learn from our partner factories and share the knowledge and programming we’ve acquired from building our own factory.
Partner Factories
Wages All producers in our partner factories are formally employed and are paid on a salary, as opposed to by the amount of product they produce each week. “Per piece� based payment does not lend itself to consistent work or income, though it is extremely common in the fashion industry.
Benefits -Healthcare for producers and dependants -Paid vacation -Subsidies for housing -Technical and livelihood trainings -Health clinics -Paid maternity leave -Savings groups -Programs to continue education while working -Access to a psychiatrist -3rd party health and safety training for all employees -Air conditioned factories.
INDEPENDENT ARTISANS Our third mode of ethical production is through working closely with small, independent artisans to help grow their businesses and production capabilities.
N A I R O B I , K E N YA is home to our partner factories.
NAIROBI, KENYA & TRUJILO, PERU
PRODUCERS
LIVELIHOODS IMPACTED
PRODUCERS
SHOES
Why we support independent artisans We believe independent artisans have a better understanding than we do when it comes to the needs of their communities. Our goal is to provide consistent product orders and free business counseling to help ignite change and opportunity in order to eradicate extreme poverty, lead purely by members of their own community.
JEWELRY
Independent Artisans
This is one of the best methods of job creation in lowincome environments and is also a way to preserve generational craftsmanship. Talented artisans around the world often face similar barriers to growth: knowledge of efficient production methodology, international quality standards and design trends, and access to quality materials, equipment, financing, and lucrative markets. We engage with independent artisans to help alleviate some of these challenges.
Wages Independent artisans in Kenya and Peru make between 23-27% more than fair trade wage requirements.
Benefits Producers have option to pay into a pension fund.
R AY M O N D N YA M O D ENTREPRENEUR + ARTISAN I was born in Nairobi (Kenya’s capital), but I grew up in Eldoret (a major city in western Kenya). That’s where I went to school. I knew quite early that I would be in the field of art, around the age of nine. But after I studied and graduated high school in the ‘80s, I wanted to study fine art. Back then, in Africa, that was taken as a joke. So I went into accounting and worked for a month at an auditing firm, where I met Alan Donovan (cofounder of African Heritage), who eventually asked me to help run his workshop. And that is how I luckily found myself into art again… to produce and see somebody satisfied is my driving force.
JHON MOSTACERO ENTREPRENEUR + ARTISAN Shoemaking is an art one has in their hands. It’s something that’s become central to our identity here. My father passed it down to me and I’ve passed it on to my son. It’s not common to have something like that. Something that goes across three generations. I’m excited to start my own shop and continue working with Nisolo. We want to continue in Nisolo’s vision of working together to help one another with our work. I’m excited to hear about what the industry is like in Mexico and hope we can all learn from one another.
We hired an operations associate who moved to Kenya to work with Raymond and his team members. The mentoring that’s come from this has resulted in:
INCREASED PRODUCTIVITY production time for some of the shop’s best selling products has been reduced to less than half the time it used to take.
BETTER ORGANIZATION OF PRODUCTION comprehension of work in progress to a capacity to plan production and provide goals for individuals and the whole workshop has increased production capacity.
IMPROVED INVENTORY MANAGEMENT All materials are now stored in an allocated space, and materials on hand are recorded. We push (and pay for) higher quality. Raymond appreciates how doing business with us has increased the quality of the jewelry he and his team produce. He’s grateful we’ve invested so much to improve his entrepreneurial skill set. Jhon, one of our founding Nisolo shoemakers, recently expressed interest in starting his own business to create more impact in his community. We are helping him launch his business through providing orders and additional counselling services.
“ I l ove s p e n d i n g t i m e w i t h m y s o n b e f o re I c o m e t o wo r k i n t h e m o r n i n g s . I h e l p h i m ge t re a d y f o r s c h o o l a n d p re p a re b re a k fa s t f o r h i m . Th o u g h t h e t i m e i s n eve r e n o u g h , I a m m o t i va t e d k n ow i n g t h a t m y wo r k c a n a l l ow m y fa m i l y t o c o n t i n u e s t a y i n g we l l .� -Violet
NEW HEADER We employ a strict set of standards all partner factories must meet for work to begin. All producers must be 18 years or older, receive beyond fair trade wages, have access to benefits including healthcare, and work in a healthy working environment. We conduct routine factory visits and are committed to establishing strong working relationships to ensure these standards are being met.
WORKING IN UNDERSERVED COMMUNITIES
The majority of artisans we partner with are coming from, or living in extreme poverty. Lack of infrastructure and job markets in Kenya and Peru result in urbanization in Nairobi and Trujillo. The majority of our producers are migrants, most of whom began as unskilled workers
Neighborhood of Truijillo, Peru where many of our shoemakers live.
A view of Alto Trujillo. We’ve intentionally placed our factory close to this community to make it accessible for our producers.�
Environmental sustainability All raw materials for our factory in Peru are sourced and processed in Peru, which means a significant share of the profits received from Nisolo business remains in the communities we’re seeking to impact. All the tanneries we work with responsibly dispose of wastewater, and we use our purchasing power to continuously encourage environmentally friendly practices. With the sourcing and production of raw materials taking place in country across all modes of production, the carbon footprint created by our products is significantly low. All Nisolo jewelry is made from upcycled raw materials in Nairobi, Kenya. All raw materials are sourced and processed in Kenya, which means a significant share of Nisolo revenue the profit received from Nisolo business remains in the community. Our first venture into vegetable tanned leather has come via our partner factories. Unlike most tanning methods that use chrome and other harmful chemicals, which can create a severe impact on the environment if not properly disposed, vegetable tanning uses natural oils, completely eliminating the possibility of contaminating the environment.
Defying Gender norms
ANA ROSA SEWIST I stumbled upon Nisolo by chance. I saw they needed work when I walked by their factory one morning… I’m content to be here. Since the moment I started, I began to feel the relief of having a stable job. The fixed schedule helps me as well. I feel like I can improve as a person here. There’s opportunity for learning skills and promotion.
24 women currently work in our factory in Peru, and we employ 4 single mothers. In a shoemaking industry that’s predominantly male, we’re proud to be challenging gender norms. It’s our goal to increase our women filled positions from 28% to 35%.
Education
We believe education is a key pillar of impact. Whereas nearly all of our Peruvian producers ended their education early for financial reasons, 100% of their children are in school. 13% of these children are in university and all will be first generation graduates. We’ve partnered with a local university in Trujillo, La Universidad Privada del Norte,
100% of their children are
to offer our producers a 10%
in school, and 100% of those
discount on all degree programs.
who are in university will be first generation graduates.
It’s easy to feel disconnected as consumers. Very little information is made available to help us make better informed decisions about how and where we choose to spend our money. It’s important we continue to work together as brands and customers to demand high standards and transparency. We can and should be letting our favorite brands know we care about how their factory workers are treated and compensated. In English, Nisolo translates to neither they -- nor we -- are alone. It’s a tribute to the interdependence of relationships. It’s a commitment and responsibility as a brand to value our customers and producers just the same. Additionally, it’s a challenge to everyone involved in the process to play their part to help push the fashion industry in a new direction.
Next Steps.
IN MEMORY OF NAME YEARS