IMPACT REPORT
OUR VISION
Te x t g o e s h e r e f o r t h e v i s i o n s t a t e m e n t .
3
c u rren t s t a t e of t h e f a s h ion in d u s t ry
5
h ow w e m ea s u re im p a c t
7
im p a c t h ig h l ig h t s
9
m od es of p rod u c t ion
13
in s i d e l ook in t o ou r f a c t ory
15
pa rt n er f a c t ories
23 31
w h y w e s u p p ort in d ep en d en t a rt is a n s
w ork in g in u n d es erv ed c om m u n it ies
42
e n v iron m en t a l s u s t a in a bil it y
44
d e f y in g g en d er n orm s
46
e d u c a t ion a s k ey p il l a r of im p a c t
48
lo ok i n g a h ea d
50
c on c l u s ion
We a re i n c re a s i n g l y d i s c o n n e c t e d f ro m t h e p e o p l e w h o m a ke o u r c l o t h i n g , a s 97 % o f i t e m s we c o n s u m e i n t h e U S a re n ow m a d e ove r s e a s . Pro d u c e r s a t t h e b o t t o m o f t h e s u p p l y c h a i n o f t h e fa s h i o n i n d u s t r y a re s o m e o f t h e l owe s t p a i d wo r ke r s i n t h e wo r l d , a n d ro u g h l y 8 5 % o f t h e m a re wo m e n . Th e h u m a n fa c t o r o f t h e fa s h i o n i n d u s t r y i s t o o b i g t o i g n o re , a s we c o n s i s t e n t l y s e e t h e e x p l o i t a t i o n o f c h e a p l a b o r a n d t h e v i o l a t i o n o f wo r ke r s ’ , wo m e n ’s , a n d h u m a n r i g h t s a c ro s s t h e wo r l d .
-ANDREW MORGAN, THE TRUE COST
Co-founders Zoe Cleary and Patrick Woodyard in Nisolo’s Nashville HQ
P at r i c k W o o d ya r d Co-founder & CEO
MEASURING IMPACT
We measure the direct impact on the lives of the producers of Nisolo products by undergoing comprehensive biannual interviews and comparing results to previous baseline assessments from the last several years. We use an intensive, hybrid impact assessment built with 3rd party experts that includes relevant elements of the Progress Out of Poverty and Human Development Index assessments. We track changes in the following areas: home/land ownership, living conditions, economic well-being, savings and debt levels, access to the formal banking sector, education access for producers and their families, professional development, health and access to proper care, and social and psychological wellness. We have full time staff members dedicated to measuring impact, and to date, we’ve spent over 600 hours conducting interviews with producers, analyzing the results, and adjusting our impact methodology on an asneeded basis. Additionally, we measure our direct impact by analyzing the effects of our relationship with the 3rd party suppliers we support through the sourcing of raw materials within the local economies where we operate.
full time,
livelihoods
above fair trade wage
sustainable jobs
supported across
requirements is what
created
our supply chain
the average Nisolo producer earns
of Nisolo producers
invested into the
of producers’
are 18 years
local economy in
children in our
or older
Peru where our main
factory are
factory is located
in school
MODES OF PRODUCTION From building our own factory to championing other ethical factories and partnering with independent artisans, take an inside look into what we’re doing to challenge the status quo of the fashion industry.
OUR FACTORY To serve as a model for the industry, we built our own facility from the ground up where all producers receive beyond fair trade wages, benefits, and a healthy working environment.
PARTNER FACTORIES We champion other ethical factories that uphold the same standard of ethics as Nisolo, guaranteeing beyond fair trade wages, benefits, and a healthy working environment.
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.
Trujillo, Peru Peru’s shoemaking capital and home to our factory
OUR FACTORY Trujillo is Peru’s shoemaking capital and third largest city. Shoemaking as an artform has been passed down through generations, and we take pride in sustaining its long held traditions.
TRUJILLO, PERU
PRODUCERS
LIVES IMPACTED
SHOES
ACCESSORIES
WAGES The average salary of Nisolo producers is 27% higher than fair trade wage requirements. The average annual income increase for all producers is 140%. Women in particular have felt significant impact, reporting an annual income increase of 173% since joining Nisolo compared to previous employment.
The effects of a fixed salary Bank ACCOUNTS Due to our in-house financial literacy training program, 100% of Nisolo producers now have a bank account. Two years ago, that figure was 10%, as the majority of employees had never had a bank account prior to working for Nisolo. Through an account, producers have access to banking services they had never had before and can save in a more secure location. For example, one of our producers, Pรกnfilo, recently had a loan approved to build his home which has always been his dream.
Savings Producers are more likely to start saving as a result of working with Nisolo. 42% of producers are currently contributing a portion of their 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 unhealthy debt.
ON CONTRACT EMPLOYMENT
local economy
Where we operate, 75% of employment takes place in
To minimize our carbon footprint, we strive to source
the informal economic sector (i.e. selling goods in the
locally whenever possible. Additionally, by sourcing
marketplace, working project to project for different
raw materials locally and working with nearby tanner-
employers, paid informally in cash without a contract.)
ies, we’ve invested $3M back into the local economy. If
All employees work on contract, guaranteeing a stable
fact, one of our primary suppliers has been able to tri-
salary with benefits and consistent work. More than half
ple their annual income as a result of Nisolo’s support!
of Nisolo producers had never previously held a job in the formal economic sector.
H E A LT H C A R E
TIME OFF
All producers and their dependents have free access
All producers receive at least 15 days of paid time off per
to company-paid healthcare. The level of care is not
year. This is one reason why providing formal employment
yet where we’d like it for to be, and after assessing the
to all our producers is important. In addition, we close
need with our producers for additional coverage, we’re
down the factory for a full week during Christmas, Fiestas
researching private plans for supplemental care.
Patrias (Peru’s independence celebration in July), and Easter week.
Trainings + Programs
Working ENVIRONMENT
We offer free, weekly livelihood trainings that range
Improving the environment of our factory is an ongoing
from personal financial management and physical and
priority, which is why we regularly seek out feedback
psychological health to interpersonal skills such as con-
from producers to assess needs and implement solutions.
flict resolution and team building communication. We
All producers are 18 years old or older, and producers
also offer free, weekly English classes to all employees
receive appropriate protection (gloves, eyewear, masks,
and their family members.
etc.) for their role in the production process.
FERNANDO LASTING MACHINE OPERATOR My experience with Nisolo has
alone. A year ago, I came back to
totally changed my life. I used to
see my family and was thinking
work 12, 14, even 16-hour days
about returning to Argentina
making shoes. I rarely saw my
until a neighbor told me about
family. After 5 years of marriage
Nisolo. My job making products
and with a 2 year old son, I had
for Nisolo has improved every
to migrate to Argentina since
area of my life. Now, my family
my job in Peru didn’t provide
has health care, and my son is
me with consistent work and a
receiving a better education
stable salary. I worked abroad
than he was before. I also get
for 4 years without seeing my
to spend more time with my
family. It was the hardest thing
family. It’s great to work with a
I have ever done, and I often felt
company that values family.
LEÓN, MEXICO North America’s capital of quality footwear + leather goods
PARTNER FACTORIES We employ a strict set of standards that all partner factories must meet in order to produce for Nisolo. At a minimum, all producers must be 18 years or older, receive beyond fair trade wages, healthy working conditions, and healthcare. Nisolo staff personally conduct routine factory visits multiple times a year to establish strong working relationships and ensure standards are met.
LEÓN, MEXICO
PRODUCERS
PRODUCERS
SHOES
Why León? As its fifth largest city, León is located in the heart of Mexico. With its centuries old tie to leatherworking and shoemaking, its artisans are known around the
ACCESSORIES
world for making some of the highest quality leather goods on the planet.
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.
Wages All producers in our partner factories make a minimum of 27% beyond fair trade wage requirements.
In one of our partner factories,
entry level producers receive up to 74% more than fair trade wages, while experienced producers receive significantly more. The annual turnover rate is less than 2% across all partner factories.
Benefits -Healthcare for producers and dependents -Paid vacation -Subsidies for housing -Technical and livelihood trainings -Health clinic access -Paid maternity leave -Saving group access -Continued education programs -Mental health access
H E A LT H Y W O R K I N G E N V I R O N M E N T -All producers receive training on a regular basis whether it be local firemen addressing fire safety or machine specialists teaching standard operational procedures -Employees receive appropriate protection (gloves, eyewear, masks, etc.) for their role in the production process -Air conditioned facilities -Optional standing workstations for increased health benefits
N A I R O B I , K E N YA home to a team of independent artisans responsible for our jewelry collection
INDEPENDENT ARTISANS Talented artisans around the world often face similar barriers to growth: knowledge of efficient production methodology, international quality standards and design trends, and lack of access to quality materials, equipment, financing, and lucrative markets. We believe partnerships with independent artisans to be one of the best methods of job creation in low-income environments and also a way to preserve generational craftsmanship. Local, independent artisans and entrepreneurs have a better understanding than we do of the needs of their communities. Our goal for our independent artisan relationships is to provide consistent product orders and free business counseling to support local community leaders’ efforts of eradicating extreme poverty.
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.
R AY M O N D N YA M O D 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.
JHON MOSTACERO ENTREPRENEUR + ARTISAN
NAIROBI, KENYA & TRUJILO, PERU
PRODUCERS
LIVELIHOODS IMPACTED
PRODUCERS
SHOES
JEWELRY
Wages + BENEFITS The Our teams of independent artisans in Kenya and Peru receive between 23-27% above fair trade wage requirements. Jhon’s team of producers in Peru receives free access to Nisolo paid healthcare, a minimum of 15 days paid time off per year, and consistent employment in the formal economic sector.
NISOLO SUPPORT TO ARTISANS We hired an operations associate who moved to Kenya in 2015 to work with the team in Nairobi. The mentoring that followed has resulted in increased productivity, better organization of production, and improved inventory management. When Jhon reached out to us and expressed interest in starting his workshop, we were excited to lend support through sharing our knowledge of logistics and suggestions on how to start and scale a company.
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 . -V I O L E T, Q U A L I T Y C O N T R O L A S S I S TA N T
WORKING IN UNDERSERVED COMMUNITIES
Many of the producers we work with either came from or are living in extreme poverty. Lack of employment opportunities in rural areas have resulted in mass migration to cities worldwide, where low quality homes are constructed based on immediate need. This makes for greater vulnerability of homes and subsequent lack of shelter when natural disasters strike. Neighborhood in Truijillo, Peru.
PERU FLOOD RELIEF In 2017, Peru experienced the worst flooding and landslides seen in over 30 years. More than 800 villages, towns, and cities declared a state of emergency. Many lost their lives and over 100,000 people were left homeless. As supplies dwindled and grocery store prices increased, many were left without clean drinking water or food. While some of our personal friends in Peru lost everything, thankfully, no Nisolo producers were injured. However, many homes faced significant damage. In addition to donating 10% of profits for a week, we were able to raise over $8,000 in relief funds for our producers, their families, and communities thanks to Nisolo’s customers, friends, and family. The community is now back on the right track. Thank you.
Environmental sustainability The majority of raw materials are sourced and processed locally across all modes of production, making our carbon footprint significantly less than fast fashion companies. The way we’ve organized our supply chain also ensures a significant amount of the revenue our products generate goes back into the communities we’re seeking to impact. We frequently visit factory suppliers, and use our purchasing power to encourage more environmentally friendly practices. Some of our suppliers have received the most well regarded 3rd party certifications in leather processing, while others have more recently started their business. We take pride in learning from established suppliers, and implementing best practices across our supply chain. All Nisolo jewelry is made from upcycled materials in Nairobi, Kenya, and our first venture into vegetable tanned leather has come via our partner factories. Unlike most tanning methods that use chrome and other chemicals, which can create a severe impact on the environment if not properly disposed, vegetable tanning uses natural oils from bark or plant tannins, reducing the product’s environmental impact. Determining and reducing our environmental impact is an ongoing priority, which is why we partnered with Vanderbilt University to further assess our suppliers’ practices. We will be taking their findings and recommendations to further enhance our current initiatives.
Defying Gender norms
ANA ROSA SEWIST I s t u mbl ed u p o n N i s o l o by ch an ce . I saw th ey n e e de d wo rk w h en I wal ked by t h eir facto ry o n e m o rn i n g … I ’m co n te n t to be h ere. S i n ce t h e mo m e n t I star te d, I be gan to fe e l th e rel i ef o f h av i n g a s t ab l e jo b. Th e fi xe d sch e du l e h e lps m e as wel l . I feel l i ke I c an im prove as a pe rso n h e re . Th e re ’s o p p o r t u n i ty fo r l e arn i n g ski lls an d pro m o tio n .
24 women currently work in our factory in Peru and 4 of those women are 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, to offer our producers a 10% discount on all degree programs.
100% of their children are in school, and 100% of those who are in university will be first generation graduates.
Looking ahead
We believe it’s important to be held accountable to society and the environment. Everything we buy as consumers has an inherent impact, and we want to be able to say we left this world better than we found it . We’re currently in the middle of the application process to become a registered B-Corp. B-Corp is to business what Fair Trade certification is to coffee or USDA Organic certification is to milk. B-Corps are for-profit companies certified by the nonprofit B-Lab to meet rigorous standards of social and environmental performance, accountability, and transparency. The certification process has pointed us towards areas of the business we can be improving. Looking ahead, we plan to conduct further research to expand supply chain visibility beyond our tanneries, and to implement initiatives to lessen our environmental impact across all modes of production. We will also be doing more in our local Nashville community. From creating employment for refugees through our hand written thanks you notes we place in our shoe boxes to working with local schools and volunteering in community clean-ups, our desire to push the fashion industry in a more sustainable direction starts at home.
CONCLUSION
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 consumers to demand high quality and high standards of ethics. 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 more sustainable direction.
In memory of
Yovanna Grados Moya 1980-2017
On January 24th, we lost a dear friend and loyal Nisolo producer. Yovanna touched our lives through her sweet smile and the way she supported her family and our team members. Prior to starting with us in 2015, Yovanna sold clothes in the local market, and could never rely on a consistent salary. Her annual income increased 140% as a result of her work ethic and newfound job stability. She quickly put much of her earnings towards her dream of providing her two children, Esteban (12) and Rodrigo (6), with an education. Her passing was a shock to all of us. She had been diagnosed with organ failure, but was unable to get the necessary attention in a timely manner, which is sadly not uncommon for the communities we work in. While she’s not able to see her dream become a reality, Yovanna would be proud to know both her boys will be continuing their education just like she had wanted. We know her spirit will live on through them and the joy she spread to all those around her. Rest in peace, Yovanna.