Okay, Thanks so much, LeAnn.
And good morning, everybody.
So we've got a really great panel here with,
I would say, industry leaders in trade sustainability.
As private sector trailblazers, these executives
are shaping the global supply chain in a way that honors their own
sustainability commitments and inspires others to do the same.
So I quickly introduce our panel.
We're joined by Mr. Mike Parra.
He is the CEO of DHL Express Americas.
Mike brings over 26 years of experience with DHL,
the global logistics and international shipping company
that is actually now rapidly developing in the field of green logistics.
He's responsible for business in over 55 countries
and territories across the Americas, which includes the United States,
Canada, Mexico, Central America, South America and the Caribbean.
Welcome, Mike.
Next, we have Mr.
Matthew Thurston.
He's the vice president of sustainability at REI.
Matthew has served nearly 13 years with REI co-op,
a global brand for top quality outdoor gear and apparel committed
to environmental stewardship and sustainable business practices.
He is a sustainability business leader
with expertise in product, manufacturing and retail, and his team looks
after global sustainability, human rights and sustainable chemistry.
Welcome Mat.
Next, we have Ms..
Dana Lorenze from Expeditors International.
Dana leads the senior vice president of Global Customs for a worldwide
logistics and freight forwarding company at the head of Sustainable Innovation.
She has over 25 years of experience at Expedited International
and is responsible for policy and strategy
of expediting global customs product.
Welcome, Dana.
A Finally to my right, we have Mr.
Michael Levine of Under Armour.
Michael is Under Armour's Chief
Sustainability Officer, Vice President and managing Counsel.
He joined Under Armour in 2011 and is overseeing the development
and execution of Under Armour's Global Value Chain,
an enterprise wide sustainability program.
As an attorney who began his career in public service,
he specializes in ESG and human rights practices.
He was co-chair of the American Bar Association's Corporate
Social Responsibility Committee and has served on the Fair Labor
Association, Board of Directors and Executive Committee since 2017.
So welcome, Michael.
Okay, let's jump right in.
And Mr.
Parra, why don't you start us off?
Hello.
Good. Good morning. Sorry about that.
Didn't see the little light turned on, so I felt I wasn't portraying my voice.
Good morning.
Thank you to all of you for being here.
I'm being told we're on time.
Thank God for the moment. John.
Thank you for the introduction and your ongoing commitment
to work with DHL and the trade community to find meaningful
and operationally feasible solutions
to the challenges facing Customs today.
So thank you for that.
We go pouncing on it too early.
It's especially exciting for me to be here today.
And when Roger reached out to me and he said, Hey, we have a great opportunity
to share some thoughts with CBP.
As you launched the first ever form of green Trade Innovation Incentive.
So thank you for doing that.
First of all, DHL was the
first logistics company to offer carbon neutral shipping,
the first to make carbon efficiency targets
and the first to make net zero emissions commitment by 2050.
We're making these commitments not because government
mandates them, but in response to three drivers.
The first one is our customers are increasingly
seeking sustainable solutions for their own supply chains.
Number two,
our investors are increasingly looking at the whole picture of a company
with FTSE for good and other indexes driving investments into companies
to see the response as well for global challenges.
And number three, transportation and logistics operations
are heavily carbon intensive, as you all know, and dependent upon energy sources
that are becoming less reliable and subject to massive price fluctuations.
So we need to take the steps to manage our own network
reliability and costs for the foreseeable future.
And the last point that I put here is as a company and we say this everywhere
we go, we have a responsibility to do the right thing,
not only for today, for tomorrow, but also into the future.
In addition to that, when you
contemplate the levers for green trade, they fall into three buckets of action.
The first is around the physical changes that we can make.
And we at DHL are leading in these areas to address
our mobile and fixed source emissions.
We have laid out a timeline for tangible actions by 2030 in line
with science based targets initiatives, and we have committed to invest
roughly $8 billion in this space up to 2030.
Of course, with aviation accounting for
the greatest percentage of emissions, for us, we're focused on purchasing
more energy efficient aircraft, including 28 Boeing 777 aircraft,
as well as buying sustainable aviation fuel.
We made a commitment to buy over 800 million liters
of sustainable aviation fuel.
But 818 months ago, that was the largest purchase of any company.
It's been surpassed as of late, which is a good thing.
We're not in a competition of that.
But again, being someone who surpasses a good thing
and we have a commitment to use 30% of sustainable aviation fuel
blend across our network by 2030.
On the ground, we're committed to greening our last mile line
whole operation with a mix of electric vehicle, e-cargo bikes,
charging stations, micro hubs and walking route.
And we paired when paired with our carbon neutral design for all new buildings.
These investments will pay dividends over the long term.
I was just mentioning to a former colleague that worked with us recently,
we opened up a brand new hub in Atlanta, which is the first ever carbon
neutral hub in our industry and in our business as well.
And then finally, we're continuously expanding our product portfolio
with green alternatives for our core products
solutions, including Go Green Plus solution offer to promote
in setting investments to a greener supply chain.
The next topic is around data,
which is our second bucket, which is key to the next level partnership
between the express industry and CBP,
an effective data management system facilitator, efficient
and sustainable trade while maintaining compliance, which is important to us.
As DHL Express operates in 220 countries and territories worldwide,
acting in an ethically and legally
irreproachable way in our dealing with business partners, shareholders
and in the public is a key factor to our company's reputation
and the basis for the use for the DHL group.
Lasting Success.
Data management not only improves risk assessment to target high risk shipments,
but also it helps reduce emissions by unnecessary steps on legitimate trade.
This does not take away any of the security controls.
Again, all shipments still subject to physical screening for explosive
data analysis, screening for drugs, IPR forced labor
and available for government inspection and seizure,
but data driven facilitations like de minimis informal entry
and trade partnership programs reduce the size of the haystack.
You yourself have been clear, John.
You yourself have been clear that it is inaccurate to call de minimis a loophole.
Facilitations like de minimis are a legitimate process Under U.S.
law to facilitate the entry of low value goods, lower
risk goods, and ultimately easing the burden for CBP and trade.
The final area of operational adjustments.
DHL has been a key partner with CBP across every trusted Trade
and Security Partnership program we see ongoing value both in targeting
threats and maintaining the the free flow of legitimate goods.
And I strongly encourage CBP to look at attracting new members to these programs,
like the individual warehouse operations from three providers
through the development of commercially meaningful, meaningful benefits for trade,
ports of entry, land borders, airport and marine terminals are often
quite tightly packed with limited capacity to grow on site.
If all shipments are treated as unknown and receive formal entry,
there's not enough land or CBP officers to handle the volume.
We need to segment the risk to manage the twin
goals of trade enforcement and trade, facilitate.
So looking at new rules at the border, like those to impose new data on green
nature of product must be something that can be administered easily.
Not only does the risk
imposing a burden on just a provider and customs official,
but this could also be a barrier for micro, small and medium sized companies
that rely on compliance with the simple rules that have a clear impact.
And we believe that the use of de minimis and simplified entry help
maintain security controls while facilitating SMB inclusion.
So in closing, finally, if we want to continue to work collaboratively,
then there are some great steps the government can take in a partnership
with the private sector to accurately to accelerate, I'm
sorry, the changes toward green trade.
Just touching on a few here.
Number one, CBP shares the space with the private sector at port entries,
therefore a commitment to collaborate with industry on EV charging and energy
efficiency in the facilities can move technology forward for all.
Number two, and reiterating the need to manage risk,
CBP should be clear with Congress
about the need to maintain existing trade facilitations in place today
to efficiently manage cargo volumes and avoid greater cost and emissions
equally assessed.
Whereas industry has a lot of data we are required to provide.
CBP Should we work on improved data sharing from government agencies
to reduce the number of bad shipments.
The other one
is operationally, if CBP and other agencies work together
to eliminate conditional releases and facilitate inspections at close ports,
this would help avoid emissions associated with the re
transporting of goods domestically just for inspection at different location.
And then finally, flexible rooting was an absolute necessity
during the pandemic,
and updating the manifest capabilities to allow for multimodal filings
would not only facilitate the flexibility in routing shipments, but it would
simultaneously reduce dwell times and related emissions ports themselves.
So all of this is just scratching the surface, but
we are supremely confident that bilateral communication
and collaborative between CBP and the industry can help us to meet
the twin goals of trade enforcement and trade facilitation.
Thank you.
Great. Thanks, Mike.
And before I ask you a follow on, I just wanted to it
just struck me as I was here and AnnMarie and I were adamant about having this.
I think the four of you guys, you really represent the old system
of what this essence of this this conference is about.
So, you know, REI and Under Armour making goods,
DHL moving goods. Yes.
And Expediter is coordinating a movement and clearing goods.
So it's I think collectively
we got a lot to a lot of good stuff to chat about this morning in this space.
So, Mike,
you touched on some recommendations for changes that government can help with
and like to kind of drill down on that a bit
other than obvious federal investment in incentives in sustaining sustainable
aviation fuel, which you mentioned, 800 million liters, that's impressive.
Um, EV charging green buildings, where do you reckon
CBP itself can support more green trade?
Well,
I would say,
you know, first of all, I mean, we're focused on electrification
and it's not just the final mile electrification, but we're also partnering
with a company in western Washington, Eviation, on
what would be the first electric fixed wing aircraft that we're looking at
in 2026 or 2027.
So that's really on the horizon.
I would say there's also the opportune city to assess
and install components in green buildings as well.
So I guess there's components there of helping us through that process.
From that perspective, really, government
incentives around SAF production, I don't know.
Again, if you said CBP could step in and help us,
but in lightning and bring it to the forefront would help
alleviate the imbalance and also the price.
It's expensive at the moment.
It's about 4 to 5 times as much as normal aviation fuel.
So that would be from that perspective.
So I would say those would be a couple just to mention.
Okay, great.
And a super quick question, because I am not steeped in this is SAF,
can it be used in any aircraft
or really special aircraft can use to blend right now at the moment?
And you've got to be set up to use it. Got it.
Okay, great.
Thanks, Mike.
Let's pass it over to Matthew, REI Co-op.
Thank you.
And it's a pleasure to be here.
As Declan
had mentioned, I have the privilege of leading sustainability for REI Co-op.
If you are not familiar with REI we are an outdoor retail cooperative
headquartered near Seattle and we have about 180 stores across the US.
Hopefully there's some REI members in the room today.
We can see a few nods.
Thank you. Wonderful.
So we got a lot, a lot of friendly faces here.
I'm ultimately accountable to you as members who own the co op
for guiding our sustainability journey at REI.
At REI, our mission is to connect every person to the power of the outdoors
and to engage them in the fight to protect it.
You don't hear too many corporate mission statements
that have the word fight in them, but for us it's very intentional
and it's because we are seeing and we are feeling the impacts
of the climate crisis and the other environmental trends.
And we're seeing them in our business, in our global supply chains.
We're seeing them in the communities where we operate
and we're seeing them in the outdoor places where Americans
recreate and enjoy the products and the experiences that we bring to them.
So for us, this is really existential to the co-op.
And we view the climate crisis
in particular not as a political football, but as a human issue,
and one that we are going to leverage our business and our community to act
on however we can.
So it's in that spirit that I get to join you today
and talk about some of the opportunities here.
REI has made some
substantial investments in greening our global logistics.
We've set ambitious goals, so above all, this is a science based target
to reduce our emissions by more than 55% by the end of the decade, and we committed
to zero carbon freight by 2040 for all of our global logistics.
As part of that, we also joined the Aspen Institute's COZEV Initiative.
That's cargo owners for zero emissions vessels in order to promote an industry
that is able to move goods across the world using things
like zero emissions trade lanes.
We're focused on decarbonizing our logistics.
So you heard Mike talk about DHL at work.
We partnered with them to purchase more sustainable biofuels for our deep sea
ocean freight,
and that is helping to actually reduce
our emissions of moving products across the world.
And we're trying to take responsibility for our own impacts in our own operations
with scope one and scope two emissions, as you heard him talk about earlier today.
So we've been 100% renewable energy
in all of our owned operations for a decade now, and we built
the industry's first LEED platinum Net zero energy distribution center.
And all of our distribution centers are certified as zero waste facilities.
So we've done, I think, some fantastic work in this space.
But the main message that I want to leave you with today
is that we have to push much deeper into our global supply chain
if we are going to create impact at the scale that it needs to happen
in order to meaningfully decarbonize my industry.
So let me talk a bit about that.
So for REI,
almost two thirds of our total impact on the climate, which is a good proxy
for general environmental impacts, occurs in our product manufacturing.
So this is the embodied emissions that Tim figures mentioned.
It is actually the creation of the raw materials
that become the final product, and that's really typical in our sector.
So for organizations like REI or for Under Armour, usually about ten X,
our direct impact on the planet is residing in our value chain,
and that is really where we have these huge opportunities.
Hopefully some of you have been in our Uline Arena store here in Washington, DC.
This might look familiar.
So Ari, I in addition to selling and importing our own
private label products, we also sell about a thousand brands.
Most of those are small to medium sized companies.
Many of them are really just getting
their first retail orders from a retailer of our size.
And so we're helping to cultivate and grow those brands and really helping to
wherever we can guide them through the process of operating
as more sustainable and responsible companies.
And when we talk about this issue,
this is a bit of an eye chart and that's intentional.
So don't try to read it,
but you can kind of squint and get the idea when we talk about
greening global logistics, I think oftentimes the conversation
that we have starts ex-factory as products move through the value
chain, through brands, and then ultimately to retailers like REI.
But we all know that there's
a much deeper supply chain behind than there are all of the different steps
that it takes to process and transform raw materials into the final product.
And accompanying that is an entire parallel supply
chain of chemical inputs that allow all of that to happen, whether that's
something like dyes and dye stuff, auxiliaries, paints, etc..
So this is the supply chain and this is what a supply chain
might look like for even a very small brand that we retail.
And so our real opportunity is to think about
what are the impacts that we can have further up this supply chain
where the two thirds of the total footprint actually resides.
And how do we bring that to life in a way that allows particularly small to medium
sized businesses to engage?
Let me jump back one more for our wrap here.
So in REI, we have implemented a set of product impact standards
that we apply to the 1000 plus brands that we retail.
Just like CBP, think very carefully about what products
enters the shores of the US.
We try to put a lot of thought
into what brands and what products are entering the doors of our stores
and our product impact standards within can serve in some respects
as a model for some of the opportunities that reside on the CBP side of the House.
For example, we prefer products that have lower impact materials,
so recycled organic or other low carbon materials, We actually give those products
and those brands additional buying support when we are merchandizing products.
Similarly, we think there's a real opportunity to update our agents
codes in order to allow for
potential tariff benefits for products that likewise are doing the hard work
up in the value chain to reduce environmental impacts.
We've required all of our vendors to eliminate
unnecessary chemicals from our products, and this is an area where the current
tax codes are actually incentivizing the continued use of chemicals of concern.
So particularly in water resistant fabrics,
and this is specific to my industry, but if you're here today and you're
wearing clothing, this is also relevant to you and your life.
So making sure that we are not
accidentally creating incentives to use potentially hazardous chemicals
when those chemicals do not need
to be used just to qualify for preferred trade benefits.
And then finally, something that Mike mentioned.
You know,
we really focus on not destroying products that retain residual value.
So even if a product has an air or some sort of issue that creates
what we would call seconds, so products that we can't sell firsthand,
we will always find an outlet for that product if it still has usable value.
Similarly, there's a lot of opportunity that we see to move information further up
the value chain and particularly put it in the hands of importers
so that if products cannot be imported into the U.S., that's discovered
before the products arrive at our shores and oftentimes are then destroyed
as a result of not being eligible for importation to the U.S..
So those are a few areas where we think that there's opportunity
to continue pushing on this and really just appreciate the opportunity
to speak with you all today and continue to push on this
critically important topic.
Thank you.
Okay. Thank you, Matt. Appreciate that.
So incentivizing more sustainable materials and manufacturing requires
that importers know their supply chain well beyond the final manufacturer.
So you said you got thousands of small brands and manufacturers that you use.
How are they able to engage at that depth of knowledge?
Yeah, it's a great question.
And fundamentally, this is going to be critical.
If CBP is in a position to incentivize
more sustainable products,
importers have to go to demonstrate the provenance of their materials.
So if you are actually claiming that there is recycled organic or other
low carbon manufacturing methods, you have to know your supply chain
well enough to prove that out in order to qualify for that.
And this is where our industry at least has really evolved over the last decade
or so.
Traceability is now widely available even to small and medium sized companies,
so that you're going to hear later today from Textile Exchange,
which is a nonprofit and in our sector that provides traceability certifications
for a number of more sustainable third party labels.
Similarly, we're seeing technology vendors really ramp up their support.
So it is now possible, even for a relatively small organization,
to Understand that, that it's part of a value chain
and be able to demonstrate how choices that they've made
in designing and sourcing materials for their products are actually conveying
through into the final product and provide CBP with evidence of that.
Okay, great.
Thank you. All right. Let's turn to Dana, please.
I have the clicker so
let's get this done.
Nice job
jumping ahead.
All right.
First of all, thank you for having me. I appreciate it.
It is a pleasure to be joined by such knowledgeable experts.
And you will find that my presentation is really from the perspective
of the customs broker, not a sustainability expert.
So at the outset,
I have to point out that I don't have any paper materials with me.
I just want to point that out.
Impressive. Impressive.
Thank you.
But I have to wear my reading glasses so that the complex challenge of climate
change requires change in many directions and actions in several different areas
and the movement of goods with the current technology involves greenhouse
gas emissions, such as governments, manufacturers and consumers.
And they must align to tackle this world's quite large challenge.
Hopefully the transition to cleaner solutions in the trade community can play
a much bigger role in reducing border related environmental impacts.
I've already made it clear that my representation today is from
the perspective of a customs broker, but for your awareness.
Expeditors is a global logistics company
and more broadly as a component of sustainability.
It is a core enabler of our company's strategy.
The details in our efforts in these areas are available
on our Public Sustainability report, so I won't go into too much detail on that.
But from a transportation perspective, we're a non asset
based ocean transportation intermediary or invoke, and as such
that means we operate at the orchestration level of the supply chain.
In this capacity we're able to provide critical carbon emissions
data to our customers, and that data allows our customers
to better Understand the environmental impact of the value
chain and analyze the supply chain impacts on a mood and lane basis.
Separate tools have been developed to show the effects of mode shifting
through the purchase of sustainable aviation
fuel and sustainable marine fuel.
So I will briefly give you an overview of Expeditors
to explain what our perspective is coming from,
and then I'll jump into my comments on green trade.
From my perspective, Expeditors in its capacity
as a global logistics provider and a customs broker.
We were founded in 1979 and we're headquartered also in Seattle.
So we're neighbors.
Actually, some of our corporate officers move to Bellevue as well.
So we're in more than one location in Seattle.
We have been in operation since 79.
As I mentioned, we have over 350 locations globally.
We're a publicly traded company on Nasdaq, and we currently sit
at 1045 on the Fortune 500 list.
So I'm just going to give you a quick overview
of the Customs piece as well, because I think it's relevant.
We're a traditional large
sort of
business to business broker in that business sector.
We actually have over a thousand licensed
brokers supporting 60 countries in which we do business.
We have a CEO or authorized economic operator status pad
being one of those programs in 27 countries
and we actually are
really very fundamentally invested in the customs product globally.
So as a matter of fact, on that front, we wanted to cover three
different challenges and really from a digitization supply chain digitizing.
And that is the first area that I want to talk about.
In the second area, I'm going to talk about where partner
government agencies and border processes connect
and then ultimately how that leads or can lead to resilience.
I'm going to provide the challenges, the recommendations
and sort of what the perceived benefits will be in these areas.
I again, first I'll start with digitization,
so you can see my version of supply
chain is not quite as fancy as the area version,
but for the purposes of green, you'll notice
that in a modern world,
really it's amazing how many documents support a supply chain.
At this point, almost every single process
has paper or data behind it become PDFs.
And just for the record, electronic data creates some energy usage as well.
And I want to be clear that more data in my version of the world of data
is not better data where I'm going to focus
the really the comments are on how to align the document
submission the data needs at the points where it intersects
and be able to pull from accurate sources of this technology.
So the recommendation is digitizing all the data requirements
to minimize redundancy and to get the data right at the first point
and pull it through.
The benefit is really a smooth flow of cargo
and technology and innovation to power and facilitate customs.
The process must be Understood and the technology,
although available, is not necessarily married up with expertise,
the barriers or the disparate processes and the disjointed data requirements.
And that linear supply chain is what
people Understand when they're thinking about supply chain data needs.
But in reality it looks something more like this.
So from a customs data standpoint, complete extensive matrix
of where it's required, when it's required and how it's required, regardless of
whether the package is a courier package or a massive container shipment.
As an example, we have 450 unique document labels within our system,
and these are not documents we generate necessarily
other than to produce for the next responsible party.
But you can Understand that that is thousands of data points.
The challenge is it crosses the borders.
Then in terms of the government interaction is that those interactions
sometimes don't align and that creates dwell time, it
creates storage, it creates idling, which creates gas emissions.
And the recommendation there is to align those processes.
And then lastly, I'll jump into resiliency,
because this last world in the last several years has been anything but easy
and you have pandemics, you have
natural disasters, unfortunately, you have cyber attacks.
You have a lot of different reasons for supply chain disruption.
And our recommendation is that the trade,
the government, all the stakeholders in the supply chain really align
and balance is absolutely fundamentally the most important thing.
So there is cost considerations, there are risks, there's sustainability,
there's communication,
and really the challenge is to work together in the supply chain.
So thank you very much.
Great.
Thanks, Dana.
So you're one of the world's largest customers brokers, and obviously you have
a lot of insight into the complexity of modern supply chains.
So in your view, Dana, what are the greatest sustainability challenges
associated with supply chain operations that could be addressed by U.S.
government agencies, including CBP?
Thank you very much for that question.
I believe that the way that we can work together is really much as you've done
in the past with other programs like CTPAT or
any of the programs that you're rolling out with the ACE rollout.
You have worked with trade quite well.
I think the recommendation, though, is more like along the lines of the BIC,
but where there is a fundamental coordinated effort at government agencies
that are not typically part of the customs processes, again, to align
those processes, the data and the work together and multi government approach.
So work that's being done at the WCO maybe taking more
and more of a leadership role in that as well would be my recommendation.
Great.
Thank you for that.
Okay, so let's close out our presentations with Mr.
Michael Levine to tell us about Under Armour.
Thanks.
So I feel a little ashamed that I use paper,
but I do have a water bottle and I'm not going to use slides.
So they're always trade offs in every interaction.
So positives and negatives.
I do want to start by thanking the CBP team.
Doc Leonard, acting branch chief Claire Every page.
Lee-Ann Bigelow, director for Green Trade and the entire CBP
team.
It takes a team really to make an event like this happen.
We're honored to be a part of it.
I also want to thank the Under Armour team
that I represent here today, including John Scheff,
who's our global head of government relations here in the audience,
as well as Alice Hartley, our director of Circularity,
and Anna Harry, who's our lead for sustainability communications.
I had a dress up like this.
I would normally be sporting my Under Armour.
I do have Under Armour footwear.
So you can look for that during my tunnel walk at the end of my presentation.
So turning to Under Armour quickly and I apologize for the breakneck speed,
but I want to do justice to the material that I have here today.
For Under Armour, we are a purpose led company.
We empower those who strive for more.
Our mission Under Armour seeks to make athletes better
and we are grounded in our values, which include sustainably
and stand for equality, which includes the notion of intergenerational access
to the same resources that each of us and our ancestors have enjoyed.
We we were founded, and you might call
an early concept protect this house for us as we do our work in sustainability.
We believe if we protect the people who make our products,
components and materials, our customers, we protect our brand,
we protect our company, our house.
But we also use that in another sense of our our house, all of our house,
which is the planet, our global home, the one and only home feel that
current and future
generations play on and to serve a right to play on in the future.
Building on what Matt said from a GHG accounting
and overall environmental impact perspective
for Under Armour, the majority of our impacts lie in scope.
Three In our supply chain.
So we focus a lot in our work on how we can drive positive action
with our suppliers, with garment factories directly who assemble our products
and more indirectly with fabric mills and material suppliers.
In this, it is a team sport.
The challenges and opportunities we face are greater than any company,
any sector, even across sectors.
So we seek opportunities that Under Armour to play an active role in industry.
Collaborations.
As Matt noted or alluded to, you know, suppliers serve multiple brands,
so it's more effective as we work with our partners if we
align around measurement standards and expectations,
like the measurement tools for facilities, environmental impact for brand
and retailer performance for design,
we see sustainability as a team sport and green trade
that we're here to speak about today can be an opportunity to set
not just a level but an enduring playing field.
We're here at a site of innovation.
Innovation is core to our DNA and Under Armour.
We believe that when it comes to sustainability, when innovators share
with the rest of the industry, sometimes it's called a good for the comments.
Everybody wins.
And I would just direct you to some work that we've done at Under Armour
in partnership with others on a scalable fiber sharing testing
method that we are working actively with others to deploy.
More broadly,
I think it was observed earlier that each of us,
as we sit on today's panel or even the audience, have multiple roles
brand customer supplier, law enforcement authority
regulator of public servant, customer service.
Some of us are trying to be servant leaders.
We have multiple stakeholders we face or set multiple and multiplying standards,
and we engage with many stakeholders, sometimes as an initiator or responder.
So we have a lot of roles in which we have a chance to drive positive impact.
Now let me turn to the heart of the matter.
Some thoughts for your consideration.
We think it's important, speaking of green trade, innovation and incentives,
that there's collaboration between government, industry
and by industry within and across supply chains, value chains and sectors,
building and incentivizing the creation of infrastructure
to pivot from a linear economy, take, make and waste to one
in which there is abundant, scalable,
mechanical and chemical recycling infrastructure is critical.
And that's in addition to the work to green, the grid,
circular economy and circular design principles.
We believe that products that incorporate circular design criteria
should be incentivized, such as those that use textile, textile,
recycled fibers or features that facilitate repair and recycling.
Turning
to the pivot to the circular economy again, textile recycling.
We support inter-agency efforts to remove barriers to and accelerate
the scaling of mechanical and chemical textile recycling.
Many of these technologies are actually proven, but they face challenges
for adoption at scale.
So focused governmental policies could help to address gaps in the market.
And we believe that some of the entities that will speak to you later today,
including textile exchange, as Matt referred to, that
incentives such as expedited CBP processing time or new
harmonized tariff schedule classifications
could recognize products that are, for example, produced at Tier
one, Tier two factories that participate and recognize efficiency programs
like Apparel, Impact Institute or Carbon Leadership program.
These look at how to reduce energy, pivot to renewable energy,
reduce other impacts, recognizing products that are produced in factories at Tier
one and Tier two that are located in clean or green production zones
and supporting efforts that create jobs for U.S.
workers and chemical and mechanical recycling innovation,
funding of related educational and training programs, including
and in particular at community and junior colleges that focus on fiber
production, fabric production and finished good manufacturing.
And we think there's a place to recognize value chain actors or favor
them that have set science based targets.
So I want to end by circling back to our I started just in expressing gratitude.
I have one minute to wrap up my time and I'm going to try to do that.
The discussion today supports job creation,
but most importantly, it supports improving the quality of lives.
And I would caution that our effort and attention should be spent
on our outcomes and goals, not terms or labels or names.
If you look behind the concepts and the terms, you're going to see people
collapsing from heat.
Homes and businesses invaded and ruined by floods.
Businesses and homes laid waste by fires recently, lungs burning, eyes
tearing from fires from hills and plains in which people
and businesses set up and try to live their lives.
That's not the kind of cross-border transaction
we want to smoke from other countries, by the way.
So let's focus on job creation, improving the quality of lives, protect our house.
That's all of our house, our planet,
our one and only home field for current and future generations.
As the environmental stakeholders often observed, there just isn't A planet B
and there's nowhere to run to, nowhere to hide.
As Martha Reeves in the Vandellas said, By the way,
they're the same group that topped the charts with
and I want to channel Assistant Commissioner Highsmith with what song
Heat Wave, which seems ironically and unfortunately appropriate.
So thank you all for being here with us today.
All right, great.
Okay.
So quick question, Michael, for you.
What best practices would you highlight that could become part of U.S.
government conversations with trading partners as part of trade
negotiations or an international standard?
Thanks, John.
So a couple of thoughts.
Familiarity, clarity and consistency can support success.
As an array of regulations emerge, Common Core provisions with clear guidance
can help businesses execute the actions
they need to achieve the outcome stakeholders desire.
Second, sorry, that's my timer here.
Calling may have gone too long.
You have more time.
Thank you.
So like Mission Impossible, I'm going to be eliminated.
Recognizing effort, good intent, and the commitment to improve.
Like the world
around us, businesses face an array of inherently complex challenges.
No one gets it right all the time, and complying with regulations
can particularly be particularly challenging for
SMEs small to medium sized enterprises where the chef, the cook,
the bottle washer often can be and are the same person
borrowing from athletic performance warm up properly.
Give us some warm up time.
Allow or provide a safe harbor or grace period for businesses to test and learn.
Test quickly.
Fail fast to learn quickly from pilots.
It takes for business to implement requirements.
We need time to adapt and implement, and some may be facing
challenges or asking their teams to do more with less.
And finally, favorable conditions favor success.
Support policies that create conditions that incentivize innovation
in the investment in the innovations and infrastructure needed to support
a pivot to a circular Under Armour's here, because our founder, Kevin Plank,
started with a T-shirt that he thought could wick sweat away
perspiration away from the body and solve a performance challenge.
We continue to focus on innovation.
I'm grateful to be here at the seat of innovation.
Great.
Thank you, Michael.
I think we're back on schedule right.
So we wrapping now, John.
Can I offer a quick response?
You may actually.
We have time for a couple of questions. Great. Yeah, please go ahead, Mike.
So you asked me a question and I failed to respond to it appropriately.
And I'm going to take this opportunity to come back
and it's around ACE 2.0, which you're fully aware of.
So today, cargo carriers and Dana mentioned it
still face a range of challenges related to trade facilitation,
including the continued use of paper gilti
forms.
So thank you for the reminder on that and paper based communication,
repetitive data requirements that we have
from various border agencies and outdated
and cumbersome systems for managing data across the organization.
Many of these shortcomings stem from the fact that the automated customs
environment has limited functionality and investments.
Updating to a 2.0 in coordination with the private sector users
would enable a simpler, faster and more effective data sharing across agencies.
This would maintaining an improved risk targeting.
It would still maintain and improve even risk targeting across all entry types,
including de minimis, while facilitating faster, more efficient cargo handling.
I think if there's one lesson we learned from the pandemic
was the importance of flexible routing of shipments.
We knew that.
Yet the existing age separates manifesting by.
So adding functionality
like Multimodal manifest would support the routing of flexibility
and would reduce dwell times and related emissions at the border.
So thank you, sir, for allowing me
that opportunity to come back and answer effectively your question.
Okay. Thanks, Mike.
Message received on ACE 2.0.
I mean, we really intend for this to be a transformational change for ACE,
The ACE 1.0, if you will, was a great start.
We really want to make some changes that can that can help this effort
and other efforts.
So I appreciate that.
Let me throw a question out there
for any of our members.
I think this is a good one.
What significant barriers are you facing
or have you faced in your sustainability efforts?
Maybe, Matt, you take a shot at that.
Yeah, sure.
I'm happy to dive in at this point in our work as an organization.
You know, I mentioned
two thirds of our impact is really in how we manufacture product
and it's things like heating up water in order to die of fabric
before it even goes and gets cut and sewn into a final product.
So our main focus as an organization right now, beyond the work
we've already done in our own business footprint, is to really decarbonize
our global value chain. So that requires a couple of things.
It requires electrifying a huge number of manufacturing processes, many
of which currently run on thermal heat, so actually combust in coal
or natural gas on site to do something like heat up that water.
And then it means greening the grid.
Once you have your systems electrified.
So for us, we are actually in the process of beginning to procure
clean energy in the places, wherever we manufacture product,
buying energy on behalf of our manufacturing partners.
Long term, though, we need our manufacturing partners
to be able to access clean energy instruments themselves on our behalf.
And we basically need to build clean energy
into the bill of materials for our product,
just like we would any other input that actually goes into creating
that final product. Right?
Or just like we think about the human rights associated
with manufacturing product, right?
This is has to be an integrated approach to how we design and build
the products we're importing.
So for us briefly, we participated in the Clean Energy Demand Initiative,
which is a fantastic US led
initiative Department of State, USAID and others.
That's actually beginning to bring some of these clean instrument,
clean energy instruments into places like Southeast
Asia, where most of the manufacturing is occurring.
So that's just a wonderful example, and I'd encourage anybody who is active
in managing a global supply chain to look into the study initiative.
And hopefully there's opportunities for us, CBP, to also engage in that.
Great. Thank you for that.
Next question.
I'd actually like Mike and Dana to respond.
And I have I have one from Michael.
What has the internal response to your sustainability
initiatives been like with your own employees?
Do you find there's a strong awareness among them?
Start With Dana.
Thanks very much.
So we outlined in our sustainability report
that is available on our website,
the employees are actively engaged in this.
So from just the company standpoint, our strategy,
one of the enablers of our strategy is really about the environment.
And we have green teams that have been formed in all of our district offices
around the world, and we do charitable giving at a very local level
in all of our locations around the world as well.
We find that our workforce is very young.
Quite frankly, at the beginning we have programs called Opportunity Knocks.
It takes young kids really from high school
and sort of brings them into the supply chain.
We have veterans and all sorts of different in terms of levels
around the world.
And this is one item that absolutely
energizes the workforce.
They feel like they can make a difference.
And we've seen some very good success from that and some creative ideas.
Great.
Mike, you're a big international company like X,
but what is the rank and file think of these efforts?
Yeah, I would say first and foremost, they have everyone is fully aware
of what we're doing.
So our ESG strategy is quite public.
It's quite known we've been vocal about it being a German company,
everything is out in the open.
We're constantly being tested.
From a shareholder perspective, on a quarterly basis,
we report on our progress.
The employees are aware of that
and they're proud of the changes that they're seeing that are unfolding
in the organization.
Just last week when we opened up the new Atlanta hub, which is a completely carbon
neutral hub for us, it's the first of its kind even in Atlanta.
The employees were quite happy that we're the first company at Hartsfield
International Airport that has solar on the roof.
And this is right in the line of sight of aircraft that are arriving and landing.
So it was a pilot with the airport.
The airport is seeing that
the Anti-Reflective Solar panels that we put on place are producing
50% of the energy for the building that we're operating.
And they they're saying they're looking at us
and saying this is what a responsible, great place to work does in the industry.
So quite happy.
We're holding ourselves accountable.
And then finally,
our corporate board members have it as part of their incentive scheme.
So if we don't hit the targets, they don't get paid
their bonus at the corporate board level.
So we said, we're going to put our money where our mouth is from that perspective
as well.
Great.
Interesting.
You both hit on the these are actually ways to attract employees to the company.
We find it with CBP as well.
With the initiatives we're working on with green trade
and forced labor and other initiatives.
Okay.
One for you, Michael, and I think we'll wrap at that.
Yeah.
So if you could just take us home with this, Michael.
One of the key tenants of the green trade strategy
is that it imagines a whole of government approach.
How have you been able to integrate sustainability measures across
your different components within Under Armour?
Have some areas been easier, harder than others?
And how did you manage those challenging areas?
Sure.
So I think a big help
for us was work that we did after what we call our materiality assessment
to look at material issues to us internally, externally to then develop
a framework of goals and targets, many of which are aspirational.
We then matrix them across the business and assign ownership and accountability
in different business units.
There's often when you are in my role at a company or match role
or discussion of sustainability in the business, and what we've worked
hard to communicate is that there's just one business.
We're all part of that team doing that.
And as my current boss, Colin Brown, our chief operating officer, always says
that sustainability at our company and this is supported by Stephanie
Lennox, our CEO.
You know, has indicated this is a strategic priority.
Can't be the sustainability team doing sustainability to the rest of the company.
It really needs to be owned and live within other business units.
And that's what's happened.
We've allocated roles and responsibilities where we've seen people
have sustainability become part of their title,
their job descriptions and responsibilities.
We have places that we're moving ahead on.
We have a lot of challenges and open space ahead of us.
I think it's hard work. It's not important.
It's not perfect work.
But we we're trying to move ahead to drive the positive impact.
Great. Thank you.
So I just want to wrap and thank all of you.
As I indicated earlier, you're in my mind, the heart of international trade,
the manufacturing, the clearance and movement of goods
and really appreciate the insight that you have that you all have provided.
So thanks so much. And let's give him a round of applause.