Anvil's 2011 CSR Progress Report

Anvil Organizational Assessment

Our greenhouse gas (GHG) emission shows the total amount of energy used in Anvil operations. We used a significant amount of real data from facilities this year that previously were estimates.

Company emissions went up 32% in 2010 compared to 2009 due to higher production, a change in product mix to a higher percentage of dyed t-shirts (which uses more energy in production) and an increase in outgoing deliveries, which was the result of more accurate reporting in 2010 for delivery emissions. See detailed GHG Emissions here.

Energy

Our primary source of direct energy continues to be Bunker C oil, used to power the on-site boilers that produce steam for dyeing and finishing fabric at our Honduras textile plant. In 2010, we saw a 64% increase in Bunker C, driven by the year's production growth and the increased percentage of dyed fabric over white. Dyed fabric uses twice as much steam as white fabric.

Meanwhile, electricity remains our primary source of indirect energy at our facilities. However, we remain committed to increasing our use of bio-mass which we did by 10% in 2010 (saving an estimated 60,460 gallons of oil).

Conservation

Conservation efforts under our AnvilSustainableManufacturing (ASM) program, which is a comprehensive company-wide initiative that incorporates Anvil's sustainability policies and goals into daily decision making, yielded savings in a number of areas, including the following examples:

Process Improvements

• Textiles
  • Energy conservation system for fabric dryer also yielded productivity gain of 5%

Energy, Water &
Waste Reduction

• Textiles
  • Enhancements to Wastewater Heat Recovery System allowed us to save nearly 70,000 gallons of bunker oil
  • 10% reduction in water consumption from dye recipe change & reuse of cooling water = estimated 60,000,000 gallons saved
  • Steam cost savings from installation of automatic moisture controls saved more than $39,000 on steam, which is equivalent to 3,300,000 lbs. of steam
• Cut & Sew
  • Electricity conservation resulted in a 6% reduction in electricity
• Waste
  • We reduced the total amount of landfill waste by nearly 25% due to greater recycling efforts in all facilities, even in a year that saw more than a 35% increase in production. Surpassing last year's target of a 5% reduction in waste!

Materials

In 2010, our production grew by 36%, driven mostly by an increase in dyed t-shirts. This also drove a 40% increase in the amount of dyes and chemicals we used, while our overall increase in production drove a 41% increase in yarn usage. Although our commitment to use environmentally-sustainable fibers remains strong, our overall usage of recycled inputs declined due to a number of factors, including challenges in fiber sourcing.

While we do not report the percentage of organic and transitional cotton yarn used per year for competitive reasons, we have been ranked by the Textile Exchange as having the 7th largest organic program in the world in 2010 and consecutively ranked 6th for 2008 and 2009. Robust sales of Anvil's private label organic and organic blends to several of our customers in the top 10 ranking was the main reason for the AnvilOrganic™ to rank 7th in 2010.

Production Water

Anvil's overall usage of water in the production of its products increased due to higher production and a higher ratio of dyed to bleached t-shirts produced in 2010, which increase was partially offset by process improvements, including increased use of recycled water. We are currently finding new ways to use and reuse water in the production process and cutting water-intensive steps, such as avoiding a rinse cycle.

While we are pleased with our progress in reducing production water in 2010, we recently discovered through a water footprint that the impact of our production water is negligible in our overall water footprint compared to the water used in cotton agriculture. The same conclusion was reached in our product life cycle water study of our basic Anvil® cotton t-shirt.

Transportation, Business Travel
& Commuting

Due to increased production, we saw an 80% increase in emissions from the transportation of our goods in 2010.

In 2010, we completed a third party assessment of our logistics which identified several areas for potential efficiencies. One example is that we have increased our shipments through the port of Wilmington, North Carolina to reduce trucking mileage compared to shipments coming into the Florida ports.

Also, we have expanded our warehouse space in Central America near our factories in order to ship direct to some large customers and avoid the environmental impact of shipping goods through our South Carolina distribution center.

Finally, commuting increased in 2010 by 16% from 2009 due to increased bus and motor bike travel as a direct result of an increased workforce.

Goals

• Goal 1 -

  Reduce Energy Per Unit Produced by
  20% by 2020

• Goal 2 -

  Reduce Water Per Unit Produced by
  20% by 2020

• Goal 3 -

  Achieve Zero Landfilled Waste Stream by fiscal by 2020

• Goal 4 -

  Adopt ASM throughout the organization by
  the end 2013

Fiber

In addition to the incorporation of a larger percentage of sustainable fibers into its product offerings, Anvil's approach to manufacturing and product life cycle management is enhancing the sustainability profile of Anvil's entire product line – not just its Eco Collection. Every aspect of the Company - from raw materials to dyes to manufacturing practices - is being examined to determine where additional sustainability measures can be applied. In 2010, the majority of Anvil's private label customers made public commitments to use more sustainable fibers by a certain date and, in some cases, commitments reaching to 100% of their apparel lines. Anvil's fiber strategy, raw materials certification and supply chain management systems are continually being enhanced to offer these brands solutions to meet their goals. In 2011, we are working on other fibers which we will announce in our next reporting period.

Cotton

The biggest challenge in 2010 for us and the apparel industry as a whole, was the impact of the widely fluctuating price of cotton and, to a lesser extent, shortages in the availability of organic cotton. Overall, our use of organic cotton fiber increased in 2010 and continued to support increased growth for but we experienced a reduction in total amount of recycled fiber used due to challenges with sourcing.

We've also shifted our focus from introducing new eco products to our Eco Collection to improving the impacts of all of our products with Oeko-Tex Standard 100 certification and other internal measures. We are currently working closely with Oeko-Tex to assess our chemical management processes and make recommendations for continual improvement.

Water

We conducted our first company water footprint assessment with the assistance of PE International to inventory the freshwater consumed at each stage of our basic cotton t-shirt's product life cycle for 2010 compared to 2009.

What did we learn?

We were surprised to learn that the results of our water footprint assessment of an Anvil® basic t-shirt made from conventionally grown cotton revealed that the major contributor to that product's water footprint comes from the agricultural process for growing conventional cotton whereas our textile manufacturing process represented only a small fraction of the overall water footprint. The four regions of the US which contribute to US cotton growth (i.e., the far-west, southwest, mid-south, and southeast) rely heavily on water for crop production whereas our textile plant is located in a water-rich region of Honduras.

Product Life Cycle

In 2010, we participated in the "road testing" of the Greenhouse Gas Protocol, a global collaboration led by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) with our AnvilSustainable™ and AnvilRecycled® t-shirts, which final protocol was released on October 4, 2011.
Click here to learn more.

In 2011, we calculated our latest GHG Product Life Cycle assessment for a new "Made in US from Imported Fabric" product line. This new line is made from US cotton, spun into yarn in the US then knit into fabric in our textile plant in Honduras and returned to the US for cutting and sewing. The estimated carbon footprint of these shirts vary, based on short-sleeve, long-sleeve, or pocket styles.

Life cycle assessment results from 2011 Made in US line from imported fabric measures the GHG impact associated with the production, use and disposal per t-shirt.

Goals

• Goal 1 -

  Continue to grow our market share of the organic and transitional cotton market and build a scalable supply chain through collaborative efforts and innovation.

• Goal 2 -

  Improve the profile of the materials used for all Anvil products, and work to eliminate the release of harmful substances, in all stages of production.

• Goal 3 -

  Improve the quality of our products.

• Goal 4 -

  Continue to collect and utilize vendor derived data and encourage suppliers to participate in the process of transparency.

• Goal 5 -

  Continue to use and develop innovative ways to educate distributors, private label customers, vendors, employees and consumers on the benefits and value of making responsible choices.

Goals

• Goal 1 -

  Commit to providing a healthy work environment and continually improve the work experience of all of our co-workers.

• Goal 2 -

  Ensure a workplace free of discrimination and workplace harassment, enforcing ethical business conduct is in all matters.

• Goal 3 -

  Achieve and retain the highest standards in social certifications.

• Goal 4 -

  Roll out ASM throughout the organization by the end of 2013.

• Goal 5 -

  Implement more programs that support the advancement of women
  and ensure diversity.

• Goal 6 -

  Be recognized as an employer of choice in the communities in which we operate.

During the 2010 year, we conducted nine internal audits at our three Central American facilities. Our company auditor also audited all five of our raw material suppliers and completed 16 audits at 12 of our sub-contractors.

All three of our owned facilities are audited and certified by Worldwide Responsible Accredited Production (WRAP), dedicated to the certification of lawful, humane and ethical manufacturing throughout the world. Our Honduran textile facility was also audited and certified by WRAPe, an environmental certification. In addition, a number of our private label customers also visited and audited our facilities.

Goals

• Goal 1 -

  Continue to use scorecard to grade supplier compliance and ensure continual improvement.

• Goal 2 -

  Provide Supplier Training to Encourage Compliance with ASM Requirements.

• Goal 3 -

  Seek social and environmental certifications for our major subcontractors and finished goods suppliers.

• Goal 4 -

  Assess, address and report on ecological impacts of supply chain.

• Goal 5 -

  Continue to do business with suppliers, sub-contractors, brands and organizations who are philosophically aligned with our mission.

Economic

With droughts and other shortages, both in the US and in other cotton growing regions around the world, the need for more sustainably grown fibers continues to dominate the global apparel supply chain agenda.

While we do not report our earnings, we experienced growth in 2010 in both sales and profit. Approximately 66% of the growth of new business in 2010 was characterized by some sustainable fiber.

We are also benefiting from a shift from global to local sourcing where speed to the US market and quick replenishment proves more profitable to large brands than diminishing savings and higher markdowns from other traditional apparel sourcing regions.

Social

2010 saw an expansion of our existing social programs in Central America, including the community job training program. In addition, we continued to support health, education and relief programs in Central America and the US.

We continued to support organizations such as Farm Aid, Earth Day Network, Earth Day NY, Best Friends Animal Society, as well as relief efforts in Central America and for the Haiti Earthquake. Donations form the sale of our Charity Pink™ line also benefited several cancer research organizations.

Results of Honduras
Job Training Program

Human Rights

In 2010, we provided training to enforce our Code of Ethics, Non-Harassment, Non-discrimination and our Open Door Policies to 96% of our employees, up from 55% the previous year.

In 2010 there were no discrimination or harassment incidents at our facilities, compared to two incidents in 2009 and four in 2008. We strongly believe this correlated with the fact that we significantly increased the amount of training this year.

Goals

• Economic -

  Assess and measure the ROI of sustainability initiatives throughout our environmental, social and product responsibility platforms.

• Social -

  Expand Anvil's social investment projects focused on housing, education and welfare

• Human Rights -

  Continue to protect human rights and ethical practices in the workplace and in our supply chain.