2010 Overview

In 2010 and continuing into 2011, 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.

Product Life Cycle Approach Continues.

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.  That’s why in 2011, Anvil introduced a new line of products which are made in the US from imported fabric.  The product life cycle results of this new line are reflected in the chart to the left and show a small per shirt decrease in carbon footprint compared to an Anvil basic t-shirt.

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.

Other Fibers.

In 2010, we continued to work on the development of other fibers but did not introduce new products from those fibers for a number of reasons, including some market challenges following the economic downturn of 2009 and sourcing issues.  Our fiber strategy for 2011-12 is being developed and will be published in our next report.

Water.

For some time,, we have worked on measuring our production water and in 2010, we achieved a 10% reduction in total production water used.  But, in 2011 we were able to complete a Water Footprint study which revealed that the highest risk in our supply chain comes from the agricultural stage of cotton.  We will use this information to source cotton from areas with lower water stress and use this information to continue to develop our fiber strategy going forward.

Management Approach

Our Management Approach to Product Responsibility has not materially changed since our last Report except that we increasingly continue to shift our focus from introducing new fibers to making sure that we grow our AnvilOrganic® line and we focus on reducing the impacts of our conventionally grown Anvil® cotton line.  2010 was a year characterized by unprecedented cotton prices and overall challenges in sourcing quality organic cotton fiber in quantities necessary to fill demand in our Anvil brand and private label.

Product safety and integrity continue to be at the core of our manufacturing. From the beginning (when we carefully identify the fibers used to make our products) through the production stage (when we follow restricted substances lists and seek out certifications such as Oeko-Tex® Standard 100, which indicates our goods are tested to be free of harmful levels of certain chemicals) and through a product’s end use (when we work to educate consumers on how best to care for it, as well as recycle and reuse it), we are constantly seeking to make improvements to the overall life cycles of our products.  In 2010, we were one of 60 plus companies that road test WRI/WBCSD Greenhouse Gas Product Life Cycle Accounting and Reporting Standard and were featured in the final standard as a case study for accounting for recycling content (page 75 of GHG Protocol).  Our focus on product life cycle assessments of our products continued in 2011 and we have elected to report those results in this Report.

We continue to face challenges in distinguishing our products in the marketplace in view of the ever increasing number of eco labels and product claims.  As with our approach to social and environmental responsibility areas, our approach to product responsibility and integrity has been to select recognized product certifications or standards in the markets in which we compete and then educate our customers and end-consumers as to our selection standards.

Please read our responses to the Performance Indicator questions for more detail about what we accomplished thus far and where we believe we need to improve in the future. The results of our product life cycle assessments are discussed in our response to EN6 under the Energy Aspect of the Environment section of this report.

Customer Health and Safety: PR1-PR2

PR1: Life cycle stages in which health and safety impacts of products & services are assessed for improvement, and percent of significant products and services categories subject to such procedures

Product safety and integrity are at the core of everything we do, and 100% of Anvil’s products are assessed for health and safety compliance in accordance with applicable law and our own product integrity standards.

From the beginning (when we carefully identify the fibers used to make our products) through the manufacturing stage (when we follow restricted substances lists and seek out certifications like Oeko-Tex, which indicates our goods are free of harmful levels of chemicals) and even through a product’s end use (when we work to educate consumers on how best to care for it, as well as recycle and reuse it), we are constantly seeking to make improvements to the overall life cycles of our products.

The future brings an emphasis of integrating life cycle information into the selection process for all materials, including process chemicals and colorants. We remain committed to chemical management practices towards the goals of green chemistry, eliminating waste generation and eliminating emissions to the environment and associated with product supply chains and life cycles. This is requiring an emphasis on developing chemical management systems and product designs based on utilization of scientifically validated data. Utilization of Oeko-Tex® Standard 100 for product certification helps insure that our products are safe for intended uses and meet rigorous internationally recognized quality and safety standards. Our plans are to continue along the path of improvement using the best toolsets available.

The majority of Anvil apparel products—from both the eco and conventional lines—have been certified under Oeko-Tex® Standard 100, which tests against one of the most stringent prod­uct safety standards in the world, to ensure products are tested to be free of harmful levels of chemicals and substances.

In addition:

–Our Restricted Substance List is based upon the AAFA Restricted Substance List and numerous private label restricted substance lists.

–Our organic cotton carries certificates, issued by third-party certifying bodies, ensure the raw cotton we purchase is certified 100 percent organic, under the USDA’s National Organic Program.

–We conduct our own research and due diligence on our supply chain as a way to ensure the integrity and safety of all raw materials we purchase.

On top of our  health and safety impacts, we have also assessed the environmental impacts of several of our products from the Anvil®, AnvilOrganic®, AnvilRecycled®, AnvilSustainable™ lines.

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PR2: Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services, by type of outcomes

We firmly believe in ensuring that all of our products meet or exceed applicable health and safety regulations.  For example, in 2009, we launched trackmyt.com in response to the Consumer Product Safety Improvement Act requiring youth product to carry a tracking label.  Our website turned the tracking label into an educational experience.

Anvil has not identified any incidences of non-compliance with regulations during the reporting period.

Product and Service Labeling: PR3-PR5

PR3: Type of product and service information required by procedures & percent of significant products and services subject to such information requirements

100% of Anvil’s apparel products require content, care and country of origin labeling.  Anvil is committed to make accessible comprehensive information about the impacts of its products.  Since we primarily sell our products to business-to-business (b2b) community and under private label, we need to find other methods to educate the end user on the impact of our products. We have developed several digital tools, including TrackMyT®, to provide supply chain traceability while also delivering certification and carbon footprint information. In 2010, one of our private label customers, Disney Stores, licensed the TrackMyT service to track all graphic t-shirts manufactured by Anvil with 100% organic cotton for their US stores on Disney.com/TrackMyT.

Released in December 20010, Shirt Scan has since been used at several large public events such as the Boulder International Film Festival.

Later in the year, we released a new digital tool, Shirt Scan™, a smartphone application which delivers multimedia content right on the shirt through a QR Code.  Unlike most QR codes, Shirt Scan does not merely link to a website but creates a virtual closet of t-shirts, each of which tell their own story.  Part of that story is the country of origin for the cotton and the places of manufacture – a mini TrackMyT for your smartphone.

Our goal is to continue to develop fun and interactive ways for consumers to learn about how and where their Anvil t-shirts come from and what their impact is.

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PR4: Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes

Anvil has not identified any incidences of non-compliance with regulations concerning product and service information and labeling.

PR5: Practices related to customer satisfaction, including results of surveys measuring customer satisfaction

We expect to conduct a brand study in 2012 but other than a 2008 brand study conducted through interviews with a selection of its business-to-business customers, and subsequent informal product testing initiatives, Anvil has not conducted formal customer satisfaction surveys.

Marketing Communications: PR6-PR7

PR6: Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion and sponsorship

In 2010, the US Federal Trade Commission proposed revisions to the guidance known as the “Green Guides” that it gives marketers to help them avoid making misleading environmental claims. The proposed changes are designed to update the Guides and make them easier for companies to understand and use.

The proposed revised Green Guides caution marketers not to make blanket, general claims that a product is “environmentally friendly” or “eco-friendly” because the FTC’s consumer perception study confirms that such claims are likely to suggest that the product has specific and far-reaching environmental benefits. Very few products, if any, have all the attributes consumers seem to perceive from such claims, making these claims nearly impossible to substantiate. [source: FTC Press Release]

The proposed Guides also caution marketers not to use unqualified certifications or seals of approval – those that do not specify the basis for the certification. The Guides more prominently state that unqualified product certifications and seals of approval likely constitute general environmental benefit claims, and they advise marketers that the qualifications they apply to certifications or seals should be clear, prominent, and specific. [source: FTC Press Release]

Next, the proposed revised Guides advise marketers how consumers are likely to understand certain environmental claims, including that a product is degradable, compostable, or “free of” a particular substance. For example, if a marketer claims that a product that is thrown in the trash is “degradable,” it should decompose in a “reasonably short period of time” – no more than one year. [source: FTC Press Release]

In light of the proposed changes to the Green Guides, Anvil undertook a review of its product description vocabulary and claims and removed, wherever possible, marketing language that did not meet the proposed Green Guide recommendations or required too much contextual copy to support the claim.  It has not been easy to remove all the terminology that would differentiate the products in our line that claim some sustainable (a word we can still use) fiber or certification over our conventional products.  This is still a work in progress as we develop and test new vocabulary but in the end, we believe that it may simply come down to simple fiber content descriptions.

In 2010, we did discover that AnvilRecycled(r) totes were made from cotton left over from the ginning process and not pre-consumer textile clippings as our AnvilRecycled(r) t-shirts so we changed the label and discontinued that sku.  There is some basis to also conclude that the FTC will not consider pre-consumer textile clippings as “recycled” since the apparel industry has been recycling scrap for other use for some time.  We await the final Green Guides in order to determine our position on the AnvilRecycled(r) t-shirt.  We still believe that it is important for us as an apparel manufacturer to recycle our waste and find new products to make with that waste.  In the meantime, the AnvilRecycled(r) t-shirt was used as a case study by the WRI/WBCSD GHG Protocol on recycled content (page 75).

As previously reported, all of our communications continue to be governed by the principles contained in Anvil’s Code of Ethics and Anvil’s marketing communications are subject to internal review by our product development and compliance departments and to applicable law. In light of the nature of product claims made regarding our AnvilOrganic®, AnvilRecycled® and AnvilSustainable™ product lines along with our various certifications, we regularly host training sessions for our marketing, sales and customer service teams.  In 2010, Anvil developed a Brand Identity Guide and an online resource anvilmarketingtools.com which were released for the 2011 season.

Our product development and textile teams also continue to conduct testing of specific product claims and provides this information to our compliance team to ensure product claims are supported.  We have developed Fact Sheets for most of our products that have certain fiber or other attributes and these are made available online.

We have also identified the need to continue training internally as we hire new marketing and sales personnel as well as ongoing training of our distributors and customers about our company and product certifications and our products’  life cycle information. We view this as an ideal opportunity to share information about our sustainability initiatives and to differentiate our company and products in the marketplace.

Anvil’s promotion and sponsorship materials are also subject to the same internal compliance review.

While we strive to ensure that all our marketing, promotion and sponsorship materials are accurate and complete, it continues to be a challenge to monitor the content of materials that is developed in international markets.  That is why we have started to require more oversight and develop more training materials for our extended sales and marketing distribution chain.

PR7: Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion and sponsorship, by type of outcomes

Anvil has not identified any incidences of non-compliance with regulations concerning marketing.

Customer Privacy: PR8

PR8: Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data

Anvil has not identified any substantiated complaints regarding breaches of customer privacy and losses of customer data.

Compliance: PR9

PR9: Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services

Anvil has not identified any non-compliance with laws or regulations concerning the provision of its products.