Interview: Alpargatas' Learnings in the quest for decarbonization

September 22, 2023 / Maria Luiza Gonçalves / Emissões de GEE

Alpargatas, founded and headquartered in Brazil for over 115 years, is best known for its flagship brand, Havaianas, the world leader in open footwear. The company also holds a stake in Rothy’s, a sustainable footwear brand in the United States, and ioasys, an innovation and technology company. With products sold in over 130 countries, Alpargatas has a vertically integrated supply chain, four manufacturing units in Brazil, and more than seventeen thousand employees worldwide.

With such a structure and scope, it is understandable that the main challenge for the owner of Havaianas within the climate agenda lies in scope 3, i.e. indirect greenhouse gas (GHG) emissions from the value chain. Ensuring accurate monitoring of this information and finding ways to engage the chain towards a common goal of reducing emissions are key points for the group.

In an interview with WayCarbon’s blog, Maria Augusta Bottino, Sustainability Director at Alpargatas, discussed the lessons learnt by the footwear industry in the climate agenda and how these issues were addressed by the group with the support of WayCarbon, which involved both consultancy services and Climas, an Integrated GHG and ESG Management software. Bottino also gave a preview of the company’s next steps on the decarbonization journey.

What is the main challenge facing Alpargatas’ industry sector in the decarbonization journey?

A: The key challenge for our sector in terms of decarbonization is broad, but mainly revolves around scope 3 – similar to many other sectors. It is about ensuring accurate monitoring of this information and finding ways to engage and raise awareness in the value chain towards a common reduction target. Aspects such as raw materials and logistics (in our case, very extensive and global) are undoubtedly points of particular attention.

What strategic guidelines led Alpargatas to seek consultancy from WayCarbon?

A: Sustainability is one of the four strategic drivers of our business. As part of this, we published our Corporate Sustainability Strategy in 2022, with 12 long-term commitments (until 2030) that give operational substance to our three main areas of focus: Circular Economy – from a value chain perspective, from the design to the end-of-life of our products; Responsible Operations – to reduce the impact of our operations, including in the value chain and; Local Development and Diversity and Inclusion – to act in the regions and environments where we operate, contributing to a more diverse, inclusive and equitable society.

Under Responsible Operations, we have a specific commitment to reduce our absolute emissions (direct and indirect) by 30%, and two other commitments related to energy, aiming to reduce our intensity and operate with a renewable matrix. In addition, there are commitments that touch the issue indirectly (but are no less important for the results), focusing on the percentage of renewable and/or recycled raw materials in our products and packaging.

Hiring WayCarbon has allowed us to have a clear and complete visualisation of our inventory/baseline, already in line with the SBTi (Science-Based Targets initiative) guidelines, as well as an initial strategic analysis of the path to be taken towards the final goal. We will also be able to more clearly assess the contribution of adjacent targets (raw materials, energy, etc.) and, of all the options mapped, which ones are already proving to be more cost-effective.

How have the challenges faced by Alpargatas been addressed as a result of the work carried out?

A: As previously mentioned, the work carried out was fundamental to mapping the company’s scope 3 emissions, in line with the SBTi guidelines. It also gave us an initial overview of the initiatives with potential to reduce emissions within the company, together with their expected financial cost and projected up to 2030 (which was an important guide for the start of our journey). Finally, we created a monitoring dashboard, taking into account the input of the company’s actual results, compared to the curve required to achieve the target, which will allow us to take an analytical and strategic view over the next few years.

What were the key lessons learnt from the work on scope 3 emissions and value chain engagement?

A: We were able to see very clearly what our key categories are, what our gaps are, and what the main focus of the business should be over the next few years. It was also possible to understand the scale of the challenge and the need for engagement across our value chain and to start thinking about action strategies.

In addition to the consultancy, Alpargatas also uses Climas, WayCarbon’s integrated GHG and ESG management software. How has this tool contributed to improving Alpargatas’ strategic approach to climate management?

A: Climas is essential for monitoring and managing the company’s emissions because it can provide emissions data in a simple, clear, and consolidated way, categorised by scope, category, location, parameter, among other specifications. This allows for emissions to be tracked and verified, facilitating the control of the most representative emissions. The systematic and cross-cutting input of data also helps to engage and hold accountable all actors involved in the process.

The various options and filters for viewing consolidated information provide a higher-level perspective, and the format, which is already aligned with the main climate frameworks in the market, greatly facilitates management and transparency practices.

What are the next steps on the company’s agenda?

A: We will certainly continue to evolve our climate agenda, refining our measurement, particularly in relation to scope 3, and focusing on mapping, assessing, developing, and monitoring priority initiatives to reduce emissions within the business and throughout our value chain. At the same time, we will continue to make progress in strengthening the company’s climate governance and the management of our related risks and opportunities.