Crocs Classic Clog
Crocs Inc. says it will take longer than initially anticipated to become a net zero company.
In the company’s 2023 ESG report, dubbed its Comfort Report, Crocs updated its commitments to becoming net zero and said it now expects to complete this milestone by 2040. In July of 2021, Crocs said it planned to achieve this goal by 2030 by using more sustainable ingredients for its products and packaging materials as well as other measures.
“We’ve learned a lot in the past year,” read the report, which went live on Tuesday. “In 2021, we made a public commitment to be net zero by 2030. We stated this goal knowing it was ambitious, necessary and frankly, neither vast nor fast enough — a common reality for most brands (and not even just those in the footwear and apparel industry). The picture is now much clearer and we are working toward a new enterprise goal.”
Crocs attributed the delay to its Hey Dude acquisition (which closed in the first quarter of 2022, after the original commitment was announced) and its ongoing global expansion. The company said it spent the last year collecting data to understand the state of its supply chain and greenhouse gas inventories. In April 2022, the company hired Deanna Bratter as VP and global head of sustainability, a newly created position at Crocs to help hit the ambitious goal of being net zero.
“This is still an ambitious goal when accounting for the realities of our business and recognition of both brands, but it’s a more realistic and credible goal given that our total emissions are significant, our growth projections are aggressive, and our footprint looks quite different today than when we set our initial goal,” Crocs said in the report.
Crocs also outlined other goals related to long-term ESG commitments. By 2030, Crocs said it plans to reduce the carbon footprint of its classic clog by 50 percent and aims to achieve 50 percent bio-based content in Croslite, the main material used to make Crocs. In 2022, Crocs said it saw a 45 percent increase in total emissions year-over-year due to the company’s continued growth and data transparency. It noted that 75 percent of the of the total footprint was tied to the Crocs brand.
To help make progress in this realm, Crocs said a 5 percent portion of executive incentive compensation is tied to ESG performance.
“Our organization has seen tremendous growth and transformation in the past year, and our business looks different today with the expansion of our brand portfolio than when we set our initial goals in 2021. This report captures our hard-earned progress, essential learnings and the bold ambitions we continue to aspire to as an organization,” said Crocs Inc. CEO Andrew Rees in a statement. “We are pleased with the progress we have made in our ESG journey and are as committed as ever to becoming a more sustainable and equitable global organization.”Crocs Inc. reports earnings for the first quarter on Thursday. The company previously said it expects Q1 revenues to grow between 27 percent and 30 percent, compared to Q1 of 2022. Adjusted diluted earnings per share are expected to be between $2.06 and $2.19. For the full year of 2023, Crocs expects revenues to grow between 10 percent and 13 percent year-over-year, or between about $3.9 billion and $4 billion.