KEEN Footwear: Sustainability Audit and Recommendations

This report presents a comprehensive sustainability audit of KEEN, Inc., a Portland-based footwear manufacturer. The audit, conducted using the Natural Step Framework, examines various aspects of KEEN's operations, including corporate social responsibility (CSR), environmental impact, social-cultural and economic environments, competitor analysis, and marketing strategies. It analyzes KEEN's 'HybridLife' campaign, product positioning, and market segmentation, assessing their commitment to sustainability through its report card. The report provides a detailed analysis of KEEN's environmental and social practices, including its supply chain, product design, and community outreach. The analysis includes a grading scale to evaluate KEEN's sustainability performance across different areas. Finally, the report offers recommendations for enhancing KEEN's sustainability efforts, particularly in production processes. The report also covers global issues relevant to KEEN's operations and offers insights into their branding, packaging, and sustainable value circle.

K E E N
2011
KEEN
Sustainability Audit
Amanda Aplet
Anna Kiritchenko
Melissa Buisan
Marshawna Williams
KEEN Contact: Chris Enlow - Care and Community
Manager
Email: [e-mail]
Phone: [phone]

Table of Contents
Introduction.................................................................................................................................................2
Background..................................................................................................................................................2
Grading Scale...............................................................................................................................................3
Corporate Social Responsibility and Ethics..................................................................................................4
Environments..............................................................................................................................................6
Social-Cultural Environment................................................................................................................6
Economic Environment........................................................................................................................8
Competitor Environment.....................................................................................................................8
Technology Environment.....................................................................................................................8
Legal-Political/Federal Environments..................................................................................................9
Natural Environment.........................................................................................................................11
Metrics and Measurement of Movements................................................................................................14
Positioning and Market Segmentation......................................................................................................17
Product Positioning...........................................................................................................................17
Market Segmentation........................................................................................................................18
Global Issues..............................................................................................................................................19
Products and Services................................................................................................................................21
Branding and Packaging............................................................................................................................25
Sustainable Value Circle............................................................................................................................29
Sustainable Pricing....................................................................................................................................30
Sustainable Marketing Communication.....................................................................................................31
KEEN’s Hybrid.Life Campaign.............................................................................................................32
KEEN’s Recess is Back Campaign........................................................................................................34
KEEN’s STAND Campaign...................................................................................................................34
Final Recommendations............................................................................................................................35
Works Cited...............................................................................................................................................40
Honors Pledge:
As a student of the Dr. Robert B. Pamplin Jr. School of Business Administration I have read and strive to uphold the University’s Code of
Academic Integrity and promote ethical behavior. In doing so, I pledge on my honor that I have not given, received, or used any unauthorized
1

materials or assistance on this examination or assignment. I further pledge that I have notengaged in cheating, forgery, or plagiarism and I
have cited all appropriate sources.
Student Signature: Amanda Aplet, Anna Kiritchenko, Melissa Buisan, Marshawna Williams
Introduction
KEEN, Inc. is a shoe manufacturing company that is based here in Portland, OR.
KEEN footwear was founded in 2003 by Martin KEEN and Rory Fuerst who had a taste for
outdoor adventure. KEEN was not just built on a shoe but they try to incorporate, what
they all, HybridLife. HybridLife is KEEN’s mantra for having good business practices that
encourage outdoor activities well taking care of each other and the earth. KEEN has built
their foundation on corporate social responsibilities by creating economically friendly and
sustainable products, encouraging life balance through “recess is back” and giving back to
help solve social issues around the globe. What has KEEN not done? To answer, throughout
this report we have explored all aspects of KEEN, from production to culture to marketing.
Using the Natural Step Framework we have analyzed KEEN’s organizational suitability
efforts and made recommendations on where they can improve the business to be more
sustainable. One of our main observations throughout this audit is that KEEN is very good
about encouraging a work life balance among their employees and to their customer. Yet,
we have discovered that there is a lot more they could do in the production of their shoes.
Adding to the aspect that KEEN has many great core values but it is the little things that can
make the biggest impact.
2

Background
KEEN, which is privately held and moved its headquarters from Alameda, Calif., to
Portland five years ago, recorded about $200 million in sales last year. With more than
5,000 retail sites in more than 50 countries, the company projects $250 million in sales this
year (Brettman, 2011). KEEN was founded on the idea of making a cover toe sandal and its
first featured shoe was the Newport that also featured the thick black bumper that covers
the toes. KEEN soon found their market in promoting outdoor and water activities. KEEN
footwear has been a fast growing company since the launch in 2003. Today, KEEN has
introduced over 150 footwear styles. As KEEN grew more variety of footwear styles were
added, growing its causal business and cold weather footwear as well as a line of bags and
socks. In 2006 KEEN moved to Portland, OR and at the same time Kirk Richardson joined
the company as president after 27 year at Nike and James Curleigh joined in 2008 as CEO.
That same year Richardson lead KEEN’s corporate social responsibility and since 2004
after donating their making budget to tsunami aid in Asia, KEEN continuously makes the
effort to donate to various organizations. This was the first step in KEEN’s long term Hybrid
Care program they partner with other organization that also attack and contribute to social
issues.
Grading Scale
In order to come up with a realistic sustainability grade for KEEN, we created a
rating system that broke down the final grade to include the ten aspects that we discuss
throughout our paper. After analyzing each aspect we gave it a score of 1-4, with 1 being
3

the lowest rating and 4 being the highest rating. Then we took the average of all ten ratings
and were able to determine a final sustainability grade for KEEN.
Corporate Social Responsibility and Ethics
In 2008, KEEN released their first and only whole-system self-assessment they call
the “report card.” The report card covers KEEN’s corporate social responsibility practices,
guidelines, and goals regarding three key areas: environment, community, and growth
(Report Card, 2008). According to the report card, its purpose is to “provide information
and supporting metrics on the challenges, successes and disappointments we are (KEEN is)
experiencing during the journey toward social and environmental best practices” (Report
Card, 2008). The report card was created following the sustainability reporting framework
of the Amsterdam-based Global Reporting Initiative. This framework, which is becoming
the global standard, indicates how to measure and report economic, environmental, and
social performance (Report Card, 2008). This accountability report card is reported at the
public disclosure level (“C” level).
As the Global Reporting Initiative indicates, KEEN created a CSR team and Report
Card Review Committee rather than a third-party reviewer to “substantiate the report’s
accuracy” and advise them on the creation of their report card (Report Card, 2008). The
committee is made up of five experts: a non-profit organization officer, university
professor, supplier, third-party logistics provider and a KEEN employee, who all
volunteered for the task. Through a series of meetings, the team reviewed the report card
and provided input on the changes or additions that needed to be made to the scope and
4

depth of future reports. KEEN also plans on expanding the size of the committee to include
a wider range of stakeholders.
As briefly mentioned before, the report card addresses KEEN’s relationship with the
environment, the community, and growth with a focus on the product line, supply chain,
and headquarter operations. More specifically, it provides an introduction to the purpose of
the report, explains and introduces the review committee, and proceeds to cover detailed
topics about the products themselves, delivery, environmental impacts, labor, carbon
footprint, supply chain, (etc.) and community outreach and goals. The first appendix of the
document provides a list of the required topics required to be covered in their internal
assessment. KEEN uses the following index to summarize how they assessed themselves on
various informational requirements:
“I” means they included the requirement
“P” indicates partially included in accordance with available data
“ND” indicates no data available
“NA” indicates not applicable due to KEEN, Inc. lack of presence in this area
“NR” indicates not required for “C” Level Reporting
(Report Card, 2008)
KEEN is aware that a CSR document benefits their corporate and brand image as
well as builds a connection with customers. KEEN states the following benefits of their
report card: “(it) allows us to engage with interested community members, helping us to
link our vision and brand values with our day-to-day actions. The report also guides our
ongoing efforts in setting goals and measuring progress, as well as gauging our
performance against peer companies” (Report Card, 2008). They are also aware that their
CSR commitment establishes transparency requirements and they expect that their report
5

card will influence them to “remain accountable for ensuring openness in our business
practices” (Report Card, 2008).
Corporate Social Responsibility and The Natural Step Framework
KEEN’s CSR focused report card causes little systematic increases in environmental
concentrations of substances from the earth’s crust. It is largely electronic, so unless it is
printed, the major extraction of substances from the earth can be traced to the production
of computers and the electricity to run them. Similarly, their electronic statement causes
systematic increases in environmental concentrations of synthetic substances related to
computer hardware. Other than the negative effects of e-waste, the report card causes no
systematic increases in ecosystem degradation unless it was printed on glossy/toxic paper
with toxic ink and was not recycled. And finally, the report card creates no systematic
barriers to people meeting their own needs. Overall, the CSR focused report card is digital
and therefore does not directly influence the Natural Step Framework, therefore we rank
this aspect of KEEN as a 4 (highly sustainable).
Environments
Social-Cultural Environment
Education and marketing and media influence the social-cultural environment.
Besides statements on valuing sustainability and striving to progress in sustainability, we
did not discover any evidence that KEEN is trying to influence their customers by educating
them on the importance of sustainability. Considering that their targeting the micro-culture
of outdoor enthusiasts who value durability and functionality of outdoor shoes, they most
likely have some background on the importance of sustainability. Instead, KEEN focuses on
6

the distinct style and comfort of their footwear and various attributes of their footwear,
such as waterproof materials, reflective webbing, steel toes, and slip resistant soles, and
other features that deliver value to their target.
Regarding marketing and media channels, KEEN has a campaign called Hybrid Life
that is intended to illustrate the company’s brand image. Hybrid Life is meant to “attract
creative thinks, outdoor lovers, and social or environmental activists alike to its global
community” (Report Card, 2008). Hybrid Life embodies living sustainable and in balance
by practicing three verbs: create, play and care. “Create.Play.Care” is the brand’s tag line as
well as their daily operating philosophy. By “create,” KEEN is encouraging individuals to
express themselves and their thoughts and be leaders in environmental or social change
(Finnegan, 2009). By “play,” KEEN wants the outdoors to be embraced through active
participation. By “care,” KEEN is encouraging individuals to support environmental and
social causes through the outdoor experience by making small and large considerate
choices (Finnegan, 2009). KEEN is relatively reserved when it comes to marketing all of
their sustainability efforts. Speaking on this, Chris Enlow states:
“We try not to beat our drum too loud because we’re not perfect, nowhere close, and
the figure of green-washing is real, because it just takes one person to scream pretty loud
and it gets ugly. We try to be relatively quiet about it and try to document what we’re doing
and then be in a position where we can say ‘yeah, this is what we’re doing’ or ‘oh geez, we
need to work on that’” (Enlow, 2009).
Considering that their product largely services the needs of people who are active and
outdoors a lot, it makes sense that they position themselves to function in a way that will
7

keep their employees and customers the closest with the environment and supporting of
their passions. KEEN markets their ads in outdoorsy magazines, social media, word of
mouth, and on YouTube. They are effectively marketing to micro-level target consumers.
Economic Environment
Although the current economic condition is struggling and has been struggling, the
shoe industry has not been significantly impacted. Whether the cause is “frugal fatigue,” or
shoes are perceived as necessities, people are not showing signs of reducing their spending
on shoes (Rosenbloom, 2009). On top of this, society is increasingly becoming aware of the
value and need for sustainability (especially to outdoorsy people), so KEEN is not
struggling because of the negative economic environment.
Competitor Environment
KEEN’s competitors consist of other outdoor recreational shoe companies such as
Merrell, The North Face, Zamberlan, and Timberland (to name a few). Outdoor and
recreational shoes are a very competitive industry as most products are similar and it can
be difficult to differentiate oneself in offering a better value proposition than competitors
offer. KEEN is also relatively new so this adds to the difficulty in competing with economies
of scale. KEEN does not necessarily participate in any competitor collaboration to receive
any mutual benefits. However, depending on the volume of product they need to make,
they “take advantage of the great supply chain that folks like Nike and Adidas have put in
place…. but KEEN only represents about 2% of factory production while Nike uses 60%; we
week out suppliers that can do the 2%” (Enlow, 2009). So they can potentially be found in a
factory with Columbia, North face, Timberland, etc.
8

Technology Environment
Emerging technologies are making shoe assembly easier! KEEN uses a revolutionary
“Direct Inject” and “Direct Attach” technology to assemble the soles of select shoe models. It
is a German technology that uses heat and pressure to adhere two separate parts of the
shoe together. Essentially, it is more sustainable because it eliminates the use of glue and
almost 99% of what you inject into the shoe stays on the shoe rather than creates waste
(Report Card, 2008). They plan on growing with this technology and using it a lot more.
Currently, they have three of these direct inject machines in Portland. These machines are
running more sustainable as KEEN has an energy compressor that helps provide energy to
run the machines. KEEN uses one that regulates with the needs of the machine so that it is
more efficient, uses less energy, and gives them tax incentives (Report Card, 2008).
They are partnered with a German-owned tannery, ISA Tan Tec, (located in
Guangzhou, China) that recently implemented a new production system called the Low
Impact to the Environment (LITE) (Report Card, 2008). ISA Tan Tec believes that reducing
greenhouse gas emissions is the most important environmental issue. Their new LITE
leather process allows them to “achieve nearly an 11% reduction (948 metric tons) in CO2
emissions and nearly a 45% reduction in water consumption (Report Card, 2008). Up to
15% of the hot water consumed in the LITE production processes is generated through
solar heating. An additional 20% of hot water is obtained from cooling devices of existing
production equipment” (Report Card, 2008). Less energy in this process produces less CO2.
Also, 86% of the products are finished with direct application technologies that result in
lighter coatings and reduced air emissions. This tannery is experimenting with water
9

treatment projects that would be environmentally friendly and require no electricity or
chemicals. 15% of their water is currently recycled (Report Card, 2008).
Legal-Political/Federal Environments
As far as we have discovered, KEEN has not been in any violation of municipal or
federal legal requirements regarding their business practices. KEEN meets all legal
sustainability requirements. KEEN “purchased 100 percent renewable energy for their
corporate headquarters to offset 164 metric tons of greenhouse gas emission through
Portland Gas and Electric’s Clean Wind Program” which is 100% new wind power from
farms in Oregon and Washington (Report Card, 2008). This energy offset “equated about
403,123 miles not driven or 21,787 trees planted annually” (Report Card, 2008). KEEN’s
“annual electrical consumption per square foot in their headquarters was 9.2 percent
higher than the national average” (Report Card, 2008). We believe it is appropriate to
mention that last May, the Portland City Council adopted a “package of regulation
amendments,” which was prepared by the Bureau of Planning and Sustainability, that will
make the installation of sustainable energy sources such as “solar panels, wind turbines,
eco-roofs, rain or gray-water cisterns, and mechanisms that produce energy from
compost,” easier to implement (“Portland Adopts…” 2011).
A lot of KEEN’s leather (70%) is sourced from the United States (30% comes from
Brazil) (Report Card, 2008). KEEN strictly follows animal husbandry policies. It is
supervised by the US Environmental Protection Agency and People for the Ethical
Treatment of Animals (PETA). KEEN also has a Workplace Code of Conduct for Contract
Production Facilities that they look for production facilities that will follow all
environmental laws and regulations of the country in which they operate (Report Card,
10

2008). They also expect that the management teams of their production partners put
efforts into improving environmental performance in their operations and that they
require the same of their suppliers (Report Card, 2008). KEEN wants them to integrate
sustainability principles into business decisions, be responsible as they use natural
resources, and adopt cleaner production and pollution methods (Report Card, 2008).
KEEN’s tanner, ISA Tan Tec, complies with ISO 14064 standards for greenhouse gas
accounting and verification (Report Card, 2008). ISO (International Organization for
Standardization) provides tools for supporting GHG reduction and emission trading.
Ultimately, following ISO 14064 standards is helping the tannery in being transparent
regarding GHG disclosure.
Natural Environment
The technology KEEN uses to manufacture their products greatly reduces the
impact on the natural environment. More the two-thirds of the leather KEEN uses for its
products is LITE Leather. This has allowed them to surpass the industry’s benchmark for
energy consumption by 36.43% and water consumption by 44.55% (Report Card, 2008).
The industry benchmarks were created by the Leather Working Group, a “multi-
stakeholder initiative that assesses the compliance and environmental performance of
tanners and promotes sustainable and appropriate environmental business practices
within the footwear leather industry” (Report Card, 2008).
Regarding packaging, 90% of their three-dimensional internal shoe forms are made
from recycled material fiber that is molded while it is still in pulp so that they can save
materials and energy (Report Card, 2008). Their shoe wrapping material with embossed
logos is made of 100% recycled fiber. And they eliminated information hang-tags that used
11