PRESENTATION

STUDENT REFERENCE NUMBER(SRN): BP0279109

NUMBER OF SLIDES: 24
DATE: 28/08/2023
SUSTAINABILTY GROWTH
AND PROFITABILITY
A STRATEGIC APPROACH
 AGENDA
• Introduction • Maintaining Ethical standards in
operation
• Models of Strategic Purpose
• Corporate Social Responsibility(CSR)
• Sustainability in Zara’s Strategy Initiatives
• Zara’s current Sustainability Initiatives • Significance of CSR
• Examples of Sustainable sourcing and production • Zara’s CSR initiatives
• Benefits of Sustainability for Zara • Positive impacts of Zara’s CSR efforts
• Ethics at Zara • Challenges and Risks
• Importance of Ethics in Business • Recommendations
• Zara Ethical Practices and Values • Conclusion
• •
 INTRODUCTION

• Zara is one of the largest globally fashion firms in the world. It is owned by Inditex,
the world's largest fashion empire (Page, 2023).
• The dedication to sustainability pervades the entire organization, from the governing
bodies, which are articulated through a strong sustainability governance structure,
through the full workforce, which includes offices, logistical hubs, and stores
(Inditex, 2022).
• The purpose of this presentation is to discuss deeply about how ZARA can sustain in
the growth and profit with impact of Sustainability, Ethics and CSR.
•
 MODELS OF STRATEGIC PURPOSE
• "Models of Strategic Purpose" are frameworks and techniques that businesses use to steer their actions, decisions,
and goals beyond profit generating.
• Three key models within this concept are Sustainability, Ethics, and Corporate Social Responsibility (CSR).
• Sustainability Model: Managing an organization's activities in a way that assures economic, environmental, and
social well-being for current and future generations is referred to as sustainability. It entails a dedication to
minimize negative environmental, social, and economic repercussions while boosting beneficial benefits.
• Ethics Model: In business, ethics entails making moral and principled decisions, acts, and conduct. It is based on
justice, honesty, integrity, and respect for the rights and values of stakeholders. Ethical behavior entails doing the
correct thing even when it is not legally required.
• Corporate Social Responsibility (CSR) Model: CSR is a framework in which corporations voluntarily accept
responsibility for the impact of their operations on society and the environment. It includes activities such as
philanthropy, environmental conservation, and community engagement that go beyond legal requirements.
SUSTAINABILITY IN ZARA’S STRATEGY
• ZARA, a well-known fast-fashion retailer, defines sustainability as the
responsible management of its operations, supply chain, and products in
order to reduce negative environmental and social consequences while
maximizing positive contributions.

• Sustainability in the context of ZARA includes topics like as eco-friendly

material sourcing, ethical manufacturing, waste reduction, and addressing
social challenges in the fashion industry.
 ZARA'S CURRENT SUSTAINABILITY
INITIATIVES
• Sustainable Materials Sourcing: ZARA has made an attempt to obtain environmentally friendly materials
such as organic cotton and recycled textiles. For example, by 2025, the company intends to employ
100% sustainable cotton. This decreases the environmental impact of conventional cotton farming.
• Reducing Water Usage: ZARA is continually seeking to reduce water use in its manufacturing operations.
Water recycling and eco-friendly machinery are being adopted in enterprises to reduce water
consumption.
• Energy Efficiency: ZARA is committed to lowering its stores' and distribution facilities' energy use and
greenhouse gas emissions. This involves utilizing renewable energy sources as well as energy-efficient
lighting solutions.
• Reducing Waste: The corporation has implemented waste-reduction strategies such as recycling
programs, improving packaging, and reducing overproduction.
• Supply Chain Transparency: By sharing information about the sources of its products, ZARA hopes to
improve supply chain transparency. This enables customers to make better informed decisions.
EXAMPLES OF SUSTAINABLE SOURCING
AND PRODUCTION
• Recycled Polyester: ZARA has used recycled polyester in some of its
collections, minimizing the requirement for new synthetic materials while also
lowering waste.
• Closed-Loop Manufacturing: The company has experimented with closed-loop
manufacturing processes, in which old garments are collected, recovered, and
repurposed to manufacture new clothing, thereby reducing waste.
• Eco-Efficient Stores: ZARA has created eco-efficient stores that are designed to
reduce energy use through features such as efficient lighting, heating, and
cooling systems.
 BENEFITS OF SUSTAINABILITY FOR
ZARA
• Cost Reduction: Through lower energy usage, more efficient manufacturing
processes, and streamlined supply chains, sustainability measures can lead to cost
savings. Using recycled materials, for example, can reduce the cost of obtaining
new materials.
• Enhanced Brand Image: Showing a commitment to sustainability can help
ZARA's brand image and reputation, particularly among environmentally sensitive
consumers.
• Customer Loyalty: Efforts to improve sustainability can increase customer loyalty.
Shoppers who share ZARA's ideals and appreciate its environmentally friendly
methods are more likely to become repeat consumers.
 ETHICS AT ZARA
• The set of moral principles, beliefs, and standards that influence the
behavior and decision-making of individuals and organizations in
the commercial sector is referred to as business ethics.
• It entails making honest, fair, and socially responsible decisions even
when they are not legally required.
• Ethical business activity includes contacts with employees,
customers, suppliers, rivals, and society as a whole.
IMPORTANCE OF ETHICS IN BUSINESS
• Builds Trust: Ethical behavior promotes trust among stakeholders like as consumers, employees,
investors, and partners. The basis of effective business relationships is trust.
• Enhances Reputation: Ethical procedures improve a company's reputation, making it more
appealing to consumers and investors. Increased sales and higher financial performance can result
from a solid reputation.
• Mitigates Legal and Reputational Risks: Ethical behavior assists organizations in avoiding legal
problems and reputational harm that can emerge from unethical action, both of which can have
long-term negative implications.
• Attracts and Retains Talent: Companies that promote ethics are more likely to attract and retain top
individuals who value a moral work environment.
• Promotes Sustainability: Ethical business practices are frequently aligned with sustainability,
environmental responsibility, and social well-being, contributing to long-term economic viability.
 ZARA'S ETHICAL PRACTICES AND
VALUES
1. Labor Practices: ZARA has created a Code of Conduct for manufacturers and suppliers
that sets its labor-condition standards. This code establishes guidelines for equitable
compensation, work hours, and occupational health and safety. The company has agreed
to participate in the Higg Index, developed by the Sustainable garment Coalition to
measure and improve the environmental and social performance of the garment and
footwear industry's supply chain.
2. Supply chain Management: ZARA has been attempting to boost supply chain openness by
sharing information about its supply chain, including the whereabouts of its suppliers'
factories, on its website. The corporation has launched steps to address labor rights
concerns in its supply chain, such as efforts to eliminate forced labor and child labor.
ZARA has undertaken environmental promises, such as lowering water usage and using
sustainable materials, to lessen the environmental impact of their supply chain.
 MAINTAINING ETHICAL STANDARDS
IN OPERATIONS
• Through a combination of internal policies, external collaborations, and audits,
ZARA maintains ethical standards throughout its operations.
• To maintain compliance with its Code of Conduct, the corporation performs
frequent audits of its suppliers' plants.
• To address labor rights issues in the supply chain, it works with organizations such
as the Ethical Trading Initiative.
• Furthermore, ZARA's dedication to supply chain transparency allows for enhanced
scrutiny by external organizations and the general public, assisting in holding the
company accountable for its ethical standards.
 CORPORATE SOCIAL
RESPONSIBILITY(CSR) INITIATIVE
• Corporate Social Responsibility (CSR) is a corporate strategy in which a
corporation pledges to operate in an economically, socially, and
environmentally responsible manner.
• CSR believes that businesses have an impact on society that extends beyond
their economic role.
• It includes any voluntary efforts taken by a corporation to help multiple
stakeholders such as employees, consumers, communities, and the
environment.
 SIGNIFICANCE OF CSR
• Enhance Reputation: CSR efforts can help a company's image by developing trust
and loyalty among customers and stakeholders.
• Stakeholder Relations: Participating in CSR can help to strengthen connections
with stakeholders such as employees, suppliers, investors, and local communities.
• Mitigate Risks: By addressing environmental and social challenges, businesses can
lessen the likelihood of legal and reputational issues.
• Drive Innovation: CSR may encourage organizations to produce more sustainable
goods, processes, and business models, hence stimulating innovation.
• Contribute to Sustainable Development: CSR encourages actions that benefit
society and the environment, aligning company objectives with the larger aims of
sustainable development.
 ZARA'S CSR INITIATIVES
• Community Engagement:ZARA has participated in community involvement
activities, which may include collaborations with local organizations,
community project support, and addressing local social issues.
• Philanthropy:The corporation has participated in philanthropic activities such as
charitable gifts and projects to benefit causes such as education, healthcare, and
disaster relief.
• Employee Wellbeing:ZARA has efforts intended at promoting employee
wellbeing, such as fair compensation, workplace safety, and diversity and
inclusion programs.
 POSITIVE IMPACTS OF ZARA'S
CSR EFFORTS
• Enhanced Brand Reputation: ZARA's CSR initiatives assist to create trust among consumers and
stakeholders, contributing to a positive brand image.
• Stronger Employee Morale: By investing in employee welfare, ZARA creates a healthy work
environment, which leads to increased job satisfaction and retention.
• Community Development: ZARA's community engagement and philanthropy efforts help to develop
the local communities in which it operates.
• Environmental Stewardship: CSR programs may include sustainability initiatives such as minimizing
water usage and promoting eco-friendly materials that are in line with the company's environmental
responsibility.
• Risk Reduction: Participating in CSR can assist reduce the risk of negative publicity and legal action as
a result of environmental or labor issues.
• Customer Loyalty: Customers are increasingly valuing organizations that are ethical and socially
responsible. ZARA's CSR efforts have the potential to boost client loyalty and revenue.
 CHALLENGES AND RISKS
• Supply Chain Risks: It might be difficult to source sustainable materials and ensure ethical labor
standards across the supply chain. Supply chain interruptions, violations of labor laws, and
challenges in locating long-term suppliers are all risks.
• Public Relations Risks: Neglecting sustainability or ethics issues can result in unwanted press and
reputational damage, resulting in financial losses and loss of customer trust.
• Regulatory Risks: Changing legislation governing environmental and labor practices can put businesses
at risk if they are not in compliance, resulting in legal and financial implications.
• Costs: Putting in place sustainable and ethical practices may involve higher expenses at first, thus
affecting profitability.
• Greenwashing: Making false or excessive claims about sustainability or ethics can harm one's
reputation and lead to legal ramifications.
 HOW ZARA OVERCOME THESE
CHALLENGES
• Supply Chain Risks: ZARA has a Code of Conduct for manufacturers and suppliers that outlines its
expectations for ethical labor practices. Supplier audits on a regular basis help to ensure compliance with
these criteria. The company's dedication to supply chain openness enables for external inspection and
encourages suppliers to act ethically.
• Public Relations Risks: ZARA's proactive participation in CSR and sustainability activities, as well as
transparency in reporting, contribute to the company's excellent reputation. The company's openness to
address public concerns and engage with stakeholders aids in the management and mitigation of public
relations risks.
• Regulatory Risks: To maintain compliance, ZARA monitors and reacts to changing rules relating to
environmental sustainability and labor standards.The company's environmental measures, such as lowering
water consumption and adopting sustainable materials, are in line with, and frequently surpass, regulatory
requirements.
• Costs: While sustainable measures may initially be more expensive, ZARA's long-term commitment to
sustainability strives to save money through greater efficiency, waste reduction, and resource optimization.
• Greenwashing: ZARA's transparency initiatives, such as publishing information about supply chain locations
and sustainability targets, assist highlight the company's true commitment to sustainability rather than
greenwashing.
 RECOMMENDATIONS
• Establish measurable sustainability goals, such as lowering carbon emissions, water use, and trash
generation.
• Commit to incorporating a greater proportion of sustainable materials into its garment lines.
• On labels and through online platforms, provide thorough information on the sustainability and
ethical aspects of its products.
• Regularly publish sustainability reports that highlight accomplishments and opportunities for
development.
• Collaborate with suppliers to enhance labor conditions and worker rights, particularly in countries
where labor issues are complex.
• Continue to audit and evaluate vendors to ensure ethical compliance.
• Develop and extend circular economy activities, such as textile take-back and recycling, to reduce
textile waste and encourage responsible consumption.
• Support local projects and initiatives that connect with ZARA's beliefs and goals to strengthen
community involvement efforts. Encourage volunteerism and community involvement among
employees.
•
 RECOMMENDATIONS
CONTINUTION…
• Diverse, equality, and inclusion (DEI) should be prioritized within the organization through training, recruiting
procedures, and fostering a more inclusive workplace.
• Ensure that all employees, including those in supply chain activities, receive fair salaries, benefits, and working
conditions. Through awareness campaigns and training programs, educate staff, suppliers, and customers
about the importance of sustainability and ethics in fashion.
• Invest in the study and development of breakthrough environmental technologies, such as sustainable textile
production methods or energy-efficient industrial processes.
• Collaborate with other fashion industry executives, non-governmental organizations, and governmental agencies
to address industry-wide sustainability concerns.
• Review and update the company's sustainability, ethics, and CSR policies on a regular basis to ensure they
remain in line with changing societal and environmental demands.
• Encourage responsible consumption by informing clients about sustainable fashion options and improving
product lifespan.
• Continuously monitor and measure the impact of sustainability and CSR activities, and communicate the results
with stakeholders in a transparent manner.
 CONCLUSION

• ZARA maintains its development and profitability through a combination

of proactive measures, supply chain transparency, compliance
monitoring, and a long-term commitment to good business practices.
• These activities assist the organization in maintaining its reputation,
minimizing potential disruptions, and aligning with evolving legislation
and consumer expectations.
 REFERENCES
• Chandler, W. B. W. J. a. D. B., 2011. Strategic Corporate Social Responsibility: Stakeholder in a
Global Environment. 2 ed. Thousand Oaks, California: SAGE.
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[Accessed 27 August 2023].
• Inditex, n.d. Inditex. [Online]
Available at: https://static.inditex.com/annual_report_2016/en/our-priorities/commitment-to-the-
excellence-of-our-products/focus-on-a-circular-economy.php
[Accessed 27 August 2023].
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Available at: https://www.inditex.com/itxcomweb/api/media/84e8d006-5e69-4f59-b2ee-
c26bb26577ba/Inditex+New+Sustainability+Commitments.pdf?t=1689066014061
[Accessed 27 August 2023].
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Global Environment. India: SAGE Publications.
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• Sitaro, T.D., 2020. Fast Fashion and Sustainability-The Case of Inditex-Zara.