Like many other previously office-based professionals, my more formal attire has not left the wardrobe in months. No need for tailored ensembles even on the most formal of video calls, where a smart-looking top (forget the bottom) would do. Definitely no need for elegant shoes either, on which I used to insist for in-person meetings; no high heels, obviously, but no sensible brogues either — not necessary and, anyway, now far too rigid for my newly liberated feet. Trainers, though, are a different story.
Why am I telling you all this? Because while I found a new appreciation for trainers, on my daily walks and school runs (now that children in the UK are, perhaps momentarily, back in the classroom), sustainability found its way to me when shopping online for my new favourite footwear. It came with a banking angle too.
Career change
Some of you may have heard of the French brand Veja. It was founded in 2004 by François-Ghislain Morillion and Sebastien Kopp, two former bankers (not our angle yet), who left their international jobs and set out to create a product they both appreciated as consumers and, more importantly, which would be made according to their personal values. Eliminating advertising, which represents about 70% of the cost of big brand trainers, say the founders, Veja pays comfortably above market price for its raw materials, chooses to manufacture where labour conditions are good and workers are protected by unions, and still manages to keep its retail prices accessible. It also uses techniques and materials that reduce environmental impact. And it selects suppliers and partners, including (here we are) banks, that match the company’s value. “We try,” says Mr Kopp. “We don’t succeed every time, but we try.”
In France, Veja banks with Crédit Cooperatif, a lender that finances companies that have a positive social impact, which is part of the BPCE Group, and to which Veja is giving more and more business, says Mr Kopp. It also works with Bred (the Banque Régionale d'Escompte et de Dépôt). But to run purchases from international websites, it relies on HSBC, in spite of the lender’s less than impeccable past record which continues to attract headlines. A recent investigation by BuzzFeed News, the International Consortium of Investigative Journalists and other news organisations exposed thousands of suspicious activity reports by some of the world’s largest banks, including HSBC. The lender responded to the exposé stating that it referred to historical information and that “starting in 2012, HSBC embarked on a multi-year journey to overhaul its ability to combat financial crime across more than 60 jurisdictions”.
HSBC may indeed have improved since. And like many of its peers, it has committed to report on its environmental, social and governance metrics. But it is still far from a perfect match for Veja, says Mr Kopp. It has, however, the kind of global reach that a small but growing company needs — put to the test, utility still trumps values. Many would be excused for feeling that we are still a long way away from structural change.
Growing business
But a company like Veja is not just a nice experiment. With a turnover of €67m ($78m) in 2019, it lacks the persuasive power of a big client or investor — withdrawing its business won’t sway any bank board one way or another. But the company is growing. It expanded by almost six times between 2016 and 2019; and it is set to grow by 30% this year, in spite of a catastrophic, global recession.
Further, the utility versus values dilemma that Veja was confronted with may soon lead to a different resolution. For now still relatively small, it attracts customers not just for its products’ aesthetics but for what the whole company stands for too. It has a strength that goes beyond the balance sheet. And a presence that is increasingly noticeable. I am late to the party, but others, from London’s much cooler scene to Instagram influencers, Hollywood actors and even the Duchess of Sussex, Meghan Markle, have been sporting Veja trainers for some time now.
While other companies, big and small, are becoming louder about their commitment to ethical products and practices, few may have openly requested the same of their bankers. But it is only logical to assume that this will come. And that clients’ moral concerns about the financial organisations they rely on may snowball into something more material. As companies and consumers become more discerning, they will increasingly look into not only how trainers are made, but also at how bankers behave.
