Jul 19, 2017
Inditex's president Pablo Isla highlights the important of "sustainable growth" and circular economy
Jul 19, 2017
In a speech today Inditex’s president Pablo Isla highlighted a “sustainable growth strategy” as “key” to the future of the group, which is “totally” focused around a circular economy centered on people, social aspects, the environment and the product’s quality. The Spanish clothing company controls Zara, among other brands.
Isla spoke at the shareholders meeting this morning where he analysed the company’s evolution and data from the 2016 period and cited “sustainable growth” as “something absolutely essential for us.”
He also referred to growth that is “solid” and “integrated” as key to the future of Inditex, which he defined as a company “centered on people, based on creative talent and with an integrated model of physical and online stores.”
The board approved the 2016 results, which allowed for dividends of 0.68 euros per share, representing a 13.3 percent increase from the previous year and an 89 percent growth over the past five years, which suggests “an attractive and certain remuneration policy for shareholders.”
Last year Inditex surpassed 7,200 points of sales in 93 markets and 41 online platforms, with sales of more than 23.3 billion euros and profits of 3.175 billion.
Isla also indicated the group’s goal to implement its short and long-term strategy across the world, as “a phenomenon such as Brexit won’t affect our shares and investment plans in the UK,” where “we will continue developing our plans as with other markets,” he said in response to a question posed at the meeting.
Inditex’s president stressed the “solid growth model” for the group, which has seen comparable growth rates of 69 to 37 percent in the past five years, with positive outcomes across all regions.
With regards to that “sustainable growth strategy” based on a circular economy, Isla cited transparency in supply chain management, adequate working conditions, occupational health and safety, dignified salaries, collective negotiations for factories, female empowerment and protection for migrants as key principals.
Placing the worker in the center of the economic policy results in pieces of “maximum quality,” which, along with programs that tend to the integrated production cycle and establish environmental sustainability, make up the Closing the Loop program.
Part of that initiative, which is one-year-old, includes the collection of more than 7,100 tons of clothing, shoes and accessories through containers found at the company’s stores, offices and logistical centres in partnership with non-profits Cáritas, the Red Cross, Oxam and China Environmental Protection Foundation.
The company’s sustainability commitment extends to the use of recycled fabrics in the collections Join Life from Zara and Wear the Change from Oysho, which, according to Isla, utilise “a selection of more than 44 million items made with the most advanced technology with regards to sustainability.”
With regards to its workforce, Inditex oversees 162,450 employees comprising 99 nationalities and 45 different languages, which marks the company as “diverse with respect to difference,” an area which has been alluded to in the “headquarters effect” of the Spanish group, and has “implications” in the “employee generation” with respect to quality and, indirectly, suppliers.
“At Inditex we want to be increasingly a company centred on people,” Isla emphasised.
He also stated that the group represents 2 percent of the total sum of Spain’s corporate tax collection, “something important to highlight,” he added. It has been estimated that the company’s global tax contributions exceed 5.6 billion euros.
Inditex’s president also underscored the group’s investment in eco-efficiency and has reached a total of 4,519 stores, comprising more than 71 percent of the company’s locations, which comply with sustainability criteria, and by 2020 anticipates reaching 100 percent compliance. The initiative results in an average savings of 40 percent of water consumption and 20 percent energy consumption when compared to a conventional store.
In 2016, the group raised 1.4 billion euros in funding and will exceed 7 billion in the next five years. A large portion of that has been spent on technological advances such as the RFID system, which has already been implemented across the Zara network and will soon reach the Massimo Dutti and Uterqüe brands. It’s estimated that in 2018 the technology will reach the remainder of the group’s brands.
Inditex counts 85 million followers across its social media networks and in 2016 saw the incorporation of mobile pay in 15 countries. Its ultimate goal is to achieve a better standard of customer service.
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