Issues of environmental and social responsibility heavily influenced how The Container Store approaches its ESG-driven governance initiatives
A large percentage (43%) of corporate legal department leaders in the consumer, food, and health industries indicated that environmental, social & governance (ESG) was a high priority business issue, according to Reuters Insights Sustainability research, with two of the top three issues being environmental and social responsibility.
In a recent interview, Tasha Grinnell, head legal and sustainability officer at The Container Store, underscored the importance of these issues for the company’s own ESG journey. Grinnell, who joined the company in early 2022 with a multitude of in-house legal experience across a number of industries, took responsibility for the packaging retailer’s ESG strategy later than year.
Three key drivers contributed to the decision to place ESG under The Container Store’s corporate legal function, Grinnell says. The legal team already was providing regulatory compliance for financial data, advising on product liability and safety, and had become central to ensuring the company’s ESG compliance to internal standards for new stores and the stores’ suppliers.
Key governance moves
The ESG program at The Container Store is still in its early days, Grinnell explains, with the strategy officially starting in 2021 with its initial ESG commitments reported in its first sustainability report in 2022. During that year, the company conducted a materiality assessment, which identified and prioritized areas of risk and opportunities across ESG topics important to the business.
One of Grinnell’s top priorities when assuming responsibility for the enterprise ESG strategy was to ensure the governance of the program was set up for success. At The Container Store, the ESG steering committee is the approving body of the company’s strategy set-up and execution. All of the voices of internal and external stakeholders — employees, investors, suppliers, and others — are represented to ensure full stakeholder feedback is considered on every initiative. “Our ESG leadership council is integral in The Container Store’s governance structure and is responsible for strategy execution,” Grinnell says. “Our leadership council consists of subject matter stakeholders from all areas of the business, including our leadership team, our associates, our suppliers, key business partnerships, our investors, customers, nongovernmental organizations, and our SG [social and governance] evaluators.”
The next priority areas for Grinnell that are currently underway, is memorializing comprehensive policies and programs that outline the environmental and social responsibilities for the company. For example, one of the recently updated key policies and procedures involves calculations of the baseline greenhouse gas (GHG) emissions for Scope 1 and 2 of the company’s stores, utilizing the Greenhouse Gas Protocol to calculate emissions. The policy execution also includes the company’s efforts to offset power usage of its stores, as well as its distribution and support centers, which derive 100% renewable energy from wind.
Coping with big challenges
No matter where companies are in their ESG journey, managing big challenges with a small team is almost universal. The Container Store’s ESG team is another example of the corporate adage that “1 equals 3” — the idea that one great employee is three-times as productive as a single good employee. Grinnell made it clear that the positive trajectory would not be possible without the everyday contributions of Ivet Taneva, the company’s Senior Director of ESG, and Ann Cunningham, a Senior Paralegal working as the internal ESG Project Manager. Both report directly to Grinnell.
Data volume and lack of automation slow progress — One of the biggest challenges for Grinnell and her 1½-person ESG team is the volume of data and lack of automation. Grinnell and Taneva now are in search of an enterprise solution that can capture all of the company’s ESG metrics. “Currently, we must work with several tools to streamline our key performance indicators — our aspiration is to move to digital when it comes to ESG,” she adds.
The team is using automation for efficiency in visualization and modeling around emissions and waste reduction reporting. To make sure the tool continues to meet the needs of the ESG strategy at The Container Store, a member of Grinnell’s team sits on the customer board of the company’s software partner to ensure the product fits its needs and external standards.
Employee education key to earn buy-in — Another challenge that The Container Store is prioritizing is employee education from the top of the organization down to local management of stores. “One of biggest hurdles is making sure those who have responsibility to report ESG information at the local level understand the purpose and value of the information that we are requesting, so that we’re receiving material information back from the business units in a timely manner,” Grinnell explains.
A key mechanism to strengthen the commitment and messaging to employees is the chief merchandising officer’s participation on the sustainability committee. The corporate merchandising division oversees a separate sustainability committee that the ESG team reinstated. The sustainability committee ensures that a good portion of The Container Store’s stock falls into the sustainable category. Having the chief merchandising officer on this committee is a critical tie-in to the corporate ESG strategy and helps ensure that products are sustainably sourced and that employees know about and understand the value and importance of sustainability.
Looking ahead, The Container Store is committed to meeting and exceeding benchmarks and standards that have been set by U.S. regulators, once they are finalized. Grinnell is confident in the team’s ability to execute, largely because of the intentional and strategic nature in which the ESG strategy and function was founded.
“The Container Store recognizes the importance of our impact on people, the planet, and the communities in which we operate, and we believe that it’s imperative to the success of our business to continue learning, proving, and advancing our vision in that area,” she says. “One way we’ve done that is by placing the ESG strategy into the legal department so that we can really implement and execute a strong, legally sound, and thoughtful strategy.”