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VF Corporation Creates Sustainable Iconic Apparel With Unique Investments In Renewable Energy

VF Brand Collection

VF Corporation (VF) is a global apparel, footwear, and accessories company founded in 1899. It is one of the world's largest companies in its sector, with a diverse portfolio of iconic outdoor, active, and workwear brands. The company is committed to connecting people to the lifestyles, activities, and experiences they cherish most through its family of brands. Its brand portfolio includes a wide range of well-known names - Vans®, The North Face®, Timberland®, and Dickies. Other brands under VF's control are Altra, Eastpak, Icebreaker, JanSport, Kipling, Napapijri, and Smartwool. Each is uniquely authentic and has earned its place in the lives of millions by consistently exceeding their expectations with amazing products that enable them to live sustainable and active lifestyles.

Steve Rendle, Chairman, President and CEO - VF until 2022

VF is also dedicated to socially and environmentally responsible operations. That dedication was recently emphasized by Steve Rendle, VF’s Chairman, President and CEO until 2022, when he said: “At VF, our performance-driven culture is grounded in purpose, which leads us to remain sharply focused on delivering consistent business results while also achieving high standards in environmental and social responsibility. He added, “Our latest Made for Change report demonstrates how we’re making meaningful progress toward our long-term sustainability commitments through the constant pursuit of responsible and profitable growth.” (VF's current CEO is Bracken Darrell)

A Commitment to Renewable Energy

Sean Cady, Vice President, Global Sustainability, Responsibility, Trade, and Government Affairs - VF

VF’s 2022 Made for Change Report highlights that the company has set a bold target to use 100% renewable energy across its owned-and-operated facilities by FY26. At the time of the report, VF had achieved 34% renewable energy across its operations representing a 7% improvement from FY21. This commitment is realized through a combination of on-site renewable energy projects and off-site renewable energy investments, including renewable energy credits (RECs). As of FY22, VF had secured RECs to support the generation of renewable energy equivalent to 34% of its global electric usage, a significant increase from 26% in FY17. All of this demonstrates that “VF is acting with urgency in this important moment for social and environmental progress,” said Sean Cady, VF’s Vice President of Global Sustainability, Responsibility, Trade and Government Affairs. “In the face of global uncertainty, we are continuing to push forward the programs we’ve been building for years on climate action, product traceability, materials, human rights, and diversity, equity and inclusion.”

VF’s Tax Equity Procurement Strategy for Renewable Energy

In early FY23, that push yielded a unique strategy as the company initiated a Tax Equity Investment to fund the development of new renewable energy generation. For VF, this investment will support the development of four utility scale solar projects in South Carolina, dubbed the Iris 4, that will generate 47,000 MWh of renewable energy annually, the equivalent of about 23% of the company's electricity consumption for FY21. The associated RECs generated through the project will contribute to VF's progress toward their RE100 goal. In the future, VF’s renewable energy plans will again target Tax Equity Investment or virtual power purchase agreements (VPPA), expanding on-site renewables projects, and purchasing unbundled Energy Attribute Certificates (EACs) also known as RECs. It’s this most recent investment that sets the company apart from others in its industry.

This renewable energy funding strategy is novel and represents one of only two ever done in the footwear and apparel industry, and the largest of its kind for the same. It's also one of only 30 ever done by non-financial companies. The unique strategy requires input and collaboration from both the finance side of the organization and the sustainability side of the organization directly impacting a company's operations and bottom line.

Jeannie Renne-Malone, Vice President of Global Sustainability - VF

“VF’s recent tax equity investment aligns with our commitment to address climate change and increase our use of renewable energy,” shares Jeannie Renne-Malone, VF’s Vice President of Global Sustainability. “We are excited that this investment is good for business and the planet. We hope investments such as this and our industry-first green bond will inspire other major companies within our sector and beyond to make similar financial investments for the betterment of people and our planet.”

Matt Puckett, Executive Vice President and Chief Financial Officer - VF

“We take great pride in executing the largest renewable energy tax equity investment in the apparel and footwear industry,” said Matt Puckett, Executive Vice President and Chief Financial Officer for VF. “We believe that financial and environmental stewardship are not mutually exclusive. This is an example of the ideal scenario, when forward-looking financial investments help us to advance progress toward achieving our science-based targets while also supporting our business needs.”

  • A tax equity investment is a transaction in which an investor leverages their balance sheet to fund a project or set of projects.

  • In return, the investor receives a tax credit through their investment, which can turn cash flow neutral or potentially cash flow positive, even when accounting for the cost of the RECs generated.

  • Tax equity investments are critical to the financing of renewable energy projects. Without such investments, these types of sustainability projects would not likely be built at the same pace in the United States.

  • Tax equity investments are possible because of ambitious public policies that support renewable energy. For instance, this type of deal could only be executed thanks to the Investment Tax Credit (ITC).

  • While ITCs have been available for years, the recently passed Inflation Reduction Act (IRA) extends these tax credits and incentives for investing in sustainability and green energy projects for 10 years.

The Impact of Renewable Energy Credits with Additionality

While VF's progress in sourcing renewable energy is commendable, the inclusion of RECs with additionality in their strategy could further enhance their sustainability efforts.

First, RECs with additionality can accelerate the transition to renewable energy by funding new renewable energy projects that would not have been possible without the additional financial support. This can help to increase the speed at which the grid can change to renewable energy.

Second, RECs with additionality can mitigate costs over time associated with continued renewable energy procurement. By funding new renewable energy projects, these RECs can help to increase the supply of renewable energy, potentially reducing the cost of renewable energy in the long term.

Third, from a marketing perspective, RECs with additionality can enable VF to make a more impactful claim about its sustainability efforts. By supporting the development of new renewable energy projects, the company can demonstrate its active role in driving the transition to renewable energy.

Fourth, as VF continues to grow, its consumption of electricity is likely to increase. RECs with additionality provide a scalable solution to this challenge, enabling the company to cover increased consumption of electricity with renewable energy.

Last, VF could continue to use its Tax Equity Investment strategy in a more streamlined manner. Tax equity financing is a wonderful strategy that’s essential for developers building new clean energy projects in the U.S. Without Tax Equity Investors, many projects would never come online. However it’s still complex strategy on its own and needs a direct renewable energy strategy tied to it. Things to consider include the fact that:

  • Tax equity investments do not always come with RECs. That means buyers must be savvy enough to source project investments providing both, or have a third party option for the RECs readily available to use the investment proceeds on. That's where RECs with Additionality can make the investment more straightforward and impactful from a renewable energy claim perspective. Allowing a buyer to focus their attention on each deal separately but as natural compliments to one another. Somewhat like negotiating a loan for the purpose of buying a house - independent, but directly connected transactions.

  • Tax equity investment can make good financial sense. But, with such large amounts of capital committed to a tax equity investment, companies will often need approval from the CFO, CEO, and even the Board of Directors before investing.

  • Tax equity investment requires a full team effort. If a sustainability team member is leading the work on tax equity investing, they should include members of other internal teams from the beginning. Representatives from tax, accounting, treasury, legal, and government relations will all likely need to participate in thinking through the complexity and implications of pursuing this relatively novel approach to sustainability.

In conclusion, VF Corporation's commitment to sourcing 100% renewable electricity is a testament to its leadership in sustainability. The company's comprehensive approach to reducing its environmental footprint sets a strong example for the apparel industry. By considering the inclusion of RECs with additionality in its strategy, VF Corporation could further enhance its sustainability efforts and continue to lead the way in the transition to renewable energy.


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