#235 - The Making of an Impact Report, with Annie Agle of Cotopaxi

Cory Ames  0:04  
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Annie Agle  1:11  
We have a business model that gives us the moral leeway to prioritize people and planet alongside profit. I think there's this misunderstanding by the general public about how limited a lot of corporations are, especially if they're publicly traded. They, a lot of times, might want to prioritize social and planetary topics more than they can because it is going to negatively impact profits. And I fully believe that sustainability and impact can deliver business opportunities as well as social opportunities, but sometimes they are in contention and sometimes you have to limit profits to put people and planet first especially in a more short term decision cycle.

Cory Ames  1:52  
Hey y'all, it's Cory here with the social entrepreneurship and innovation podcast. As always, so grateful to have you listening in. Today we are talking about the making of an impact report. And to do so I am speaking with Annie Agle, the Senior Director of Impact and Sustainability for Cotopaxi. Annie and I go deep into the substance of talking about how a company like Cotopaxi goes about thinking about their impact, strategizing their impact, and ultimately, measuring their impact producing an annual impact report. As you'll hear in the conversation to come, Annie clearly has an exceptional level of depth and expertise, as it comes to how businesses and corporations can very mindfully, intentionally, and deliberately approach the ways they make an impact - both negatively and positively, of course. 
But before we jump into this conversation, which I'm very excited for you to listen to, I want to invite you to sign up for my better world weekly newsletter. It's a newsletter I write and publish myself, send out every single Monday, thoughts and musings on all things building a better world. Go to growensemble.com backslash newsletter to get the next one in your inbox. That's growensemble.com backslash newsletter. Alright, y'all. Without further ado, here is Annie Agle from Cotopaxi.

Annie Agle  3:25  
My name is Annie Agle. I have the honor of being the Senior Director of Impact and Sustainability at Cotopaxi. I've been for a little over four years. Thanks so much for having me, by the way. 

Cory Ames  3:37  
Excellent. Well, I appreciate the introduction. And I'd love to start right there as to how it was that you found yourself in this line of work and then perhaps particularly with a company such as Cotopaxi? 

Annie Agle  3:47  
Yeah, I always joke that I sort of tripped and fell and aimed my fall at the direction of corporate sustainability. I'm 33, so when I was in undergrad, this wasn't a space yet. It wasn't really a field. I didn't know that this career existed. And I gravitated towards the field for a lot of reasons. I'm quite type A, I really enjoy the quant side of making informed decisions when it comes to sustainability and philanthropy. And really enjoyed nerding out on methodologies, technologies, personalities, studies, all the kinds of things that can help inform decisions and leadership in the space. 

And I also grew up very much in the outdoors. I'm from Park City, Utah. I grew up skiing, mountaineering, climbing and doing all of those really fun, formative sports from a very young age, courtesy of my parents. And so when there was an opportunity to be back in my home state of Utah working for a purpose-driven outdoor brand who was the first and only benefit corporation in Utah at the time, I just jumped at the opportunity. And at the time I was brought in because they needed help recertifying for B Corp, which is one of our third party certifications that we hold, I'm sure your audience is probably quite familiar. 

And I reached out to Davis and I had one sort of half hour interview with him and was just blown away and utterly convinced of his character. He just really got the leadership part. And I've been in New York, consulting for a myriad of companies, and really just wanted to find someone authentic, who truly believed in doing the right thing, and just not compromising on ethics as a business leader, and just have not looked back.

Cory Ames  5:33  
Well, there's a wide spectrum of sustainability and sustainable business. And it seems like there's a wide spectrum of perhaps corporate social responsibility and impact work. What is it like to work with a company in that post, such as Cotopaxi, as opposed to-- I don't know who you consulted with in New York City, but there's a lot of different companies that have impact departments and folks like yourself, but to perhaps work with a company that has much more of this maybe built into its core? I'm curious how that experience has been, and continues to evolve for you?

Annie Agle  6:08  
For me, it's been a breath of fresh air, I think there's always this question in social entrepreneurship and sustainability for people in the career - like, where can you go that's going to have the biggest impact? Do you try to make an incremental change for a very big player? Or do you try to go make a really big move, kind of pioneering move, in a smaller company where maybe, you know, you don't have quite the reach, but you can take a certain methodology or a model farther. And so for me, I've kind of done the bigger and the smaller, but I really wanted to go be in house at a company that was high growth, to see if it was possible to get kind of the best of both worlds. I wanted my cake and I wanted to eat it too, sort of thing. And it's definitely proven that. 

I would say, I think one of my learnings coming from inside is that there is a certain kind of personality that I think can absolutely have a big change and a big player and go do that. I was not that personality type. I have Asperger's and didn't always know how to navigate the politics and the personalities and the egos in big business, and felt sort of undermined consistently and felt that I wasn't always clear where my red line in the sand was around ethics. And I felt that, for me, at least, that wasn't where I could be to have the biggest change. And I like having professional conversations, but I think that you need to make personal choices when it comes to your profession in this space, and be very rigorous with yourself about what your ethics are and what your role is - not just what's going to bring you the greatest happiness, but if you're serious about social entrepreneurship, what's the intended role that you are meant to play in this space? 

And Cotopaxi has really been a dream for me in the sense that I could go in and be a builder. And I really enjoy the deep strategy work, the deep methodology research, and sort of kind of rolling up the sleeves and just doing it and not having to deal with red tape or politics. And that has been completely refreshing for me at Cotopaxi. I have not had to spend an ounce of energy ever convincing my leadership or my team to go do the right thing. Whereas, coming from New York, coming from Big City capitalism, you expend a lot of energy having to get people on board. I wasn't very good at that. That's an incredibly important role for people to play in this sector, and I think people are natural diplomats in certain situations - that just wasn't my role. I didn't quite know how to connect or read people well enough to present the topic of sustainability or corporate social responsibility in a way that they could tap into. 

Davis has a real talent for that, and in some ways, I think that's something I've been able to kind of be like a sponge and just learn from him and learn how he just really is able to tap into anyone, regardless of political leanings, regardless of their kind of wirings and make them care about issues. And I've learned from that, but I think that's a learned talent for me, it's not a natural talent. And so I think that that has been just refreshing. It's been a very good fit for me personally, with my strengths. And I think I've been able to bring to a company like Cotopaxi, a lot of discipline, a lot of experience that formal consulting brings with that. The ability of kind of taking a pretty diverse, wide ranging understanding of how to go build a sustainability program from the startup and make sure that it can scale over time. 

And so hopefully, I think, and that's obviously not just me, I can go bring in the strategy, but implementation falls to every employee at Cotopaxi. And I think everyone brings their expertise and passion to bear and that's the true strength of our model, is that it's democratized, and everyone feels invested in it. And I think that that's why it's been successful. But that's also kind of been my dream was to build a more democratized program.

Cory Ames  9:58  
And so I'm assuming - are you the first of your position for Cotopaxi?

Annie Agle  10:02  
I actually wasn't, there was another impact officer before me who'd done a great job putting together a lot of the foundations. I think by the time I got there, though, the growth has been so astronomic since the start. I mean, we basically like doubled headcount, I think every year we've been there. I mean, I think when we started we were like, 48 employees, and now we're close to 200. So I think, just, growth has been huge. Being part of a startup, I think that's kind of gotten bashed in recent years, startup culture, for good reason. But to be honest, being part of a growing company is freaking exciting. And I don't do boredom. So that's been fun. And I think just given that there was a lot of building that had to be done, but there were good foundations in place, courtesy of the previous officer.

Cory Ames  10:46  
Well, you know, similar to the conversation of what sort of spectrum these different fields exist, I think, likewise, there's different startups that you might consider to work for. And at least from my conversation with Davis, and generally, or more broadly speaking to that type of business, you know, a serious ethos and commitment to values might be more mindful as you scale and grow as a company and a team. 

And so, I'm not sure who you might think it would be the best to answer this question, but curious: from your experience, in particular, what's the appropriate time for a company like Cotopaxi, you know, has been historically on that type of growth trajectory, to start to really build out an impact and sustainability program? Do you think companies generally do it later than they should, you know, and start to bring someone seriously accountable for it? Or is there kind of a right fit time that a company like that takes that very seriously, and, you know, get staffed with the right people and resources?

Annie Agle  11:40  
Generally speaking, the earlier you can do it, the better. It's always harder to reverse engineer something than it is to implement something and ensure that it scales over time. I think, especially when it comes to considering really important decisions about, what do you want your legal structure to be? Do you want to be a benefit corporation or a C Corp? If you really care about delivering value and being a purpose-first brand, from day one, you need to be thinking about what you're legally incorporating as. What is your board structure gonna look like? What is your employee compensation and stock structure going to look like? All of these things have tremendous impact. 

And I'm pretty huge that if you're going to be an impact company, you should have an impact business model. You can't just go do one strategy. I think there's this huge cart-before-the-horse trend that I'm seeing in the more Wall Street, ESG space, where they're really putting tactics ahead of motives. And you need to get very clear on motives before you understand what tactics are going to make sense. So, you know, if you're a true social entrepreneur company, and that's part of your business model - let's say you're sourcing things in such a way that's really driving impact from day one - you might not need a stand alone sustainability or impact officer because it's so ingrained in your model. What you really might need is someone who's really good at cause marketing and can tell the story, and really just drive what your business model is already deliberately set up to deliver on. 

Whereas if you're more like, that just doesn't make sense for us, we've been around for a while, I don't think we can reverse engineer to a business corporation, then you want to go find a more seasoned sustainability or impact officer who can really think about where your historical business model has evolved from. How can it evolve further to incorporate a model that's going to deliver more value chain prosperity going forward, and thinking about how you can make choices going forward that are going to be strategic based on your existing model, but also going to take you in a newer, positive direction to deliver social change. 

So I think it kind of depends from company to company. But I would say the sooner you can do it, the better, because the more you grow, the harder it is to make any change to your business. And that's been proven, not just in case studies around sustainable business models, but just in business in general. It's very hard to evolve, the bigger company you are. It requires more implementation, more cross functional meetings, more time, more energy, more effort. So I think that the sooner you can do it, the better. But there are different ways of doing it, but again, getting really clear on what you're trying to achieve is a first step, and then thinking about strategically how you're going to deliver that. Not trying to do the how before the why.

Cory Ames  14:31  
Gotcha. And perhaps taking a few steps from there, I'd be curious to delve deep into this building that you're talking about here with with Cotopaxi, specifically. I'd love to know, when y'all are looking at what you want to do with your focus and impact, what you want to do with sustainability, where do you even begin with that? How do you start to decide the strategy? Or, do also, things like budget and resources come before that, and you see like, "we have this pot available to us, and then now let's start to see what we can do with that," or where do you begin? What are the first steps that y'all take?

Annie Agle  15:06  
Again, I think the first is really getting everyone on board on what positive impact looks for you. And I do think the Sustainable Development Goals are a really good way of going that. Like, just choose three goals. Three goals, maybe, and one primary goal. For us, we really want to end extreme poverty in the Americas in our lifetime. That is our North Star issue. That's why Cotopaxi was founded. So we use that lens to build a strategy. 

So first is what kind of impact you want to change. And maybe it's really delivering equitable opportunities for women and girls. Maybe it's climate change or biodiversity. Like, whatever your kind of North Star issue is, I always recommend to businesses that they should have a North Star, and really effective companies do this. Patagonia, you know, in business to save the planet. Clearly SDG 13, climate change is really their number one, and then they're going to leverage every aspect of their business in service of that mission and North Star. 

So first pick your North Star, have a sense of direction. And part of me, the climber, is like, you can't know how to approach a climb if you don't know what summit you're going after, right? If you're just like, "Well, I'm just gonna climb aimlessly." When you're a climber, you're like, no, "I'm gonna climb this mountain. It's this kind of conditions." Is it rock, or is it snow? What are the conditions? What kind of gear do you need? When do you want to climb it? Are you climbing this alone? Are you climbing with a team member? How does that mean anything to someone is like-- so there's a part of me that having a sense of direction and destination, I think is very important. 

And so once you're clear on destination, then from there thinking about, okay, you know, coming into Cotopaxi, my issue was, there are two ways I want to look at impact, always using this kind of double definition of materiality, which is, you know, jargony language to think about: what are the inherent ways we are negatively contributing to people and planet? Because every person, every business has negative impacts upon the planet and people. And on the other side, there's also this opportunity to live our positive change. So I kind of want to think of two strategies. 

One is how to mitigate any potential damage that we're doing. Because if you're just thinking about the positive side, but you're increasing damages done through your business model, or things like through procurement, or irresponsible sourcing and material selection, then you're sort of in competition with yourself in terms of how you're delivering and contributing to a cause, negatively and positively simultaneously. So making sure that you're sort of differentiating that out, and sort of going through the exercise with your team and your company of thinking about, okay, what industry am I in? 

So we're in apparel textile, which is a very unsustainable industry. It's quite predatory, generally speaking. You're taking and extracting a lot of natural and social capital out of global South, particularly in Southeast Asia, where most supply chains are located, including much of ours, and delivering that based on, you know, kind of strange costing, historically, and then building products that historically have not been that functional or that needed for people in wealthier developed Global North. 

And so thinking about that business model from day one and thinking about, we really need to lean into supply chain and sourcing. And I'm very privileged in the sense that I feel that the outdoor industry in general, and Cotopaxi, I get to breed some rarefied air. Our product design team and sourcing team was already so conscientious about the way they were making fabrics. Our most popular product line, the Del Día line, was using true scrap material that would be incinerated or end up in landfills to make the majority of our bags. So literally eliminating waste, as opposed to creating it, in a carbon neutral product, which is very unusual for textile apparel, and having really strong and ethical relationships with good suppliers, kind suppliers, suppliers, who, generally speaking, really cared deeply about their communities and the environment. And who we've been able to grow and progress with mutually as companies. 

So that was one side of really thinking about the ways we were doing that. And in terms of the strategy, specific strategies we've used to take responsibility: one is reporting, which I know we're going to talk about. You can't really make good action plans if you're not measuring your negative impacts. So we're carbon neutral certified. We measured our entire scope one through three footprint in 2020 and reduced or offset the entirety of it and will remain a carbon neutral company through that certification process going forward. We're also B Corp certified, so we always want to be able to quantify and measure whether or not we're having a net positive impact on people on planet and always get better. 

We really want to be-- we have a goal of being the best B Corp for textile apparel in the world, and doing our bit to hold wider fashion and apparel to a higher standard than it has been in the past. So those are some of the specific strategies we use to try to take responsibility for those negative impacts that we have. And on this sort of augmenting of the positive side, we have our foundation and our business model. So we are a benefit corporation. I can't take credit for that, that was the vision of Davis and Stephan, our two co-founders. They were able to receive venture capital funding, which made us the first benefit corporation, I believe in the world, to receive top 500 venture capital funding. Just - there are funders out there willing to really invest in these things, and Davis is just like an OG at finding really good people to invest in our company who are just values-aligned. 

And so that is a really cool achievement in and of itself, is that we have a business model that gives us the moral leeway to prioritize people and planet alongside profit. I think there's this misunderstanding by the general public about how limited a lot of corporations are, especially if they're publicly traded. They, a lot of times, might want to prioritize social and planetary topics more than they can because it is going to negatively impact profits. And I fully believe that sustainability and impact can deliver business opportunities as well as social opportunities, but sometimes they are in contention. And sometimes you have to limit profits to put people on planet first, especially in a more short-term decision cycle. 

And then, beyond that business model, we've tied 1% of our revenue to our Cotopaxi Foundation to work towards efforts, methodologies, organizations that are delivering true sustainable change for poverty. So that has been informed largely by methods and studies that have come out of MIT's Poverty Action Lab. I'm deeply passionate about corporate philanthropy. I think that it's gotten written off in recent years, kind of as window dressing,. I think we need to bring it back. I think one of the issues that we've seen is good corporate philanthropy is complicated - it's actually hard to tell stories around it without being predatory. You can't dumb it down or just have a one for one model. These things don't deliver the kind of sustainable change that we really want. 

But there are methods and organizations that have been tested through people, like MIT, using very sound, double-blind economic studies, where you really can see that educating one girl in this particular region is going to uplift a family of 10 out of extreme poverty, especially if things like financial literacy are awarded to her so that she can help steward finances for the family, for example, if that's part of a practical education program, as well. So I think using those deep methodologies and accountabilities and certifications to deliver that companion impact, where you're reducing your negative impact and augmenting your model in ways that are going to deliver that positive impact. 

So that was long winded, but that's kind of holistically how I think about sustainability and impact.

Cory Ames  23:14  
No, incredibly informative. But I think you make a very important point there, Annie. It's not that there aren't exceptional people that have been historically working within corporate philanthropy. I think what you mentioned are the things that y'all are very cognizant of that Cotopaxi, of minding, your negative impacts, as well as you know, seeking out positive impacts. I think those, perceptively anyways, have been historically things people have been frustrated with. Corporations who, you know-- Corporate Social Responsibility has been around for a long time. But there are many business models where, perhaps, people would hope that they'd look at lessening the negative impacts that they're perhaps causing versus focusing on what might be philanthropic initiatives. 

Sustainable-- or textiles, as an example, paying a verifiable living wage throughout their supply chain might be what someone would hope that they focus on first before some sort of kind of community project that seems arbitrary, or not exactly related. Really minding consciously, their business model, supply chain, the operation itself, you know, what kind of negative impacts are limited and verifiable positive impacts are created? I think that's perhaps been what, in some way, at least in my perspective - you might have a different one - as to what's maybe had people write off corporate philanthropy historically.

Annie Agle  24:30  
I agree with you, Cory, I think corporate philanthropy needs kind of a relaunch almost. I think it needs to do more to get credibility. I also think that corporations in general just need to be more collaborative. There should be more efforts to just understand with a degree of humility, all the things you can't do. We're not an MIT, I can't go commission research that's looking at various methodologies for creating more economic prosperity in various parts of the world. I don't have that community legitimacy. I can't be on the ground to do that. I'm not a PhD economist. 

And so tapping into knowledge and taking the time to make informed decisions from a place of humble curiosity, I think is a huge part of what I believe it takes to be successful in the field of philanthropy. And also, just knowing that there are really good resources out there, there are very legitimate resources. And to your part in the arbitrariness, I really liked that you use that term because I think that that's the number one issue that I see in corporations, is this kind of personal arbitrariness with how they're choosing to field organizations or what they choose to invest in or not. It can't just be because a certain employee has a certain issue that's personal to them and suddenly the company just invests in a one time grant. 

One of the leading takeaways that we found is long term grant tenureship with leading organizations that allow them to invest in specific, localized methods and change programs. That's what really produces the long term improvement and quality in life. You need to have that longevity, and corporations can provide that more long term funding, much more so than individuals who might kind of have booms and busts in terms of their financial capacity to to make donations. So that's one of the things we've made as a commitment to our philanthropy is having longer term grant tenures that are informed initially by studies that suggest that this methodology and this organization have a high potential to deliver long term change. 

So that's kind of our method for that. And I think it's not just our method, I think we're definitely seeing it in better and more sophisticated Corporate Social Responsibility businesses. I would hope that this becomes more of a trend that I see in wider companies. Not seeing it quite yet, but I bet it gets there in the next 10 years.

Cory Ames  26:54  
Interesting. Well, next on there, Annie, I'd be curious to hear what are the decisions made around like, resourcing and budgeting? I know that y'all have the foundation, which allocates 1% of the top line revenue. I think that the impact report I picked up from 2021, total allocations were somewhere around in the valley of like, 2% of Cotopaxi's overall revenue when it was all said and done. How are those decisions made? I mean, not that 1% isn't, you know, a small number or whatever it is. I'm just curious, are there concerns in over-investing that at particular times or under-investing? Or like, where does that number start, as opposed to like, "well, let's throw it up on the board. 1% seems like a good number for us to allocate." Any insight to how those decisions are made would be very useful.

Annie Agle  27:37  
Sure. So again, we were 1% pledge members before I joined. And historically, we hadn't given just 1% of revenue, we'd given close to 100% of profits. I mean, Davis was giving away money before the company was profitable, which I think is pretty rad. And they were giving, frankly, more than I think we could have afforded as a company, which is a weird thing to have come in as an impact officer and be like, "Oh, my gosh, we were giving we're so generous as a company is is awesome." 

But I think when it comes to those decisions, we try to give everything we can. The giving model - we wanted to tie revenue to our giving for perpetuity. And part of that was I wanted to protect the legacy of what Davis and Stephan had built, regardless of whatever form our company could take in the future, whether that was going public or being purchased or some kind of hostile takeover scenario. You know, I'm a disaster planner. I think part of what makes any good outdoors person is really thinking through your worst case scenarios. And I think part of being a good sustainability and impact officer is honestly thinking through the worst case scenarios. 

And so we have a legally binding contract in the bylaws of our corporate foundation that stipulates for all time, Cotopaxi the corporation must give at least 1% of top line revenue, and top line revenue can't be chipped away at as something goofy, like, you know, post EBITDA minus salaries or something like, that can't be defined as something that's less than 1% of top line revenue. And the company must give that for all perpetuity to the foundation. And that's not reversible. So that was important for me to carve that out for the philanthropy. 

And so that gives a kind of dependency, and it's nice for my budget planning for grantees in the sense that I, alongside my amazing head of giving, Charlie, we can plan for long term based on sales estimations and sales goals roughly what we're going to have to be able to give to contribute. We often have historically out performed that revenue, which has given us additional information. And so that's just our giving. 

For budget for sustainability and wider business impact model, I'd say in some ways every dollar spent as a company should be delivering on our goals, our values, as a company. And I think that's the difference between having a true impact business model as opposed to just a traditional corporate model. I see it as an opportunity with every salary, for every person to, say, bring their full potential. And every person in my opinion, people are the best investments you can make. I mean, in some ways, that's what gets me to be a humanitarian is like, fundamentally, humans are amazing investments. We're an incredible species, we don't give ourselves enough credit. 

I love working with people. And when people, you tap into their passion and their desire to bring their expertise, or their lens, into the business world and say, "Great, you go do X, Y, Zed. How are you going to do X, Y, Zed in a way that's going to deliver change?" And one example I use is, when I first joined the company, like six months in, I had our head of supply chain management come to me, and we'd had a shipping container get waterlogged. And so we had a whole shipping container of goods that were not sellable. And historically in fashion, what you've done to get an insurance claim is show proof of destruction. So literally, you incinerate your goods, you light them on fire, and show photographic evidence that they have been destroyed, and then the insurance will give you a payout. 

That's historically how it's been done. Obviously, that's super unsustainable. And in certain places where you have good pyrolysis plants that can recapture that energy, you at least get some of the energy back. But in America, where we were at, that was straight just going to end up as burned goods in the atmosphere. Not a good use of all of the inputs, and not the kind of company we want to be. And so she reached out to me with this issue, because she said, "You know, I'm not even sure you're aware of this, but this just doesn't seem like it's in line with my values, and I don't want to move ahead forward with this. But we're a small company, I know, we need the payout, what do we do?" 

And I was like, "Wow, first of all, thank you for like bringing this to my attention." And I reached out to our bigger logistics partner, Flexport, who has a lot more weight, you know, they represent billions of dollars of business with companies who could eat us, you know, and especially at the time, we're bigger now, but we were very small then. And I said, "Hey, man, we don't want to destroy these goods. Is there a way of showing proof of donation as opposed of destruction?" And Flexport went back to their insurance providers and was able to line up an insurer who was able to accept proof of donation as opposed to proof of destruction. And they rolled that out and all of their different brands. 

So since then, millions of tons of products have been donated, as opposed to destroyed just because this one employee in our company, just was able to flag what was a small, felt like internal issue, and suddenly kind of changed the game in terms of how donation could replace destruction for insurance paths for all product based companies. And so, I mean, to me that's just like shows the power of the values-aligned individual and a purpose driven organization. And so, in some ways, that salary to me is part of impact budget. 

And so I think being more creative about how we think about budgeting in this space, and being creative with how we stretch our dollars without being understaffed, is really important. And being collaborative. I wish more sustainability officers built horizontally as opposed to vertically. I don't think building 1100 person teams of just, you know, climate data analysts, which I see like PWC doing, or these really big corporations who are just tracking down emissions. Well, what's the why behind tracking emissions? What's the reason for that? And is that really a good use of energy? Or is it really more spending time, deep time, with procurement companies to say like, "why are you using this material when there's three better materials that would half that, as opposed to just measuring your emissions?" 

There's a lot you can do right away when you just think about product material selection. That could potentially be a way better use of time and resource. So again, always coming back to the motive and the why and the purpose of things, not just looking at these minute, kind of almost trending tactics, right? There's all these trending tactics in this space that are very costly. They're costly in terms of time and budget, and sometimes actually saying no to certain things as a sustainability officer, rather than just like jumping on the bandwagon, is really important. Making discerning decisions. 

And again, a huge part of my job is collaborating. It's making time for different teams, it's making sure that everyone at Cotopaxi knows that they can come to me with issues and ideas. And I have not been the origin of the vast majority of our best impact sustainability ideas. I've helped bring them to fruition, that's my job. But it wasn't my job to go find a path to donate as opposed to destroy - that came from Dani, our supply chain manager. You can't have eyes into everything. So I'd say when it comes to budget, bringing it back to like the root of the question, definitely think about compensation for your team. Think about the resources and softwares you really need to make it work. But then think very judiciously and creatively and democratically about how you can build horizontal holistic programs.

Cory Ames  35:03  
Very thoughtful, I think that's a perspective that many people will find quite impactful. Annie, the relationship, internally, the relationships that you have with your team throughout Cotopaxi's supply chain are one thing, but in the realm of the impact of the foundation and partners and efforts that you have on the ground in various communities throughout the Americas, for example, what's the relationship like there with those various partners that you're working with, you know, in many cases, resourcing and funding, helping to see their objectives made?

Annie Agle  35:38  
Those relationships are humbling, they're inspiring to me, they're what gets me up in the morning, they're what deliver our impact. We're very aware, as a company, that we're not on the ground delivering this impact. There are really tremendous, heroic individuals whose expertise allows us to go deliver these packets of aid that can go deliver and produce the kinds of societies that we at Cotopaxi feel should come to fruition in the next 10 years. 

And so I think we try to have a very humble approach in terms of working with impact partners, and always understanding who's really delivering the services that we want to provide. And making sure that intermediaries are necessary working with people with true community legitimacy and understanding who have long term invested localized roots, with deep understandings, again, in the kind of programs and the methods that they're leaning into. This is what we can do as a company - we can just make good investments. 

And I think that's how we see it, we see it as a as a very human - I don't mean to like dehumanize it - but as an investment portfolio, as a social investment portfolio that really relies on just these lionhearted organizations who are building change. I think in terms of how we think about budgeting and just vetting organizations, again, we really reference and invest in the methods that MIT Poverty Action Lab have suggested make very good investments. There are some very helpful decisions that they can help you make, like, is microloan a good option for this region? And there's, you know, literature suggests that that might be a good option in region A, but not in Region B. 

And so we're always really focused on Latin and South America, and thinking about what are the interventions that are most likely, highest probability of succeeding and delivering the kind of change that we want to see? And I think that based on those methods, a lot of our customers and even, I'd say, value chain members, whether they be employees, or suppliers, or whoever might be kind of touched by our impactor are surprised, often, by what methods do that. 

So one of the findings was that preventive medicine, especially in the form of malaria, is one of the best investments you can make. Malaria is one of the leading causes of personal bankruptcy in South America. With climate change, there's been massive rises of disease mosquitoes, and oftentimes having sick kids and sick parental figures who are leading income providers can completely bankrupt families. And so there's not this linear connection in most people's minds between malaria and extreme poverty and personal bankruptcy. But what we found at Cotopaxi is these preventive measures and insecticide treated bed net costs around $5. And that's a lot cheaper than a company, especially in indigenous Amazon, having to go trek to a major city, get treatment, while not being able to provide for income, taking their kid out of school, who is far less likely to return to school than they would have been had they remained in school being healthy. 

So there's all these kind of echoing residual impacts that comes from something like malaria. And so if you just prevent it for $5, you can save an entire family from personal bankruptcy. And so there are these kinds of methods that might not seem obvious, but you can make these informed decisions in terms of these studies that are coming out of these really amazing academic groups and just tapping into those resources. And so we really see our strength at Cotopaxi of making very discerning bets, basically, on these programs. 

And then really hearing from the organizations themselves about what is their ideal partnership? Not just making something work for us, not thinking that we understand impact better than they do. There's a lot of corporations out there that think they know more about philanthropy than the people actually doing it. And so a lot of our organizations, we've definitely gotten the feedback that having a three to five year contract that sort of gradually bumps up based on, sort of, metrics that they agreed to with us in terms of what would success for this program look like. 

And what just having enough flexibility so that, you know, when a global pandemic happens, they can adjust their programs because that's going to change how they deliver services across the board. That's obviously disrupted the business models, not just for for profit companies, but for nonprofit organizations as well. And so having both, this kind of consistency that is dependable for them, while also having enough flexibility and humility to say like, "Hey, you guys know what you're facing better than we do. If we need to adjust some of these metrics, or if you need to change your methodologies based on that, then let's go think about this and have those conversations. So that's just kind of our general approach with how we vet and partner across the board.

Cory Ames  40:29  
So, to transition a little bit more so towards the the measurement and the metrics and the assessment of success in that portfolio that y'all see it, how does Cotopaxi measure the success of the social and environmental impact?

Annie Agle  40:44  
Environmental impact, I think the leading metric for that is a bit easier. We really look at climate intensity. And so climate intensity, for those who are not as much of a nerd, which I hope none of you really are as much of a nerd, because I nerd so hard sometimes it's just insane, but I'm probably in good company. But so our carbon intensity is under 1%, which means that it's basically the lowest it could possibly be in terms of the amount of carbon it takes to produce $1 of revenue. 

I think that that's a much more significant metric, in my opinion, than just flat carbon tonnage, which is kind of this, like, dangling metric, it's sort of like looking at weight without looking at diet or height or other factors. For me, it's just sort of this nebulous metric, that doesn't really mean anything. And so what we really want to see is the most efficiency possible, and to have the most reduced impact we could possibly have for dollar of revenue. Which, again, the dollar of revenue is also tied to our impact giving model. 

So when we're talking about how I really think about this, it's like, how much negative impact does it take to produce the positive impact that we want, right? And we want the negative impact to be the lowest possible and the positive impact to be the highest. And so for me, carbon intensity is the best metric to sort of link and bridge the environmental and social side of those two issues. And so for me, I really always want to keep that percentage under 5%, preferably under three, and if we could hold at 1% right now, as we grow, that will be a phenomenal achievement I think for our team. 

That's the single biggest. Of course, we also measure our footprint, and we're always looking for meaningful reductions ahead of offsets. We still think offsets are the best mitigation factor available today. But we know it's not apples to oranges, it's not perfect. And in general, we're trying to do insetting, which means really, leaning into our scope through our suppliers, helping them, say, install solar, or make better transitions, use more recycled water, and spend more money on insetting than offsetting. Which saves us money in a long time, too - there's a good business case for that as well. 

So that's the environmental side and how we kind of think about metrics there. And obviously, we use climate neutral in the sense that we believe that should be verified and certified by an outside party so that there's really rigorous accountability that is meaningful for the consumer and builds trust and credibility. On the social side, I think we really want to know how many people we've assisted, and then track that long term, not just in the short term. 

So we try to know how many people our programs have met. And then also I think we're really building on this over time. And our goal is that we're following up with those people that we're touching, not just on a yearly basis, but two years out, five years out from that intervention to see: did that really actually produce the long term change that we want to see? I think we're finally at this inflection point four years after I've joined, six years in from our founding, of really thinking about how can we instead of just using MIT's Poverty Action Lab, how could we bring them in to have them evaluate and monitor long term the impact that we want? 

And so we actually, it's one aspect of our programs that I want to get more sophisticated in that I don't think we have the internal expertise to do ourselves is that I think we've done as much monitoring and evaluation as we can as a company. Now, we really want to be the one commissioning those studies and research and having additional verification to really ensure over time that we're having the impact. So I think that that's going to take some outside collaboration and partnership, and investing in additional stewards of change that go beyond outside of our four walls.

Cory Ames  44:36  
I think that's a very important step in the future. Just because, there's so many ancillary effects and things happening that are on the ground that people are dedicating their entire lives to researching, working within, and it seems like balancing how stringently y'all can monitor and evaluate and assess on the level that you do. Seems like the right move to continue to bring in good people one way or another, to verifiably continue to see how things are going and ideally meeting that North Star that you brought up at the top of the conversation. 

But here in the the final portion of the conversation, Annie, thank you so much, first off, for spending so much time with me here this afternoon. But I'd love to talk about the kind of tactical and technical makings of an impact report after we've covered here so much of what the substance is that ultimately goes into that. But for those who are unfamiliar, I guess first, would you mind providing us with a little bit of an overview of what is an impact report even to begin with? And then then let's transition to what the purpose is of it?

Annie Agle  45:36  
Absolutely. I mean, first of all, I love the question. I love getting tactical and nerding out about this and reporting is something I nerd out on. I think reporting is really important. I think it can be meaningful, or I think it can be garbage to be totally blunt. But if you make it meaningful, it can really help you make deeply informed decisions and provide customers and value chain members with meaningful insights and verifiability into your model. 

So I think it's very important. I think it's important to take the time to kind of do a post mortem on your impact and sustainability every year as a company. you can't improve what you can't measure, right, you can't make claims on things that you can't measure and monitor. So I think that reporting is important to us, at some foundational, metaphysical level, which sounds lame, but we think it's important. Record keeping and sound data and measurement are important steps to having a hygienic, effective sustainability model. 

So an impact report is an annual report. There are a few different kinds of common frameworks. We're aligned with the Global Reporting Initiative, GRI, which is the most popular framework for impact and sustainability reports. And you can call it an impact or a sustainability report. We typically call it an impact report, because sustainability, at least in America, even if this is inaccurate, is really just associated with environmental impacts, as opposed to environmental, social and governance impacts, which we want to measure on all three of those verticality, and do, and impact and our giving and corporate philanthropy for us is very important.

We treat that with the same degree of seriousness that we do our carbon accounting, for example. Which typically, for most companies, again, philanthropy is sort of window dressing. It's not necessarily a core aspect of how they report. We use GRI. The, kind of, other big competitor in the space is SASB. And the reason we use GRI is that it uses the double definition of materiality, which really prevents companies from being able to cherry pick topics just based on what they think they do well. SASB says a company should only really report on the environmental, social, governance topics - ESG topics - that are financially material to them. 

So that gives companies the leeway to not measure a lot of important things. GRI says no, you must use a double definition of materiality, which says you should measure the issue topics that are financially material to your business. And you need to report on the topics that are material to others - to people on planet, which means you also have to report on things and disclose topics where you might be having negative impacts or likely to have negative impacts on people and planet. 

And so we think that it's a much more holistic, less green-washy reporting framework, just by it's foundational kind of concept. And so that's the framework we're aligned with. We do believe in aligning with frameworks, we don't believe in reinventing the wheel or just doing it how we want to do it. I think that there does need to be consolidation around certain topics and frameworks in the industry. We see frameworks as a means to an end, not an end in and of themselves. We're not just going to chase every certification out there. But GRI is, I think, a very adoptable framework that you can still make creative and kind of make your own. 

And so based on that we've done a materiality assessment to really understand where our biggest negative impacts and positive impacts are, where our biggest impacts in general as a company. So you can see those materiality assessments, we're very transparent about how we've determined what we report on. So that's the first bit is understanding what you report on. And then GRI does a really great job providing the metrics that you should be using to disclose on those certain topics and how you disclose what your management approach is, what your impact is, on those areas, what those metrics are, what's your goal, where you fell short of your, sort of, quantitative and qualitative goal making and where you met or exceeded. 

And so I think it's a very good framework in the sense that it's flexible enough that each business can sort of report on what's meaningful to them in their business, while also having a sort of standardized set of disclosures and metrics that provide more comparability in between companies of the same industry or size. So that's sort of the more tactical side of that. And we try to be as transparent as possible, in terms of how we report and how inclusive we are. It's pretty, pretty ad nauseam and very detailed, but we believe in truly having as sophisticated reporting as possible that are going to allow investors, customers, other businesses to really judge for themselves about the authenticity and effectiveness of our business model.

Cory Ames  50:33  
And so for y'all, what do you feel like personally is, I guess, more so internally, as opposed to what it's displaying and showing externally, what's the function of the report for you all internally? And how, if at all, do you use that in some ways to map from one year to the next, for what's ahead or on agenda for sustainability and impact?

Annie Agle  50:54  
I'd say it's fundamentally a goal setting exercise. I think it's really important to be able to monitor and evaluate your performance over a set list of disclosures, that we might add to our list of disclosures we want to disclose on a little bit more and be a little bit more transparent every year, but we also want anyone, ourselves included, to be able to measure and track our performance over time. 

And so, we definitely want to see-- one area of reporting that we obviously include in our annual impact would be that carbon intensity score. And so that's something that we've publicly declared. We want to keep that under 5%. And if we can keep it under 3%, then we consider that as a success as a goal. And that's something we're going to be monitoring and comparing year over year in perpetuity. And same with giving, we want to see a gradual improvement in, not just the quantity of people we reach, but the quality of services that we provide through our philanthropy programs, and that through our reporting, we want to be able to demonstrate that both internally and externally, and continue to make informed decisions around that. 

And so certain grants, you know, we want to see that they're being able to deliver the most significant amount of change possible for the least amount of investment. And so if we're seeing one grantee, for example, sort of delivering not that much change for a pretty big investment, then we need to kind of go back and hopefully help them improve their methodology because we don't just want to leave partners behind. And that might be kind of area of mentorship, where we can bring a potential mentor organization in or do some training with them to kind of up level or have a hard conversation around whether or not this makes sense for us as a partnership. But in general, measurement and reporting is a crucial step to making informed decisions for the future. And over time and holding yourself accountable internally and externally.

Cory Ames  52:48  
And so of course, you have the framework that you work with, as mentioned, and now the reporting has been done for a good few years now from Cotopaxi. But when starting to fashion the reports yourself, the actual impact report, were there any other companies that you look to for examples of what you found were really effective, well done impact reports?

Annie Agle  53:08  
It's probably not companies that other people think of, but Unilever is the one I think of. You know, a lot of people, I think if you're on a customer base, consumer basis with us, might think of Patagonia as our competitor. I've never seen Patagonia as a competitor. If we lose a customer to Patagonia, I personally am okay with that. That's an amazing organization. I sort of see them as a benchmark, and I see us as a bridge. And so I don't see them as a competitor. I see fast fashion and Big C capitalism, which is the space I come from, I see that as the competition. 

I don't want any Gen Z person to go shop at Shein for a down jacket as opposed to us. And so for me, those are the companies I want to look at as, kind of, my inspiration of how not to do it. And a few of those companies, like Unilever, as just the most exhaustive sustainability reporting organization. I mean, they report on everything. And so I want to be at that level of sophistication, not necessarily at the rest of the outdoor industry. I'd still say there are a few companies for whom I really look up to, I'd say the best impact reports I've seen for philanthropy is LifeStraw. 

LifeStraw has just the most in depth quality reporting in terms of their philanthropy, and obviously, they have a very technical philanthropy program based on the products that they provide for water purification. And so that's something I look up to it's just that really sophisticated reporting. Like, we're a fun, funky company, and I love that. I'm a pretty funky tomboy, like wearing what I want to wear. I like color. I want to be goofy. I want people to have fun, adventurous lives. But I also want people to look at the impact and kind of be like, "Oh, damn, this company: they're sophisticated, they pull their weight, they aren't kidding around with this aspect of their business. They may be like, funky, fanny pack, you know, but then they're like, but no, we are serious about this. We're serious about impact and sustainability and here's literally everything we're doing right. Here are some of the things we're doing wrong. Here's what we want to do better." 

And so I kind of look at bigger, really sophisticated companies and I want to really punch above our weight in terms of the sophistication of our reporting. So I looked at bigger companies, generally.

Cory Ames  55:23  
I love that. Well, thank you so much, Annie, for taking the time today. I want to be respectful that time and get you outside here, it sounds like, to enjoy the rest of your afternoon. But before we wrap up, you mind if I ask you a couple of rapid fire questions? 

Annie Agle  55:35
Oh, do it. Love these. 

Cory Ames  55:37 
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Cory Ames  56:35
All right, so first one for you: What's a book or film that you might recommend to our listeners, either something that you always come back to or something that's impacted you recently? And doesn't have to be about what we talked about today.

Annie Agle  56:47  
Sure, Poor Economics by the founders of MIT's Poverty Action Lab. If you truly want to understand how to think about philanthropy, and measuring that, really recommend Poor Economics. Also, people should read more poetry, I'm passionate about poetry. Go read some Wordsworth, some Whitney.

Cory Ames  57:05  
Anything specifically? Wordsworth?

Annie Agle  57:07  
Wordsworth, I think the Lakes District poets. I'm a big fan. But I think even just reading one poem a day is a really good form of meditation. Maybe doing that outside if that tickles your fancy, but for me, it's a good form of meditation.

Cory Ames  57:20  
Contrast some poetry with some dense academic literature on philanthropy. 

Annie Agle  57:26
It's not that dense, it's actually it's really good. It's very readable as well. 

Cory Ames  57:29
All right, well, next one for you: What's a daily habit or morning routine that you have to stick to? If anything,

Annie Agle  57:34  
I have to start my day by walking my dog outside. Not just because I have a dog, but for me, I'm very outdoorsy, I have a lot of energy, as you can tell. So for me just taking a walk in the morning, maybe listening to a guided meditation while walking my dog. That's how I start every day, no matter what.

Cory Ames  57:51  
Having dogs is good reminder to get outside early in the morning. 

Annie Agle  57:57
100%.

Cory Ames  57:58
You mentioned a few things that you like to do outdoors. What's maybe your top favorite if you're spending your own time outside 100%?

Annie Agle  58:05  
Rock climbing and hiking. It's a hard one but I'm going with rock climbing right now because it's rock climbing season. That's all I want to do right now. I love my job, but honestly, if I'm going outside want to climb. I want to climb everything right now.

Cory Ames  58:16  
I love it. Great time of year for you then. Is it not getting too hot on the rocks right now? 

Annie Agle  58:22  
No - well, it's cooled down. It was definitely too hot this weekend, which bummed me out so I went to the gym, but it's cooled down a lot. So now I'm like, I'm hankering to get after it. 

Cory Ames  58:31  
Good to hear. Okay. And a final, final question for you, Annie: What's one piece of advice that you might leave our listeners with? These folks are changemakers and innovators from all sectors all over the globe, hoping to leave the world a better place than they found it.

Annie Agle  58:44  
Be humble, be curious. I think being very disciplined with yourself about understanding the limits of your knowledge, and then just getting really interested and finding those people who are deep experts in the space and being a collaborator, building bridges. Spending a lot more time building bridges than establishing benchmarks. That's the biggest piece of advice I think I can give.

Cory Ames  59:07  
Lovely advice for us to end on. Final item, Annie, where is the best place to follow along with you and the work you do at Cotopaxi?

Annie Agle  59:14  
I only do LinkedIn, I don't like social media otherwise, but LinkedIn. I'm on LinkedIn. I'm like a, I guess if I were to be an influencer, I'd be a LinkedIn influencer. I'm that not cool.

Cory Ames  59:26  
Well, that's fine by this crowd here for sure. So we'll have that linked up in our show post at growensemble.com and socialentrepreneurship.fm. Annie, thank you again for taking the time.

Annie Agle  59:36  
Thank you, Cory. And thank you all for listening. Have a great day.

Cory Ames  59:39  
All right, y'all. That's a wrap on another episode of the social entrepreneurship and innovation podcast. As always so grateful to have you listening in. If you love the show, please leave us a review on Apple podcasts or hit subscribe wherever it is that you get yours. And as well. I want to invite you to sign up for our Better World Weekly newsletter. This is our weekly discussion with our community of social entrepreneurs and changemakers on all things building a better world does the newsletter I write and publish send out myself every single Monday go to growensemble.com backslash newsletter, to join in on that discussion, all things building a better world. Go to growensemble.com backslash newsletter to get the next one in your inbox. 

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