AMDP Final

 

AMDP MEMORANDUM

 

TO: Professor Clark Hansen, CEO, ADMP

FROM: Angel Perez

DATE: March 11, 2022

SUBJECT: Investment Recommendation: Tentree

 

This week after conducting a thorough investigation of possible investment opportunities, the Research and Development Department and I have identified Tentree as a candidate. I will first go over the requirements needed for investment which include that all potential partners consider a Triple Bottom Line, Corporate Social Responsibility, Social Enterprise, and Carbon Footprint.  I will then go over a description of Tentree regarding their mission, goals, impact, finances, and their reputation. Lastly, I will state my case and reasons as to why we should invest into TenTree.

 

I.        Requirements

 

Triple Bottom Line

To reiterate, all candidates must follow the triple bottom line. This is a business concept that a firm shouldn’t just focus on making profits, but also place emphasis on social and environmental factors. This concept can be broken down into the “three P’s”  (Miller)

1.     Profit- the goal of a firm is to maximize profits while reducing costs.

2.     People- A firm’s commitment to all stakeholders. A measure in a company’s societal impact.

3.     Planet- refers to how environmentally responsible a firm is. A company should thrive for becoming more eco-friendly.

 

 

Corporate Social Responsibility

Corporate Social responsibility- is a business model in which a company focuses on operating in a way that doesn’t harm society or the environment rather it alleviates or enhances. It is a way for a business to take ownership and responsibility for the way it conducts itself and how it affects society, the economy, or the environment. (Investopedia)

 

Social Enterprise

A social enterprise is an enterprise that prioritizes its social objectives. Most firms will prioritize just maximizing profits, but a social enterprise seeks to maximize social, economic, and environmental factors as well. (Investopedia)

 

Carbon Footprint

A carbon footprint is the impact that one leaves on the environment due their actions. More specifically it is the amount of greenhouse emissions that are released in the atmosphere as a result from the operations of a firm. A carbon footprint is measured by how many tons of carbon dioxide is emitted on a yearly basis. It is important for a firm to reduce its carbon footprint because it can help alleviate the effects of global warming and indicates to stakeholders that maximizing profits isn’t the only objective.(Conservation)

 

II.   Description

 

TenTree Origins

Tentree was founded in 2012 by Kalen Emsley, David Luba, and Derrick Emsley. In 2011, during a trip in Hawaii, Kalen Emsley and David Luba were inspired to create an apparel company that focused on giving back to the Earth. Kalen Emsley at the time was working as a tree planter, his priority was to create a greener Earth. According to Derrick “Authenticity is important to us because it is who we are. We started a tree-planting company that sells apparel, not the other way around”. (Insider) The model for Tentree was to use a percentage of the funds from each sale to go to planting ten trees literally.

 

Mission and Impact

TenTrees commitment to decreasing their carbon footprint, is recognized with their use of 95% sustainable eco-friendly materials. The apparel is made up of mostly tencel fibers, cork, hemp, and organic cotton. On average their products use 75% less water to make compared to other manufacturers. They are currently working on eliminating all plastics and using only sustainable materials for their packaging by 2023. TenTree has partnered with several international nonprofit organizations to assist in planting trees around the world; thus far a total of 73,334,342 trees have been planted. The sustainable model has also created several job opportunities, “Communities in Nepal, Madagascar, and Senegal are absorbing the benefits of a customized, sustainable business model. Tree-planting provides good paying jobs where once none existed”. (Insider)

 

 

Reputation

B Corporation recognized Tentree by awarding them B Corporation Certification in May of 2016. In order for a company to receive B Corp Certification they must exhibit high social and environmental performance, accountability, and transparency with all stakeholders and shareholders. According to B Corp, “Tentree is a environmentally progressive, lifestyle apparel brand that plants ten trees for every item purchased. They believe that they can inspire a new group of consumers to tackle the environmental issues we are now faced with head on, positively impacting our future. To date, they have already planted over 25 million trees and have a goal to plant 1 billion trees by 2030. With millions of trees planted to date, the impact is easy to see.” B corporation isn’t the only well-regarded industry source to notice Tentree’s efforts; Climate Neutral has also rewarded them with certification. Climate Neutral is a nonprofit organization that has certified 339 brands in various industries. According to Climate Neutral “When a brand gets certified, it achieves zero net carbon emissions for all of the carbon it creates while making and delivering its products or services for a year. By measuring, offsetting, and reducing their footprints, these brands are setting the standard for corporate climate action.”

 

Financial Outlook

TenTree currently doesn’t disclose their revenue or profits, but according to secondary sources it is believed that from 2015-2019 Tentree was making around $35 million a year in revenue. While they don’t disclose their financials specifically, Derrick Emsley has stated “We can say more than £50m in revenue and profitable”. Currently they operate strictly online, but they plan on opening stores worldwide by the end of 2022 or early 2023. Their popularity on social media has increased significantly and seem to be going in the right direction.(Drapers)

 

III.          Final Recommendation

 

After conducting my research, I have come to the conclusion, that it is in the best interest for ADMP to invest in Tentree. Tentree meets the standards that we adhere to at ADMP.

 

·      Following the triple bottom line

·      They are a social enterprise that emphasizes corporate social responsibility

·      They are constantly working on ways to reduce carbon footprint

  

Tayllor Henczel a blog writer for Tentree has stated that their goal is “To provide the best, most environmentally progressive clothing possible and act as a challenge to the clothing industry to do better by the planet.” The clothing is fashionable, durable, and most importantly environmentally sustainable. Climate change has been an issue on the minds of people, and many governments around the world are encouraging businesses to operate in ways that are sustainable. Tentree is on an upward trajectory and has made an impact on the world, people, and they have inspired. It is fundamental for AMDP to align itself with TenTree and their vision for a better Earth.

 

 

 

Works Cited

 

“Climate Neutral Certified: About Climate Neutral.” Climate Neutral, https://www.climateneutral.org/about. 

Fernando, Jason. “Corporate Social Responsibility (CSR) Definition.” Investopedia, Investopedia, 7 Mar. 2022, https://www.investopedia.com/terms/c/corp-social-responsibility.asp. 

Fish, Isabella. “Tentree: A Tree-Planting Company That Happens to Sell Clothing.” Drapers, 20 Oct. 2021, https://www.drapersonline.com/insight/comment/tentree-a-tree-planting-company-that-happens-to-sell-clothing. 

Growjo. “Tentree Revenue, Competitors and Alternatives.” Tentree: Revenue, Competitors, Alternatives, https://growjo.com/company/tentree#revenue-financials. 

Leighton, Mara. “This Startup Plants 10 Trees for Every Item It Sells - Here's What Its Clothing Is like in Real Life, beyond the Instagram Hype.” Insider, Insider, 23 Apr. 2021, https://www.insider.com/guides/style/tentree-sustainable-clothing-review#juniper-pullover-hoodie-1. 

“A Simple Explanation of the Triple Bottom Line: University of Wisconsin.” University of Wisconsin Sustainable Management Degree, 19 Jan. 2022, https://sustain.wisconsin.edu/sustainability/triple-bottom-line/. 

“The Story of Tentree.” THE ENVIRONMENTOR, 30 Apr. 2021, https://blog.tentree.com/the-story-of-tentree/. 

“Tentree International.” Certified B Corporation - B Lab Global, https://www.bcorporation.net/en-us/find-a-b-corp/company/tentree-international/. 

Tentree. “About.” Tentree, https://www.tentree.com/pages/about. 

“The Triple Bottom Line: What It Is & Why It's Important.” Business Insights Blog, 8 Dec. 2020, https://online.hbs.edu/blog/post/what-is-the-triple-bottom-line. 

“What Is a Carbon Footprint?” What Is a Carbon Footprint, https://www.conservation.org/stories/what-is-a-carbon-footprint. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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