Hessnatur CEO Wolf Luedge brings some much needed teeth to the garment industry.
You would be forgiven for rolling your eyes if the CEO of a $100 million clothing company told you that he has "never, not even once" compromised his ethical and environmental practices to get the job done. Yet Wolf Luedge, top dog at the German organic clothier Hessnatur, is completely serious. But he has evidence to back up his claims that his 33-year-old company practices what it preaches-from its profit-distribution and free classes for workers, to its rigorous organic farming, energy-efficient infrastructure, and the fact that the company willingly pays a 40 percent premium above the world market price to buy organic cotton.In the United States, Hessnatur was until recently either unknown or considered part of the crunchy fringe. But after it debuted a line by the hotshot designer Miguel Adrover at last year's New York fashion week, the company is drawing more attention. It has also partnered with Grameen Knitwear, a nonprofit export business that falls under the umbrella of Nobel laureate Mohammad Yunus's Grameen Bank. That effort is based not coincidentally in Bangladesh-where 76 percent of national exports are clothing, and where labor standards are often barely above sweatshop levels. We sat down with Luedge to grill him on his business model, the Grameen partnership, and the evils of the garment industry as a whole.GOOD: Tell me about your recent project with Grameen Knitwear. Before you partnered with them, were they doing organic farming?WOLF LUEDGE: I met Dr. Yunus in Berlin and we right away said we should do something together. He's famous for microcredits and fighting poverty, and we are famous for our organic cotton. So we said, We'll bring you our organic know-how, and you bring in your socially conscious leadership. Grameen is based in Bangladesh, which, you have to know, is one of the worst countries for making clothes.G: In terms of what? Environmental standards? Waste?WL: The poverty of the people working in the garment factories-it's really cruel. All these really cheap companies that will sell T-shirts for a dollar, a lot of those T-shirts are produced in Bangladesh, not China. They don't care for organic or environmental standards, they don't care for social issues-they don't care about anything. So we decided to produce something in a really poor country and bring it as a hip product to the West, and then the money goes back to Bangladesh for its workers.G: What would you like to see change across the board in the garment industry?WL: That all goods are priced with their social and environmental footprint. It would be the best thing if the pricing wasn't based on lobbying but what a given product needs in terms of resources-and what does it do to the environment and the people. If we did that, we could see real change.G: Organic farming and social benefits obviously affect your bottom line. How do you offset those costs? WL: Every business model has a profit and loss account, and in ours, the marketing costs are very low. We don't have high rents for shops because we're a mail-order and web business. So we have distributed those costs to other parts of our business that we stand by.G: What do you think of the idea of taxing a company's harm on workers or the environment?WL: Well it happens in Germany, and is beginning in the United States, too, with CO2 emissions-it's the same idea. It would be very hard to organize it, but it should go in this direction.G: Your emphasis seems to be as much on environmentalism as it is on worker's rights. WL: Worker rights are not a big deal in Germany. Maybe it's a big deal here, but not in Germany.G: Well, in the United States, that's why a company like American Apparel is such a big deal-because they pay decent wages and offer health insurance and worker benefits.WL: But they don't show all sides to their business. I'm not 100 percent trustful of the American Apparel story, but I don't know the whole story. ... At [Hessnatur] we have several programs where workers can get on-the-job, off-the-job, or private education, and we pay for that. We distribute 3 percent of our profit to workers-all workers, not just the CEO. We have a really low hierarchy-it's open doors everywhere and it's a very relaxed atmosphere. We also have a chef on site who makes organic food-the workers pay about $3.50, and we pay the other half.G: What has changed since Adrover came aboard?WL: Brand awareness, knowledge from the fashion crowd. Our customers have responded to it differently-some are positive and a couple of them are negative, because you have the organic, social roots, and normally that is the enemy of fashion. But we're trying to bring that together. It's an interesting process. Even with our employees-they are very engaged in discussing what we're making, and what's we're all about. They want to know why we need to have a coat that costs $1,000. And it's a good question.G: What does it mean that you are have certification by the Clean Clothes Campaign and Fair Wear?WL: The Clean Clothes Campaign were the ones who went after Nike, and they have the power to say you are the worst company in the world. So they came to us and said, "You might be organic but are you socially conscious?" And we said, "Organic is by definition socially conscious, because it's better for workers, and we have these programs," and it went back and forth. So eventually we said to them, "Tell us what we should do, and we will do it." So we set up a monitoring system, and we have a third-party complaint system for workers, etc. To be really honest, it's easier to secure certification for organic and ecological ingredients than it is to meet social standards, much easier, even though it's the social effects that are actually the [biggest issue] in the textile industry.G: What do you think of the ubiquity of terms like "eco-fashion" and "green" and "organic"?WL: Personally, I think it's very good. The thinking that we need to change something is getting a broader audience. The customer has to decide-do we go for greenwashing marketing gimmicks? Or do we go for the companies that are authentic and really take care of what we should take care, for the environment, and for our people?G: The counter-argument is that the ones who greenwash end up diluting the message. It makes people feel good to buy an expensive organic T-shirt at Barney's, but they're not sure what's actually pure and what isn't.WL: Because of access to information on the internet, the really educated people will get the information, and they are the leaders because their decisions make all the difference. And you can't stop the process: Consumers are getting more and more informed about what they buy and the [footprint] of the products. From my point of view, you set a trend-and if there are some marketing gimmicks around it, who cares.Photo by Roger Richter.