Source: http://jsmith.cis.byuh.edu/books/sustainable-business-cases/s15-case-accounting-for-sustainabi.html
Timestamp: 2019-04-22 02:45:29+00:00

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V. F. offered $43 for each Timberland share, a premium of 43 percent to Timberland’s closing price the day before the offer. On the announcement day, Timberland shares climbed $13.21, or 44 percent, to $43.20. Timberland stock had traded between $15.07 and $45.72 from June 10, 2010, to June 10, 2011, and was at $30 before the offer. The owners of about three quarters of Timberland’s stock, including Chairman Sidney Swartz and CEO Jeffrey Swartz, entered into a voting agreement and gave written consent for the deal on July 26.
V. F.’s shares rose by 10 percent after the deal was announced, which added about $1 billion to the V. F.’s market capitalization. This was atypical as shares in the buying company usually fall due to stockholders expectations that most acquisitions end up destroying value. V. F. says it intends to both grow Timberland’s sales and increase Timberland’s sales efficiency. In 2010, Timberland’s operating margin was 9 percent, which was considerably lower than V. F.’s operating margin of 20 percent.Marc Gunther, “Timberland’s Jeff Swartz: ‘This Is Hard,’” Marc Gunther (blog), June 14, 2011, http://www.marcgunther.com/2011/06/14/timberlands-jeff-swartz-this-is-hard.
V. F. has not been a recognized leader on corporate social responsibility (CSR) or sustainability. The company is at an early stage of addressing climate change and other issues related to climate change. According to the Climate Counts Company Scorecard on V. F. (http://www.climatecounts.org/scorecard_score.php?co=58), the corporation has started to measure its company-wide impact it has on global warming (i.e., its greenhouse gas emissions or climate footprint) and has made some efforts to reduce its impact on global warming (i.e., its greenhouse gas emissions or climate footprint) through the North Face. It has, however, shown minimal public information that it supports public policy that addresses climate change and provides limited information on its company-wide efforts to address climate change.
On June 28, 2011, after the announcement of V. F.’s purchase of Timberland, the company hired a new vice president for corporate social responsibility, former Dell executive Mark Newton. Newton is joining Timberland following eight years with Dell, most recently as executive director of global sustainability, where he was responsible for balancing the company’s growth strategy to minimize impacts on natural and human resources across the value chain. During his tenure with Dell, he directed global policy development, stakeholder engagements, and corporate strategies on environmental and social issues. Prior to joining Dell, Newton led environmental technology programs at Apple and Motorola. He sits on the advisory boards of Clean Production Action and Carbonfund.org.
Recently, I listened to the acquirer’s CEO addressing Timberland employees, in an open air town hall meeting (we take the 10 minutes of New England summer time seriously here, and so when we can meet outdoors, we do). It tore my guts out, to sit in the community gathering as a listener, watching my colleagues watching the new boss, wondering what changes are in store for our brand, our business, our community…an environmental activist in our ranks rose, way in the back, to ask the new guy, the Boss to Be, about sustainability.
He went on; the answer got more detailed and more concrete. But I had stopped listening.
For 30 years, we’ve been trying, fighting, struggling, to choreograph the intricate interaction between shareholder value, consumer demand, and social accountability. I have the scars, and the long list of failed efforts, incomplete outcomes, unrealized dreams and frustrated ambitions before my eyes all the time that reflect this passionate effort. And yet in this poignant moment of transition, from a business run by my family for three generations to a business to be run by relative strangers—here is the CEO of a 10B$ powerhouse, talking about sustainability simply and easily—good for business, good for the earth. And he means what he says. And it strikes me, hard, as I sit there—30 years later, a vitally important conversation has shifted. Maybe, there comes a time to say, “my job here is finished.”Jeff Swartz, “Endings and Beginnings,” The Bootmakers Blog, September 13, 2011, http://blog.timberland.com/jeff-swartz/endings-and-beginnings.
V.F. Corporation has had limited efforts in sustainability, but the acquisition of Timberland provides it with the opportunity to be a global leader in business sustainability.
The stock acquisition of Timberland provided great value to the stockholders of V. F. Corporation.
Prepare a memo for V. F. that summarizes Timberland’s experience with CSR and sustainability reporting. What are the benefits and difficulties of the different activities within reporting? What are the main lessons that have been learned?
Review V. F.’s corporate website. Prepare a two-page memo to the company’s CEO outlining whether V. F. should more broadly adopt Timberland’s CSR reporting, identifying which of its brands would most likely benefit the most from sustainability reporting.
Upon reviewing former CEO Jeff Swartz’s final blog post, do you agree or disagree with his finding that the business world has shifted to sustainability?
Review Timberland’s timeline included at the end of this chapter. Do you think including environmental and social indicators in the timeline paints a fuller picture of the history and actions of the company? Why or why not?
1955 Nathan Swartz bought the remaining interest in Abington Shoe Company and welcomed his sons into the company, manufacturing private label shoes for leading brand manufacturers for almost 10 years.
1973 The Swartz family developed the “Timberland” brand name. Timberland created its first guaranteed waterproof boot under the Timberland name.
1975 Company produces 25,000 Timberland brand boots and approaches the $1 million mark in sales.
1978 The Swartz family changed the name of the company to the Timberland Company.
1980 Timberland footwear introduced into first international market—Italy.
Sources: “Our History,” Timberland, http://www.timberlandonline.co.uk/timberland-corporate-timeline/about_timberland_corporate_timeline%2Cdefault%2Cpg.html; “Home Page,” Timberland, http://www.timberland.com/category/index.jsp?categoryId=4089424; “About Timberland,” Timberland, http://www.timberlandonline.co.uk/timberland-corporate-timeline/about_timberland_corporate_timeline%2Cdefault%2Cpg.html; “About Us: Timeline,” Timberland, http://www.timberland.com/category/index.jsp?categoryId=4089424.

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