NA-KD: How to make profitability and sustainability go hand-in-hand

“Since the base year, NA-KD has reduced its climate impact by 35% while maintaining its total turnover.”

Eleonor Björserud, Climate Action Manager at NA-KD

NA-KD is a Swedish fashion company that offers the latest trends in clothing, accessories, and beauty products. They have quickly become a go-to destination for fashion-forward consumers around the world, with millions of loyal customers and followers.

NA-KD is also a perfect example of how companies can seamlessly incorporate climate work into their business strategy, allowing them to increase profits while reducing emissions.

Eleonor Björserud, Climate Action Manager at NAKD, shares her story with us.

The Challenge: Creating NA-KD’s Climate Action Roadmap

NA-KD’s core audience is Gen Z and Y women - customers who are incredibly conscious of their environmental impact. Additionally, with key markets like France tightening legislation around sustainability and carbon reporting, they knew they needed to act soon.

Rather than waiting for regulations to change, NA-KD decided to proactively start calculating emissions and create a concrete climate roadmap, with clear goals to help achieve their ambitious targets.

For NA-KD, carbon reporting wouldn’t be a box to tick to appease customers and lawmakers - they intertwined their climate goals with their financial goals, letting their work permeate all operations.

“Since sustainability work affects us financially, it was important that we designed our roadmap based on both our financial goals and climate goals so that they really went hand in hand.”

The Solution: Calculating the impact of each product and department

With Atmoz identifying the emissions produced by each business area, NA-KD were able to review their entire range and identify:

• Which products were directly unprofitable
• Which products were creating unnecessary emissions at a raw material level, production level and transport - and thus were inefficient

These were phased out, helping to cut NA-KD’s impact without cutting revenue.

Atmoz’s platform also helped provide some key insights for other areas of NA-KD’s strategy:

“It quickly became clear that we need to focus on reducing our quantities, increasing our sales, increasing circular business models and raising the price of the remaining products in order to reach both our financial goals and our climate goals.

Based on that, we have worked internally to come up with the equation that suits us and our products best. We know what we need to work on, we have started our journey and are humbled by the challenge we have in front of us.”

To help further reduce their impact, NA-KD has also utilised Atmoz to offset emissions. From the curated list of Gold Standard projects, the company has chosen to contribute to:

• The Cecic Zhangbei Dayangzhuang wind farm project in the Hebei province in China - 66 wind turbines that will help power the North China Power Grid.
• The Kartaldagi and Balabanli wind power plants in Turkey, estimated to reduce 180,000 tonnes of CO2 emissions per year

The Impact: 35% less emissions while maintaining total turnover

By the time France introduced their strict laws, NA-KD were more than compliant - meaning no vital brand equity or revenue lost, unlike some of their competitors.

As the EU’S Corporate Sustainability Reporting Directive and other new legislation takes effect in the coming years, NA-KD is prepared to quickly and easily adapt to any changes.

But beyond reducing risk for the business, implementing a roadmap and strong carbon management process has been great for their bottom line. During 2022, they reduced purchase volumes by 38% while maintaining total turnover, resulting in a 35% reduction of carbon emissions compared to the base year of 2020.

Overall, NA-KD’s approach is a masterclass in how to set goals that help the business and the planet:

• The Climate Action Roadmap gives each department clarity on how to work towards their targets
• Climate goals have been integrated into their quarterly internal follow-up of the company’s most important key figures
• The company has a dedicated team of 3 people who are employed solely to focus on carbon management and overall sustainability

“2022 proved that profitability and sustainability go hand-in-hand.”

• Oscar von Konow, Former CEO of NA-KD