There is a certain irony in oil prices making the business case for sustainability — but that is precisely what unfolded at VF Corp. Speaking at Textile Exchange’s annual conference in Vancouver, Sean Cady, the company’s Vice President of Global Sustainability, Responsible Trade and Government Affairs, explained how military escalations, blockades, and attacks on commercial vessels slashed traffic through the Strait of Hormuz from more than 100 ships a day to single digits, sending oil prices soaring.
The immediate consequence was a sharp rise in the cost of virgin polyester, which is tied directly to petrochemical processes. Recycled polyester, however — linked to post-consumer waste streams rather than petrochemical cracking — initially held steady. For VF Corp, this was not luck. It was the result of years of deliberate planning toward a more sustainable supply chain.
VF Corp’s Bet on Recycled Materials
Today, more than 70 percent of the polyester used across all VF brands — including JanSport, Timberland, and Vans — comes from recycled sources. At The North Face, the company’s largest brand, over 95 percent of the polyester and 80 percent of the nylon found in its puffer jackets, fleece layers, bags, and footwear are derived from recycled, responsibly sourced, or renewable materials.
“We made that choice for carbon reduction and sustainability reasons and to build price and supply resilience into our supply chain,” Cady said. “This has enabled us to continue sourcing recycled polyester at very profitable prices without having to deal with the volatility of virgin polyester.”
A parallel story played out in ocean freight. VF’s decision to pay a modest premium for eco-fuel helped shield it from fuel surcharges when oil climbed above $100 per barrel. Companies that had not made the same commitment ended up paying more than those that had locked in eco-fuel pricing from the start. “It was a choice we made, and it was a choice that paid off in the end,” Cady said.
Scenario Planning as a Resilience Tool
As trade upheaval, geopolitical conflict, and climate risks increasingly intersect, VF Corp argues that navigating the current crisis is only part of the challenge. Building a sustainable supply chain resilient enough to withstand the next one is equally, if not more, important.
VF routinely uses scenario exercises to explore what future disruptions could look like. What happens if another pandemic strikes? Or a more damaging trade war emerges? What if rising temperatures force ski resorts to close and demand for The North Face’s winter gear collapses? “So we build scenario planning like that, and we figure out what choices would we make at what time, and what are the indications or indicators we should be looking at to see if that scenario will come true,” Cady explained.
He acknowledged that some scenarios are extreme by design, but maintained that they serve a functional purpose — building internal organizational muscles for decision-making under uncertainty.
Reo Eco: Scaling Textile-to-Textile Recycling
For Reo Eco, a vertically integrated recycling and textile manufacturing company, building supply chain resilience means securing both raw materials and long-term brand demand. Anticipating an industry shift from bottle-to-textile toward textile-to-textile recycling, the Chinese firm has already secured 100,000 tons of castoff garments for its enzymatic recycling operations, scaled up from a pilot plant established just a year and a half ago.
Rather than competing at the lower end of the market on price, Reo Eco is focused on elevating the value of recycled polyester into higher-end products such as stretch yarn, cotton-touch yarn, and dope-dyed yarn. Stefan Edkvist, Business Development Director at Reo Eco, noted that moving upmarket also demands transparency about material origins — an increasingly critical requirement as regulatory scrutiny of greenwashing intensifies.
“The market demand for textile-to-textile is huge now, not only because of cost or emissions but also because of regulation with digital product passports around the corner,” Edkvist said. “So where is that feedstock coming from? How can we secure the supply chain?”
The company aims to share its production capacity with brand customers and “grow together,” he said. Keeping processing in-house has allowed Reo Eco to control quality and avoid the extra freight costs and margins associated with outsourcing. Even so, Edkvist acknowledged that the company’s 10,000-ton textile-to-textile recycling capacity remains a “drop in the ocean” compared to the more than 80 million tons of polyester produced globally every year.
Cotton Supply Chains Face Climate and Logistics Pressures
For Jordan Lea, Vice President of Sustainable Fibers at the American arm of Olam Agri — a major cotton merchant and agribusiness — delivering a commodity “produced by Mother Nature on a just-in-time basis” is already a complex undertaking, made more so by drought and other climate-related risks.
Long logistical lead times add further pressure. Cotton purchased from the United States today can take four to six weeks just to reach a vessel, leaving ample time for energy prices and geopolitical conditions to shift beneath a supplier’s feet. To reduce those delays, Olam Agri divested a warehouse in Dallas and added facilities in Memphis and Savannah.
Lea described his philosophy with customers plainly: “You’re not my customer — you’re my partner. So how can we be a better partner? Again, that’s by making our product — the one that keeps your supply chain functional — more available to you as cost-effectively as possible.”
Another strategic priority for the company is increasing cotton’s “fungibility” — offering customers greater flexibility to substitute cotton sourced from one origin with cotton from another. Of the roughly 45 million bales exported worldwide annually, approximately 35 million come from just three countries: the United States, Brazil, and Australia.
“It sounds like a diversification of risk,” Lea said, “but when you consider that Australia is looking at production being down by 50 percent next year and the U.S. is in a drought facing a super El Niño during the harvest season…there are enormous risks just from the production side.”
Compounding those production risks are shipping disruptions — drought-related transit restrictions at the Panama Canal, Houthi attacks along the Red Sea route to the Suez Canal, and ongoing conflict at the Strait of Hormuz. One response, Lea said, is positioning cotton inventory closer to customers in relatively neutral locations such as Singapore or Malaysia, allowing Olam Agri to respond more quickly to shifting demand. “I can’t disrupt anybody’s supply chain based on an inability to deliver,” he said. “That’s not an appropriate response.”
Insurance Industry Grapples with Emerging Supply Chain Risks
Even when companies invest meaningfully in trade disruption protection, converting that investment into lower insurance premiums remains a challenge. Ridwan Bhuiyan, Vice President of Digital Products for Global Resilience at Chubb, illustrated the complexity with a hypothetical scenario: if a supply chain depends on a single dye house, or several located within the same flood zone, what happens when an extreme flood shuts them all down simultaneously?
Identifying such concentrations allows insurers to work with companies on preventive measures before a disruption leads to major losses. Bhuiyan also noted that insurers must increasingly account for risks that fall outside traditional underwriting categories, including climate change, heat stress, shipping lane blockades, blackouts, and labor strikes.
The challenge lies in demonstrating that specific mitigation investments justify reduced premiums. “We often hear our clients saying, ‘OK, if we build a $2 million flood wall at this factory in Thailand, is it going to affect our premium?'” he said. “It’s really tough to answer that because you haven’t necessarily demonstrated through that investment that it has truly protected you from that emerging risk. There’s no precedent — unlike saying that adding a sprinkler system in your facility will prevent a catastrophic fire from destroying the building.”
To develop that evidentiary base, Chubb combines historical site assessments with claims data to connect previously identified vulnerabilities to actual losses. “To be honest, it becomes more art than science,” Bhuiyan acknowledged. “You can collect all the numbers, investments, interventions and disruption planning, but as our adaptations to these inherent and emerging risks become more prevalent and we see incremental benefits from them, they will eventually trickle down to the policies we write as insurers.”
VF Corp’s Strategic — Not Reactive — Sourcing Decisions
Managing geographic risk also shapes how VF Corp structures its vendor relationships. The company gives suppliers with manufacturing capabilities in multiple countries higher ratings in its vendor-performance matrix, positioning them for more orders compared with single-country suppliers. However, Cady was explicit that this does not translate into reactive, short-term supply chain shifts.
“We make changes that are strategic in nature, that are ‘no-regret’ decisions,” he said.
When President Donald Trump announced the so-called “Liberation Day” tariffs in April 2025, Cady described the development as a “big shock” the company had not budgeted for. Before the Supreme Court struck down those tariffs in February, citing executive overreach, VF responded with a three-part approach: reducing manufacturing costs where possible, raising prices selectively where demand allowed, and absorbing a portion of the tariff burden at the expense of near-term profit. The company also incorporated more U.S.-manufactured material inputs to help offset import duties.
“But from a supply chain perspective, we don’t react with a knee-jerk reaction,” Cady said. “We’re taking a strategic view of what’s going to stick for the long term. Where do we have certainty? Where are we just trying to move through an uncertain period until we have clarity of what the future holds? Because what we’re choosing to design and develop today isn’t going to hit the market for over a year. And so, just switching here and there doesn’t really create value in that long-term supply chain.”
Responsible Exit and Worker Protection
VF Corp also applies its values framework to the way it manages supplier relationships, evaluating prospective partners not only on their production capabilities but also on compliance, human rights standards, environmental protections, and sustainability reporting.
Cady described the company’s approach as “controlling what we can control.” This extends to how VF handles the departure from a supplier. “If we do have to leave a supplier and reduce production with a supplier, our planning teams understand the impact that will have on that supplier: What percent of the capacity of that supplier or their workforce is responsible for producing our products?” he said. “And if we don’t give that supplier another order, are they going to have to exit? Are they going to close?”
Whatever form supply chain resilience takes, Cady was unequivocal that it cannot be achieved at the expense of the workers within it. “We have a very public and very important responsible exit procedure if we’re exiting orders from a supplier that we follow to the T, to ensure that we don’t have a negative impact on the workers in our supply chain,” he said.
