Corporate Social Responsibility

Andrew Koenig, president of CITY Furniture with 34 stores and 2,400 employees, wants the business he leads to improve people’s lives and make the world a better place. He admits it’s a more aspirational goal than many home furnishings retailers take on for themselves.

Early in life Koenig dreamed of being a professional golfer. “Some things just don’t work out the way we plan,” he mused. “It turned out that those guys were way too good for me, so I joined CITY Furniture right out of college, starting in the receiving department. I worked all the jobs in our warehouse and operations, then continued to work my way up through the organization.” It was in many ways a typical path for a family member in a family-owned business. However, CITY Furniture is no typical company.

Furniture World asked Koenig about the company’s focus on corporate responsibility as outlined in its recently released Corporate Social Responsibility report (CSR).

“It doesn’t matter if a company is selling potatoes or furniture,” he replied, “it needs to know its mission on this earth. Our focus on corporate social responsibility came together several years ago as a branding project. We polled many of our associates and family members to collect their thoughts. What we discovered was that the people who work here have an interest in enriching people's lives and making the world a better place. When they go to work they want it to be about more than just selling a sofa. They want something to aspire to and feel good about.

“To make this a reality, our business has to be well run and profitable. Only then will we have funds available to take care of our associates, our community and the environment. This was the purpose we stumbled upon—and for me as an older millennial, it still feels right.”

Corporate Social Responsibility

“We give the report to new hires when they join the company. It opens up their world a bit. Our founder and current CEO Keith Koenig always emphasizes the importance of transparency. We might be sharing some of the secrets of our corporate culture in this report but, on the whole, transparency makes us much better.

“It’s also a way for every person who works at CITY Furniture to hold the company’s management accountable for making progress in so many areas including diversity, inclusion, green efforts and giving back.”

A Green Promise

In 2020, CITY Furniture made major progress toward its promise to make all of its operations carbon neutral by 2040. Some high points included:

• Ran 100 percent of its delivery fleet on natural gas, reducing greenhouse emissions by 45 percent. Five Tesla all-electric trucks are on order.

• Broke records for the U.S. furniture industry’s most eco-friendly retail space, now operating eight LEED-certified “green” showrooms totaling 460,000 square feet, with two more showrooms on the way.

• Adopted strategies to save over 7.2 million kilowatt hours of electricity per year, which prevented 11.2 million pounds of CO2 from being released.

• Recycled 99 percent of cardboard and plastic operational waste at its own recycling center.

Expense or ROI?

Is making good on CITY Furniture's 2040 Green Promise an expensive proposition?

“There are definitely big upfront costs,” says Koenig, “but like any good retail investment it pays for itself over the longer-term. CITY Furniture was the first retailer in the furniture industry to use compressed natural gas delivery trucks on a massive scale.” CITY Furniture’s CSR report notes that 100 percent of their delivery trucks utilize CNG or Renewable Natural Gas (RNG).

“Our head of fleet, Dave Clevenger, has been working on this project now for seven years and is the leading authority on using compressed natural gas for delivery trucks.” These trucks were not off-the-shelf purchases. For retailers who may want to upgrade to this technology, Koenig advised, “there’s a capital investment plus a lot of hard work involved to make this newer, greener technology work out in the field.

“We had to find a factory to make the truck, complete with natural gas tanks, then work with them to make the technology continue to improve over time. There were small issues here and there. When you're on the cutting edge of technology there are always problems. There are benefits as well. Our compressed natural gas cost, known as a gas gallon equivalent, makes us approximately 50 percent more efficient than anyone else out there and operates one of the most efficient delivery fleets in the United States.

“We are now in the process of doing something similar with electric semis from Tesla. I believe we are also the first retailer in the Southeast United States to develop an electric yard spotter truck to move containers.

“I'll tell you this, our associates love hearing that we're going down this road, that we're paving the way. It’s a challenge for them to figure out something that's never been done before. It's true that CITY Furniture is ideally suited to do this kind of development work, but every retailer has to start somewhere. There are innovative green methodologies appropriate for any furniture operation, large or small. Every furniture retailer can save energy in the corporate office, on the showroom floor or with delivery. There’s an opportunity—with a little upfront investment—to do what’s right while investing in a longer-term ROI strategy.”

In 2020, CITY Furniture ran 100 percent of its delivery fleet on natural gas, reducing greenhouse emissions by 45 percent. Five Tesla all-electric trucks are on order, and the company has developed electric yard spotter trucks pictured above.

CITY Furniture’s 2040 Green Promise doesn't include product sourcing information as of yet. “Over the past couple of years we've established green product partnerships with sustainable suppliers of sheets, pillows, pads, furniture and upholstery. Going after our complete supply chain is a step we will need to address in order to further our green strategies and report those metrics. It will require the collection of huge amounts of data from suppliers as we pursue a sustainable supplier strategy. I believe that, long-term, customers will want to see us move incrementally in that direction over the next 10 to 20 years.

“Our goal is to be carbon neutral by 2040 and we measure our performance towards achieving that goal. Some retail organizations aren’t going to make it to carbon neutrality, but there’s a benefit for any retailer to highlight that they're trying, if only because customers and associates—especially millennials—expect that.

“The same is true of documenting how retailers give back to the communities they serve. This includes providing jobs, paying people fairly, encouraging diversity, inclusion, and treating people right. Also, progress in advancing women to leadership positions and equality in gender compensation. We highlight our goals in the CSR report and ask for feedback from our associates, community, business leaders, and suppliers.”

Transparency

Moving on to corporate transparency, Andrew Koenig explained his approach.

“CITY Furniture values and benefits from transparency with its employees, vendors, and the community. We’ve had competitors visit our corporate offices and warehouse,” says Koenig. “We have an annual vendor conference to build relationships with our suppliers and confidence in our brand. Vendors come away knowing that we are doing great things and getting better year after year.

“The company is also transparent with its associates, something that’s become more important, especially in hiring and retention. We share information about employee salary ranges by title within each department. So, if an associate working in receiving wants to move up to a developer position, she can easily get salary range information for developers at CITY Furniture. This information is made public.

“We’ve gotten rid of our old review systems, replacing them with quarterly individual development plan meetings,” said Koenig. “Every quarter we meet with our associates. If they're doing a good job in their current role, we'll work to develop them into the next role they want to have at CITY Furniture. We help them get instructional materials or whatever else they need to help them further their career path. Our learning and development department is responsible for helping people to transition up the ladder, transfer into other departmental roles or become better at performing their present duties.”

Koenig explained that the development plan meetings have helped to advance people to leadership positions. The CSR report documents that women currently hold 41 percent of leadership roles. The goal is 50 percent.

Diversity & Inclusiveness

After the events following the death of George Floyd, management at CITY Furniture felt strongly that a town-hall meeting with associates was the best approach. “It was a way for us to get direct response, and for them to share their feelings and perspectives,” explained Koenig. “It was a chance to find out how the people who work at CITY Furniture felt about our business and the events of last summer—heart and soul.

“Diversity and inclusiveness strategies start at recruiting and hiring. We have a strong code of ethics that’s presented in our associate handbook. It’s been vetted with outside legal experts in the diversity space, but even with those in place, it’s important to realize that there's a lot of systemic racism out there that those policies don't address.”

CITY Furniture’s 66-page 2020 CSR report states: “We firmly believe that all Associates should feel welcomed, respected, appreciated, valued, safe and are given opportunities to grow.”

By 2040, CITY Furniture's plan is to run nearly all showrooms on renewable energy to offset electric use and help achieve the goal of carbon neutrality. The Corporate Social Responsibility report pages at left relate CITY's use of high efficiency HVAC units, Energy Star certification progress, lowering of GHG emissions and footprint, use of LED lighting and solar panel installations. So far, the report says, these efforts have resulted in a yearly reduction of 11.2 million pounds of CO2 per year.

“These principles,” Koenig said, “are more important today than ever before. We are all made better by the diversity that exists within our organization, and we are stronger when all voices are heard and respected.” Company employees are currently 33 percent women, 35 percent Black/African-American, 37 percent Hispanic/Latino and 24 percent white.

Pictured are 2020 Kevin Koenig Leadership Award winners, Keri Malone and Katie Gottlieb, with Keith and Andrew Koenig. Also a photo of women who have leadership roles at CITY Furniture.

“CITY Furniture has increased the number of women in leadership roles, and the diverse population in leadership roles metrics. So, we're making progress, but have work to do like pretty much every company in America.”

Still on the topic of diversity, Andrew gives Keith Koenig a lot of credit. “He's always been focused on diversity, but right now a more strategic approach is needed to take it to the next level, to get it over the goal line.

“We plan to require diversity training as an annual re-certification. I think so far what we’ve been doing in this area has been effective, but realize it is just one of those things that has to be done all year. There are a lot of strategies that need to be adopted in order to be able to someday declare victory.”

Not a Top-Down Strategy

“We are firm believers that the c-suite executives at CITY Furniture don’t know everything. To become a truly diverse, equitable, and inclusive organization takes input from everyone in the company. We all need to work together and see issues from our different lenses.

“CITY Furniture is getting good feedback from associates who are encouraged to contribute ideas to make our company better. We’ve done a number of town hall meetings and plan to do a lot more in 2021. We also have our ERG groups (Employee Resource Groups) that assist with the process of advancing diversity and inclusiveness.”

Advice for Other Retailers

“No matter how busy you are as a retail leader, it’s important to reserve time to reflect on the progress your company is making to become a great business—a good corporate citizen.

“For those organizations that are just getting started, I don't think that comprehensive reporting is possible to achieve overnight. Every business, small, medium or large, has to pace itself. Corporate social responsibility reporting evolves and improves over time. An annual corporate social responsibility report helps everyone who interacts with your company to see where you’ve made strong efforts, as well as identify areas that need to be prioritized going forward.

“If you choose to make social responsibility a part of the vision for your company, doing this type of reporting is almost a requirement. The benefits will be many. It will be a great hiring and retention tool and raise your company profile as a good corporate citizen.

“It might sound corny, but it fills my heart to know that here at CITY Furniture we do more than just sell furniture. We're engaging to do good in the world for our associates, for our community and the environment. It makes us more productive and caring because doing good in the world beats out purely transactional business every time.”

Parting Thoughts

“I'll leave you with this story: Recently one of our associates came up to me. He said, ‘Andrew, I would like to help support the American Heart Association as part of CITY Furniture’s effort. But am sorry that I just don't have the money right now.’ I replied, ‘Dude, The fact that you care about what we are doing is the nicest thing. But,’ I said, ‘don't worry about it. You work hard for this company every day. If you and I do a good job, and there are profits at the end of the year, CITY Furniture will give it back to the community, invest in green technology, invest in our people and donate to the American Heart Association and other charities. So, don't you worry, don't stress your pocketbook. You and I are already making a difference in this world by just doing our best work every day.’”