SIG Winter ‘25 Stock Pitch–Crocs
Take a look at our full stock pitch deck here.
Another quarter, another stock pitch! In March, my team and I won first place pitching Crocs, Inc. (CROX) as a 'buy' at Sustainable Investment Group’s Winter Stock Pitch Competition. At first glance, Crocs is a plastic shoe brand–not exactly the poster child for sustainability. But our research surprised us.
Navigating the tension between the corporate growth imperative and environmental responsibility–two seemingly irreconcilable concepts–is a problem at the forefront of the trillion-dollar fashion industry. Not only are most clothing items made of synthetic (plastic) fibers like polyester, nylon, and acrylic (or in the case of Crocs, Croslite EVA foam), but it’s contributing to an increasing waste problem. Only 20% of textiles are recycled globally, and in the U.S., clothing waste is now the fastest-growing waste stream (read this awesome article from PIRG about it). Under the fast fashion mandate, circularity seems impossible… or is it?
Enter Crocs. During our stock pitch, I got to present on Crocs’ value chain and ESG considerations, where their circularity efforts stood out to me. Their commitment to circular economy via partnerships with Soles4Souls (a nonprofit clothing donation program) and ReCircled (a used garment reselling/recycling startup), as well as their retail takeback program (with a mail-in option), integrate waste reduction directly into their supply chain. Their proprietary ISCC PLUS-certified bio-circular Croslite also makes their shoes durable–they last 3-5 years, if not longer–requiring less frequent replacements. And best of all, they’re aligned with industry ESG frameworks like SASB, TCFD, CSRD (EU), and the UN SDGs.
Seeing a company like Crocs actively invest in circularity is refreshing, especially when so many major brands shy away from real sustainability because they fear it will hurt their bottom line. I saw this friction firsthand while working on SB 54 (Plastic Pollution Prevention and Packaging Producer Responsibility Act) with CALPIRG. The bill, which holds plastic producers accountable for waste reduction, faced strong pushback from corporate interests that prioritized short-term profit margins over long-term sustainability. Now, SB 707 (The Responsible Textile Recovery Act) is bringing that same Extended Producer Responsibility model to the fashion industry, requiring companies to fund textile waste collection and recycling programs–a necessary step toward making sustainability a corporate responsibility, not just a consumer burden.
What’s exciting is that Crocs proves sustainability isn’t just ethical–it’s profitable. Their commitment to circularity hasn’t slowed their growth; in fact, their financial data shows the opposite. As they’ve expanded their sustainability efforts, their revenue has grown (hitting a new record of $4.1B in 2024), and they’ve maintained strong profitability (profit margin: 23.16%, ROE: 57.76%–shoutout to Equity Research!). This challenges the outdated assumption that eco-friendly business practices come at the expense of financial success.
Of course, that isn’t to say that Crocs is a perfect company. Their scope 3 emissions are still high, accounting for 98% of total emissions, and their circularity efforts require scalability that might be challenging outside of the U.S. market. Nevertheless, they’re taking steps in the right direction. Perhaps Crocs can be a role model for other fashion companies to strengthen their sustainability initiatives. Just some food for thought.
Sources: Crocs 2023 Comfort Report, LSEG Data & Analytics
