Annual Benefit Report

mission statement

We are design-led, with the mission of creating products of beauty and integrity, while designing, manufacturing, and running our business in a way that’s better for society and our planet.

Since our founding in 1948, Heath has always been committed to making our products and running our business in ways that support people and the planet. Edith Heath designed her earliest ceramics to be fired at a lower temperature than the standard—an energy-saving practice we continue today. We also recycle clay and water from our manufacturing process back into the factory. We source our clay and manufacture our products in California, which keeps our carbon footprint light. In recent decades, we have developed living wage and employee stock ownership opportunities supporting our entire staff. And all of these things are just the beginning of a long list of old and new practices we have integrated into our operations, many of which have contributed to our official designations as a California Green Business and Certified B-Corp. Below is our Annual Benefit Report for the fiscal year 2023 (4/1/22-3/31/23).

Certifications

B Corp

In 2023, Heath formalized our commitment to social and environmental responsibility by becoming a certified B Corp. Achieving this certification involved a holistic review of our operations and processes, including environmental management, equitable compensation, purchasing policies, and local economic development. We chose this certification because of its comprehensive and credible assessment process.

Through careful measurement of our practices across all areas of our business, we were able to determine where improvements were needed and how to take concrete steps in that direction. Our score was 84.5, with a minimum of 80 points to qualify. We are proud of this achievement, as most businesses score 50.9 points when attempting the assessment. One significant change we made was to our legal structure, transitioning to become a benefit corporation in California. California Benefit Corporations are legally required to think beyond profit when making business decisions, factoring in the long-term health and wellbeing of people and the planet.

Heath continues to operate according to Edith Heath’s vision, established 75 years ago, of hand-crafted, well-designed, durable products made in California with regard to nature and the community. We see B Corp certification as a way to galvanize this vision for future generations.

California Green Business Certification

This certification ensures that our practices align with resource conservation and pollution prevention in our factories and retail operations. In the fiscal year 2023, our San Francisco Factory, Showroom, and Warehouse were recertified, and our Sausalito Factory and Showroom were newly certified California Green Businesses. This verifies that spaces comply with applicable laws, develop internal policies, and continue the journey with each new employee, purchase, and material. All certified locations exceeded the standards to be considered innovators, serving as stewards for what is possible as a business. In the coming fiscal year 2024, we plan on developing our Ferry Building and Los Angeles showrooms to be more sustainable to meet or exceed the certification requirements.

Social Responsibility

Employees

Heath is a small company with a workforce that spans many roles and skill sets. We are proud to have many employees who’ve been with us for decades—some for nearly half a century. One of our central values is supporting our employees to be fulfilled at work and secure in their lives.

All our full-time employees have retirement and healthcare benefits. We worked with ICA Fund in 2020 to develop our Living Wage Initiative, which expanded benefits and increased hourly wages. Starting wage in the San Francisco Bay Area is $25 an hour; in Los Angeles, it’s $21.50. In addition to a minimum of eleven paid time-off days and nine paid holidays, we have a paid volunteer day for all employees to help their communities.

All Heath employees are eligible for the Employee Stock Ownership Plan as of 2016, which gives employees partial ownership of the company. It also provides each employee with increased retirement benefits through stock ownership in Heath.

Heath understands that applying ergonomic principles at our worksites is fundamental to providing our employees with daily health and safety support at their workplaces. A part of this approach consists of weekly, in-person, onsite ergonomics training sessions. Employee feedback provided during the training sessions has created a collaborative space where employees and managers can work together to reduce potential workplace injuries at our sites. Additionally, Heath provides ergonomic assessments on an as-needed basis and provides ergonomic equipment where needed to support and sustain our injury prevention strategy.

Employees are reimbursed for boots, headphones, home office furniture, or other items needed to complete their jobs. We support a diverse workforce by providing translation, meetings in Spanish, and human resources personnel who can translate.

Community Engagement

With locations in Marin County, San Francisco, and Los Angeles, we are committed to being a positive presence in the communities where we manufacture and sell our products. We aim for our two factories—in Sausalito and the Mission District—to be anchor institutions that provide a place for the community to connect and grow and open opportunities for other businesses and entrepreneurs to thrive alongside us.

Heath wants to nurture the spirit of human-scale manufacturing and traditional craft. The San Francisco Tile Factory features the Heath Collective, a group of small businesses that rent space below market rates to continue working within San Francisco. Our annual Make Good Market is a community event showcasing a unique convergence of modern makers, many of them local, to the broader community. Heath is a member and supporter of SFMade and their mission to bring local manufacturing to San Francisco. Last fiscal year (2023), we hosted an SFMade happy hour at our San Francisco Factory, bringing together the manufacturing community and local black-owned businesses.

Heath regularly gives funding and product to causes that support social equity and environmental protection. Third-quality dinnerware is available to employees for a dollar per piece, and this money supports non-profits of the staff’s choosing. Each sale of Chez Panisse dinnerware supports the work of The Edible Schoolyard Project and its mission. We regularly collect donations at our holiday Make Good Market for a good cause. In 2022, that event yielded donation funds that provided over 6,000 meals through The San Francisco-Marin Food Bank.

Environmental Responsibility

Waste

Heath has found ways to significantly reduce landfill waste with innovative end-uses for various waste streams. We go out of our way to sort our materials. This includes donating production overrun mixed tile boxes to arts non-profit organizations, recycling our nitrile plastic gloves into plastic furniture, recycling fired clay waste into raw material for concrete, and composting any unusable clay. In the fiscal year 2023, we recycled over 200,000 gloves.

Our break rooms have comprehensive recycling and composting, with plenty of Heath dinnerware as an alternative to disposable food service ware. We use reusable plastic bins and pallet covers to avoid packaging waste for moving products between locations. We also work with our vendors to return packaging materials, including the foam used to package kiln cones.

Our waste diversion from the landfill currently stands at 86% for the fiscal year 2023, after hovering around 81% for the prior two years. The increase is due to sorting a greater quantity of niche waste materials and improving our data collection. We hope to further increase our diversion rate to zero waste as we continue to enhance our education, sorting, and data collection.

Energy and Carbon Emissions

Heath uses 100% renewable electricity in our factories, from a mixture of solar and wind. In 2019, we finished installing LED light bulbs in both factories, with over 350 fixtures converted. We are lucky that natural lightning is plentiful, and the factories require no heating or cooling. The switch to 100% renewable electricity reduced our utility carbon footprint (scope 1 & 2) by 18% in 2023 compared to the previous fiscal year.

Our most significant utility consumption is natural gas used to heat our kilns. Edith Heath developed Heath’s clay body to meet performance durability, and to be fired at a lower temperature than typical ceramic tableware and tile products.

Heath is constantly pursuing ways to reduce our carbon footprint. As part of our carbon accounting for emissions, we keep track of our carbon emitted from scope 1 & 2 (utilities, owned-vehicle transportation) and scope 3 (employee commuting, shipping, third-party products, raw materials, supplies, and more). Like most companies, we have found that the scope 3 carbon accounting can add up. But unlike most companies, these are about half our total carbon footprint, not the typical 95-99%, because we make ceramic products from start to finish. Although we sell other goods as part of our Heath Home collection, our own products remain the bulk of our sales.

Water

Located in a water-stressed area, Heath has installed infrastructure to avoid using fresh water and to protect our watershed. To achieve this, we built water recycling systems at each of our Sausalito and San Francisco factories. These systems collect water from manufacturing for reuse and filter out particulates for proper disposal. As of the fiscal year 2023, 55% of our annual water intake is from internally recycled water.

At our San Francisco Tile Factory and Retail Showroom, we installed permeable pavers, planter beds, and planter benches made from recycled Heath Tile and Dinnerware, with bench seats made from salvaged wood from the renovation of the building. The porous surfaces allow us to divert up to 42,000 gallons of water into the watershed rather than the drainage system. The plants are native to the region and rarely need watering. This project was completed in 2015.

Shipping

Dinnerware and Heath Home purchases are shipped using ExpandOS\u2122, a paperboard pyramid that replaces foam packing peanuts to stabilize our products. They are biodegradable and recyclable, made of Forest Stewardship Council-certified wood or 100% recycled paper. Dinnerware and Heath Home shipments are sent to customers using UPS carbon-neutral shipping, offsetting 132.8 metric tons of carbon dioxide equivalents in the calendar year 2022. We use cardboard shipping boxes and gift boxes with recycled content, as well as shredded recycled magazines for gift packaging done in-store.

Purchasing

In addition to our commitment to local and independent vendors, Heath works hard to incorporate sustainability throughout our supply chain. Our manganese clay body consists of a mixture of minerals, nearly half of which are mined locally near Sacramento, CA. We have phased out white clay from our formula as of the fiscal year 2023, which reduced our clay material footprint by 54% due to the distance of the minerals from our factories. We use internal purchasing policies to be better stewards of the environment and create a healthy workplace for employees by using non-toxic cleaning products. Our Heath Home vendors fill out our sustainability surveys, and we work with them to improve their practices. Enhancing our data collection of vendors’ sustainability metrics is a project for the upcoming year.