The retail industry is a billion-dollar business in the United States. Competition for consumer dollars is fierce, particularly when it comes to department stores. Nordstrom and Macy’s are two of the most ubiquitous department stores in the country, and while there are similarities in their audiences, they have unique differences in their visitors and customers.
Deciding which department store to support next time you’re shopping can be a tough decision, so we’ve tried to break down both stores and what your purchase will support.
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Macy’s (originally R. H. Macy & Co.) is an American department store chain founded in 1858 by Rowland Hussey Macy. It became a division of the Cincinnati-based Federated Department Stores in 1994, through which it is affiliated with the Bloomingdale’s department store chain; the holding company was renamed Macy’s, Inc. in 2007. As of 2015, Macy’s was the largest U.S. department store company by retail sales.
Nordstrom, Inc. is an American luxury department store chain. Founded in 1901 by John W. Nordstrom and Carl F. Wallin, it originated as a shoe store and evolved into a full-line retailer with departments for clothing, footwear, handbags, jewelry, accessories, cosmetics, and fragrances. Some stores feature home furnishings and wedding departments, and several have in-house cafes, restaurants, and espresso bars.
These two companies, while often compared side by side, have no distinction when it comes to overall ESG score. Even though they have the same exact score, there are some differences in a few subcategories that we look into.
Overall, Macy’s and Nordstrom both scored a 57/100. Within the subcategories, the differences are highlighted in all three categories which gives us more insight into how these companies operate differently.
Let’s dive in (Reminder, check out our Methodology for definitions on each of these subtopic scores)
Impact on the environment
Impact on the environment relates to how a company or brand impacts the natural world around us. This could be related to the products they create, their manufacturing policies, or even their corporate response to climate change. Macy’s and Nordstrom both impact the environment in a number of ways, from their manufacturing policies to the products they produce. Below are more details comparing these two companies.
Nordstrom has the score advantage over Macy’s in this category, with the scores being 64 to 60. The Environment has to do with the companies’ compliance with environmental regulations, energy efficient operations and development of renewable energy and alternative environmental technologies.
Double clicking on that score difference,Nordstrom scored a 75/100 in Energy & Climate Change, a 55/100 in Environment Policy & Reporting and a 63/100 in Resource Management. On the other hand, Macy’s scored a 70/100 in Energy & Climate Change, a 56/100 in Environment Policy & Reporting and a 53/100 in Resource Management.
- Macy’s has announced a series of new initiatives in its multi-year strategic program to enhance environmental sustainability. They are consistent with the company’s sustainability principles first adopted in 2008 and implemented with increasing intensity during the past six years. Results through 2013 include a 38% reduction in the company’s electricity usage since 2002 and a 95% adoption rate of recycled or certified paper used in the company’s marketing materials. In 2011, Macy’s became the first major department store to pilot the use of EV charging stations when it forged an agreement to install 16 charging stations outside five Macy’s stores and one Bloomingdale’s store in the San Diego area, which are currently being operated as part of the Blink Network, the company said. The company’s product development organization has joined the Sustainable Apparel Coalition, a trade organization working to reduce the environmental and social impacts of apparel and footwear products around the world. SAC is made up of brands, retailers, manufacturers, government, and non-governmental organizations and academic experts, representing more than a third of the global apparel and footwear market.Macy’s is also working to reduce waste in the merchandise supply chain by standardizing the size of packing cartons, incorporating recycled polyester fibers in many woven garment labels, minimizing packaging materials and adopting paper hang tags made from FSC-certified paper. Source
- Nordstrom, the Seattle-based retailer, today published its 2025 Corporate Social Responsibility goals — with the overarching aims of becoming more sustainable, driving positive labor practices and philanthropically supporting the communities it serves. “As a company, we believe the impacts we have on our employees, customers and communities extend well beyond the walls of our stores,” wrote Pete and Erik Nordstrom in a letter. “The idea that we have a role to play in building and shaping a positive, more inclusive and sustainable future isn’t new to us, but it’s become more important than ever.” In terms of sustainability, Nordstrom hopes to halve the single-use plastic used in its value chain by 2025, as well as to help customers extend the life of 250 tons of clothing through donations and to take back 100 tons of beauty packaging to ensure it’s recycled. What’s more, the retailer plans to contribute $1 million in grants to support industry innovation for textile recycling, along with $250,000 in grants toward slowing and preventing climate change. Toward driving positive labor practices, Nordstrom hopes to disclose traceability to the factory for 90% of Nordstrom Made products by 2025. In addition, the company’s goal is to produce 90% of those products in factories that invest in women’s rights and to ensure that all Nordstrom Made strategic suppliers receive a living wage. Source
Impact on social responsibility
Social responsibility includes all the things that make a company “good”. Whether that’s giving back to the community, standing up for equal rights, treating workers fairly. Macy’s and Nordstrom both have a number of policies around LGBTQ+ rights, community outreach, and equal pay and rights for all.
Macy’s has a slight advantage over Nordstrom in the Social Responsibility ranking, with the scores being 59 to 57. This category includes all programs, policies and performance in diversity, labor relations and labor rights. It also focuses on compensation and benefits as well as employee safety.
Upon further analysis, Macy’s beats Nordstrom in the rankings of Compensation & Benefits (56 vs 55) and in Diversity & Labor Rights (63 vs 60). Both companies scored the same in Training, Health, & Safety (57).
- Macy’s, Inc. (NYSE: M) today announced a five-point approach to further ensure the company reflects the diversity of the customers and communities it serves. As part of this effort, the company has set goals and outlined specific strategies to increase its impact. “At Macy’s, diversity and inclusion are essential to our culture and core values. Our mission is to embed D&I into how we think, act, and operate by fostering an inclusive culture and an environment that inspires, reflects, and embraces everyone,” said Jeff Gennette, chairman and chief executive officer of Macy’s, Inc. “We hope the steps we are taking will encourage others to reaffirm their commitments to inclusion for all.” The newly established approach and goals will position the company to use its scale and reach to help set the tone and influence inclusivity standards and practices across the retail industry. The new vision is centered on five key focus areas of impact opportunity within the company’s customer base, marketing, colleagues, suppliers and community. Each focus area has specific performance objectives for 2019 and beyond. Source
- Nordstrom is continuing to invest in its commitment to leave the world a better place than it found it. The upscale department store chain recently set its 2025 corporate social responsibility goals, which include commitments in the areas of environmental sustainability, specifically operations and product value chains; human rights to drive systemic change to ensure positive labor practices and women’s empowerment; and corporate philanthropy to support families in the communities it serves and organizations that make its communities stronger. Source
Quality of corporate governance
Corporate governance is much like social responsibility, but for how the company operates internally. Do they have a diverse board? Is there transparency in accounting? Are they doing what they need to do to survive and operate in an ethical and correct manner? Macy’s and Nordstrom both are large public companies with shareholders and boards they answer to.
The last slight score distinction is observed within the Governance category, where Macy’s scores a 56/100 and Nordstrom scores a 57/100. The Governance score refers to leadership structure and the values that determine corporate direction, ethics and performance.
The major differences were the respective companies’ Leadership Ethics Macy’s: 55 vs. Nordstrom: 56 and Transparency & Reporting with Macy’s: 53 vs. Nordstrom: 55 score.
- Macy’s CEO and Chairman Terry Lundgren likes to fill his board with members who have diverse perspectives. As the head of a major U.S. retailer, he’s adamant that the board reflects his customer base so he can stay attuned to trends in how different people shop. What Lundgren looks for in board members hardly sounds radical, but the results have been: Half of Macy’s (M) 12 board directors are women. Last month, when he appointed Leslie Hale from RLJ Lodging Trust to the board, Macy’s reached this milestone. Less than 1% of companies in the Fortune 500 have achieved or surpassed gender parity on their boards, according to a recent Fortune analysis in collaboration with S&P Capital IQ. Macy’s, Inc. is considered to have among the strongest and most diverse boards in Corporate America. Currently, six of Macy’s directors are women (43 percent of the total board of 14 members). Among Macy’s directors are four members who are ethnic minorities (Black, Hispanic and Asian-American). Source Source
- Maintaining strong governance is critical to driving Nordstom’s ongoing progress and results. Nordstrom’s General Counsel and Chief Marketing Officer provide updates to their Board of Directors through our Corporate Governance and Nominating Committee at least once per year, if not more often. They receive feedback and answer questions from the members of that committee at that time. Nordstrom also maintains a Sustainability Committee made up of key executives and senior leaders from teams across the business. This committee meets quarterly and is chaired by our Chief Marketing Officer. Through the work of this committee, Nordstrom is able to align on priorities and overcome roadblocks on complex projects and initiatives. Nordstrom’s Corporate Social Responsibility team collaborates closely with the teams across our business that are working toward our shared goals. Source
Ethically partners with CSRHub as a primary data source, which in turn, aggregates over 700 data sources, compiling them into simple, easy to digest grades.
Macy’s and Nordstrom are the two of the most known department stores in America. They both share the same overall ESG score; however, specific distinctions are noted upon further investigation in their subcategories within all three categories. Nordstrom scores higher in the Environment and Governance rankings while Macy’s takes the lead in Social Responsibility. Both companies could progress in their individual scores. If you’re a Macy’s or Nordstrom advocate and want to see more evidence that they’re committed to these areas, email our CEO at email@example.com and let us know. We’d love to hear from you.
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As always, please check out our Methodology page for more details on how we get our ratings data.