A Case Study of Adidas Sustainability progress, Transparency and

improvements needed
Siva Ganesh Babu -Director Academics JN Professional Training Institute - India
Abstract: Sustainability is the major topic of concern in globally in all fields. Global
population is projected to reach nine billion people by 2030 alarming that nature will struggle
to meet human demands like never before. Fashion Industry is the Second largest polluting
Industry in the World. it emits more than 1.2 billion tons of greenhouse gases each year,
accounting for more than 10% of the world’s carbon footprint (1). Adidas one of the premier
footwear companies known for its innovation and technological development is working on
Sustainable goals since 1989 (2) and gradually making progress every year. In this study efforts
are made to track the history of sustainability approach of Adidas group, what effectively they
have done towards sustainability, how transparent is Adidas in its Sustainability approach and
Scope of Improvements.
Key Words: Sustainability, Fashion, Footwear, Adidas, Sustainable fashion, Greenhouse
gases, Pollution, Innovation.
Introduction:
Sustainable Fashion is one the most heard term in fashion industry nowadays. Production,
marketing, and consumption of fashion products result in negative environmental impacts due
to the massive production volume of fashion items. There is a very few information available
on how fashion industry integrates sustainability-related practices into business models, how
sustainability is measured within the business models, or what drives the sustainability-
emphasis of the fashion industry. The key aspects regarding sustainability integration into
business models include organization values, entrepreneurship, innovation, and
internationalization processes (3).
Gen Z and a majority of Gen Y Consumers knowledge about materials used and manufacturing
process is increasingly leading them to make socially responsible choices like a value tag while
updating their Wardrobe (4). Social and environmental sustainability is of top priority for
apparel companies, just as it is increasingly important issue for consumers and governments.
Demand volatility is pushing companies towards a more flexible, demand-driven sourcing
model. At the same time, it is increasingly important that companies improve the efficiency
and sustainability of their end-to-end product development and sourcing processes. Trade war
between United States and China has added pressure to the companies for whom margins are
under pressure and the search for cheaper sourcing locations is running out of steam and
shifting from China as a sourcing country is of a great concern (5). Fashion Industry’s impact
on the environment is by no means a new revelation. Unlike in the past when “sustainability”
is no longer an ideal adopted by individual, niche grassroot organizations, it is now considered
a core value globally across the fashion industry (6).
Business Model:
A business model describes the rationale how an organisation Creates, Develops and Captures
values for an organisation as whole or for a unit in particular. Most of the established Fashion
companies or brands are finding it difficult to shift to Sustainable model immediately as it a
cumbersome process and they are moving partly. To make fashion sustainable it is important
to integrate Ecological and Social Issues into the Core business and Value Creation of the
Business Model.
 Business
Innovation Strategic

Model
Management

fig1: General Business Model

Business Model for Sustainability is Describing, Analysing, Managing and Communicating

the Company’s Sustainable value proposition to its Customers and Stake holders. International
brands like H&M, Indigenous, Rent the Runway, Stella McCartney etc., have become more
focused to approach fashion in as ethical and transparent manner as possible considering both
environment and customers. Emerging slow fashion brands like Raw Mango, Ka-Sha, Bodice,
Doodlage etc. are dedicated to design and offer clothing made using fair and ethical means
such as providing safe working conditions to the factory workers, working with handloom
weavers and artisans to create handcrafted products, sourcing organic or recycled raw materials
and up-cycling post-production and post-consumer wastes (3). Sustainability is contributing
positively to saving nature and its elements while letting people to flourish. Though each
company’s method or a process for its business model differ, but there are standard elements
which should be considered when business models are structured and designed. These elements
are people, strategy, structure, process, and reward (7).
Sustainable business models differ from the traditional business model in these four ways
1) It is directed towards sustainable development
2) It has notion of value that includes ecological and social value
3) It is about Stakeholders not only suppliers, manufacturers and customers.
4) It considers the relation to Natural and Social Environment.
Circular Business model is a business model in which the conceptual logic for value creation
is based on using the economic value retained in the products after they have been used, in the
production of new products. A fashion product is considered sustainable if it adheres to these a)
design for the entire garment’s life cycle (including use and disposal) b) reuse waste materials
c) recycle d) upcycle e) repair and remodel garments f) recreate (e.g. existing design concepts)
g) reduce (use of resources and creation of waste) h) use ecological materials i) use mono
materials j) use new technologies k) create longer lasting products l) design multifunctional
clothes m) design for delight(8).
Adidas sustainability approach.
3P’s of Sustainability are People, Planet and Profit. A business is Sustainable if it is Socially,
Economically and Environmentally Sustainable. The Adidas brand known for sportwear. It has
a broad and diverse portfolio in both the Sport Performance and Sport Inspired categories
ranging from major global sports to regional grassroot events and local sneaker culture. This
enabled adidas to transcend cultures and become one of the most recognized, credible, and
iconic brands both on and off the field of play. Mission of Adidas is “To be the best sports
brand in the world. Every day, we come to work to create and sell the best sports products in
the world, and to offer the best service and consumer experience – and to do it all in a
sustainable way. We are the best when we are the credible, inclusive, and sustainable leader in
our industry.” According to Adidas sustainable business is about striking the balance between
shareholder expectations and the needs and concerns of our employees, the workers in our
supply chain and the environment. Adidas has a holistic approach to sustainability by
responding to the challenges that endanger Planet Earth and People and hence Sustainability is
an integral component of the Strategy ‘Own the Game’ (2). Adidas is working on its CSR,
Circular economy, Business ethics to improve its Sustainability even further.
Adidas Sustainability policies and practices:
Adidas has been working towards Sustainability from years. They understand that Plastic
Waste is the problem and believe that innovation is the solution. Since 1989 Adidas stopped
using Chloro Fluro Carbon (CFC) and Sulphur hexa Fluoride (SF6) in any of their products.
Between 1998 – 2000 Adidas developed workplace standards indicating the contractual
obligations under manufacturing agreement that it signs with suppliers. Company’s Social and
Environmental Affairs teams ensures its implementation. In the same period adidas also
developed Restricted Substances policy a policy that prohibits the use of Harmful or toxic
Chemicals and introduced innovative bonding technologies and water-based systems reducing
use of volatile organic compounds. EAMS Environmental Management system certification
received was a major achievement in reducing environmental foot prints. In 1999 Adidas
Joined Fair Labor Association (FLA) as a Founder member. FLA focused on creating long
lasting solutions for sustainable supply chains. As a major move towards Ethical investment
stage in 2000 for the first time Adidas entered Doe Jones Sustainability Indices (DJSI) and then
continues till Date.
In 2001 Adidas published its first sustainability report making it transparent to stakeholders
and continue till today and is honored to be the only company in sporting goods industry to
publish such a report (2). In 2002 introduced more guidelines to protect environment and Adidas
proudly stands as the first industry to ban all six high risk – hazardous chemicals used in
manufacturing units.
2004 is a major year in the history of Adidas sustainability Journey as it focused on
Environmental and Human Resources. Adidas became the Founding member of Better Cotton
Initiative (BCI) in its birth year. Better cotton is grown in a way that reduces the amount of
Chemicals used. BCI addresses Social and Environmental Issues. To minimize money,
material, transportation and distribution Adidas followed Virtualization leading to minimizing
carbon emission. 2007 is the year of Transparency and Corner stone year of sustainable
products as it made it public the Global Supplier List and Launched it Adidas Grun Collection
(2)
.
Adidas launched its first Environmental Strategy in 2010 and became member of Better Work
and Sustainable Apparel Coalition (SAC). In 2011 Adidas became the founder member of Zero
Discharge of Hazardous Chemicals (ZDHC) and committed to phase out the use of
Perfluorochemicals (PFC’s) by no later than 2015. London 2012 Olympic collection was one
of the most Sustainable products launched, adizero Primeknit a seamless engineered light
weight one piece upper was launched in the same year. It also introduced DryDye a dye that
eliminates the need of water and minimizes the chemical usage and produced 1 million yard of
fabric.
2013 was a year of reducing wastage of raw materials for adidas. It launched Element voyager
Shoe and a full activewear line with 95% pattern efficiency each. Leading to Just 5% waste. In
2014 Adidas presented its 4P’s of Sustainability framework (People, Product, Planet,
Partnership), produced 4 million yards of DryDye Fabric there by saving 100 million liters of
Water. Adidas partnership with Parley for the Ocean to launch shoe made of ocean plastic in
2015 and also launches 3D printed midsole made of Ocean plastics. In 2016 Adidas launched
its sustainability strategy for 2020. It also goes plastic free in all its stores. In 2017 Adidas
office became plastic free, launched it product take-back program in four key cities (New York,
Los Angeles, London and Paris) as a step towards Circular economy. It produced around 1
million pairs of Adidas Parle for the Ocean Shoes and successfully delivers it mission 99% free
of Poly and Perfluorinated Substances (PFC’s) by the end of 2017.
In 2019 Adidas launches Futurecraft.Loop made of fully recyclable materials in collaboration
with Allbirds. Adidas and Stella McCartney presented prototype of tennis dress made of bio-
fabricated materials based on Cellulose and Protein. In 2021 Adidas launched next five-year
strategy as ‘Own the Game’ as an integral component of Sustainability.
Adidas 3 Loop Strategy and Products
The guiding principle of adidas, is simple: to make athletes better. That is why, at adidas,
innovation is at the core of all our products. The choice of materials and how they are
manufactured are the two main ways by which our innovation teams can influence the
environmental footprint of our products. To mention some examples: Avoiding oil-based
plastic helps reduce carbon emissions. Thinner or lighter materials mean less waste and less
embedded carbon. Dry-dyeing clothes saves water, chemicals and energy. Approaching the
innovation challenge from an environmental perspective helps us make products that are better
for consumers and better for the planet, too. Adidas adapts a 3-loop strategy to handle
sustainability issues where in Recycled Loop, Circular Loop and Regenerative Loop. Adidas
for some of its products in some specific cities follows the principle you wear it and return it,
we will grind it and use it for a new product.
Parle Ocean Plastic.
Since 2015, Adidas has partnered up with the environmental organization, Parley for the
Oceans’ and uses Parley Ocean Plastic as an eco-innovative replacement for virgin plastic.
Primeblue are products that contain a certain amount of Parley Ocean Plastic. In 2020, Adidas
produced more than 15 million pairs of shoes containing Parley Ocean Plastic.
FUTURECRAFT.LOOP
Adidas FUTURECRAT.LOOP is a commitment to tackling plastic waste. It is a 100%
recyclable performance running shoe. The FUTURECRAFT.LOOP project is aimed at
tackling the problem of plastic waste, enabling a “closed loop” or circular manufacturing
model, where the raw materials can be repurposed again and again. But not just repurposed
into a water bottle or a tote, but into another pair of high-performance running shoes.
The FUTURECRAFT.FOOTPRINT, a running shoe with a carbon footprint of less than 3
kilograms of carbon dioxide equivalent emissions (CO2e) per pair (9).
Recycled Materials
A way to improve our environmental footprint is using more recycled polyester which is a way
adidas attempts while still making high-performance products for the athlete. Polyester is the
most common single-used material in adidas products and, by 2024, Adidas aim to replace all
virgin polyester with recycled polyester in all products where a solution exists. The ‘Primeblue’
and ‘Primegreen’ labels, which were introduced in 2020, mark products made with recycled
materials. While offering full functionality and durability in sports, they avoid waste and
preserve natural resources.
Transporting and Packaging
Packaging protects the products during shipping, handling and storage, and is important to
ensure that the consumers receive them in sound condition. Adidas aims to reduce the use of
virgin plastic and have set ourselves the goal to transition to 100% recycled LDPE polybags
by the end of 2021. Adidas achieved the targets of using 20% recycled polybags in the
fall/winter season 2020, and 70% recycled polybags in the spring/summer season 2021. As part
of adidas’ transition to 100% recycled LDPE polybags, Adidas re-engineered their polybags to
reduce their weight by 20%, which directly translates into a related footprint reduction.
Conclusion and Recommendation:
Adidas is much ahead of its competitors in Sustainable process. It has approached the
sustainability challenges with RESTART principles. It started Redesigning its products instead
of standing still (Adidas Parley from Ocean Plastics), Experimentation rather than turn around
(DryDye), Service logic rather than product logic, the Circular rather than linear economy
model (FutureCraft.Loop), Alliances rather than solo -runs (Parley for Oceans, All birds etc),
Results rather than indulgences and Three dimensionality rather than one dimensionality
(adizero Primeknit)(10). It is commendable progress that Adidas has achieved while most of the
players are just Green washing.
Still there is no transparency with regard to the percentage of sustainability in Individual
products. Effective communication of the business model to the Customers can help them in
joining the ‘We Own’ strategy as stakeholders contribution is indispensable. The impact of
upcycling of the products in lowering the purchase of new products is not mentioned anywhere.
It would have been better if Adidas can think of Microbial Cellulosic Fibers in their products.
CSR activities and involving a society like rehabilitation activities like including addicts or
depressed people as a part of the sustainable strategy will be more appreciable. This study is
not elaborate and more study needs to conducted on impact of upcycling on quantity of
purchase and topic alike.
Reference:
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