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
Model

Innovation Strategic
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.
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