Adidas Sustainability Report Analysis

Doing well on sustainable production but can work better in terms of closing the loop

Intro

Adidas, the second largest sportswear manufacturer in the world, partnered with Parley For The Ocean and launched the first mast-produced running shoe made from up-cycled marine plastic in 2016. Adidas x Parley footwear is a huge success. With an ocean-plastic-waste-reduce-pioneer image and actual comfortable wearing experience, the Parley shoes collection sold over one million pairs in 2017 and aimed to increase the sales volume rapidly.

With the awareness of sustainability rise in the world, not only Adidas, more and more brands are taking actions, trying to catch up this trend.The innovation of Parley Ocean Plastic™ has no doubt to be an important step in the footwear industry, but I can’t stop wondering whether Adidas has true commitment to a sustainable future, or just wants to follow the eco-friendly trend to gain more profits. After delving into relevant reports of Adidas, I realized that although there is still room for improvement, they have made a lot of efforts to pursue sustainable development.

Summary and compliments

Adidas’s 2020 sustainability goal includes three major axes, focusing on water resources, innovative materials and processes, and energy conservation. They formulate a holistic strategy which most of the achievements are hidden from customer experiences. If I didn’t read their sustainability report, as a consumer, I might not notice. These efforts make me feel that Adidas really values sustainability. For instance, Adidas developed waterless dyeing technologies and reached four million yards of DryDye fabric produced by the end of 2014, at the same time saved 100 million liters of water. They used 93% of more sustainable cotton instead of conventional cotton in 2017 and aimed to achieve 100% sustainable cotton by 2018.

Moreover, Adidas works with many external organizations. Those partnership not only increases the innovation energy of Adidas, helps them achieve their goals, but also enhances the public’s belief in Adidas’ sustainable development policy. For example, the joint development and promotion of eco-friendly materials with Better Cotton Initiative (BCI) and Parley for the Oceans, aligning office design standards with the Leadership in Energy and Environmental Design (LEED) certification, and achieving 100% sustainable input chemistry by adopting the Manufacturing Restricted Substances List (MRSL) of the Zero Discharge of Hazardous Chemistry (ZDHC) group.

Another thing I like about Adidas is that their corporate vision, core values, and sustainability are coherent. To further elaborate, in the 2016 Adidas Sustainability Progress Report, Kasper Rorsted, Adidas CEO commented, “Based on our passion for sport, we want to be the guardians of these spaces of sport, and we aim to protect these spaces that have a direct link to our business: we want to protect spaces where sport is made, sold and played.” This statement resonates with Adidas’s mission of being the best sports company in the world, which makes the sustainability policy not appears to be no reason, but rather implements the company’s value and reflects on its customer-oriented products.

Challenges and Suggestions

Despite all the efforts to promote sustainability, I have found from previous years’ reports that Adidas does not seem to perform well in towarding closed-loop solutions. One of the main issue in the world now is to recycle and reuse life-ended products. If there is no recycling mechanism, the shoes which Adidas and Parley made from recycle plastics, will eventually become new marine waste.

In 2016, Adidas introduced a take-back program in Canada, which consumers can drop off old clothes and footwear from any brand to give those products a second life. The collected items will be sent to the Adidas Distribution Center, and either go into a second-hand market or recycle to be used for new products. In 2017, Adidas expended this program to other 9 Adidas stores in Western Europe and the United States.

The program sounds good, but Adidas has more than 2,500 direct sales worldwide, plus 13,000 single-brand dealers and online sales platforms, selling more than 300 million pairs of shoes a year. How can the nine stores in Western Europe and the United States cover every customer’s old shoes recycling?

To further understand the situation of shoes-recycling in Adidas, I chose a store that was not included in the take-back program, and went there to observe from a consumer’s perspective. I pretended that I want to give away my sneakers, and asked a clerk do they receive worn shoes. The answer I got was they don’t now, but they sometimes would hold shoes recycling events.

Although Adidas intends to increase the stores that can recycle used shoes, I think that is not enough. If the ultimate goal is to be able to recycle all the old shoes that are sold, that means stores need to receive and handle old shoes that are equal in quantity to sales. It is impossible to complete those tasks with the spacial design and manpower in store now.

Therefore, I suggest while enlarging the take-back program, Adidas can launch a new service that allows people to mail old shoes directly to Adidas. E-commerce has gradually become the mainstream, and online and offline integration is the trend of retail industry. In 2017, Adidas online revenue increased by 57% to nearly 1.6 billion euros. Adidas CEO, Kasper Rorsted, also said that the reduction of physical stores is to boost profitability. The profit of e-commerce is better than traditional retail. I believe that Adidas can take advantage of the online shopping and return habits of customers, and apply the original return process to collect worn shoes.

The details of the plan are as follows: When consumer buys a pair of new Adidas shoes, there will be a return box barcode attached to the shoe box. Consumer can directly pack a pair of old shoes and go to UPS to send it in the same way as the return procedure. After the drop-off, consumer will receive Adidas coupon through email. Recycled a pair of old shoes, while selling a pair of new shoes. This mechanism can effectively collect worn shoes and at the same time, recycle the shoe boxes as well.

In general, Adidas’s sustainability policy carrys through product manufacturing, material development, internal operations, and even employee education and training. The only downside is that the product recycling strategy has not yet had clear goals and plans. However, I am very much looking forward to their follow-up performance, expecting them to be the model of the sportswear industry and realize the future of economic and environmental balance.