This series of posts aims at showing how fashion companies are changing the way they conduct business to make it a better business. We will look at the achievements of these businesses in terms of innovation and sustainability and, possibly, how these achievements affect their business.
After my last Better Business blog post on Nike, this time it’s the turn of Adidas. As direct global competitor of Nike, Adidas differentiates for its aspiration to be fashionable like a lifestyle brand.
Adidas first CR report in 2000Adidas was the first sportswear company to report on sustainability in 2000 following its first Standard of Engagement (SoE) in 1998. Allegations of sweatshops in their supply-chain preceded this move. Adidas stated that its sustainability commitment was largely based on the group’s core values: authenticity, inspiration, commitment, and honesty. At that time, the corporate responsibility work of the group had the main goal of ensuring their suppliers complied with their code of conduct (SoE); they also provided them with regular training on the company’s code. The first corporate responsibility report was quite rudimental however, it shows that the awareness of the company on both environmental and social issues was already quite high; some of the issues recognised then are still being tackled today. As an example, already in 2000s the company recognised the dangers, for workers’ health, of Volatile Organic Compounds (VOCs), present in solvents used in manufacturing. While at the beginning of the 2000s the grams/pair of VOC was superior to 100, today it is 20 and the aim is to further reduce it below 20.
The group’s current approach to sustainability is holistic and the style of communication very factual. Every achievement is assessed against targets to share the actual performance of the group.
Better Design
The Sports Performance division has reduced the number of ranges by 12% from 37,000 to 32,000. This has meant a reduction of samples, resources, emissions and waste.
Adidas recently launched Low Waste Initiative looks at new ways of designing products in a simpler way in order to reduce waste. The brand’s Element Voyager running shoe is made of only 12 components, 60% less than the average running shoe. The project also includes apparel designed with over 95% pattern efficiency, which translates into less than 5% material waste.
Adidas CR report 2012Better and alternative materials
In 2012 5% of the cotton the group used was Better Cotton.
The uniforms made for 2012 London Olympic Games were made with more sustainable materials including recycled polyester. Among the alternative materials used, and besides recycled polyester and Better Cotton, there are: organic cotton, Polylactic Acid (PLA), Tencel (a fibre made from wood pulp), and non-mulesed wool for apparel and leather.
Better resource efficiency
They launched DryDye technology in 2012 in collaboration with the Yeh Group. This technology uses 50% less energy and chemicals while not using water to dye garments. Adidas has produced 50,000 t-shirts made with fabrics using this technology this year.
The Green Company initiative, released in 2008, has the goal of improving the environmental performances of the group’s direct operations (offices, distribution centres, own production sites). The final aim is to make Aidas a zero emission company.
In 2012 the GREEN Energy Fund was launched: this is a sustainability venture capital fund for energy efficiency and renewable energy projects globally. The goal is to accelerate investment in cost-effective energy and carbon reduction projects profitably. The project targets a 20% Internal Rate of Return (IRR) across the portfolio.
Better manufacturing
All the core suppliers must have environmental management systems. In 2012, 30 footwear suppliers, producing 94% of the group’s athletic footwear were certified ISO14001 and OHSAS 18001. The number of footwear certified suppliers has increased by approximately 25% in 3 years.
86% of the company’s strategic suppliers now have a 3C-rating (good) or better, and 37% have a 4C-rating or better (self-governance model).
A mobile phone pilot project aiming at improving communication among workers and mangers in Indonesian factories has been implemented. Through this system, workers can simply send an SMS text message and raise the alarm if they are concerned that their rights are being compromised.
97% of non European leather suppliers achieved the Leather Working Group rating of silver or above with 64% scoring gold and 33% silver.
Approximately 1,560 audits or factory visits (carried out by the group’s compliance monitoring team SEA) and 170 trainings were undertaken in 2012.
Transparency
Adidas disclosed their global factory and licensees’ list in 2007 and, more recently, the list of suppliers of the uniforms for 2012 London Olympic Games and the 2010 football World Cup. The public release of 2007 followed the group’s refusal to make the same list public in 2005.
The brand shares information about the factories they source from through the Fair Factories Clearinghouse database.
The future – the group’s main commitments
- To use 40% Better Cotton by 2015 and 100% by 2018.
- Zero discharge in their supply-chain by 2020.
- Reduction in the use of colours by 15% and in ranges by 20% within the Sports Performance division by 2015.
- To cut energy emissions by 10%-15% per product output in the factories of core suppliers (as per baseline 2010)
- 100% of non-EU tanneries to achieve Leather Working Group Silver or above rating.
