The Adidas Group, which just rolled out its outdoor line in the U.S., laid out a comprehensive new Environmental Strategy in its 2010 Sustainability Report that gives the company and its suppliers until 2010 to reduce its environmental footprint by 15%.
The five-year plan calls for Adidas to collaborate more with other global brands, international agencies, and Asian governments to provide more and better training to its Tier 2 suppliers, such as textile mills, tanneries and dye houses.
The strategy requires reengineering the company's approach to environmental management by requiring all business units and functions to aim for environmental targets alongside their business targets.
For instance, designers will be responsible for reducing use of colors at Adidas’ Sports Performance division by 50% to about 400 by 2015, excluding colors required by clubs and projects outside the control of the company. This will include a 20% reduction in colors offered in apparel and 40% in footwear.
“We showed our designers some photos of what happened in a factory when we made a decision to change from one orange to a slightly different orange,” noted James Carnes, VP of design. “We all saw how much water, chemicals and materials were wasted. Now our designers have a connection with what it means to change a color. They are emotionally empowered to achieve the 50% target.”
The innovation (R&D) team, will be responsible for developing new performance enhancing materials and manufacturing processes with minimal environmental impact. This will favor waterless glues, modular mold systems for footwear and lighter products.
“This is where the team will explore if the component can be thinner: using less material means less waste and less embedded carbon,” reads the report. “It also helps meet cost criteria. The choice of materials is key, too. If the component can be made from a lighter material then that will also reduce carbon emissions. And with plastics being oil-based, the team is also on the lookout for bio-based alternatives.”
Marketing will be responsible for increasing use of sustainable materials in all footwear by 2012.
Sourcing will be responsible for ensuring the Adidas Group uses 40% Better Cotton by 2015 and 100% by 2018 as a way of reducing use of water and pesticides. Sourcing has also been tasked with cutting energy emissions by 10-15% by product output at core suppliers by 2015 and ensuring that all non-European tanneries achieve Leather Working Group rating of silver or better by 2015.
Cost is acknowledged as a big challenge, given that more sustainable products recycled polyester, organic cotton, Polylactic Acid Tencel and non-mulesed wool – are often in short supply. For this reason, The Adidas Group became a founding member of the Better Cotton Initiative (BCI), which works with organizations across the cotton supply chain to address the negative social and environmental impacts of mainstream cotton farming, such as excessive pesticide, child labor and water use. Other BCI members include Levi Strauss & Co., Nike and British retailer Tesco.
“It is a volatile market so we think we are helping to ensure our own security of supply by developing relationships with the spinners and cotton farmers and further strengthen the partnership with our direct fabric suppliers,” said Philipp Meister from the apparel materials development team. “Our commitment to sustainability is effectively driving us deeper into our supply chain.”
Under its “Green Company” initiative, Adidas will focus on reducing energy and water consumption, carbon and solid waste emissions at its own sites. In 2010, for instance, five North American sites obtained an ISO 14001 certification for a shared environmental management system.
Adidas acknowledged that it must depend on its vendors to reach many of its goals, since it outsources most its production. In 2010, Adidas performed 118 environmental audits of suppliers and began pilot testing a program that ranks vendors high, medium or low risk depending on key environmental performance indicators.
The company found that many of its Tier 2 materials suppliers, namely fabric mills and dye houses, lacked the knowledge and skills to implement certified environmental management and occupational health and safety programs.
Going forward, Adidas will focus more on training these Tier 2 suppliers through seminars such as one held in Taiwan last August that drew 43 participants from 17 suppliers.
It has also commissioned a $207,000 study by Royal Melbourne Institute of Technology in Australia to identify the opportunities and barriers to establishing a regional Sustainable Manufacturing Training Program for the footwear and garment industry in Asia. The study will consider the feasibility of forging public-private partnerships between governments, international agencies and brands to increase training opportunities in Asia.
Group CEO Herbert Hainer said the new Environmental Strategy will help Adidas Group lure the best employees, set industry standards and attract investors and customers who value long-term sustainable business practices.
The strategy assumes greater cooperation with other brands through initiatives like the OIA Eco Index and Sustainable Apparel Coalition.
“Protecting the environment is not a point of competition between brands,” said Joan Anderson, head of footwear material development for the adidas brand. “It is a substantial, base-line principle: consumers just expect it now.“
