{"id":11754,"date":"2016-11-04T15:18:35","date_gmt":"2016-11-04T19:18:35","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/germanys-adidas-and-global-climate-change\/"},"modified":"2016-11-04T15:18:35","modified_gmt":"2016-11-04T19:18:35","slug":"germanys-adidas-and-global-climate-change","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/germanys-adidas-and-global-climate-change\/","title":{"rendered":"Germany\u2019s Adidas And Global Climate Change"},"content":{"rendered":"

The apparel industry accounts for roughly 10% of total global carbon emissions and remains the second largest industrial polluter, second only to oil. As a billion-dollar industry, fashion has a direct impact on the environment. The processing of raw materials required for textiles and the vast amounts of water used (2,700 liters per single t-shirt) contributes to the emission of greenhouse gasses which are causing climate change. The arrival of fast fashion and the massive increase in number of clothes that we are buying (and quickly discarding) means that this impact is only getting greater. Adidas, the number two global sportswear brand, is trying to new find new ways to reduce its impact on global climate change and be a frontrunner in the global fashion retail industry and make an impact beyond its own supply chain. To give an idea of Adidas sheer size and impact on the global climate; in 2015, Adidas\u2019 55,555 own employees and those in the more than 1,000 independent factories produced 301 million shoes, 364 million units of sports apparel and 101 million sporting goods in 160 countries generating \u20ac16.9 ($18.8) billion in revenues and \u20ac1.5 ($1.6) billion in EBITDA.<\/p>\n

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Adidas has reacted and put climate change and Adidas\u2019 influence on the global environment on its agenda. Adidas uses a three-fold approach in addressing the impacts of climate change a) in its own operation, b) in the entire supply chain and c) in collaborating with policy makers and industry alliances to mitigate the impact of the industry as a whole on the global climate. While most initiatives focus on reducing carbon dioxide emissions in the supply chain through reduction in energy consumption and moving towards clean and green energy, they also include changes in employee travel planning (i.e. reducing global air travel in exchange for more environment-friendly options) and choosing carbon emission reducing ways of transport within its entire logistic chain.<\/p>\n

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In its effort to not only reduce its negative impact in line with newly designed standards, Adidas has begun to try and think outside the box to make a long-term impact on the way clothing companies think about environmental damage. One of these examples includes Adidas finding a new way to dye its clothing using no water at all, instead of only looking to reduce its water use or find water recycling options. Given the high use of water in the production of apparel, improved water consumption is one of Adidas main goals going forward: by 2020, Adidas aims to save 50% at its material suppliers, 35% at its own sites and 20% at their strategic partners compared to current levels. Other examples include the presentation of a shoe made entirely of yarns and filaments reclaimed and recycled from ocean waste and illegal deep-sea gillnets (in collaboration with Parley; see picture), the goal to use 100% recycled cotton by 2018 or a three-year research program started in 2015 to develop soccer cleats that can be repeatedly recycled, use no chemical adhesives and create no waste.<\/p>\n

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In order to communicate progress and challenges, Adidas has begun to publish an annual Sustainability Progress Report. The report goes beyond the mere impact on climate and incorporates developments around worker and employee safety, happiness and empowerment.<\/p>\n

Adidas has made an impressive effort in putting climate change on its internal and external agenda and done a great job in communicating its progress and challenges in an open and trustworthy way.<\/p>\n

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While the first positive effects are visible, Adidas will need to take even more responsibility for its entire supply chain going forward and force strategic partners and suppliers to adhere to its high internal standards in terms of water use and energy consumption. \u00a0While Adidas has started to consult material producers and manufacturing partners to shift to energy and water saving production processes, it will need to create strict guidelines and set binding targets in the future and exclude non-performing partners to not only to improve carbon emission and water use metrics but also serve as an industry leader. In addition, Adidas should double down on its mission to interact with industry groups and legislatures to mitigate the industry\u2019s effects on climate change and \u2013 in its own interests \u2013 create a level playing field for the entire industry. Adidas has co-founded and joined several groups (such as the Sustainable Apparel Coalition, UN Climate Neutral Now Initiative and the Business for Innovative Climate and Energy Policy. While these efforts are great and should be valued, going forward, Adidas should focus on influencing policy makers by showing what is possible in terms of sustainable retail manufacturing and create awareness of the progress and challenges in the general public to increase pressure on law makers.<\/p>\n

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