Nov 24, 2023

From Voluntary to Mandatory: Our Journey Update with the EU Green Deal

Senior Manager for Government Affairs Diego explains the importance of upcoming legislation for achieving a climate neutral and circular Europe and gives you a sneak peek on what this means for the textile industry.
by Diego Antončićstaff

Depending on where you fly in the world, there’s one document you might need to gain entry into your destination country. Your passport. It just so happens that in the near future your clothing will also need a passport of its own, at least a digital one. But let’s take a step back to provide some background.

Towards the end of 2019, the European Commission, one of the European Union’s key political institutions, introduced its environmental and climate strategy, named the European Green Deal. They set a target for the EU to be the first climate-neutral continent by 2050 with a functioning circular economy.

You can imagine the disruptive effect this ambitious regulatory package has across industries and sectors with a presence in the EU. We’re talking about anything from transport, mobility, energy, finance, manufacturing, textiles, and the list goes on.

"Although truth be told, adidas has been working towards similar environmental goals for a few decades already."

Our pledge to people and planet dates further back than the Green Deal

Back in the 90s, adidas was already building the foundations for a sustainable future.

We took steps to be more transparent about the suppliers we work with and how our products are made. And we closely cooperated with them to adhere to our supply chain code of conduct that we called workplace standards. And, through intense industry collaboration, we addressed systemic challenges in our industry, like the use of chemicals or raw materials (e.g., cotton, synthetics, and leather).

"In more recent years, we’ve set ambitious targets to reduce absolute greenhouse gas emissions by 30% across the entire value chain by 2030 and to achieve climate neutrality across the entire value chain by 2050."

We had even set our sights making 9 out of 10 articles sustainable – meaning they’re made with environmentally preferred materials.

And maybe you already had the chance to participate in our Move for the Planet event, where we donated €1.5m through Common Goal to help educate communities around the world on sustainability through sport.

We were clearly on the right track with our previous efforts and now the European Green Deal is pushing us to do even more.

The EU Green Deal to fortify our sustainability foundation in four key areas

The EU Green Deal strives to fundamentally alter the EU business landscape across industries and sectors for climate neutrality’s and circular economy’s sake. For us in the textile industry, the to-do list will include fortifying our sustainability foundation in at least four different areas.

A first pillar to make good on the EU Commission’s strategy will touch upon our product creation.

Looking into the future, each textile product will be eco-designed and will have a digital passport affixed to the physical label. With this passport, you’ll be able to trace a product back to where it came from, as well as access information about, among other things, the product’s durability, recyclability, and how much of it is made up of recycled content in addition to other product-relevant information.

And product creation isn’t just a matter of a product coming to life. We also need to think about when a product can’t be used anymore. So, once you’ve worn or kicked around a product until it’s unusable, we’re even gearing up to pay an additional waste management fee for every product we create to account for its sustainable disposal. The main rule here will be – the more eco-designed a product is, the less fee you will pay.

Know your value chain

The second pillar is all about due diligence and transparency. Similar to the traceability info you’ll have access to thanks to our digital passports, this pillar will shape and enhance the way we carry out our due diligence to prevent any adverse effects on the environment and human rights.

The aim here is to make sure we continue to stay on top of our entire value chain, including how we collaborate with our upstream suppliers and business partners. After all, it’s our responsibility to ensure everyone at the 3-Stripes and the partners we work with do their part to safeguard the environment and human rights.

Walking the walk and talking the talk – and putting it into a certificate too

The third pillar ensures companies have proof points and substance behind every claim they make about their products. This part of the EU Green Deal shines a light and scrutinizes the accuracy and truthfulness of consumer claims.

In this context, the regulators will introduce more stringent rules on substantiation and communication of environmental claims to prevent potential practices that could mislead consumers.

"Moving forward, it is highly likely that every environmental claim will have to be verified by a third-party, external auditor before being communicated to the consumer."

A significant increased level of transparency

And the final pillar that will strengthen our sustainability foundation, the fourth one, will neatly package all environmental and people-related information in the company’s annual report according to European Sustainability Reporting Standards (ESRS).

This extensive and definitive report, which will be accessible to everyone, will delve into environmental, social, and governance issues—so that the public, analysts and investors understand where we stand on topics such as climate change, human rights, and even biodiversity.

This is just the beginning

To best prepare for what’s to come with the EU Green Deal, we’ve established effective cross-functional cooperation with teams that will be fundamental in tracking and implementing the new provisions.

Since many of the laws and regulations that will come into effect in the near future are still in either the proposal, negotiation, or final adoption phase, there is a lack of clarity on how these different pieces of the puzzle will connect and work in practice once implemented.

Therefore, our team will continue to closely monitor and assess the latest developments coming out of the EU Green Deal to inform and upskill the internal organization. Then, in close cross-functional cooperation, we will assess what steps and actions have to be taken to ensure future regulatory compliance and prepare everyone for what’s to come.

"The EU Green Deal set their climate neutral and circularity finish line for 2050 – but this is one marathon that intends to go on for much longer and will have an everlasting impact on all of our lives and our industry."