Managing our environmental impacts at our own sites and along the value chain, where our products are designed, created, manufactured, transported and sold, is a key focus of our work. Our Sustainability Strategy for 2020 shows we have set ourselves ambitious targets to optimize our environmental impact along the entire lifecycle of sport.
MITIGATING CLIMATE CHANGE
Energy is the fuel of the body. The responsible use of energy is also critical for our planet to survive. In order to mitigate climate change, we are committed to reducing our absolute energy consumption and CO2 emissions, transitioning to clean energy, and looking into energy harvesting opportunities. adidas is proactively addressing the impacts of climate change through a number of initiatives in its own operations, its supply chain and through various partners
As a signatory to the UN Fashion Industry Charter for Climate Action, adidas has committed to reduce both its own and its suppliers’ greenhouse gas emissions compared to 2017 by 30 percent by 2030 and to achieve climate neutrality by 2050.
- In our own operations: We have established and maintain a certified Environmental Management System (EMS), covering 18 of our sites globally by the end of 2017, and are taking various measures to reduce the environmental footprint of our own operations. Firstly, the Green Company program targets improvement of the environmental performance at our own sites around the world, which includes administration offices, own manufacturing sites, distribution centres and retail stores. We also have dedicated budget, the greenENERGY Fund, which helps us accelerate energy and carbon reduction production projects. Secondly, as part of our commitment to transparency, we have been reporting about our carbon emissions and our progress on an annual basis through the Carbon Disclosure Project (CDP), an independent not-for-profit organisation, since 2007. And lastly, as air travel is widely used by adidas employees we monitor and record all air travel managed through our in-house travel agency regularly since 2006 and keep a close eye on the environmental footprint caused. Between 2012 and 2014, we were able to reduce our absolute emissions by around 16%. In addition, a Green Company Initiative, in the form of an additional monetary car bonus amount, encourages our employees and management to use low-carbon vehicles and public transportation.
Green Company is the name we gave to our environmental program at our own sites around the globe. Since its launch in 2008, the program and its ambitious 2015 targets have driven continuous improvement in the environmental impacts of our own operations (administration offices, manufacturing sites and distribution centres).
Based on this success, we developed the second generation of our Green Company program in 2015, including targets to be achieved by 2020. Building on seven years of achievements, the these targets do not only demonstrate our continued focus on industry leadership in environmental stewardship but also take our ambitions one step further. For the very first time our programme covers our own retail stores and includes the phasing out of plastic bags at all retail locations that we own, as well as LEED-certifying our new flagship stores globally. Further highlights of our 2020 targets include the fact that our carbon reduction target is ‘science-based’, meaning it is an absolute, annual emissions reduction designed to deliver carbon neutrality for our own operations globally. As managing water as a vital resource remains a key strategic priority, we have defined individual and ‘context-based’ water reduction targets for our sites taking local watersheds into account. Examples of Green Company initiatives are:
- Expansion of integrated management system (IMS): In order to manage and influence environmental impacts at our own sites, we have established an integrated management system (IMS) which combines three existing management systems: ISO 14001 (Environment), OHSAS 18001 (Health and Safety) and ISO 50001 (Energy). As of December 2018, 20 major locations around the globe were ISO 14001 certified. A dedicated IMS policy ensures application among all adidas entities affected.
- Green Funds: Launched in 2012, the greenENERGY Fund acts as a source of capital for energy efficiency and green energy projects across all adidas locations. It has proved to lead to carbon reduction, with almost 80 projects already supported by this financial source. High-return projects are used to subsidize projects that may be less appealing financially but promise major reductions in carbon emissions. In 2017, we introduced the greenWATER and green WASTE Funds, representing further environmental saving opportunities in water consumption and waste generation.
- Transparency and reporting: To carefully track the progress of our environmental initiatives and their impacts against our targets, we have established a detailed environmental data recording and reporting system which currently includes 72 sites and covers around 90% of the adidas internal environmental footprint. Every year we publish a special Green Company Performance Analysis that details the progress towards targets sites around the globe have made in the year.
- In our supply chain: As most of our carbon emissions come from the manufacturing of our products, we work in close cooperation with our suppliers in various ways to increase energy efficiency in our manufacturing processes. In addition to promoting an EMS, like we have at our own sites, to make continuous improvements in performance, we help our suppliers to improve environmental conditions, increase energy efficiency and reduce carbon emissions. For some examples of training we give to suppliers in energy efficiency, please click here. Secondly, even though our products have to deliver, it does not mean they cannot be made in a sustainable way. Our environmentally friendly ideas and technologies include ‘Low Waste’, ‘DryDye’ and sourcing ‘Sustainable Cotton’. And lastly, we work with carriers who operate sound EMS in accordance with the ISO 14001 standard and reduce the environmental impact by shipping most of our cargo by sea.
- In collaboration with policymakers and industry alliances: We engage with critical stakeholders and collaborate with partners to improve our industry in various ways, for example, as a founding member of the Sustainable Apparel Coalition (SAC), by joining the UN Climate Neutral Now Initiative, by engaging with EU policymakers on mandatory carbon reporting and environmental impacts of products, as a member of the Business for Innovative Climate and Energy Policy (BICEP), as well as by being among 33 consumer brands which have signed a ‘Climate Declaration’ urging U.S. federal policymakers to collaborate on a bold response to climate change.
About the UN Climate Neutral Now Initiative
When the UN Climate Change Secretariat asked us to join their Climate Neutral Now Initiative, we did not hesitate. While the ultimate goal is to support a successful outcome towards an international agreement at the upcoming climate conference COP21 in Paris at the end of 2015, the initiative promotes a wider understanding of the need and the opportunities for society to be climate neutral and showcases that many organisations are already acting today. As a champion of the initiative, we commit to the following:
By supporting the initiative, we are delivering a strong message to the industry, our employees and external stakeholders about our continued vision for adidas to become a ‘zero-emission company’. Please click here to read more.
INNOVATING MATERIALS AND PROCESSES
We create the best for the athlete, while optimizing our environmental impact. We are committed to steadily increasing the use of more sustainable materials in our production, products and stores. At the same time, we are driving towards closed-loop solutions.
We are committed to steadily increasing the use of more sustainable materials in our production, products and stores while driving towards closed-loop solutions. From 2024 onwards, adidas will use only recycled polyester in every product and on every application where a solution exists. The first fully recyclable running shoe “Futurecraft Loop” has been in the test phase since 2019. The market launch is planned for 2021.
MANAGING WATER EFFICIENCY AND QUALITY
Water is essential for life. It is also a key resource for our industry. In order to tackle the ever-growing issue of water scarcity and achieve water stewardship, we have developed an approach addressing water efficiency, quality and accessibility. It forms one of the strategic priorities of our Sustainability Roadmap for 2020, with clearly defined targets and annual progress reporting toward these targets.
We have developed an approach to address water efficiency and quality. We aim to reduce water usage by 35% per employee by 2020 (2008 baseline) as well as reduce water intensity at our strategic suppliers by 20% by 2020 (2014 baseline).
We recognize the human right to water, as first developed under the UN’s International Covenant on Economic, Social and Cultural Rights of 1966 as well as through the UN resolution 64/292, adopted in 2010, which acknowledges the importance of equitable access to safe and clean drinking water and sanitation as an integral component of the realization of all human rights. In line with our company’s commitment to human rights throughout our operations, both at our own sites and in our supply chain, we are fully committed to respect the human right to water.
As a responsible company we are aware of the human dimension of water and other environmental impacts, and we strive to respect and integrate it into our work. This includes water management to minimize impacts on local communities, supporting the sustainable use of materials and the conservation of natural resources and recognizing that uncontrolled consumption of resources may have dire implications for local communities and for the planet. We are therefore committed to act wherever we have direct influence – in the design of our products and in the selection of materials – and where we see measurable adverse impacts from the manufacture and transportation of our goods. We expect suppliers and business partners to be aligned with our globally agreed policies and frameworks for sustainable resource use and have a clear strategic roadmap in place for a stepwise improvement in their efficiency, with specific measures to eliminate all forms of waste and to reduce their:
- energy consumption, with a primary focus on energy efficiency,
- carbon emissions and associated impacts on greenhouse gases (GHG),
- water footprint, with a focus on water conservation and recycling efforts.
Improving water efficiency and quality
The following programs and collaborations allow us to improve water efficiency and quality throughout our own operations and in our supply chain. For a detailed progress reporting toward the targets set, please see our 2017 Annual Report.
- In our own operations: Since 2008, our ‘Green Company’ program strives to achieve ambitious savings in water at adidas own sites globally, our target for 2020 is to reduce water usage by 35% per employee by 2020 (2008 baseline). Recent highlights include the establishment of an Integrated Management System (IMS) which combines three existing management systems (Energy, Environment, and Health and Safety) in 2016, and the launch of our greenWATER Fund in 2017, which now supports the implementation of water projects at our sites.
- In our supply chain: Most of our production is outsourced and a significant part of our environmental impact occurs, at different intensities, throughout the supply chain. For this reason, we are working with our suppliers to ensure the highest environmental standards are applied, supporting them to reduce their overall water consumption and improve their overall quality of wastewater. ‘E-KPI’ is our tool designed to measure and improve environmental performance of our strategic Tier 1 suppliers by setting them 20% water intensity reduction targets to be achieved by 2020. Using a benchmarking approach, the E-KPI allows for a high level of transparency into suppliers’ actual water consumption and reduction opportunities, supporting us to define suppliers’ specified areas for improvement and training needs that match their respective situation. We follow a similar approach for our apparel material Tier 2 suppliers, with the aim of them achieving a 35% water reduction by the end of 2020 (baseline 2014). In addition, we have initiated a system of multi-level and cross-functional advisory and training sessions with our global supplier network.
- By using more sustainable materials and processes: We innovate materials and processes and are committed to steadily increasing the use of more sustainable materials in our production, products and stores, and we are driving toward closed-loop solutions which can also lead to a positive impact on water. Our targets include increasing the use of recycled polyester, including Parley Ocean Plastic, in our products, sourcing 100% Better Cotton by the end of 2018, as well as further following the ambition to expand the use of waterless dyeing.
- By advancing chemical management: Sustainable chemical management has a positive effect on water quality. adidas follows a holistic chemical management program that is continuously updated and developed, also in consultation with external stakeholders. Our targets for 2020 include achieving 100% sustainable input chemistry by adopting the Manufacturing Restricted Substances List (MRSL) of the Zero Discharge of Hazardous Chemistry (ZDHC) group, phasing out hazardous chemicals and providing our strategic suppliers with a list of positive chemistry (the bluesign bluefinder). Recent highlights include our contribution to the development of the ZDHC Wastewater Guidelines, an international wastewater standard aiming to harmonize the process, sampling, test methods and TLVs (threshold limit values) in 2016, as well as its implementation in 2017. All our strategic suppliers are required to test their wastewater according to the ZDHC Wastewater Guidelines twice a year, and test results have to be disclosed on the IPE DETOX platform and the ZDHC Gateway platform.
- In collaboration: We believe in collaboration to achieve lasting change. We hold strong relationships within the sustainability area and engage openly with stakeholders. On water-related topics, we actively engage with organizations such as the Zero Discharge of Hazardous Chemicals group (ZDHC), the Sustainable Apparel Coalition (SAC), the International Chemical Secretariat (ChemSec) Business Group, the Better Cotton Initiative (BCI) and the Leather Working Group (LWG). We believe that transparent communication to our stakeholders is critical, and we will continue to regularly disclose important sustainability updates, including on water, in our Annual Report and on our corporate website.
Managing Water Risk
Water is a highly complex public resource. Due to its dependency on local basin conditions, there are many factors that contribute to increased water risk at local level which cannot, or can only to a limited extent, be influenced by adidas directly. Examples are water scarcity, e.g. caused by water depletion, groundwater over-abstraction, droughts or climate change impacts. Therefore, in addition to the water programs as outlined above, we also analyze our water basin-related risk exposure and act on the findings.
In 2017/2018, we did a water risk assessment to check the specific risk exposure of our own sites and key suppliers. Digging down into the details, e.g. risk categories, site attributes or sourcing volumes, helped us to expand our understanding of the issue. We used the results to raise awareness and inform discussions to further initiate improvements within our company.
For example, for our own sites, we took immediate action focusing on the high-risk sites. To complement the water basin-related score, we collected and analyzed additional site-specific water risk information. We plan to have a water program in place at all high-risk sites or, if one already exists, to critically review it. In future, we will develop targeted awareness-raising and training material for site managers, include water risk in our greenWATER Fund decision criteria which determine fund allocation, explore how a water risk assessment could become part of the selection criteria for new sites, and include water risk in future program development and target-setting exercises. In our supply chain, we use the HIGG Facility Environmental Module (FEM) 3.0 to help identify suppliers in high water risk areas and, as we continue to strengthen and evaluate our environmental program for our supply chain, we will explore how water risk could be included in the overall risk assessment.
The management of chemicals in multi-tiered supply chains is a complex challenge, requiring many actors to play a role in achieving effective and sustainable solutions. For years, adidas has been running leadership programs that address this topic within its area of direct influence.
By 2020, we aim to achieve 100% sustainable input chemistry by adopting the ZDHC MRSL, phasing out hazardous chemicals, as well as providing our strategic suppliers with a list of positive chemistry (the bluesign® bluefinder).