Climate Change and Decarbonization
Managing the environmental impacts at our own sites and across the entire value chain is a key focus of our work. We are committed to decarbonization by reducing our absolute energy consumption and GHG emissions, and transitioning to clean energy.
According to the United Nations, climate change is the most pressing long-term challenge facing civilization. For this reason, we have set ourselves science-based decarbonization targets that will serve as part of a collective effort to limit global temperature rise. adidas has committed to achieving climate neutrality (GHG - greenhouse gases) across its own operations by 2025, reducing absolute GHG emissions across its entire value chain by 30% by 2030, measured against a baseline of 2017, thus paving the way for climate neutrality (GHG) by 2050. We support global initiatives that aim to drive change for our industry, such as the Fashion Pact and the UN Fashion Industry Charter for Climate Action (UNFCCC).
We also committed to the Science Based Targets initiative (SBTi), and our greenhouse gas (GHG) emissions reduction targets by 2030 have been approved by the SBTi. The targets covering GHG emissions from adidas' own operations (scope 1 and scope 2) are consistent with reductions required to keep warming to 1.5°C, the most ambitious goal of the Paris Agreement. Our GHG reduction target for the emissions from its value chain (scope 3) meet the SBTi’s criteria for ambitious value chain goals, meaning they are in line with current best practices.
Achieving our ambitious targets requires reliable data, so we have developed an environmental footprint tool that enables us to quantify and monitor our environmental impacts – not only across our own operations, but along our entire value chain. This covers all stages from extraction, production and processing of materials, product assembly, own operations, logistics, to the disposal of our products at their end of life.
This tool has been instrumental in helping us to understand our impact caused by GHG emissions, and in setting appropriate GHG emission reduction targets. It allows us to track and measure our progress towards our targets and to conduct scenario analyses that feed into making fact-based decisions.
Results show that our estimated impact on the environment is distributed unequally across the value chain, with the most significant impacts generated in the supply chain (more than 90%), particularly raw material production and processing.
Climate neutrality at adidas is not possible without the cooperation of our suppliers, as a substantial portion of environmental impact occurs throughout the supply chain. We are working with our suppliers to continuously improve environmental performance, increase energy efficiency, reduce GHG emissions and expect them to have an environmental management system in place.
Strategic suppliers at Tier 1 and Tier 2 level (who produce most of our products) are enrolled in our environmental program. We partner closely with them and provide suitable training required to achieve their targets to progressively improve their footprint. As an example, we empower them to develop their own decarbonization business plans, considering they best understand their respective situation and can find the most appropriate measures for their future GHG emission reduction plans. In addition, we encourage all suppliers to enrol in the UNFCCC Climate Action training to equip them with the knowledge they need to effectively mitigate climate change and achieve climate neutrality (GHG).
We have set ourselves a target for 2025 to keep our emissions at 2017 levels, through the increased adoption of renewable energy at strategic Tier 1 and Tier 2 supplier facilities. To support this transition, we are driving various initiatives to help suppliers scale the use of renewable energy and increase their energy efficiency.
Eliminating the use of coal-fired boilers at all direct supplier facilities at Tier 1 and Tier 2 will significantly reduce our environmental impact. We will no longer install coal-fired boilers, heaters or power generators from 2022 onwards, and have committed to phasing out existing onsite coal-fired equipment at all direct suppliers at Tier 1 and Tier 2 level by 2025 at the latest. We are supporting our suppliers with this transition and have steps in place should this not be achieved.
We regularly track the environmental impact related to the transport of our goods. To reduce emissions, we work with carriers who operate sound Environmental Management Systems (EMS) in accordance with the ISO 14001 standard and ship most of our cargo by sea.
Many of our environmental initiatives and innovations also have a positive impact on our climate targets. Our ambition is that 90% of our articles will be sustainable by 2025. We define articles as sustainable when they show environmental benefits versus conventional articles due to the materials used, meaning that they are – to a significant degree – made with environmentally preferred materials. Getting to nine out of ten requires us to rethink how we design and create products.
One example of this is the FUTURECRAFT.FOOTPRINT shoe: In collaboration with US running shoe manufacturer Allbirds, adidas developed its most climate-friendly performance running shoe ever, offering a limited number for sale. At just 2.94kg CO2e per pair, the running shoe is responsible for emitting 63% less CO2e than a comparable running shoe across its entire lifetime. To do this, the companies combined their most innovative and climate-friendly design principles and materials. For example, key materials used are recycled polyester, Tencel and EVA foam made with biobased content, derived from sugar cane. Only renewable energy is used to produce the shoe.
In 2008, we launched our Green Company program to reduce energy and water consumption and waste generation across all of our sites globally. These include administrative offices, distribution centers, production sites as well as own retail stores, and by 2025, we want to achieve climate neutrality (GHG) across all these sites.
We have defined a clear roadmap to achieve our emission reduction targets, including measures such as implementing onsite renewable energy production, improving energy use efficiency, sourcing renewable energy and energy attribute certificates. We aim to steadily increase our overall environmental performance data coverage and continue to implement eco-efficiency standards through a holistic Integrated Management System (IMS) at key sites, including environmental management (ISO 14001), energy management (ISO 50001) and facility management (ISO 41001).
‘Green building’ certifications are a key enabler to reduce carbon emissions and enhance resource efficiency in the construction of facilities. adidas has predominantly been using Leadership in Energy and Environmental Design (LEED) and Building Research Establishment Environmental Assessment Method (BREEAM) certifications for the construction and renovation of own retail stores and corporate facilities. As green building certification is used for strategically relevant projects, a set of internal eco-efficiency standards have been implemented for all projects which mirror the priorities of LEED certification. The ultimate goal is to achieve energy reduction through investments into energy efficient equipment and energy monitoring. Launched in 2012, Green Funds act as a source of capital for energy efficiency and carbon reduction projects across all adidas locations. The dedicated budget is used to subsidize local projects, e.g. to improve energy efficiency or onsite renewable energy production. In addition, a Green Company initiative in the form of an additional monetary car bonus amount, encourages and incentivizes our employees to use low-carbon vehicles and public transportation.
We acknowledge the value of climate-related reporting and for many years have been reporting into well-established frameworks such as the Carbon Disclosure Project (CDP). Based on its international accreditation, we are aiming to include recommendations from the Task Force on Climate-related Financial Disclosures (TCFD) that enable companies to improve reporting of climate-related financial information, especially climate-related risks and opportunities. The TCFD is structured around four areas that represent core elements of how organizations operate: governance, strategy, risk management and metrics and targets.