Adidas’ Sustainability & Ethics Snapshot
> Learnings for business
Adidas has the resources to drive sustainability advancements in its products, manufacturing process, and supply chain.
The Adidas sustainability report details its investments in greener alternatives, including initiatives like using recycled materials and renewable energy, and what steps it has taken to further reduce its carbon footprint. These actions encourage other businesses to follow and improves their standing among eco conscious consumers.
Regarding Adidas’ ethics, the company has recently committed to improving diversity at a corporate level and addressed some accusations concerning unfair labor practices, though there is still a significant lack of proof of Adidas corporate social responsibility and provision of fair wages.
> Learnings for consumers
Adidas has improved its sustainable offerings in recent years and is taking steps towards becoming more eco-friendly, but there are still numerous Adidas ethical issues—both human and animal—for the ethical consumer to contend with. However, given Adidas’ vast chain of supply and history of worker’s rights infringement, we’d encourage purchasing from smaller, more ethically conscious and sustainable activewear brands instead.
Who Is Adidas?
Adidas is a market leader in activewear, competing with Nike for the most valuable sports brand title in the world.
But is Adidas sustainable?
Or is Adidas fast fashion that should be avoided at all costs?
In 2022, The Adidas Group turned over €22,511 billion (or $24.418 billion), making it the largest sporting goods manufacturer in Europe and the second biggest in North America.
As consumers seek more environmentally friendly and ethical purchases, they look at how companies address workers’ welfare, animal rights, and social impact.
Over 80% of US consumers consider a brand’s sustainability and ethical practices when buying an item—a statistic not to be ignored.
Despite this, around two-thirds of retailers believe customers won’t pay more for greener or fairer products, instead perpetuating the fashion industry’s worst trends: air and chemical pollution, tremendous textile waste, and staff exploitation.
At the forefront of sports apparel, understanding Adidas’ environmental and social impact is crucial.
In recent years, Adidas has set ambitious and innovative targets to lessen its environmental impact, utilize recyclable materials, eliminate single use plastic, reduce GHG emissions and support green technologies. While a growing number of Adidas products are sustainable material-based, many still have a long way to go.
However, while the brand appears to be making genuine efforts towards sustainability, Adidas’ ethical issues are apparent.
Like many global companies, the brand regularly encounters exploitation and discrimination accusations. Although it has taken steps to address these, it’s too early to know if its efforts have been successful or how ethical Adidas is today.
Observation over the next five years will reveal a lot regarding whether “Adidas is All In” (as their slogan purports) to becoming an ethical and sustainable business or not.
Still, Adidas’ public efforts to acknowledge and address their shortcomings demonstrate at a degree of awareness and sets an example for other large brands to follow suit.
Let’s take a closer look.
What We Cover: Is Adidas Sustainable & Ethical?
1. Adidas Sustainability & Transparency Reporting
You can find the Adidas sustainability report as part of its annual report, which outlines Adidas’ primary achievements over the last 12 months alongside current sustainability focuses.
Recent reports have detailed Adidas’ efforts to combat plastic waste through clean-up activities and products made from recycled items.
Other Adidas eco-friendly highlights include the company’s involvement in the circular economy, using more natural and renewable materials, and charitable initiatives. But is Adidas an eco-friendly company on the whole? If so, how sustainable is Adidas?
2. Adidas Environmental Impact: Is Adidas A Sustainable Company?
Adidas inevitably has a significant impact as one of the world’s largest and most widely worn clothing labels.
To understand if Adidas qualifies as a sustainable brand, we need to analyze how the company reduces this impact.
How sustainable is Adidas’ Supply Chain & Manufacturing
Adidas has been working to improve the sustainability of its supply chain and manufacturing processes in recent years through several initiatives, collaborations, and expectations.
One such initiative is the company’s partnership with the “Better Cotton Initiative,” which promotes sustainable cotton production worldwide. However, BCI cotton itself has been scrutinized for numerous greenwashing accusations, which begs the question if this is a boon or bust to Adidas’ sustainability.
According to the 2020 Sustainable Cotton Ranking, 99% of the cotton used in Adidas’ products in 2018 was “sustainably sourced”, though given the lack of details as to what this means combined with cotton industry fraud this number should not be taken as fact.
Adidas has also tried to reduce its carbon footprint, particularly in its supply chain. Using science-based reduction targets, the company has set a goal to become entirely carbon-neutral by 2050.
To help achieve this, the brand outlines expectations of its suppliers’ decarbonization efforts, covering areas such as:
- Sustainable materials
- Low-carbon products and technologies
- Transparency and traceability
- Clean energy sources
Various organizations have recognized the brand’s sustainability efforts in manufacturing.
Adidas’ Fabrics & Materials
Adidas has incorporated more sustainable and innovative materials into its products over the last few years.
Some of these include recycled polyester, BCI or organic cotton, and materials made from ocean plastic.
In 2022, over 96% of all polyester used was recycled polyester made of plastic bottles and textile waste. Consumers can identify products made with recycled materials via the “Primeblue” and “Primegreen” labels.
The brand has partnered with Parley for the Oceans since 2015 to create products made from recycled ocean plastic.
Its “Made To Be Remade” (MTBR) is a product line made to be worn, returned to Adidas, shredded and ground down, and remade into something new. In 2021, the brand increased its MTBR range, launching fully recyclable versions of Adidas sustainable shoes and apparel.
Adidas recently revealed the result of its Allbirds collaboration, a running shoe with its lowest-ever carbon footprint—2.94 kg of CO2 to make.
Is Adidas a cruelty-free and vegan company?
While not yet entirely vegan, Adidas has started producing cruelty-free versions of its products. Alternatives of several classics, such as the vegan Adidas Stan Smith, were launched in 2020.
The brand has recently attempted to make a new material—a purely natural leather alternative made from mycelium—for its footwear.
Adidas has also committed to “Vier Pfoten”, an animal protection organization, to ban furs from its products.
However, on the whole, their animal welfare policies leave much to be desired. Adidas still uses significant amounts of leather, down, wool, and exotic animal skins (such as kangaroo leather).
While Adidas claims any wool is from non-muelsed sources and that they followed the Five Freedoms of animal welfare, there are no certifications (such as ZQ merino or Responsible Wool Standard) or evidence to back up these claims.
What Are Adidas’ Carbon Reductions & Commitments?
Adidas has made several commitments to reduce its carbon footprint.
The company aims to achieve carbon neutrality by 2025 and reduce greenhouse gas emissions by 30% across the entire value chain by 2030.
Also by 2025, Adidas is targeting a 15% water consumption intensity reduction within its own operations and 40% across the wider supply chain.
Currently, it has reduced CO2 emissions by 26% and water usage by 21% since 2017.
They’re also aiming for a 15% GHG emissions reduction per product and to make 9 out of 10 Adidas products sustainable by 2025, meaning they will be made “to a significant degree” with “environmentally preferred materials”. However, they fail to define specifics for either qualifier.
By 2030, Adidas has set a 30% emission reduction target across its whole supply chain.
While these are promising commitments and show the brand’s apparent intentions, it’s unclear how close Adidas is to reaching these overall targets. However, they recently scored an A- and B respectively on Carbon Disclosure Project (CDP, the not-for-profit who helps organizations manage their environmental reporting and disclosure) climate and water questionnaires.
3. Adidas Social Impact: Is Adidas Ethical?
Adidas’ ethics are complicated.
While the company has taken steps to address its history of ethical problems, large-scale issues surrounding Adidas’ working conditions and fair wage standards remain.
Adidas’ Labor Practices
First, where is Adidas manufactured?
Per their most recent 2020 Global Management Report, they worked with 132 independent manufacturing partners around the globe (Asia, North and South America, Europe, the Middle East, and Africa), significantly down from 277 in 2019.
Halving manufacturing entities is a significant step towards greater traceability and control, though lack of a more recent report means we don’t know if this trend has continued across more recent years.
Adidas scored 128 (51%) in the 2022 Fashion Transparency Index (FTI), down from 136 (54%) the previous year. The FTI rates the ethical performance of worldwide brands, particularly concerning workers’ welfare and labor practices.
For reference, 51% puts Adidas in the same bracket as other fashion giants like Nike, Lululemon, Calvin Klein, and Converse. Only a handful of the total assessed brands fall into the two higher brackets, with the highest transparency scores still no more than 78%.
The company is a member of the Fair Labor Association (FLA), a nonprofit organization that works to improve labor conditions in global supply chains.
As a member, Adidas’ Code of Conduct is reflective of the FLA’s, which includes standards on fair wages, working hours, and safe working conditions.
While this shows Adidas’ commitment to ethical worker treatment in its downstream operations, tier 2 and 3 raw material suppliers and fabric mills remain outside the scope of FLA audits.
Does Adidas use ethical labor?
Besides sharing policies on protecting supply chain workers from COVID-19 during the pandemic, Adidas has been criticized for its labor practices and living wage payment in its global supply chain. The company has been accused of using sweatshop labor and exploiting workers in certain countries.
In 2020, Adidas and other notable brands (like Nike and Apple) were linked to forced Uighur labor. The company claimed it had no contractual relationships with the suppliers, but could not rule out a link further down the supply chain.
The Clean Clothes Campaign highlighted that textile workers across 114 factories in Cambodia, who produced garments for Adidas, were owed an estimated $109 million (USD) in wages in April–May 2021.
The campaign has continuously called on Adidas to sign the Pay Your Workers agreement, regularly criticizing the brand’s public plans to prioritize and protect workers’ rights.
Adidas’ human rights and labor practices also have a history of worker abuse and sexual harassment, particularly against women.
Adidas Diversity, Equity, & Inclusion (DEI)
Adidas has faced employee complaints over a lack of diversity and unfair treatment in the workplace.
A top executive at Adidas received a “final warning” from the company after repeated “inappropriate and unacceptable” remarks about diversity in the workplace.
Workers at the US headquarters in Portland said a lack of diversity at Adidas created a discriminatory working environment, leaving some employees feeling marginalized. In 2019, only 4.5% of 1,700 workers identified as Black.
Diverse employees at Adidas rated the company 63/100 across Comparably’s culture categories, placing the company in the bottom 35% of companies with over 10,000 staff members.
The company responded to diversity criticism with high-level exits and several internal initiatives, research, and training groups.
Adidas has established employee resource groups (ERGs) that promote diversity and inclusion, such as the Black Employee Network and the LGBTQ+ ERG.
To improve the Adidas code of ethics, it launched the ‘Global DEI Council’ in 2021, increasing representation, retention, and advancement of diverse talents within its workforce.
It is responsible for business ownership and accountability on DEI initiatives, promising to invest $120 million toward ending racism and supporting US Black communities through 2025.
They’ve also pledged to fund 50 university scholarships annually for Black and Latino students.
Adidas aims to fill at least 30% of all new US-based positions with Black and Latino people, and to increase the share of women in management positions or above to 40% by 2025. By the end of 2020, it was 35%.
Is Adidas A Socially Responsible Company?
If so, how is Adidas socially responsible?
Adidas’ corporate responsibility is demonstrated in its many initiatives, supporting the community in sports, education, and sustainability.
These initiatives reflect the company’s goals of making a positive impact beyond its core business operations.
Adidas’ primary focus is sports, thus the company’s projects, programs, and partnerships help make sports more accessible, such as building playground and sports courts, fundraising campaigns, and virtual events.
For example, collaborations with the Boston Athletic Association and Girls on the Run provide running programs for local youth and girls in low-income communities.
The company also partnered with Allbirds, providing sneakers to students in need.
4. Adidas Controversies, Red Flags & Greenwashing
Adidas was accused of greenwashing by an ethics jury. Its “Stan Smith Forever. 100% iconic, 50% recycled” advertisement’s use of the “End plastic waste” logo was deemed misleading.
The jury reached this verdict because, despite the slogan, 50% of the total material used in the shoe isn’t made from recycled items.
While Adidas has publicly addressed concerns surrounding labor exploitation many accusations remain.
Inappropriate comments, behavior, and attitudes at the corporate level – particularly discrimination issues—are another red flag.
Finally, while the company clearly communicates its goals towards sustainability, there is a lack of key performance indicators (KPIs); measuring their real-world progress is not an exact science.
5. Is Nike Or Adidas More Sustainable?
As the two biggest activewear brands, Nike and Adidas are regularly compared—but is Adidas more ethical than Nike? Is Nike sustainable at all?
In terms of sustainability and ethics, Adidas usually wins.
While Nike (with greater resources) invests more money in sustainability programs than its closest competition, Adidas better considers its overall environmental impact.
Greenpeace has criticized Nike for its continued use of hazardous chemicals in its supply chain, saying that other brands are phasing out chemical use faster.
While Adidas is currently the more sustainable sportswear brand, both companies lack transparency and independent certifications for sustainability measures and results.
