Fashion sashays into the circular economy

The textile industry is one of the most polluting in the world, emitting more CO₂ than aviation and shipping combined. But a leading sports firm is showing a way the sector can embrace radical change.
Mannequins in a studio, Seoul, South Korea
Picture of Pauline Grange

Pauline Grange

Deputy portfolio manager, STANLIB Global Equity Strategy and the Threadneedle Sustainable Strategy

Key takeouts
  • The textiles industry is one of the most pollutive in the world and little of what the industry produces is recycled and reused.
  • There is a growing shift to a more sustainability-conscious consumer and rising regulation around building a more circular economy.
  • Adidas is a good example of a company seeking to capitalise on this trend.
  • Their initiatives include incorporating sustainable fabrics and seeking ways to improve the longevity of fashion items and ensure products are biodegradable.

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I love shopping for clothes – I admit it. But increasingly, my shopping is tinged with guilt. I am now much more aware of the terrible environmental impact of fashion: the textiles industry is one of the most polluting in the world. Around 100 billion apparel items are sold per year, which is an increase of about 50% over 2006.[1] This is largely because of the rise of “fast fashion” – cheap, high-fashion items. In fact, the industry now emits more CO₂ than the aviation and shipping industries combined, and uses 79 billion m³ of fresh water a year, while causing around 20% of industrial water pollution.[2]

 

Unfortunately, very little of what the industry produces is recycled and re-used. Most items end up in landfill or are incinerated within a year of production.[3] Indeed, according to the Ellen Macarthur Foundation, the global fashion industry produces about 53 million tonnes of fibre a year, of which more than 70% ends up in landfills or on bonfires. Less than 1% is re-used to make new clothes.[4] 

 

With heightened awareness, I have changed my consumption patterns – I now buy fewer but higher-quality items. In addition, I have changed my negative attitude to buying second-hand clothing and now happily scour for bargains either through online platforms or local charity shops. And it looks like I’m not alone: 70% of women either have, or are now open to, shopping for second-hand clothes, up from 45% in 2016.[5] As a result, rental and resale fashion platforms are growing strongly.[6]

 

In fact, consumers are increasingly prioritising sustainability, which is starting to influence the way they shop. Nearly 2.5 times more consumers plan to shift their spending to sustainable brands.[7] At the same time, regulation to build a more circular economy is rising too, such as the EU Circular Economy Action plan, which aims to shift production and consumption from the linear “Take, Make, Dispose” model to more circular use of products and materials.[8]

 

Adidas is a good example of a company seeking to capitalise on this trend. Its production and promotion of technical sports performance products contribute positively to social themes like good health and well-being. In any case, fitness wear is generally worn more frequently and for longer than high-fashion items. Adidas is also a sustainable leader in the industry and has detailed its innovations towards making its products more circular and sustainable. Its target is to have nine out of 10 of its articles environmentally sustainable by 2025, using a “Three-loop” strategy[9]:

 

  1. Recyled loop Sourcing recycled raw materials outside its own products, namely 100% recycled polyester or Parley ocean plastic waste (upcycled plastic waste collected on shorelines and coastal areas).
  2. Circular loop Producing products that can then be recycled and re-made into new Adidas products – “made to be re-made”. It has launched an Ultraboost trainer that can be returned, recycled and subsequently re-made into a new pair, and aims to expand this concept to more franchises and categories over time.
  3. Regenerative loop Where products cannot fit into the categories above, Adidas aims to make them from natural materials that can biodegrade.

Management has set a target for 100% of its products to use only recycled polyester by 2024, aided by the introduction of its sustainable fabrics[10]. This all sounds positive, but we wanted to see first-hand how sustainability was embedded into the company’s marketing and products on the shop floor. So, more than a year after our last visit, we revisited the Adidas flagship store on Oxford Street, London.

 

Adidas has improved the integration of sustainability across its product ranges. Before, “green” ranges were showcased separately and in very limited parts of the store. Today, recycled materials are evident across all their ranges throughout the store.

 

Adidas uses two sustainable materials in its ranges, which are clearly marked (with a label) on different apparel items and trainers:

  • Primeblue This is a high-performance yarn made with at least 50% Parley ocean plastic[11].
  • Primegreen This is a series of high-performance materials that are made from recycled ingredients.

When we looked t through men’s, women’s and children’s apparel and trainers, it was evident these products made up a substantial percentage of each range. This is a huge advance from a year ago.

 

Adidas also aims to implement sustainability innovation at scale to make its most popular products its most sustainable. When you enter the flagship London store, you are greeted by its new “green” Stan Smith selection, one of Adidas’s most iconic trainer franchises, which are now made from either Primeblue or Primegreen materials. The store also showcased an industry first: a Stan Smith made using Mylo, a mushroom-based material that performs like leather but is biodegradable.

 

Another in-store service is the “sneaker services” repair station. This allows customers to repair their trainers, preventing early and unnecessary disposal. Extending the life of a garment by just nine months reduces its environmental impact by an impressive 20%-30%.[12]

 

There was also evidence of progress in targeting our social outcome of “Good health and wellbeing”: 

  • Expanding sizing in apparel ranges Previously there was a separate section for plus sizes. This has now been replaced with expanded sizing, integrated across all ranges, as well as the use of plus-size dummies to model clothes for both women’s and men’s ranges. This helps promote inclusion in sport and exercise.
  • Greater focus and dedicated innovation around women’s training Adidas has increased investment in women’s training ranges. This was evident in-store from the impressive technical items in the women’s Terrex outdoor range to displays of its exciting new women’s Tennis range.

Digital is another key area of investment for the firm, and the integration of digital and sustainability was on display in the store. For example, there were photo booths where you can take and share your picture and environmental pledge with the online Adidas community.

 

Overall, we walked away confident that Adidas might achieve its corporate mission: “Through sport we have the power to change lives. By striving to expand the limits of human possibilities, to include and unite all people in sport and to create a more sustainable world”.[13]

 
Article References:

[1] https://www.ubs.com/global/en/investment-bank/in-focus/2021/industry-at-risk.html?caasID=CAAS-ActivityStream

[2] https://www.ubs.com/global/en/investment-bank/in-focus/2021/industry-at-risk.html?caasID=CAAS-ActivityStream

[3] https://www.ubs.com/global/en/investment-bank/in-focus/2021/industry-at-risk.html?caasID=CAAS-ActivityStream

[4] https://theconversation.com/fashion-production-is-modern-slavery-5-things-you-can-do-to-help-now-115889

[5] GlobalData Consumer Survey, December 2019-January 2020

[6] GlobalData Consumer Survey, December 2019-January 2020

[7] https://www.thredup.com/resale/#methodology-and-sources

[8] https://ec.europa.eu/environment/topics/circular-economy/first-circular-economy-action-plan_en

[9] Unless stated elsewhere, all facts and figures regarding Adidas are from this document: https://news.adidas.com/running/adidas-aims-to-end-plastic-waste-with-innovation—partnerships-as-the-solutions/s/be70ac18-1fc9-45c1-9413-d8abaac2e849.

[10] Unless stated elsewhere, all facts and figures regarding Adidas are from this document: https://news.adidas.com/

running/adidas-aims-to-end-plastic-waste-with-innovation-partnerships-as-the-solutions/s/be70ac18-1fc9-45c1-9413-d8abaac2e849.

[11] Unless stated elsewhere, all facts and figures regarding Adidas are from this document: https://news.adidas.com/running/adidas-aims-to-end-plastic-waste-with-innovation-partnerships-as-the-solutions/s/be70ac18-1fc9-45c1-9413-d8abaac2e849.

[12] https://traid.org.uk/wp-content/uploads/2018/09/impacts_of_clothing_factsheet_23percent.pdf

[13] https://www.adidas.co.uk/impossibleisnothing

This article appears in the Q3 August 2021 edition of our StandPoint publication. Click here to download a copy of the full publication.

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