We interviewed Sigrid Buehrle, SVP of Sustainability and ESG at Adidas. Find this interview and other case studies with brands and suppliers in the 4th playbook, The Data Advantage.
“My North Star is to get supply chain-related data to the same robustness as financial data.”
In 2022, adidas expanded and enhanced their existing approach to digitally tracing material flows and material certifications with one key aim: to overcome data gaps for proving the origin of materials.
The company’s first goal was to establish further verification steps to ensure the accuracy of recycled material certificates, starting with recycled polyester. This was done by linking brand purchase orders to
production steps, certificates, supplier declarations and quality reports, so that adidas could prove the use of recycled content.
According to Sigrid Buehrle, Senior Vice President, Sustainability & ESG, adidas first started with transparency with direct suppliers (to map their supply chain) and then moved into traceability:
“We built the tool with TrusTrace initially to ensure that we have the certificates for [our recycled polyester] products to support our recycled polyester ambition. Now we are expanding our approach to cotton, other recycled [materials], certified down, certified wool, and organic hemp.”
Where mapping and traceability can enable due diligence and compliance via documentation (such as the country of origin of a material), the gathering and handling of environmental impact data – including energy, water, chemicals and waste – is more complex.
“Today’s landscape is fragmented, so we have TrusTrace as a partner for traceability and certificates. Whereas, to capture metrics such as energy, chemicals and waste there are separate software tools”
“There might be a future opportunity to align and consolidate this fragmentation to reach broader industry solutions, in order to reduce the reporting burden for the suppliers.”
A key challenge for brands and suppliers is determining the energy use and therefore emissions attributable to each product – especially as they are made in factories that are simultaneously manufacturing goods for multiple brands. Such attribution is needed for calculating Scope 3 emissions and to enable emissions reduction planning.
“We do depend on suppliers’ data, and ideally there will be continuous solutions to make it easier for them. For example, adidas collects energy data on a monthly basis and this information is audited. These data are critical to calculate our Scope 3 emissions and to plan reduction measures.”
From traceability to transformation, the next big leap is clear:
“Traceability is where we are today. The next priority is to establish an ecosystem of data providers who collect, manage and safeguard information in a standardised way with interoperability as a key feature.”
The ultimate aim is to shift from reactive compliance to proactive evaluation and planning:
“Ideally, in the future, we should be able to work with the non-financial data as we do with the financial data. This would be my North Star – that’s where we need to get to, with an effective data landscape and a standardised approach to data collection and evaluation.”
Clearly, supply chain tracing, data collection and data management meet two overarching needs: mandatory compliance (with ESG reporting to comply with regulations, and to laws); and risk mitigation (environmental impact reduction to achieve publicly declared targets and uphold brand reputation).
These two framings help to explain what supply chain data needs to do in both ‘non-negotiable’ terms (compliance), and ambitions (improved business practices, better served customers and a competitive edge at a time of economic, environmental and social upheaval).
While each brand that qualifies as a corporation may be subject to the same mandatory legal and regulatory requirements, their differing product types, markets and business models influence their priorities and requirements for supply chain tracing and data collection.
Herein lies a fundamental challenge suppliers face since each brand requests different data in different forms and frequencies to achieve their own goals, and without standardisation and an interoperable solution – as called for by Buehrle – that’s set to continue.
While tracing recycled polyester (the brand’s most used fibre) for sports apparel is key for adidas, Primark’s majority fibre is cotton. While the brands may face the same regulatory demands, their sustainability strategy and goals differ, resulting in different data strategies.