Sustainability remains firmly on the agenda of almost every sports and outdoor company in 2022. More than that, a detailed new report insists that, as a result of covid-19 and the recent United Nations Climate Change Conference (COP26), the pace of change towards sustainable materials and practices is accelerating.

Two years of covid-19 have interrupted business plans and product launches of many kinds (just ask any organiser of an industry exhibition or conference). Nevertheless, a report that the World Federation of Sporting Goods Industry (WFSGI) and consultancy firm McKinsey & Company presented in late January insists that last year, 2021, was not just good but “great” for many sports and outdoor brands. “The sporting goods industry performed the rare feat in tough economic circumstances of returning to pre-covid-19 levels of growth,” it says.

WFSGI and McKinsey published the report, Sporting Goods 2022, before most companies had compiled full-year figures, but it predicts that 2021 results will put the global sportswear market at the pre-pandemic levels of 2019. It goes on to forecast that growth will continue at almost 9% per year and that the market will be worth $400 billion in 2025. The authors offer a number of reasons for this optimism. “The tumultuous events of the past two years are reminders of the fragility of human life and the ecosystems that support it,” they say. “As a result, many people have reconsidered their lifestyles. Sporting goods companies have been able to help, and while uptake has been uneven across demographics, there are signs post-lockdown that changed consumer behaviours are here to stay.”

Natural alignment

Brands’ increasing ability to provide consumers with lower-impact products, supported by more convincing and more sincere corporate sustainability strategies, is helping the sector. Perhaps surprisingly, these quieter years of the pandemic seem to have speeded this up. “Climate change has steadily climbed consumer agendas over recent years,” the report explains, “and the impact of the covid-19 pandemic has accelerated its progress. People, now more than ever, understand the strong connection between their choices and the world they will leave for future generations. Sporting goods companies are naturally aligned with these values. Sports, nature, wellbeing, and health are intrinsically linked.”

There is much work still to do, of course. As the report points out, “brands must do more to enable their customers to make sustainable choices”. Companies must focus more on sustainable materials, on circular business models, and on “helping consumers make choices that reflect their values”.

In the first year of the pandemic, the authors noted that sustainability concerns were already leading brands to present products that they called more sustainable. They also suggest that there is evidence from high-profile events such as the COP26 Summit in November 2021 that “expectations are growing”.

In the wake of COP 26, a number of sports brands made new public commitments on sustainability, for example, by signing the UN Fashion Industry Charter for Climate Action or setting science-based targets for emissions reductions, renewable energy, or transparency and reporting. Nike, for instance, signed a pledge with the Renewable Energy Buyers’ Alliance to reduce its carbon footprint by 30% and use 100% renewable energy by 2025. “This shows that leading brands still see an opportunity to use sustainability to create a difference between themselves and their competitors,” the McKinsey-WFSGI report says. 

Our vulnerability 

From this, the authors conclude that sustainability is certain to remain as one of the key themes in sports and outdoor clothing and equipment for 2022 and beyond. In fact, there is what they now call a “sustainability imperative” for companies in this market, and this is a theme that the report examines in some depth. It says searches by consumers in the US and Germany on Google with ‘sustainability’ and ‘sportswear’ as keywords have more than doubled since 2015. Now, two-thirds of consumers say that the promotion of sustainability is an important factor in their purchasing decisions. “The sustainability mindset has increased and accelerated,” Zurich-based McKinsey partner Alexander Thiel says. “We’re not sure of the reason but some research suggests that the more we reflect on our own vulnerability, the way many people did during lockdown, the more likely we are to care about the planet.”

Careful not to name names, he says there are brands that already have a strong sustainability heritage behind them and brands that are already being genuinely innovative with the sustainable products they bring to market. “These brands are making a big impression and are able to differentiate themselves,” he explains. The report’s position on this is that it is positive, of course, but it says it will not be too long before sustainability becomes “so embedded in industry business models” that any chance for companies to set themselves apart will have evaporated.

“But we also see brands that have been disappointed in the past,” Mr Thiel continues, “because while consumers insisted they wanted sustainable products, this was not always strongly reflected in the purchases they made.” He also has some sympathy for consumers here, saying that products’ true sustainability credentials have not always been easy to judge at the point of purchase. Benchmarking schemes for sustainable apparel are rarely comparable with each other or created using the same criteria, Sporting Goods 2022 points out. This is in stark contrast to other industries, including automotive and food, in which standards are “aligned and clear”, it says.

From Alexander Thiel’s point of view, the world of sports clothing, shoes and equipment is beginning to emulate those other sectors. “Everything has changed now,” he says. “This is partly because many more consumers take this issue very seriously, but it’s also that brands have become better at communicating about the sustainability benefits of their products. There has been a shift in mindset and brands today look at sustainability as an opportunity rather than as an obligation.”

He explains that if brands look at sustainability as an obligation, they will only see it as something they cannot avoid spending money on. And they cannot afford to over-promise on sustainability and then under-deliver, Mr Thiel warns, because if a brand loses consumers’ trust it will be almost impossible for it to get it back. If it’s labelled as “a greenwasher”, for justifiable reasons, it will be very difficult for it to recover.

But if it is an opportunity it means that brands can be confident that sustainable products will help them not just gain consumers, but delight them. “I see a new dynamic now in this,” he continues, “with companies trying circular business models and lots of new materials. And the rate of innovation is accelerating.” Circular ideas that are taking hold include platforms for renting products out, rather than selling them. For example, from the start of 2022, customers of French brand Picture can hire €330 jackets for €13 per day.

Two priorities for adidas

One of the industry leaders who helped inform the report, adidas chief executive Kasper Rorsted, says the two main sustainability topics he wants to continue to address as priorities are reusable materials and carbon footprint. This is in the specific context of commitments adidas has announced already to making 90% of its products sustainable by 2025 and reducing the carbon footprint of each of its products by 15%, also by 2025. But, whatever happens along the way, he says telling the public the truth is essential.

“As an industry, we must always be transparent about what the consumer can have and what is not yet possible,” he explains. “If we don’t behave like this, people will become cynical and lose trust.” Part of this is that certain products “will not be sustainable below a certain price point”, Mr Rorsted continues, saying that consumers need to accept this and put their money where their well-intentioned social media posts are. Consumers need educating, he insists, and to accept that sustainability also comes with a minimum price tag, although he adds that brands must also resist any temptation to take advantage of this by applying what he calls “a price premium for sustainability”.

In Sporting Goods 2022, McKinsey and WFSGI estimate that sustainability matters to around 75% of consumers, but that only around 50% say they are willing to pay more for sustainable products, and only 25% actually do pay more.

Solve the unsolved problems

Mr Rorsted makes it clear that adidas does not yet have all the solutions it requires to meet its 2025 targets, but expresses confidence it will have them in place on time. The authors of Sporting Goods 2022 say that, in materials, many brands are sponsoring or undertaking their own research into bioengineering, new fibres and traceability solutions. And there is another way. “We are working with large companies, collaborating with associations, and making strategic investments in smaller, innovative companies,” Mr Rorsted confirms. “We are particularly looking at working with or investing in companies that are working on sustainable material innovation.” In this, he says, adidas is operating less like a major sports group and more like a venture capitalist firm, setting out to provide the capital and the incentives for innovators “to solve the unsolved problems”. After that, the job will be to take forward the good ideas that come from this, scaling them up, in the case of adidas, to perhaps 400 million pairs of shoes a year.

Sharing is caring. French skiwear brand Picture is one of a number of sports apparel companies that are launching product rental programmes at the moment, arguing that hiring expensive, high-performance apparel for a few days at a time is more sustainable. 
Credit: David Malacrida

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