Sustainability Reporting in the Footwear Industry07.03.2023 · Expert Felicitas Huong Friedrich / Editor Luisa-Maria Mrcela
Sustainability, ESG, Circular Economy, Nature Positive, Net Zero, Sustainable Development Goals – the list is long and includes concepts and frameworks. What they have in common is the aim: For a better world for everyone.
All these ideas have another thing in common. They all recognize that we live in a complex interconnected and interdependent system and if we want to tackle global challenges, we need to work together.
Climate change, biodiversity loss, waste, and pollution, are not only for governments to solve, but businesses are expected to do their part in actively changing an extractive, wasteful, and polluting economy and transform production and consumption patterns.
The fashion and footwear industry is known to be among the ones where social and environmental standards need to evolve. Companies have to think about solutions to become more sustainable and to change their production patterns.
The 2030 Agenda – Leave no one behind
The SDGs are unique as they are a call for action for everyone – nations, businesses, and individuals alike.
Details of each SDG can be found here.
Businesses shifting from Shareholder to Stakeholder focus
Traditionally in business shareholder interests used to be above all other interests. There is a fundamental shift going on, where businesses actions and decisions move from sole shareholder primacy into a broader approach, considering how the company impacts all stakeholders. Nowadays, companies are expected to step up and create values for all stakeholders*, not just shareholders.
*Everyone who has a stake in the organization (customers, suppliers, employees, investors, communities…)
Challenges of the footwear industry in terms of sustainability
Everyone in the industry is facing the same challenge(s): How to address global challenges while staying compliant and competitive. The most pressing topics are:
Supply Chain Accountability
Adresses the need of transparency in the supply chain by ensuring social and environmental compliance of suppliers. This includes risk assessment, traceability, identification of supplier non-compliance, and implementation of plans to avoid them.
This can be achieved through waste reduction, proper waste separation, conscious material use and fostering a circular economy. Shoes are part of the fast fashion industry; they are cheap and trendy. Occasional buying turned into seasonal buying. Shoes being much more affordable comes at a price for people who produce the shoes (cheap labor) and the environment (pollution – chemical and waste).
The traditional product lifecycle of a pair of shoes is linear – take, make, dispose – and designed to be thrown away at the end of their life, creating a huge amount of waste.
A circular economy in contrast, has a make, use, recycle/repair and reuse mindset, touching as well unsustainable consumption patterns. In order to achieve this, we have to rethink how many different materials and colors we want our shoes to have. The more colorful and poly-material we go, the more harmful it will be for the environment.
What can we do to tackle complex challenges?
Applying system thinking would be the most important step. When we understand how things are interconnected and interdependent, we see the bigger picture and realize how our activities impact nature and humanity.
In addition to that, collaboration is key. Sustainability challenges are global systemic challenges and can only be solved together. Therefore, SDG number 17, partnership for the goals, is crucial. We need cross-sector and cross-country collaboration if we want to achieve the 2030 Agenda.
Sustainability reporting ESG
Sustainability reporting means to disclose a company’s environmental, social and governance (ESG) goals. Through the report we communicate the progress towards these objectives.
- Environment: how a company performs in an ecological way
- Social: attention to relationships management of stakeholders (employees, suppliers, customers, communities etc.)
- Governance: analyzing the company’s leadership, internal controls, audits, etc.
The benefits of sustainability reporting include:
- Better risk management
- Costs savings
- Optimizing processes
- Competitive advantage
- Compliance with regulatory requirements
- Talent acquisition
ESG and Nature Positive
Today’s main approach (left) is to balance all the dimensions and finding the “sweet spot”. With this approach trade-offs are imminent.
If we shift to a nature-positive hierarchy (right side), the environment is not seen as externality but as the context for all life on earth. We, as society are setting the context for all our activities, of which the economy is just one. When we look at it as an hierarchy, we do not face the challenge of competing interests.
Last year framas published its first sustainability report, based on the Global Reporting Initiative (GRI) framework, which lays out what and how and why topics need to be disclosed. We believe that if we want to stay in business it’s imperative to access our impacts and to contribute to sustainable development.
As a first step we did a materiality analysis to define our material topics by interviewing our stakeholders. Through this process we defined 9 material topics for framas for which we will define targets within 2023.
- Long-term Economic Success – determined by the core topics of innovation and digitization and product and service quality.
- Attractive & Responsible Employer – includes employment, training and education as well as diversity and equality of opportunity.
- Energy Efficiency and Climate Protection - The focus is on increasing energy efficiency, reducing harmful emissions and using renewable energies.
- Materials Use – For framas and for the footwear industry, the materials used in products are a key issue.
- Product Responsibility - Customer satisfaction, one of the most important factors for framas‘ success, and directly correlated with our customers, brands and users‘ expectation in terms of products and services.
- Sustainable Supply Chain - Consumer expectations for ethically and ecologically sound products is also a major issue in the sports industry.
- Protection of The Environment - Because natural resources and ecosystems are under intense pressure locally and globally, environmental protection is a major concern in modern society.
- Occupational Health and Safety - Occupational safety and health protection are integral parts of framas.
- Corporate Citizenship – framas practices social responsibility through donations that directly benefit local communities.
You can access the report for more details.
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