Building a Green(er) Supply Chain in the Sports Business: Practical Insights and Best Practices

• Understanding Green Supply Chain Management in Sports
• Benefits of a Green Supply Chain
• Key Principles and Practices of Green Supply Chain Management in Sports
• Practical Steps to Implement Green Supply Chain Practices in Sports
• Case Studies and Examples in the Sports Industry
• Overcoming Challenges in Green Supply Chain Management
• Future Trends in Green Supply Chain Management in Sports
• Why Green(er) Supply Chains Matter

Traditional definitions of supply chain management were focused on managing the efforts involved in manufacturing a product and delivering it to the customer. The aspect of the environment did not feature as a core concern in this process.

Green supply chain management (GSCM) on the other hand, considers the economic, social, and environmental goals in managing supply chains. While traditional supply chains terminate at delivering the product to the customer, GSCM is also concerned with reverse logistics i.e. the repair/recycling/disposal of the product post-use.

GSCM is particularly significant for the sports industry which not only uses polluting components in manufacturing but also leads to a pile-up of products that are often discarded prematurely or wear out rapidly. Thus, leaving a sizable carbon footprint and harming the environment.

Implementing a green supply chain in your sports business comes with multiple advantages:

1. Reusing & Recycling

Since the focus is on using recycled materials in the manufacturing process, a green supply chain reduces the cost of acquiring materials and dependence on suppliers. This creates supply chain resilience and also brings down the cost of acquiring material in the long run. 

2. Enhanced Efficiency

The focus on sustainability forces you to improve erstwhile practices in order to optimize efficiency. For example, innovation in packaging that allows more boxes to fit in the cargo thereby reducing costs as well as the carbon footprint.

3. Regulatory Compliance

Environmental regulations in manufacturing are increasingly becoming a concern, especially in countries like the USA, EU, Japan, etc. And these are only bound to get stricter as climate change forces us to take drastic measures. Therefore, it is imperative for sports manufacturing companies to incorporate these legislations for regulatory compliance. 

4. Aligning with Customer Values

A recent study by McKinsey and NielsenIQ concluded that “Consumers are shifting their spending toward products with ESG (environmental, social, and governance) -related claims.” The report also claims that companies that are responding to the trend are growing at a faster rate.

Sustainability strategies can be implemented across the sports supply chain from sourcing to design and production to transportation. Following are some key areas where greener ways may be adopted:

1. Green Product Design

The use of rubber, plastic, coal, and oil derivatives in sports equipment and apparel forms a major chunk of the pollution component in this industry.

Green product design implies focusing on the use of sustainable materials and environment-friendly structures and processes to minimize the energy and waste burden on nature. For instance, the application of biobased polymers in sports equipment to replace plastic. 

2. Green Procurement

Sustainable sourcing or green procurement involves incorporating environmental criteria when making purchases. It involves selecting suppliers who follow green practices like using biodegradable/recycled material, ethical/fair labor, and local community support.

Due diligence, engaging with the supplier, and periodic audits and monitoring are some ways in which you can develop a responsible sourcing policy.

Sports brand Reformation's RefRecycling program takes sourcing a step further. It encourages customers to return their old Reformation products for store credits. These clothes are then broken into fibres and reused in new products.

3. Energy Efficient Operations

A supply chain can be broken down into three major components- manufacturing, warehousing, and logistics. There are ample opportunities in each of these segments for imbibing green practices.

Even minor changes with slightly high upfront costs are capable of big returns in the long run. Some of these include:

• Switching to energy-efficient lighting, heating, and cooling systems.
• Shifting to solar or other renewable energy source
• Creating a closed-loop system where everything is recycled.
• Replacing over-stressed machinery and implementing automation where possible. 
• Nearshoring, route optimization, and using fuel-efficient vehicles for transportation.

4. Waste Management and Recycling

An effective waste management strategy involves curbing waste production at the source rather than eliminating it after it has been created. 

Following the 3R approach - reduce, recycle, and reuse- can help in dealing with the challenge of waste in manufacturing sports equipment and garments.

5. Collaboration & Transparency

The supply champion ecosystem is made of multiple internal and external stakeholders. For the effective implementation of GSCM it is vital to build a good relationship with your suppliers and partners. 

Your overall strategy should reflect your goals which must also be clearly communicated to all stakeholders for strategy alignment. 

The integration of sustainability in the supply chain is key to enhancing efficiency and reducing operating costs in the long run. A clean environment is a prerequisite for the sports sector to promote and inculcate participation in activities.

Below are some steps that can be taken to implement a green supply chain.

1. Assessment & Mapping of the Supply Chain

A careful analysis of your existing supply chain is required to reveal the lacunae and identify opportunities. A thorough study of the processes and actors involved in the chain helps create a roadmap for action. 

Adidas for example, has a large and multi-tiered supply chain that they manage with a supply chain code of conduct called the Workplace Standards. The continual monitoring and assessment of the supply chain helps the brand in ensuring environmentally sound factory operations. 

2. Clean Sustainability Goals

Establishing clear goals and aligning them with the overall company policies is the first step toward achieving success. Goals that are not in sync with the company’s vision or do not have measurable metrics are seldom fulfilled with precision. 

Under Armour’s sustainability strategy, What’s Under Matters, does not just stop at listing the 23 responsible business goals. Rather, they publish a yearly Sustainability and Impact Report which captures the efforts taken toward achieving these to ensure they are implemented. 

3. Engage Top Management

Policies trickle from the top and this holds true for a momentous overhaul that green supply chains require. A unified commitment by the top leadership is essential to the flawless execution of changes. 

Like in the case of Puma which has a Sustainability Committee of the Supervisory Board. The functional heads of PUMA at the SE level are members of the Executive Sustainability Committee. ‘

Besides,  all members of the PUMA Management Board are frequently updated on sustainability topics to eliminate any friction and ensure smooth operations.

4. Invest In Green Technologies

Companies that invest in technology to foster sustainability will emerge triumphant in establishing a green and efficient supply chain. Sports companies will benefit from 3D printers, smart devices, AI, electric vehicles, ERP (Enterprise Resource Planning) tools, etc. 

In fact the key to mastering supply chain management lies in using technology at every step. 

Brands like Adidas, Nike, and New Balance have realized the potential of green tech. It is now used extensively in footwear design and manufacturing to create futuristic footwear.

Here are some examples of brands that have recognized their role in environmental protection and social responsibility by making pivotal changes:

Nike

Nike earned the ire of consumers when its unethical and unsustainable business practices came to light. Sweatshop conditions, child labor, excessive emissions, etc., were some of the criticisms faced by the company.

But Nike has turned this around and emerged as the leader in its commitment to ethical and sustainable practices, serving as a role model for other brands.

Nike’s “Move to Zero” campaign pledges to move towards zero carbon and zero waste through a series of incremental changes. These include reducing water usage in textile dyeing, reusing plastics, yarns, and textiles, and focusing on a drastic reduction in greenhouse gas emissions.

Adidas

Adidas is sprinting towards becoming a green company in the near future. Their Sustainability Targets for 2025 include:

• Making 9 out of 10 products sustainable
• An increase in the Human Rights and Environmental Due Diligence (HREDD) efforts across their value chain
• Achieving a 15% reduction in GHG per product

The sustainability culture permeates Adidas’s entire processes from employees to suppliers, with all of them working towards a shared goal of green business practices.

Paris Olympic Games

The recent Olympic Games in Paris heralded a new age of sustainability in games. The idea was to create a new model for organizing sporting events as elaborated in the Legacy and Sustainability strategy.

In fact, the Paris 2024 Games pledged to halve the event’s carbon footprint compared to past events. Some of the innovative steps taken in were:

• Using 100% recycled gold and silver in medals.
• Using eco-designed furniture made from materials like used shuttlecocks, bottle caps, etc. 
• 95% of the games were held in existing buildings, with only one new one being built. This too is solar-powered and uses natural bio-based building materials.
• The use of plant-based food and a reduction in single-use plastic was also emphasized. 

Any change is always accompanied by challenges. And committing to a green supply chain is no exception. But as you will see, these challenges are just minor hiccups that can be addressed swiftly. 

Cost Concerns

It is true that there are additional costs involved when striving towards sustainability. The costs of making structural changes to the physical and intangible aspects of business can be overwhelming.

But what must be remembered is that a majority of these costs are going to pay for themselves as ROI. For example, solar energy fittings may put an initial dent in the budget but will reduce dependency on expensive non-renewable energy and save you from expensive energy bills. 

Besides, sustainability practices are likely to be mandated by governments in the near future. So, these changes are more a question of when than why!

Leadership Commitment

The people at the top are the ones who drive change and provide a visionary roadmap for the entire organization. Therefore, it is crucial that they embody the principles of sustainability and are on the same page in their commitment to the goal. 

Any disagreements or skepticism at the leadership level can endanger the smooth execution of sustainable practices. Fostering collaboration and aligning diverse perspectives will empower the leadership to contribute towards and take ownership of sustainability measures. 

Supplier Engagement

Suppliers and external partners are among the most important links in the supply chain. Pursuing a hands-off approach with the suppliers cannot guarantee success in implementing sustainability initiatives.

It is important to keep an open communication channel along with audits, stringent codes of conduct,  and other monitoring tools to ensure supplier compliance. 

As the world’s interest in sustainability continues to rise, new innovations are lining up for more efficient green supply chain management. Some of these future trends are:

Innovative Tech

Technologies like blockchain, AI, and IoT (Internet of Things) have transcended boundaries to find applications across diverse sectors. 

Blockchain is being used to offer security and accountability in supply chains through the use of a decentralized ledger that records all transactions. IoT enables the monitoring and tracking of goods at each stage. This helps in ensuring that all actors in the supply chain are in compliance with the business practices.  

Companies like Nike have successfully harnessed the power of AI to enhance consumer experience, optimize product design and development, and improve their supply chain. It is clear that technology is key to increasing operational efficiency and seamlessly integrating green practices into the company culture. 

Circular Economy

Reducing waste is an important component of a green supply chain. It adds another layer to the traditional supply chain - that of reusing and recycling which closes the erstwhile wasteful loop. 

By reusing material companies can not only solve the problem of waste disposal but also add to their profits. Reusing existing material can save costs in the long run. 

Another benefit of a circular economy is that it increases supply chain resilience. As the pandemic taught us, this is a boon to avoid supply chain disruptions in a global economy.  

Adidas is a shining example of a company that is taking circularity seriously. It constantly partners with various organizations to address circularity challenges in the supply chain. The Adidas and Parley Collection is created by cleaning up ocean plastic and recycling it to make shoes, garments, and accessories.

Regulatory Changes

The role of supply chains in achieving sustainability goals is being increasingly recognised by governments the world over. The EU Parliament has recently proposed the EU Corporate Sustainability Due Diligence Directive (CSDDD) law that will require companies to take accountability and remedy the social and environmental injustices in their supply chains. 

This trend of environmental regulations takes cognizance of the harmful impact on the planet as well as the rising public sentiment for ecological protection. Companies that do not take immediate damage control measures and redesign their supply chains are likely to face compliance issues in the future.

Extreme weather changes, loss of biodiversity, and shortage of non-renewable resources are gradually pushing the Earth to its tipping point. The global sports industry generates waste from equipment, apparel, single-use plastic, apparel, accessories, etc., thereby creating a large carbon footprint.

By implementing effective sustainability measures in their supply chains, sporting brands can contribute towards saving the very environment that they need to thrive. After all, sports are all about the great outdoors, right?

A small step towards green supply chain management by the sporting industry can prove a giant leap towards moving the needle on environmental risk reduction.