Sustainable Athleisure Industry ESG Thematic Report, 2023

Environmental, Social and Governance (ESG) in the Sustainable Athleisure Industry

The athleisure market negatively affects the environment, social and governance factor through fabrics used in fast fashion and cheap textiles.

A sustainable athleisure product is made from environmentally sustainable materials and methods. Manufacturing processes are chemical-free and sustainable to make sure that natural fabrics like cotton, hemp, bamboo, merino wool, and recycled synthetics are used.

The fashion industry is an energy-intensive market that consumes a huge amount of energy. It has also been noticed that around 10% of GHG emissions are released because of human-related activities and 20% of global wastewater-related activities that ultimately impact the environment. Sustainable athleisure fashion is a key trend in the fashion industry because it combines comfort, style, and functionality. It brings together sport, culture, and urban fashion. In recent years, increased participation in sports and recreational activities has increased awareness on the importance of fitness. According to the American Chemical Society, fashion production has doubled since the 2000s and will triple by 2050. Polyester, a key component of cheap fast fashion as well as athleisure clothing, has increased 9-fold in the past 50 years.

ESG Risk

Fashion has created a race to the bottom, as companies seek ever-cheaper labor sources. Cheap labor is readily available in many of the countries that manufacture textiles and garments. This gives rise to the problem of child labor in fashion which is exacerbated by the fact that much of the fashion supply chain relies on low-skilled labor, with some jobs better suited to children than to adults. For cotton picking, employers hire children because they can pick the cotton without damaging the crop.  Apart from child labor the industry also has a negative impact on the supply chain due to high demands and forced labor practices are seen increasing day by day. The Covid-19 pandemic has also led to the loss of jobs and increased the risk of forced labor. All these factors significantly affect the social aspect of ESG.

In addition, manufacturing a product comes with certain drawbacks, such as a lack of transparency in terms of the sourcing of materials from various locations. There is also no way to determine whether the human rights standards were followed on the supplier's end, and sometimes corruption is also a major concern for the brand owners because the suppliers ignore the laws.

Additionally, athleisure clothes made of synthetic materials leak microscopic plastic fibers into natural waterways. These microfibers eventually reach the sea and contribute to water pollution. Considering the United Nations’ Sustainable Development Goals (UN SDGs), these factors have a direct impact on SDG - 1 (No poverty0, SDG - 3 (Good Health and Wellbeing), SDG - 8 (Decent work and economic growth), and SDG - 10 (Reduced Inequalities).

ESG Future Trends

The sustainable athleisure industry also has a significant negative impact on the ‘E’ - Environmental aspect of ESG. With the aim of reducing the ESG impact of its products, the athleisure market is moving towards sustainability and investing in more environmentally friendly wearables. Athleisure brands riding the wave of sustainable athleisure to gain the attention of conscious shoppers and launching eco-friendly and ethical clothing lines. Based on our analysis, Gen Z and Millennials value brands that are sustainable, and, as a result, most fashion brands are launching sustainable athleisure. For example, one of the athleisure wear brands recently launched active wear from sustainable material including bamboo.

The aim of most companies is to balance eco-friendliness, profitability, and social impact by partnering with only vendors that supply organic cotton, non-toxic chemicals, and recycled polyester while adhering to fair labor standards. There is a shift in athleisure companies' focus from offering only short-lasting, disposable clothes to long-lasting, durable garments. However, it increases the consumer base after marketing the new linings of products under the eco-friendly label.

Top athleisure brands are taking several steps to be environmentally responsible, including making sustainable activewear made with fair labor, which is certified by SA8000, the Social Accountability Standard International. In addition to using recycled polyester, the brand uses non-toxic dyes and is fully certified by Oeko-Tex Standard 100. A Canadian brand plants ten trees for every item purchased to regenerate ecosystems and create employment in communities around the world and their products all follow the Earth-First philosophy, which means they're made under safe, fair working conditions and contain sustainable materials.

As another way to reduce the environmental impact of wearing athleisure, microfibers can be caught before they enter the gray water of washing machines using filters that can be attached to washers. With this solution, consumers may also contribute to the wearables’ sustainable growth.

In response to consumers' growing awareness of sustainable fashion, manufacturers have increased their focus on research and development and developed new products. Premium sustainable athleisure is growing because of improving living standards and consumers' willingness to spend more on ethical and clean fashion.

Growth of the Sustainable Athleisure Market 

In 2019, the global sustainable athleisure market was valued at USD 79.41 billion, with a compound annual growth rate (CAGR) of 5.0% from 2020 to 2027. The growing awareness of physical fitness and personal grooming among millennials, along with their propensity for sustainable development, is expected to boost product demand during this period. Athleisure wear's mass market is growing steadily due to numerous product launches by domestic as well as regional players. Moderate pricing and the inclination of millennials towards sustainability bode well for athleisure wear's growth.

Key Companies in this theme

    • Vuori

    • PANGAIA

    • Outerknown

    • ABLE

    • Hanesbrands Inc.

    • EILEEN FISHER

    • Patagonia, Inc.

    • Adidas AG

    • Pact, LLC

    • Under Armour Inc.

Scope of the Sustainable Athleisure Industry ESG Thematic Report

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process.

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key Benefits of the Sustainable Athleisure Industry ESG Thematic Report

    • Developing a comprehensive understanding of macro-economic, Policies & Regulations and innovations affecting this sector, globally.

    • Key insights into Infrastructure developments and ESG issues affecting the theme.

    • Identifying ESG risks and opportunities to business among leading players in the sustainable athleisure industry.

    • Obtaining a clear and relevant understanding of company actions, progress, and impact and find opportunities for investment.