Sustainable Footwear Industry ESG Thematic Report, 2023

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

The rise in climate change has prompted people, organizations, and industries to align and work on environmental, social, and governance standards. For companies, aligning with ESG standards has helped them create a positive ESG impact through their operations, thereby minimizing critical risks to the planet and factors associated with ESG.

The sustainability of the shoe industry has increased significantly. Sustainability in the footwear industry can be defined at the design process, production process, manufacturing process, distribution process, and selling process. All these have significant effect on the planet minimizing the negative impact on the environment. Further, it also contributes to the efficient use of energy and natural resources, the safety of employees, communities, and customers, as well as being economically sound.

The need for sustainability in footwear has arisen because the footwear industry alone contributes up to 700 million metric tons of CO₂. This has a serious impact on the climate. The manufacturing of a footwear product involves various materials that need to be sourced from different sources as it is difficult to manage the price of carbon. To resolve this the footwear industry supports imposing a price on carbon, which will equitably and efficiently reward innovation that is low carbon and progress positively and will be beneficial for the environment. Moreover, the sustainability factor has had excellent impacts as the sustainable raw materials sourced help in reducing the amount of waste, and to achieve an ecological balance sustainable leathers are made from recycled vegetable oil and recycled materials. In addition, many companies have introduced various take-back policies where consumers can play a part in promoting sustainability.

Increasing Innovations and Trends In Sustainable Footwear

Sustainability is not just a trend but has become a necessity; consumers are very aware of what they are purchasing and if the product is sustainable or not. One of the main reasons for the shift of consumers towards sustainable footwear is the higher quality of the materials used in the footwear that lasts for a longer period. In addition to consumers, producers are also emphasizing sustainability through marketing. This is because people prefer to shop with brands that share their values and sustainability is a value that will become increasingly significant in the future.

Speaking of sustainability in the development of a footwear product such as a shoe, many startups, companies, and brands have introduced several sustainable products and techniques such as using biomass for manufacturing, introducing circular economies, manufacturing footwear from recycled materials, utilizing leftover wool, increasing the use of natural and recyclable ones, and finally utilizing 100% recyclable cardboard for packaging.

ESG Challenges

In the footwear industry, the key challenges are as follows: the transition towards sustainable footwear is a need since it reduces the negative impact on the environment. But this also comes with a cost as sustainable materials are expensive, and the production process is lengthy. This has been overcome by technological advancements where recycling helps in the reduction of the cost of the materials procured. Moreover, challenges are faced by the shoe industry from the earliest stages of the footwear life cycle, which is the manufacturing stage. Elaborating the same, when footwear is manufactured it requires machines that are powered by fossil fuels that produce GHG emissions when burned. As one of the energy sources used to power factories, coal contributes to the production of pollutants in the environment. Moreover, the chemicals used in the process also have a negative impact on the environment. When chemicals are leaked into the water, they pollute the water and have a significant impact on wildlife and the communities nearby.

Finally, improper disposal of footwear impacts the environment in a negative way. If footwear is thrown away and ends up in a landfill, it harms the soil and even the water supply. To reduce the number of shoes ending up in landfills, companies are promoting programs such as recycling and donating used shoes to avoid such a process.

Growth of Sustainable Footwear Market

In 2019, the global sustainable footwear market was valued at USD 7.5 billion, and it is expected to increase at a 5.8% CAGR between 2020 and 2027. There is a strong likelihood that the market for sustainable footwear will grow soon. This is because of advancements in the environmental sector as well as technological advances in material processing. As consumers become more aware of the products, this is resulting in manufacturers innovating their product offerings. Furthermore, the research highlights the key aspects and information regarding sustainable footwear.

Key Companies in this theme

    • Adidas group

    • Nike

    • Native shoes

    • Threads 4 thought

    • Nisolo

Scope Of the Sustainable Footwear Industry ESG Theme 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 Sustainable Footwear Industry ESG Theme Report: 

    • Developing a comprehensive understanding of macro-economic, policies & regulations and innovations affecting the sustainable footwear Industry, 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 footwear industry

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