Allbirds wants people to understand their sneakers’ carbon footprint like they do calories in food

• Allbirds is labeling its shoes with their carbon footprint in the hope that other companies will follow suit and lead to a reduction in greenhouse gas emissions.
• Climate change and carbon emissions are difficult topics for consumers to understand, compared to plastic pollution, which appears more tangible to consumers according to Allbirds' sustainability lead Hana Kajimura.
• The fashion industry contributed 4% of global greenhouse gas emissions in 2018, per a McKinsey estimate.

LONDON — When Allbirds founders Tim Brown and Joey Zwillinger launched the footwear brand in 2016, they wanted to make a simple-looking shoe that was logo-free. They started with a sneaker that had a wool upper, and ads claimed they were the "world's most comfortable" shoes.

Their sneakers soon became the go-to footwear of Silicon Valley executives, but they had another mission beyond being fashionable: they wanted to be environmentally-friendly. However, using a sustainability message in marketing at the time wasn't necessarily the sexiest selling point, explained Allbirds' sustainability lead Hana Kajimura.

"From the very beginning, Tim and Joey (felt that) getting our product out into the world is key to us having any (environmental) impact. Sustainability is a big topic, it's really heavy. People don't really understand (it and) we don't want to take the risk that we're going to confuse them. And so, let's lead with comfort and design," Kajimura told CNBC by phone.

While concern for the environment was something the founders had "embedded" into the business, it needed to focus its efforts, Kajimura stated. She joined Allbirds in 2017. "My job was to say, OK, sustainability is this incredibly big term, this broad umbrella that can mean 10 different things to 10 different people … and what does it mean to us?"

Brown and Zwillinger knew that sneaker soles were traditionally made from plastic, which is produced from fossil fuels, one of the contributors to carbon dioxide emissions and climate change. "Climate change is really the central issue that we wanted to effect change in, and the way we were going to do that was to reduce our own carbon footprint and then help empower other businesses to do the same," Kajimura explained. It worked with a Brazilian manufacturer to make soles from sugarcane instead, a product it calls SweetFoam, and has made the technology available to other companies at no cost.

An unfashionable issue

The fashion industry produced about 4% of global greenhouse gas emissions in 2018, per a McKinsey estimate. Anna Granskog, a partner in the consultancy's global sustainability practice, told CNBC that "way too few" fashion companies are doing anything to tackle this, and McKinsey's "Fashion on Climate" report published in August suggests that the sector needs to cut its carbon emissions in half over the next 10 years if it is to meet climate goals set out in the 2015 Paris Agreement.

"For fashion companies … if they want to start thinking about their sustainability agenda, they will have to address emissions to get credibility for that agenda," Granskog told CNBC by phone.

Allbirds' environmental goal is to eliminate carbon emissions from its products, from the raw materials it uses to the CO2 produced by shoes as they decompose in landfill sites. Its approach is to measure its emissions, reduce its environmental impact by including recycled or natural fabrics, and then offset anything that remains.

Measuring emissions is complex because there are several processes involved in producing goods, but the company estimates the carbon footprint of an average Allbirds product is 7.6 kg CO2e (carbon dioxide equivalent emissions). That equates to putting five loads of laundry through a dryer, it has calculated, and compares to 12.5 kg CO2e for the average standard sneaker, per a method used by Allbirds based in part on an MIT study that looked at how to reduce emissions in footwear production.

Sustainable stories

The problem with talking about carbon footprint, or greenhouse gas emissions, is that they're not terms the average consumer instinctively understands, explained Kajimura. "We kind of chose to go after the hardest topic first. I think something like plastic is really tangible to people. They can see it, they can touch it. So, when companies talk about ocean plastics or recycling, it's pretty intuitive. Climate change, carbon emissions, not so," she told CNBC.

Part of the solution may lie in telling the story better, and earlier this month Allbirds published a video featuring comedian Bret McKenzie explaining that emissions are pretty similar to calories. As he says: "The higher the number, the more work we have to do to cancel it out," and to that point, Allbirds is publishing the carbon footprint of all of its products.

"We … feel like that's an important step in starting to help our customer develop this relational understanding for carbon footprints in the same way that they already have for calories or other nutrition facts on food, for example," Kajimura said.

People are more concerned about green issues than when Allbirds was founded, she added. "(Now) the average person is much more coming into consciousness around what sustainability means … And as we grew and had a bigger platform and a bigger audience, we feel it is our responsibility to help bring more and more people into this conversation regardless of whether they get it at first, or not."

Karl-Hendrik Magnus, a senior partner at McKinsey and co-leader of its apparel, fashion and luxury group, agrees that more transparency is needed. "If you go into a fashion store and look at a t-shirt, it's really hard for you to judge is this a sustainable piece of garment or not. Enabling the consumer to make the educated choice to walk away from non-sustainable brands and to celebrate and support sustainable brands is the first thing that (businesses) can do and must do better," he told CNBC by phone. 

In May, Allbirds announced a partnership with Adidas to produce a sports performance shoe with "the lowest ever carbon footprint" and the broader aim for Allbirds is to encourage other businesses to also publish details of their emissions, Kajimura said. "In deciding to publish our carbon footprint, we acknowledge that another brand might come out with a lower carbon footprint than ours, but that would be a win because not only would we get people talking about carbon footprints … but we'd be creating this competition and (that's) exactly the right way to reduce the footprint of our industry."

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