Even if the name Allbirds doesn’t ring any bells, you’ll probably recognize the brand’s comfy wool sneakers.
Founded in San Francisco in 2015 by biotech engineer and renewables expert Joey Zwillinger and former footballer Tim Brown, Allbirds has built its name off sneakers made from wool, which it says is the more sustainable choice. In half a decade, this Silicon Valley startup has grown to be a major player in the footwear industry. It’s been worn by tons of celebrities and garnered early investment from Leonardo DiCaprio, and has expanded to offer activewear and loungewear in similarly minimalist designs and conscious materials. By 2020, Allbirds was valued at $1.7 billion, and in August this year, the brand filed for what it is calling a Sustainability IPO.
It’s widely considered a sustainable business. Allbirds is a B Corp that is known for inventing its own materials, as well as pushing for greater collaboration and transparency in the footwear industry. In July, the brand announced a 10 step sustainability commitment called the “Allbirds Flight Plan” which has the ambition to cut the brand’s emission in half by 2025.
But when a company comes out with lines like “Reverse Climate Change Through Better Business,” one can’t help but be a little suspicious. Is Allbirds the sustainable disrupter we’re led to believe? Let’s get into it.
Making Fewer But Better Sneakers… for Now
Allbirds launched with just one product, the Wool Runner, a lightweight, machine washable casual sneaker that Time magazine called “The World’s Most Comfortable Shoes”. Since that super successful first sneaker, the brand’s offering has slowly expanded to performance trainers and casual footwear in a range of muted colors. In 2019, it launched a small range of socks, followed by underwear in 2020, and in August this year, the brand launched activewear with a modest collection of five womenswear pieces and two menswear pieces. By any brand’s standards, that’s a small product range.
“I think their process is the equivalent of slow fashion,” says Ken Pucker, senior lecturer at Tufts Fletcher School and advisory director of Berkshire Partners, who spent 15 years at footwear giant Timberland, 7 of which he was the company’s chief operating officer. Pucker has just co-authored a Harvard Business School case study of Allbirds. “They introduce so few styles annually compared to big footwear companies, and they don’t have a product development calendar that’s based on speed, it’s based on innovation.”
Allbirds’ approach to selling footwear and apparel is minimalist in every sense of the word, which is important, considering the footwear industry traditionally relies on a regular roster of celebrity collabs, new product drops and new ever-so-slightly-tweaked versions of their existing shoes. “I’ve tried to make us the opposite of Nike almost,” Tim Brown told Glossy last year. “The initial idea of Allbirds was all about the reduction of the shoe down to its simplest form, which is the opposite of the streetwear model, with small changes and a million different models.”
What’s less minimalist is the brand’s ambition to scale. Allbirds’ founders have said that since launching, the brand has sold more than eight million pairs of shoes, and it’s got big plans to expand physical retail locations (by 50% according to Bloomberg) and product offerings.
The question remains, can the brand continue to grow — and be a publicly-traded company — while maintaining the environmental credentials that are core to its DNA?
Are Allbirds’ Materials Sustainable?
Through a combination of environmentally friendly materials and conscious manufacturing, Allbirds claims that its shoes have a 30% smaller carbon footprint than a standard pair of sneakers on the market.
There are four main materials that Allbirds uses, including Merino wool, Tencel Lyocell (a sustainable alternative to viscose), SweetFoam, a sugarcane-based EVA used in Allbirds shoe soles, and Trino, made from a blend of Merino wool and Lyocell. Allbirds shoelaces are made from recycled plastic bottles, recycled nylon can be found in the brand’s activewear, and other pieces are made from TrinoXO – a material that contains chitosan, a compound made from crab shells. To understand just how much investment Allbirds put into materials, let’s look closer at two of its most prominent ones.
A native New Zealander, Brown has been working closely with the country’s wool farmers to supply the hero material for Allbirds shoes. Allbirds works with ZQ Merino, a wool certification created by the industry group New Zealand Merino Company that ensures farms and suppliers meet high standards of animal welfare, environmental care and social responsibility. In March 2020, Allbirds and ZQ held the inaugural Regenerative Wool Summit in Christchurch, which brought together 160 farmers from across the country to educate them on regenerative farming practices. “Bringing carbon back into the soil through regenerative agriculture is one of the greatest opportunities to address human and climate health, along with the financial well-being of farmers across the globe,” states the brand’s 2020 Sustainability report. Crucial to the brand’s ethical expansion strategy is encouraging the industry’s shift towards better farming practices, and by 2025 it aims to source 100% of its wool from regenerative farms.
Not everyone is convinced by the brand’s efforts. Earlier this year, a class-action lawsuit was filed against Allbirds claiming that the company has greenwashed consumers to believe that the brand’s shoes are more sustainable and ethical than they actually are. The suit, filed in New York by a woman called Patricia Dwyer, cites a PETA article that accuses both Allbirds and ZQ Merino of leaving out some of the environmental impacts of their wool, as well as refusing to give PETA access to more information about the living conditions of sheep on the farms. The suit also claims that ZQ’s audits, which happen every three years, don’t do enough to prevent the abuse of animals in the wool supply chain.
Further reading of the article and lawsuit suggests that PETA and Dwyer have an issue with the use of wool altogether, not just Allbirds and ZQ’s wool specifically. PETA points to “luxurious animal-free options” without going into detail about what these alternatives are.
Considering the prominence of wool in Allbird’s products, as well as wool’s unique selling points that feature heavily in the brand’s marketing (“breathable, temperature regulating, moisture-wicking”), it seems unlikely that Allbirds will be divesting from this fiber any time soon.
The vast majority of footwear soles are made from ethylene-vinyl acetate (EVA), a rubbery foam that is derived from petroleum. In 2018, Allbirds announced a partnership with Brazilian petrochemical company Braskem. Together they created a bio-based, carbon-negative EVA made from Brazilian sugarcane — a rainwater fed, renewable crop that removes carbon from the atmosphere as it grows. SweetFoam, as Allbirds call it, was named one of Time’s best inventions of 2018, and is now used throughout their entire footwear range. Allbirds claims that, while manufacturing a regular kilogram of petroleum-based EVA emits 1.8 kilograms of CO₂e, “SweetFoam material actually removes 1.2 kilograms of CO₂e per kilogram of material produced.” Allbirds has not provided a third-party certificate attesting to this figure, however.
Allbirds’ Water, Energy and Carbon Footprints
Allbirds has set out ambitious targets for 2025 around its energy and water usage. What is unclear, however, is the brand’s current usage of these resources — the 2020 Sustainability report skims over this to focus on future commitments.
Water is identified as one of the brand’s five foundational topics (alongside fair labor, chemistry, animal welfare, and traceability and transparency) in the 2020 report, but details on this are scarce. Allbirds prioritizes materials that are water-efficient, like Tencel’s Lyocell — made using a closed-loop process, where 99% of the water used is recycled — and Sweetfoam, which comes from a rainfed source crop. The brand also says it’s committed to measuring and reducing water consumption within its Tier 1 and 2 suppliers, but doesn’t give details. Part of the 2025 Flight Plan strategy is to convince 100% of its customers to wash their trainers with cold water, although it’s not clear how this would be achieved — currently, the brand supplies customers with suggested care instructions.
Energy (which Allbirds defines as “electricity and fuel across materials processing, manufacturing, transportation, and customer care”) makes up around three-fourths of the brand’s carbon footprint, so it’s making pretty impressive commitments to reducing its use. By 2025, it’s aiming to use 100% renewable energy across Allbirds offices, retail stores, and Tier 1 suppliers, which the brand says it’ll achieve by working with factories located in regions with cleaner grids, and working with suppliers on energy efficiency measures as well as encouraging “low carbon materials.” The brand provided no further information on how this would be achieved. Allbirds also plans to use 95% ocean shipping by 2025 (as opposed to more carbon-intensive air freight) which would be an increase from 80% in 2020. It should be noted that Tier 1 suppliers, which is fabrication, use a much smaller proportion of energy compared to Tier 2, 3 and 4 suppliers: dyeing, finishing, material manufacturing, and raw material extraction.
Allbirds has been carbon neutral since 2019 when it became a founding member of Climate Neutral, a nonprofit that helps brands reduce their footprint in part by offsetting their emissions through environmental projects. Since joining, the brand has used carbon credits to offset 100% of its emissions by funding initiatives including the Big Smile Wind Farm, Envira Amazonia Project, Argentina Regenerative Wool and the Montana Grazing Project, among others. Allbirds’ key goal is to reduce the brand’s carbon through regenerative agriculture, renewable materials, and responsible energy.
“On the environmental side, I think they’re really quite good,” says Pucker. “I think that they’re authentic about their claims, and I think the plan they’ve laid out for becoming a net-zero emitter is legitimate, aggressive and informed.”
Open Sourcing, Collaboration & Investments
Allbirds’ investment in material innovation isn’t just for the brand’s benefit. After convincing Braskem to adapt its factory systems in order to make SweetFoam, Allbirds open-sourced the recipe so that the rest of the footwear industry could adopt green EVA too. Timberland has since embraced the material, renaming it GreenStride, while Puma’s green EVA is called Better Foam. TOMS, Dansko and other brands have since incorporated green EVA into eco capsule collections.
Similarly, in April, Allbirds shared its proprietary carbon footprint calculator, a life cycle assessment tool that helps a brand understand its carbon footprint, as well as its carbon labelling template, with the industry. “Our great hope is that this will catalyze other people to share the science [behind their products], and it’s going to take some time,” Brown told Vogue last year. The LCA was created to fill a gap in the industry for auditing tools, believes Pucker. “I think Allbirds was bold to come up with their own product [the LCA system] and be willing to share it,” he says. While Pucker doesn’t disagree that an objective third-party group should be creating and overseeing these assessment tools, “They’re not saying they won’t participate in an industry-standard,” he says. “But the absence of something led them to say: ‘we’re not going to wait.’”
Allbirds has also teamed up with Adidas on a shoe collaboration called FUTURECRAFT.FOOTPRINT, set to be released in 2022. (Turns out the “opposite of Nike” is Adidas.) The partnership, announced last year, has the ambition to create a shoe with a carbon output of less than 2 kg (around 5 kg less than the output of an Allbirds shoe).
Allbirds is no stranger to seeking investment, but the company has also invested in five other companies, including Natural Fiber Welding, which creates a plant-based leather substitute that Allbirds looks set to introduce into its range this December.
Lack of Labor Transparency
As a B Corp business, Allbirds is required to have a “triple bottom line” that values people, the planet and profit — this includes paying living wages, ensuring safe and fair working conditions, and providing opportunities for growth and development to its employees throughout the supply chain. The minimum score a brand needs to qualify as a B Corp is a score of 80/150, and currently, Allbirds scrapes in at 89.4, but B Corp doesn’t provide any information on how this score is broken down.
One area where Allbirds shares very little information is on the garment workers that make its products in countries including the U.S, Peru and Indonesia. In 2020, Allbirds worked with only nine Tier 1 factories, however, there’s no information available on factory names, the results of factory audits, or areas for improvement. In fact, in its 42-page sustainability report, only two pages of information is given to manufacturing partners. As is becoming industry standard, Allbirds has a publicly available supplier Code of Conduct policy as well as a brief document on its factory auditing process.
As of September, Good On You gave Allbirds a “not good enough” score for its labor transparency (and an overall “it’s a start” mark), while Remake gave the brand 28/100 points in its impact assessment. Workers wellbeing doesn’t come into any of the brand’s 10 quantitative commitments for 2025, although fair labor is outlined in the 2020 report. The brand’s initiatives around fair labor include conducting a wage analysis of Tier 1 suppliers, and supporting workers in areas affected by climate change, although the details of these initiatives are unspecific. This scarcity of information doesn’t necessarily indicate that the brand’s manufacturing partners aren’t up to scratch, but considering transparency is such a hot topic (and given the brand’s open and collaborative actions elsewhere in the business) it’s worth asking why there is a lack of detailed information where Allbirds’ garment workers are concerned.
We reached out to Allbirds for more information, but they declined to comment citing the SEC-mandated quiet period after filing for an IPO.
So is Allbirds a perfect company? No. We wish they would do more to back up some of their claims with third-party certifications. But it’s fair to say it’s a young brand that’s made big strides to improve the footwear industry, not just for its own sake, but for its competitors too. From open-sourcing information to investing in and inventing new materials, it’s ambitiously challenging the status quo of the industry by looking at the bigger picture (the climate emergency) to inform its strategy.
Industry veterans like Pucker can’t rate them highly enough. “Their approach to materials development and innovation is spectacular,” he says. “I think their transparency about their footprint and their intentions for net-zero is really good, and their focus on collaborations — like a partnership with Adidas — ostensibly a competitor, is awesome. They’re seeking to influence the industry.”
Materials are clearly the brand’s biggest focus, but it’s hard to ignore that there’s a glaring omission in its reporting: workers’ rights and safety, which feature only briefly in its future strategy. Overall, Allbirds is making tangible commitments to becoming as sustainable as possible, with a diverse portfolio of projects that could help it achieve these goals. If you’re in the market for a sneaker that is more sustainably made, you could do worse than Allbirds.
Let’s just cross our fingers that there are no labor scandals lurking in its supply chain.