Maia Morrissey, Reciprocity Lab, updated June 2 2026
Abstract
This academic paper is shared through Reciprocity Lab as part of our mission to connect people through sustainability education, storytelling, and community engagement. The purpose of publishing this research is to make sustainability concepts, ESG reporting, and the United Nations Sustainable Development Goals (SDGs) more accessible by examining how major global companies incorporate these principles into business strategy and decision-making. The finding illustrate how sustainability has become a part of business strategy, innovation, and long-term resilience, while also highlighting the trade-offs and ongoing challenges related to environmental impact, labor practices, and corporate accountability.
Beyond this paper, this research serves as an educational resource for readers interested in understanding the concepts, frameworks, and emerging standards that shape sustainability in business today. Reciprocity Lab wants to spark more informed discussions about the role businesses play in advancing sustainable development.
Introduction
Sustainability has become a strategic priority for multinational corporations, particularly in industries with high environmental and social impacts. Nike and Adidas, two global leaders in the apparel industry, have faced scrutiny over their environmental and social impacts. In response, both have adopted sustainable business strategies.
This report provides a comparative analysis between Nike and Adidas and their sustainability strategies. Drawing on corporate disclosures, academic literature, and environmental, social, and governance (ESG) reporting, this report examines ESG challenges, stakeholder expectations and the integration of the United Nations Sustainable Development Goals (SDGs). Furthermore, it explores their approaches to risk management, responsible governance, and double materiality to offer insights into their contribution to sustainable development and corporate social responsibility (CSR).
Identification of Relevant External Stakeholders
Understanding the external stakeholders engaged by Nike and Adidas is essential to evaluating their sustainability strategies. Stakeholder theory emphasizes that companies must create value for all parties affected by operations by extending beyond shareholder prioritization to include society and the environment (Freeman & Elms, 2018).
Both Nike and Adidas are consumer-facing brands whose market value is closely tied to brand perception. Consumers are increasingly demanding sustainable products, ethical labor practices, and environmental stewardship. This pressure is particularly intense among Gen Z and Millennial consumers (White et al., 2019). Adidas has responded to this demand with product lines made from ocean plastic, while Nike emphasizes zero waste and carbon-neutral campaigns.
As neither Nike or Adidas owns the majority of their production facilities, their suppliers are vital external stakeholders. These include textile mills, factories, and logistics partners, primarily in Asian countries. Adidas activity engages these stakeholders through environmental training, audits, and wage assessments. Nike conducts audits, but has been criticized for a lack of supplier-level transparency. These relationships are critical for Scope 3 emission reductions and labor rights enforcement (Locke et al., 2009).
Non-governmental organizations (NGO) such as the Clean Clothes Campaign, Fair Labor Association, and Greenpeace serve surrounding communities by holding companies accountable for ESG lapses. Adidas collaborates more closely with independent organizations, while Nike has faced criticisms from labor advocacy organizations for its lack of participation in certain multi-stakeholders safety initiatives such as the International Accord on Health and Safety in the Textile and Garment Industry (Clean Clothes Campaign, 2022). Civil society also plays a role in advocating for supply chain justice, climate action and living wages.
Institutional investors and ESG analysts like MSCI and Sustainalytics influence corporate decision-making by evaluating ESG performance and recommending investment strategies. Adidas appeals to investors because it’s included in the Dow Jones Sustainability Index and receives strong ESG ratings. Nike engages with investors, but has less third-party ESG verification, which may impact credibility with sustainability focused funds (KPMG, 2022).
Both companies must comply with increasingly stringent environmental and human rights regulations. These include the European Union’s Corporate Sustainability Reporting Directive (EU CSRD), the German Supply Chain Act, and anti-forced labor laws in the United States. Regulators are external stakeholders with growing influence because failure to meet legal requirements can result in fines, bans, and reputational damage.
Organizations such as the United Nations and the International Labour Organization (ILO) set global standards that frame stakeholder expectations. Adidas engages more visibly with these initiatives by aligning its strategy with several SDGs and participating in the Fashion Industry Charter for Climate Action, while Nike references global goals but does not consistently embed them into operations or performance frameworks.
Adidas demonstrates a more structured and transparent approach to external stakeholder engagement, particularly with suppliers, NGOs, and multilateral organizations, whereas Nike maintains strong consumer engagement and investor outreach, and is less transparent in its supplier relationships and NGO partnerships. Adidas and Nike have made strides to shift from a shareholder model (Friedman, 1970) to a more inclusive stakeholder approach.
Main ESG Issues Reported
Environmental
Environmental sustainability is vital for Nike and Adidas due to the fashion industry’s environmental impacts, such as high carbon emissions, water consumption, and waste. Nike and Adidas have aligned their environmental strategies with the urgency underscored by IPCC’s mitigation goals (Masson-Delmotte et al., 2022) and advocate circularity as a response to planetary limits (Rockström et al., 2009).
Adidas has reduced Scope 1 and 2 emissions by 50% since 2017 and advances Scope 3 reductions through supplier engagement. The goal is to reach climate neutrality by 2050 (Adidas, 2024). Nike has delivered a 69% reduction in Scope 1 and 2 emissions since 2020, but Scope 3 reductions remain limited at 36%, failing to meet its 40% reduction target (Nike, 2024). While both companies show progress, Adidas’ disclosures indicate a more comprehensive supply chain decarbonization strategy and greater transparency in supplier engagement and climate transition planning (De Marchi et al., 2013). Figure 1 shows the comparison of Scope 1-3 greenhouse gas emissions in metric tons pulled from their 2024 sustainability reports. While Nike presents a simple chart of its emissions, Adidas provides a full breakdown of GHG emissions, as shown in Figure 2.
Nike sources 96% of its electricity from renewables and aims for 100% by 2025, though this excludes supply chain energy use. Adidas supports suppliers through energy programs, and about 34% of its strategic suppliers use renewables. Additionally, Adidas is a RE100 member which reflects Adidas’ commitment to renewable electricity procurement and alignment with internationally recognized climate leadership frameworks, and in turn boosting its credibility with ESG investors (Bocken et al., 2014; RE100, 2024).
Adidas’s “Three Loop Strategy,” includes fully recyclable shoes and uses approximately 99% recycled polyester in products where ts technically feasible. Also, its Parley for the Oceans partnership repurposes marine plastic waste for products. Meanwhile, Nike has programs like Nike Refurbished and innovations such as Flyleather and Flyknit, where products are made from recycled leather and use sustainable cotton. However, it does have fewer metrics on circular outcomes. Figure 3 offers a side-by-side comparison of top five materials reused by each company in 2024.
Adidas reflects a more holistic approach by using an Environmental Footprint Tool (EFT) to measure and minimize its impacts across the entire product lifecycle. While Nike’s innovations are impactful, they are largely product-focused and not fully integrated into its organizational systems.
Social
The social dimension of ESG presents a significant challenge for multinational corporations with complex supply chains. The global supply chain in the apparel industry often intersects with labor rights violations and ethical governance concerns. Nike and Adidas have taken measures to address these issues, but their transparency, depth, and accountability varies.
Nike has been criticized for labor abuse across its factories in Asia, but have since reported improvements in workplace safety, fair wages, and anti-child labor policies. Figure 4 is from Nike’s 2024 sustainability report (p. 9), and offers insights into workplace safety, measured by Occupational Health and Safety Assessment Series (OHSAS).
Despite this, the firm still faces scrutiny regarding poor conditions in subcontracted supplier factories in countries like Vietnam and Indonesia, unpaid garment worker wages during the COVID-19 pandemic, and its refusal to sign the International Accord on factory safety (Clean Clothes Campaign, 2022). Adidas has taken a more proactive approach by publishing factory lists since 2001 and collaborating with the Labor Association. However, in 2024, Adidas transitioned from OHSAS-based reporting to ESRS, making direct comparisons with Nike more complex. Both companies highlight community investment companies and employee well-being initiatives as part of their social responsibility; however, both firms encounter challenges in fully eradicating labor abuses (Park et al., 2022).
Currently, Nike’s workforce consists of 47% women and 44% of leadership roles are held by women (Nike, 2024). In comparison, Adidas’s “People Strategy” initiative has achieved 41% women in leadership positions and is aiming to increase that to 50% by 2025. Figure 5 offers a visual comparison of gender diversity across leadership and in the global workforce.
Governance
Corporate governance structures underpin sustainability efforts. The governance disclosures reflect an increasing recognition of ESG as central to corporate risk management and value creation (Eccles et al., 2020).
Adidas has a Sustainability Committee within its supervisory board and reports on anti-corruption policies, risk management, and compliance programs. Adidas reflects strong governance alignment with global standards through its integration of ESG into board-level strategy, ties executive pay to sustainability key performance indicators (KPI), and undergoes third-party ESG audits (Adidas, 2024).
In comparison, Nike established a Corporate Responsibility and Sustainability Committee that oversees ESG risks and performance (Nike, 2024). However, Nike lacks consistent ESG-linked compensation and has fewer third-party validations (KPMG, 2022). Governance experts argue that oversight and board accountability are essential to ESG credibility (Eccles & Serafeim, 2014).
Adidas leads in stakeholder inclusion by offering grievances mechanisms for factory workers and publishing summaries of outcomes. Conversely, Nike provides whistleblower tools and community engagement programs, but is less transparent about supply chain level grievance resolutions. Adidas partakes more in participatory governance which involves engaging affected workers and communities compared to Nike.
Finally, board diversity reflects inclusive governance essential to ESG success. Research indicates that diverse boards are more likely to consider long-term risk and stakeholder interests (Aguilera & Griffiths, 2014). Adidas reports 25% women board representation, whereas Nike shows 38% (shown in Figure 6). Although Adidas has a less diverse board, it makes up for it with links executive pay to ESG KPIs and conducts third-party audits, while Nike discloses less on ESG -linked compensation and audit transparency. Overall, Adidas exhibits deeper integration through more formal governance structures, third-party verification, and participatory stakeholder mechanisms. Effective governance is crucial to aligning incentives with long-term sustainability and the avoiding pitfalls of greenwashing (Delmas & Burbano, 2011).
Connections to Business Purpose, Strategy and the UN SDGs
The sustainability agendas of Nike and Adidas are central to their evolving business models, long-term growth strategies, and brand identity. They have firmly rooted in alignment with the UN SDGs, but they differ in execution and scope.
Adidas aligns its ESG goals with three key strategies outlined in its “Own the Game” strategy: credibility, experience, and sustainability. Its 2024 Sustainability Statement explicitly linked ESG performance to corporate values, innovation strategies, and specific SDGS, while focusing on circularity and climate-neutral operations. Adidas integrates SDG 12 (Responsible Consumption and Production) through recycled polyester and circularity, SDG 13 through science-based climate targets, SDG 14 (Life Below Water) through its ocean plastics reduction efforts, and SDG 6 (Clean Water and Sanitation) through product lines and water stewardship. Additionally, it integrates SDG 5 (Gender Equality) and SDG 10 (Reduced Inequalities) via fair labor practices. These alignments are backed by data and third-party metrics.
Comparably, Nike integrates multiple SDGs in its 2024 sustainability strategy and links them directly to operational practices. SDG 13 (Climate Action) and SDG 12 (Responsible Consumption and Production) are addressed through reductions in Scope 1-3 emissions, energy use, and water consumption. SDG 6 (Clean Water & Sanitation), SDG 14 (Life Below Water), and SDG 15 (Life on Land) guide Nike’s water stewardship efforts, including a 15% reduction in freshwater and wastewater compliance to ZDHC guidelines across 90% of strategic suppliers. SDG 16 (Peace and Justice in Strong Institutions) is reflected in governance structures, grievance mechanisms, and stakeholder engagement. SDG 3 (Good Health and Well-Being) and SDG 8 (Decent Work and Economic Growth) are supported through occupational health and safety systems across Nike’s global workforce and supply chain (Nike, 2024). Additionally, Nike’s emphasis on circularity and renewable energy supports SDG 7 (Affordable and Clean Energy). A simplified comparison of SDG integration of Adidas and Nike follows.
Measuring progress requires specific KPIs and transparency. Adidas offers more detailed metrics, including reductions in water use since 2017, advanced recycled polyester usage (99% vs Nike’s undisclosed percentage), transparent Scope 3 emissions per product, strong supply chain living wage coverage, and investment in circular recycling. As for Nike, it reports larger GHG reductions since 2020, greater renewable electricity use, clear waste diversion metrics, gender pay equity data, and significant investment in diverse suppliers. However, Adidas’s shift to ESRS reporting introduced new KPIs and calculations methods which complicate direct comparisons. As stakeholder scrutiny amplifies, transparent and measurable progress toward the SDGs becomes both a strategic imperative and a reputational asset (UN Global Compact, 2023).
Approaches to Risk Management, Business Opportunities, and Responsible Governance
Risk Management
As global brands in a volatile industry, Nike and Adidas must manage environmental, social, and regulatory risks while pursuing sustainable growth. Their ESG performance depends on climate and transition risk responses as well as stakeholder engagement.
Adidas adopts a more transparent approach to ESG risk management. Its risk assessment is embedded within its broader enterprise risk management (ERM) framework aligned with the Task Force on Climate-related Financial Disclosures (TCFD). Key material risks include climate change, water scarcity, supply chain disruption and regulatory uncertainty. To monitor and mitigate these risks, Adidas uses climate scenario analysis to prepare for future climate-related supply chain disruptions and supports suppliers in implementing low carbon technologies.
Nike also aligns with TCFD and has made improvements in climate-related risk reporting. Its “Move to Zero initiative includes commitments to climate resilience. Nike has begun integrating risk-based screening in sourcing decisions based on IPCC climate pathways to assess risk. However, its ESG risk disclosures are less detailed, particularly for supplier risk exposure and mitigation, and focus heavily on renewable energy use without detailing supply chain specific vulnerabilities. Unlike Adidas, Nike does not publicly disclose scenario-based analysis or structured climate resilience plans.
These differences in strategic preparations are especially relevant as climate disclosure regulations tighten globally. Companies that are unprepared may face legal risk and reputational backlash (European Commission, 2024; SEC, 2023). Therefore, proactive ESG risk integration offers regulatory resilience and long-term business continuity.
Business Opportunities
Opportunities in sustainability arise from growing consumer demand and regulatory incentives. Both Nike and Adidas reflect the ideas of stakeholder capitalism and view sustainability as a competitive advantage (Freeman & Elms, 2018).
Adidas explicitly positions sustainability as one of its strategic growth pillars under its “Own the Game” strategy. Examples include its circular “Three Loop Strategy,” partnerships with environmental innovators like Parley, and development of fully recyclable shoes. These initiatives allow Adidas to capture emerging eco-conscious consumer markets and reduce long-term material risks.
Similarly, Nike seeks business growth through sustainable product design, digital customization, and circular business models like Nike Refurbished. Its repurposing waste into new products has environmental and economic upsides. However, Nike often frames these innovations as brand-driven rather than systemic operations shifts with minimal public disclosure on how innovation is evaluated against ESG risks and opportunities.
Academic literature supports viewing ESG as a strategic lever for innovation through Porter and Kramer’s (2011) concept of creating shared value, which posits that aligning business success with social progress can unlock new markets, increase efficiency, improve finances, attract investors, and foster loyalty. Adidas metrics and lifecycle-driven approach better embody this strategic alignment.
Responsible Governance
Aforementioned, effective governance is essential to embedding sustainability into corporate decision-making and long-term strategy. Adidas’s governance structure includes board-level sustainability oversight and factors ESG KPIs into executive performance reviews. It also uses third-party audits and aligns with international frameworks. This fosters transparency and accountability to investors and stakeholders.
Nike’s Corporate Responsibility, Sustainability, and Governance (CRSG) Committee operates under the board of directors, and discloses policies on ethics, compliance, and stakeholder engagement. The committee monitors ESG risks, strategy, execution, and regulatory compliance. Additionally, Nike’s internal audits claim that it ties a portion of executive compensation to sustainability performance, particularly around carbon emission reduction, workplace diversity, and supply chain audits (Nike, 2024).
Despite progress, both firms face governance gaps in supply chain traceability and external accountability. Corporate governance must include formal board responsibility, performance-linked incentives, and third-party audits to create long-term value to be credible (Eccles & Klimenko, 2019). Adidas’s governance approach reflects these principles more comprehensively than Nike’s governance approach.
Evidence of Double Materiality
Double materiality emphasizes the duality of ESG by measuring how sustainability issues affect the company via finances, and how the company affects the environment and society via impacts (Delgado-Ceballos et al., 2022).
Adidas explicitly implements double materiality by evaluating sustainability issues through impact materiality and financial materiality perspectives, and remains consistent with European Sustainability Reporting Standards (ESRS) requirements. Adidas sets thresholds (a score >3 on a 1-5 scale) across both dimensions to identify material ESG topics, and assesses a long list of issues through impact, risk, and opportunities (IRO). For example, the company identifies water scarcity and climate risks as threats to production stability, while also reporting on its water consumption reductions and supplier engagement (Adidas, 2024).
Conversely, Nike’s ESG disclosures tend to focus more on financial materiality by evaluating how ESG risks may threaten its brand, supply chain, or market value. Nike outlines climate risks in line with TCFD, but provides minimal detail on how its practices contribute to global grand challenges. There is no publicly available double materiality matrix.
Critical Analysis & Recommendations
Nike and Adidas exhibit notable commitments to sustainability, but their journeys reveal the complexities and contradictions of embedding ESG principles into a high impact industry. Both companies have to be wary of greenwashing. Green marketing without transparent third-party verification can be counterproductive, lead to consumer skepticism, and reduce investor confidence (Diandra & Aprillianty, 2024; Ho, 2023). Based on publicly available disclosures, Adidas appears to adopt a more systems-oriented approach by emphasizing partnerships, traceability, and circular design compared to Nike. Collaborations and the use of life cycle assessment tools reflect a deeper organizational shift toward sustainable consumption and production.
Nonetheless, both firms face structural limitations. Their supply chains are long, opaque, and reliant on subcontracted labor in regions where labor protections are often weak. Despite efforts like factory audits and training programs, reports of labor violations continue to emerge. Furthermore, Nike and Adidas face the strategic tension between growth and sustainability. Nike’s ambition to increase market share in emerging economies and Adidas’s rapid product expansion raise questions about the ecological limits to consumption (Sachs et al., 2019). Additionally, both firms engage NGOs and consumers, but lack inclusion of marginalized groups, such as factory workers, into decision-making processes. Without direct stakeholder participation, sustainability efforts risk becoming top-down and compliance driven rather than transformational (Freeman & Elms, 2018). To advance their ESG performance, both firms should strengthen third-party audits, increase community and labor union engagement, and integrate sustainability into governance and incentive structures.
Conclusion
Ultimately, both companies have made significant progress and serve as industry benchmarks, but their efforts are constrained by broader systemic forces. Nike and Adidas approach sustainability with ESG strategies aligned with the UN SDGs, though their reporting practices, stakeholder engagement approaches, and levels of transparency vary. Incorporating double materiality, stronger governance, and deeper stakeholder engagement are vital for advancing sustainable development and long-term corporate resilience for Adidas and Nike.
References
Adidas. (2024). Sustainability statement 2024. Retrieved from https://report.adidas-group.com/2024/en/.
Adidas. (2024). ESRS 2: General disclosures and double materiality assessment. Retrieved from https://report.adidas-group.com/2024/en/.
Bocken, N. M. P., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of Cleaner Production, 65, 42–56. https://doi.org/10.1016/j.jclepro.2013.11.039
Clean Clothes Campaign. (2022). Unpaid wages in global supply chains. https://cleanclothes.org/file-repository/unpaid-wages-in-global-supply-chains/view
De Marchi, V., Di Maria, E., & Micelli, S. (2013). Environmental strategies, upgrading and competitive advantage in global value chains. Business Strategy and the Environment, 22(1), 62–72. https://doi.org/10.1002/bse.1738
Delgado-Ceballos, J., Aragón-Correa, J. A., Ortiz-de-Mandojana, N., & Rueda-Manzanares, A. (2022). The concept of double materiality: A systematic literature review and research agenda. Business Strategy and the Environment, 31(6), 2446–2461. https://doi.org/10.1002/bse.3053
Delmas, M. A., & Burbano, V. C. (2011). The drivers of greenwashing. California Management Review, 54(1), 64–87. https://doi.org/10.1525/cmr.2011.54.1.64
Diandra, P., & Aprilianty, F. (2024). The impact of greenwashing towards brand trust and brand loyalty: A study of Nike Move to Zero initiatives. Mandalika Journal of Business and Management Studies, 2(2), 85–114. https://journal.institutemandalika.com
Eccles, R. G., Ioannou, I., & Serafeim, G. (2014). The impact of corporate sustainability on organizational processes and performance. Management Science, 60(11), 2835–2857. https://doi.org/10.1287/mnsc.2014.1984
Eccles, R. G., Johnstone-Louis, M., Mayer, C., & Stroehle, J. C. (2020). The board’s role in sustainability: A new framework for getting directors behind ESG efforts. Harvard Business Review, 98(5), 48–51. https://hbr.org/2020/09/the-boards-role-in-sustainability
Eccles, R. G., & Klimenko, S. (2019). The investor revolution. Harvard Business Review, 97(3), 106–116.
European Commission. (2024). Guidelines on non-financial reporting: Supplement on reporting climate-related information. https://ec.europa.eu/info/publications/non-financial-reporting-guidelines_en
Freeman, R. E., & Elms, H. (2018). The role of the corporation in society: An alternative view and opportunities for future research. Business & Society, 59(7), 1295–1318. https://doi.org/10.1177/0007650317711894
Freeman, R. E., & Elms, H. (2018). The social responsibility of business is to create value for stakeholders. MIT Sloan Management Review. https://sloanreview.mit.edu/article/the-social-responsibility-of-business-is-to-create-value-for-sta keholders/
Friedman, M. (1970, September 13). The social responsibility of business is to increase its profits. The New York Times Magazine. https://www.proquest.com/docview/2441921739
Ho, C. (2023). Greenwashing in ESG investing: Risks, regulation, and reputation. Harvard Law Review Forum, 136, 112–129. https://harvardlawreview.org
KPMG. (2022). Survey of sustainability reporting 2022. https://home.kpmg/xx/en/home/insights/2022/12/survey-of-sustainability-reporting.html
Locke, R. M., Amengual, M., & Mangla, A. (2009). Improving work conditions in global supply chains. MIT Sloan Management Review, 50(2), 85–94.
Masson-Delmotte, V., Zhai, P., Pörtner, H.-O., Roberts, D., Skea, J., Shukla, P. R., … Waterfield, T. (Eds.). (2022). Summary for policymakers. In Global warming of 1.5°C (pp. 3–24). Cambridge University Press. https://doi.org/10.1017/9781009157940.001
Nike. (2024). Purpose 2025: Impact report. https://purpose.nike.com/
Park, H., Russell, W. G., & Lee, J. (2022). CSR performance and labor issues in global supply chains: A longitudinal assessment of Nike and Adidas. Journal of Business Research, 143, 15–27. https://doi.org/10.1016/j.jbusres.2022.01.045
Park, J., Cuervo-Cazurra, A., & Montiel, I. (2022). The historical origin of the Sustainable Development Goals: From local to cross-national to global sustainability. In A. Goerzen (Ed.), The research handbook on international corporate social responsibility. Edward Elgar Publishing.
Porter, M. E., & Kramer, M. R. (2011). Creating shared value. Harvard Business Review, 89(1/2), 62–77.
RE100. (2024). Member directory. https://www.there100.org/companies
Rockström, J., Steffen, W., Noone, K., Persson, Å., Chapin, F. S., Lambin, E. F., … Foley, J. A. (2009). A safe operating space for humanity. Nature, 461(7263), 472–475. https://doi.org/10.1038/461472a
Sachs, J. D., Schmidt-Traub, G., Mazzucato, M., Messner, D., Nakicenovic, N., & Rockström, J. (2019). Six transformations to achieve the sustainable development goals. Nature Sustainability, 2(9), 805–814. https://doi.org/10.1038/s41893-019-0352-9
SEC. (2023). Final rule: The enhancement and standardization of climate-related disclosures for investors. https://www.sec.gov/rules/final/2023/climate-disclosure
UN Global Compact. (2023). SDG integration in corporate strategy: Progress report. https://unglobalcompact.org/library
White, K., Habib, R., & Hardisty, D. J. (2019). How to shift consumer behaviors to be more sustainable. Harvard Business Review, 97(4), 70–76.