Skip to content
  • For Financial Professionals in the US Change
  • Contact Us
    • Subscriptions
      • Select Preferences
      • Log in
search bar
Janus Henderson Investors
  • Products
        • Investment Options

        • Mutual Funds
        • ETFs
        • Managed Accounts
        • Variable Insurance
        • Filter By

        • Equities
        • Fixed Income
        • Multi-Asset
        • View

        • Prices and Performance
        • Morningstar Fee Levels
        • Mutual Fund Distributions
        • Product Literature
        • View All Funds
  • Insights
        • Knowledge Shared

        • Explore our insights

        • Blog News Feed

        • Abandon Your Doubts
          Not Your Goals

          Uncertainty can cause investors to question their investment strategy. But with the right perspective, it’s possible to look past today’s uncertainty and stay focused on long-term objectives.

        • Learn More
        • Global Perspectives
          Recurring global market views and research
        • Portfolio Construction
          Actionable asset allocation insights from our strategists
        • For Your Practice and Your Clients
          Expertise on matters unique to your business and to your clients
        • Investment Viewpoints
          Updates and outlooks from our investment teams
        • Wealth Management & Retirement
          Unique wealth planning strategies and timely insights in the DC marketplace to stay ahead
        • View All Insights
        • Telescope Insights
        • Timely views on market events and the latest thinking from Janus Henderson.

        • View All Posts
  • Resources
        • Our Resources

        • Our Knowledge Labs Program

        • Choose Your Goals

        • Knowledge Labs
        • Webcast Series
        • Podcasts
        • Connect with Your Clients
        • Professional Development
          Resources to enhance your performance and grow your practice.
        • Wealth Management
          Discover wealth planning and tax strategies for your complete spectrum of clients.
        • Portfolio Construction and Strategy
          Form a partnership with Janus Henderson and gain access to analytical resources.
        • Defined Contribution
          Stay informed about the latest defined contribution strategies.
        • Client Acquisition
        • Client Loyalty
        • Team and Personal Effectiveness
        • Compliance and Regulatory
        • Portfolio Strategy
  • About Us
        • About Janus Henderson Investors

        • Our people

        • Environmental, Social and Governance (ESG)

        • Who We Are
        • Our Investment Capabilities
        • Connecting With Our Clients
        • We provide access to some of the industry’s most talented and innovative thinkers.


          Meet our teams
        • Find out how environmental, social and governance (ESG) considerations are embedded within our organization and investment principles.

          Learn more
{{banner.link_text}}
For Financial Professionals in the US

Knowledge. Shared Blog

November 16, 2020

Quick Views Environmental Social Governance (ESG)

Sustainable Design in Consumer Products

  • Charlotte Nisbet
    Charlotte Nisbet
    Analyst, Governance and Responsible Investment

Last month, Ama Seery, Sustainability Analyst on the Global Sustainability Equity Team, explored how the team incorporates sustainable design into their investment decision making. In the second in the series on sustainable design, Charlotte Nisbet, Governance and Responsible Investment Analyst, takes a deeper look into its role in consumer products.

Key Takeaways

  • The apparel sector is well known for its detrimental effects on the environment. However, as consumers become more aware of their own environmental footprints, there has been a surge in demand for sustainable goods.
  • A circular economy is based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems.
  • Companies including Nike, Adidas and DS Smith have incorporated a circular approach to the design and production of their goods, creating durable and long-lasting products with a reduced environmental footprint.

The Janus Henderson Global Sustainable Equity Team believes there is a strong link between sustainable development and innovation. The team looks for companies across various sectors that have adapted their business models and invested money to solve environmental issues through the development of sustainable product and service design.

Out with the Old, in with the New

It is well documented that the apparel sector has a long history of detrimental effects on the environment as a result of production, including depletion of non-renewable resources, high greenhouse gas emissions, and excess amounts of water and energy usage. However, as consumers have become more aware of their own environmental impact there has been a rising demand for sustainable apparel. Global consultancy firm McKinsey found that searches made on the Internet for “sustainable fashion” tripled between 2016 and 2019.1 Compared to standard clothing, sustainable textiles should be longer lasting, be produced in a safe and renewable way and be recycled wherever environmentally beneficial.

Despite the prevalence of resource-guzzling textiles, there are companies within the apparel sector that have reshaped their business model to become more circular, as opposed to linear, using circular design to create new products. The concept of circular design is linked to the idea of a “circular economy.” As defined by the Ellen McArthur foundation, a circular economy is based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems. It is estimated that 80% of a product’s environmental impact throughout its life cycle is designed into the product, meaning that the design stage is critical to minimize environmental impact effectively.2 Creativity in design has always been a key component but now more than ever the apparel sector is being forced to think outside of the box and explore new ways to create more sustainable and circular designed products that are built to last.

Going Toe-to-Toe with Linear Design

In a previous article on fast fashion, we discussed how Adidas and Nike have invested into technology and operations to create more circular business models with durable products. Since then, Nike has launched a shoe which showcases its innovative approach to sustainable design. The Nike Air VaporMax 2020 Flyknit has at least 50% recycled content by weight. In fact, the recycled Flynknit yarn used in the shoe was made from around 67% post-industrial recycled content by weight as well as different recycled components.3 Adidas, too, has partnered with Parley Ocean Plastic to create a line of sustainably made, high-performance sportswear. Parley Ocean Plastic used marine plastic waste to replace virgin plastic in its collaboration with Adidas.4 Adidas has also committed to shift to use 100% recycled polyester in their products by 2024.5

Sticking with the footwear theme, Reebok has gotten creative too, launching plant-based performance running shoes which maintain the important features of a running shoe – breathability, support and water resistance – without the use of animal and petroleum-based products. Instead, the footwear utilize four key sustainable materials including an algae-based sock liner, a eucalyptus and castor bean shoe and a natural rubber outsole.6 These brands highlight the positive impact that their investments into circular design can have on the both the environment and the fashion industry.

Longevity is also a key consideration in the circular design process as sustainable retailers strive to create apparel that can last for a long time or which can be resold thanks to the quality of the product. Extending the life of clothing by an extra nine months could reduce carbon, water and waste footprints by approximately 20 to 30% each.7 Nike employs its own circular design guide outlining 10 principles of design, which includes ideas such as refurbishment and durability, helping the company target its commitment to create products that are built to last.

Adidas similarly has a range of innovations developed internally to aid in the circular design process. Sports Infinity is a research project launched in 2015 between adidas and the European Commission, which aims to create sporting goods “that will never be thrown away.”8 The project brings together industry and academic experts to determine how broken down sports products can be used in combination with excess materials from other industries to allows old football boots to be restyled to make new ones.

Taking the Wraps off Sustainable Packaging

Another important aspect associated with the consumer sector is packaging. With an exponential rise in online shopping, from clothes to food to household goods to books, there has been a direct correlation in the increase in waste in the form of packaging. This has been exacerbated by the impact of COVID-19, where a large proportion of global consumers have relied on online retail, food delivery and personal protective equipment (PPE). According to the United Nations Conference on Trade and Development, historical data tells us that 75% of plastic used because of the coronavirus pandemic will ultimately clog our landfills and end up in the sea.9 This is another area that is under scrutiny for its detrimental environmental impact and the pressure is on companies to address this issue. Morgan Stanley recently carried out research which showed that 90% of respondents from a survey are already buying products with sustainable packaging or intend to start doing so.10

UK-based packaging company DS Smith has been pivoting its business to provide customers with more sustainable packaging products. DS Smith runs three business operations that offer sustainable solutions for their customers in packaging, paper and recycling. The core purpose of its business model is “Redefining Packaging for a Changing World.” Within the packaging arm, DS Smith provides sustainable corrugated packing solutions where the fibers in the corrugated system can be recycled up to 25 times.

Food packaging is another component of DS Smith’s business. Plastic is vital to increase the longevity of shelved food products and, given that the need to reduce food waste is so imperative, it is important to balance the need for packaging with the environmental consequences of using it. DS Smith has tackled the need for single-use plastic head on by developing fridge-box wraps with carefully designed air vents to keep produce fresh.

In June 2020, DS Smith launched its Circular Design Principles in collaboration with the Ellen MacArthur Foundation to ensure that more of its products are sustainably designed, backed by their team of 700 packaging designers. Now, 98% of the packaging it manufactures is reusable or recyclable and 100% of the paper used come from recycled or chain of custody certified sources. The company has also made a series of commitments to tackle environmental issues including the goal of manufacturing 100% reusable or recyclable packaging by 2025.11

The environmental impact of consumer products is twofold; in the way that products are made, and in the way that products are consumed. As the strain of human consumption on the environment becomes ever more apparent, it is pleasing to see companies change the way that products are designed and to incentivize consumers to change their behaviors. By making conscious decisions about the materials and processes used in designing a product, the world’s finite raw materials will remain in use for longer rather than being sent to landfill, reducing excess carbon and water waste.

Read the first article in the series on sustainable design: Deconstructing Sustainable Design.

 

1McKinsey & Company, “Fashion’s new must-have: sustainable sourcing at scale,” October 2019.
2Ellen McArthur Foundation: “What is the circular economy?”
3Nike News: “5 Ways the Nike Air VaporMax 2020 Flyknit Celebrates Circular Design,” 14 July 2020.
4Adidas website: Sustainability, Parley Ocean Plastic
5Climate Action News: “Adidas reinforces sustainability commitment with use of recycled polyester,” January 2020.
6Reebok blog: “Reebok Takes You on a Run With its First Plant-Based Shoe,” January 2020
7Wrap.org: “Valuing Our Clothes: the cost of UK fashion,” July 2017.
8Adidas press release: “Messi’s Boots Today, Recycled Into Yours Tomorrow,” September 2015.
9United Nations Conference on Trade and Development: “Growing plastic pollution in wake of COVID-19: how trade policy can help,” July 2020.
10Morgan Stanley: “Growing Demand For More Sustainable HPC Products and Packaging,” June 20 2020.
11DS Smith Sustainability Report 2020: Redefining Packaging for a Changing World.

Knowledge. Shared
Blog

Back to all Blog Posts

Related Posts

ESG in 2021: Closing the Expectations Gap
January 2021
Global Perspectives Environmental Social Governance (ESG) Investment Outlooks

ESG in 2021: Closing the Expectations Gap

Read More

Sustainable Equities: The Future Is Green and Digital
December 2020
Global Perspectives Coronavirus Environmental Social Governance (ESG) Featured Investment Outlooks Technology

Sustainable Equities: The Future Is Green and Digital

Read More

Subscribe for relevant insights delivered straight to your inbox

I want to subscribe
  • United States
  • Financial Professionals
  • Individual Investor
  • Institutional
  • US Offshore
  • Investor Relations
  • Media Center
  • Careers
  • Foundation
  • Contact Us
  • Privacy
  • Legal
  • Terms of Use
  • Facebook
  • Twitter
  • LinkedIn
  • YouTube
  • Podcast
The opinions and views expressed are as of the date published and are subject to change. They are for information purposes only and should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation to buy, sell or hold any security, investment strategy or market sector. No forecasts can be guaranteed. Opinions and examples are meant as an illustration of broader themes, are not an indication of trading intent and may not reflect the views of others in the organization. It is not intended to indicate or imply that any illustration/example mentioned is now or was ever held in any portfolio. Janus Henderson Group plc through its subsidiaries may manage investment products with a financial interest in securities mentioned herein and any comments should not be construed as a reflection on the past or future profitability. There is no guarantee that the information supplied is accurate, complete, or timely, nor are there any warranties with regards to the results obtained from its use. Past performance is no guarantee of future results. Investing involves risk, including the possible loss of principal and fluctuation of value.
Janus Henderson Group plc ©

C-1120-34901 11-15-21

Close Notification
You are now leaving janushenderson.com

You are now leaving our site and entering a website not operated by or affiliated with Janus Henderson Investors. While we aim to point you to useful external websites, we cannot be responsible for their content, opinions, advice or accuracy, even if you utilise the services on the linked site to invest in our products.

The protection of your personal information on other websites is not governed by Janus Henderson Investors privacy policy and Janus Henderson Investors cannot be responsible for the privacy policies utilised on such third party sites, nor for the implementation of such policies by those third parties.

You should review the Terms and Conditions of third party websites and contact the operators of such sites if you have any queries.

You are now leaving Janus Henderson's website and will be redirected to the website of the Securities and Exchange Commission (the "SEC"). Money market funds are required to provide the SEC with a monthly electronic filing of more detailed portfolio holdings information on Form N-MFP.

Janus Henderson is not responsible for the content, accuracy or timeliness and does not make any warranties, express or implied, with regard to the information obtained from other websites. This link should not be construed as either a recommendation or offer to by or sell any securities.

Region

Country

Language

What type of investor are you?