The Allbirds co-founder/co-CEO and former New Zealand international on tackling carbon emissions and setting an industry standard with Adidas, the imperative of collective action and how far business and government alike have come on sustainability commitments in just a year’s time.
By NOAH DAVIS
ND: Allbirds, and you specifically, have been outspoken advocates for sustainable capitalism and sustainable business practices, and have called out companies for paying lip service to the concept but not actually doing the work. In the past year or so, we’ve seen the Business Roundtable advocate for market-based mechanisms to reduce greenhouse gases and other reforms of that nature. Do you see genuine progress being made in terms of companies trying to be more responsible and having that be a bigger part of their mission? Or is it still mostly just rhetoric?
TB: I absolutely do. As much as I’m more fearful than ever of the implications of inaction around climate change, I’m encouraged by the increasing interest in the topic, curiosity about the topic on the consumer level, and action at the business leadership level.
There’s a Google announcement from a few days ago around their plans to be carbon neutral on a very accelerated timeline. We’re now two years out from Greta Thunberg starting to protest on the steps of the Swedish parliament building by herself. There have been youth marches. Things are slowed down a little bit by COVID, but in many ways they’ve accelerated in terms of the increasing importance of this as a topic. You’re seeing it in the current political cycle. I’m optimistic. As an entrepreneur and a business-builder maybe that’s your default setting, but I think this conversation is being had by a lot of people and we’re seeing some powerful things happen.
At the end of the day, the consumer desire for answers and holding business accountable is a larger movement. When you have the Business Roundtable proposing a different type of capitalism, a shift from shareholder capitalism to stakeholder capitalism—realizing that they have a leadership responsibility—that’s a big moment. But I think it’s behind the curve a little bit in terms of what consumers are feeling and demanding. It’s a cycle of action and progress on this topic that I think is really positive. In the financial markets you see ESG funding starting to become a real viable option with large pools of capital seeking out investments that are better for the environment and for society as a whole. They’re doing it not just because they’re good guys, but because the returns are better. The consumer demand compels the business leadership to develop new strategies, and the new strategies can reward the consumer demand. But let’s be super clear that we have to go faster, and we’ve got to go further.
How has the pandemic challenged the business? Have you rethought anything?
It depends on the day you catch me. We’ve had retail stores shut and seemingly different challenges every week. We’re really proud of how resilient our team has been. As a product company that’s all about making physical goods and touching them, we’ve been completely limited in some places. We’ve had to resort to using technology in different ways, to fast-track what was already a pretty fast product-creation cycle. There have been some real positives.
But also, the Zoom window becomes transactional by its very nature. We managed to get some of our team together for the first time, in a long time, last week. We went through the tests; we did everything safely. The idea of being able to have conversations that happen outside of the Zoom window make it so much more manageable. For a business like ours that was built to be online, and built vertically to have a direct relationship with our customers, is definitely an advantage. We feel very, very fortunate about how we’ve come through this.
Businesses that are preparing now for eventual public policy action are the ones that are going to win in the long term.
What are the takeaways from the Adidas collaboration so far?
When I think about the Adidas project, it’s about the pledges around 2050 and 2040 and, broadly speaking, about doing better—which are all well and good. But what can we do right now, and how can we make this more tangible beyond the idea and the understanding that we’ve got a problem? Because I think we’re well past that point.
Solving the complex nature of reducing our global carbon footprint, of making zero-carbon products and generally limiting the impact of climate change and even reversing it is not going to be solved by Allbirds alone, nor by Adidas. It’s going to be people coming together, writing new rules, sharing things transparently. This problem is bigger than any one person, one entity, or one company. It’s very unusual in the footwear space for two companies to come together and try something, and we haven’t just done it, we’ve done it in a way that I think has been really inspiring. We’ve got a long way to go to realize the product challenge that we set for ourselves, but I think it speaks to what will be required to solve this problem. The businesses that are not attempting to do that are going to be on the wrong side of history. This is a call-to-arms moment for everyone, and I think the Adidas partnership is a small example of how you can do that.
How do you think about partnerships going forward? How important is having these shared values between the two companies?
The shared values are the non-negotiable bit. The question we’re asking ourselves is how can you go further together than you would separately?
Allbirds’ Tree Dasher running shoe, introduced in April. (Courtesy: Allbirds)
The Adidas partnership is a great example. Also, we launched an EVA, which is one of the most commonly used materials in footwear. We made it out of the byproduct of the production of ethanol and sugar cane. We called it SweetFoam, but we didn’t just make it for ourselves. We made it freely available for anyone to use. There are something like a hundred companies globally using it this year. We didn’t do that just because we’re good guys, and not just because it’s better for the environment, but because the more people that use it, the cheaper it will be for everyone. That’s a great example of the intersection of possibility here. It’s not just about the story, it’s also about the impact and the business equation. There are so many of those opportunities that we’re finding, and there’s a bunch of stuff in the pipeline that we’re working on in the moment. In that sense, it’s a really positive time, and it’s a long way from where we started four years ago.
Your co-CEO Joey Zwillinger recently contributed a piece to New York Times’ DealBook that was quite critical of Milton Friedman’s 1970 essay, ‘The Social Responsibility of Business Is to Increase Its Profits.’ From your perspective, where does the government role fit into the idea of sustainable businesses? How can government regulation, especially around climate issues, play a role in the future?
Ultimately, they play a very important one. But I don’t think governments are ever going to lead the way. That’s usually not the case. But I think at some point, there will be a recognition broadly that the externalities and the cost of pollution should be borne by the people making it. We think that businesses that are preparing now for eventual public policy action are the ones that are going to win in the long term.
There is a cost to carbon, whether or not we realize it at the moment. Allbirds is currently paying that, and that’s one part of it. We’re using certified offsets to make our business carbon neutral in the short term, but the real game here is to measure it and to innovate to drive it down to zero, so you effectively don’t have to pay that tax. And that’s very, very hard to do. We think that an average pair of sneakers takes about twelve and a half kilograms of carbon to make. Ours are somewhere in the seven to eight range. We’re trying to go under two.
Yes, it’s for the health and wellbeing of the planet, but it’s also for the health and wellbeing of the individual businesses that crack this, because I think they’re the ones that will win in the long run. Earlier this year, we announced that we were labeling the products that we were making as kilograms of carbon, the same way that calories go on food. It’s moving this conversation from the heart, i.e., we know there’s a problem, to the head. Here’s some objective information that guides me towards making healthier choices, and somehow I now have a measurement to understand apples and oranges. To tackle climate change is really exciting, and every time we make a pair of shoes, we’re contributing to that and, at the same time, doing it far better than others, so there’s a positive there, but there’s still a lot of work to reduce that to zero. That clarity has been quite helpful. When we started, we didn’t have it.
One of the challenges with the conversation around sustainability is it means 10 different things to 10 different people. Some of the work we’ve done over the four and a half years we’ve been around is to really focus on the unifying metric of carbon. The great thing is that it connects it to a dollar value and a cost for us sitting there, which brings us to a financial conversation, which is why you have the Business Roundtable making the proclamations they are because I think they see the time where you have to pay the piper coming.
The shared values are the non-negotiable bit.
Do you have a roadmap to get down from seven to two?
It’s little changes. It’s about a little bit here with packaging, and a little bit here with materials. It’s a little bit about where you make the product, about how a country’s electrical grid is constructed. There are a lot of aspects to it. Air shipping and sea shipping is obviously a factor. It’s not something that we account for in the actual number of our product, but it’s a factor in the company-wide footprint. The clarity of the target allows you to make a lot of small choices that slowly move you towards getting there. In the case of Adidas, we’re trying to jump a few steps and imagine what it might look like to really solve for that in a dramatic way. But every single day, our product teams and innovation teams are coming in, working out not only how we can make our running shoe a little bit lighter and a little bit more comfortable, but also how we can make it a little bit lower in terms of its carbon impact.
It’s pretty cool, man. Honestly, from an innovation design point of view, you really feel like you don’t always have the answers, but you’re very, very clear about what the question is.
You’re a football guy. Any thoughts about expanding into football?
Not at this point. The idea of making a performance product is really where we started as a company. When I retired from sport, one of the very first shoes that we made was called the Wool Runner because I always imagined a running product. So many people told us not to do it, that it was too hard, that natural materials couldn’t make performance products. The Dasher shoe that we launched in April has been really well received. We’re really proud of it. There are a bunch of things that we could do and are doing to make it better, but the reaction has been amazing. We’re just focused on running at the moment and trying to do that really well. That’s enough for now, I think.
Tim Brown earned 30 caps as a central midfielder for New Zealand’s national team, captaining the All Whites during the 2009 FIFA Confederations Cup. He retired from professional football in 2012.