adidas Group: Portfolio Approach to Internal Funding for Energy Efficiency and Renewable Energy
adidas Group is a multinational sports and clothing manufacturer and retailer with over 2,700 retail locations and 22 million square feet of corporate office space. The company’s strong environmental commitments have driven adidas to find creative solutions to reducing energy needs. It created a greenENERGY Fund in 2012 as an internal venture capital fund that provides financing, expertise, project management, and monitoring and verification to facilitate investments in energy efficiency and renewable energy projects -- while delivering a net profit. By creating a dedicated internal fund, the adidas Group is able to overcome common internal financing hurdles, such as internal competition for capital, short payback horizons, and a lack of time or budget on the part of facility managers. To view the full PDF version of this implementation model, click here.
adidas created the greenENERGY Fund to facilitate investments in energy efficiency and renewable energy projects; the company approved funding for 61 projects, investing $10.8 million and achieving a 29% internal rate of return across the project portfolio.
Hurdles to investing in energy efficiency and renewable energy projects due to time, budget, and expertise constraints
Develop a greenENERGY Fund within the company that identifies investments in leased and owned stores, manages project risk, and monitors and verifies project savings
Invested $5.5 million in 49 projects between June 2012 and Nov 2015; forecasted an internal rate of return of 33% across project portfolio and avoided 118 million kWh over the expected lives of these projects