Allbirds, marketed as an eco-friendly sneaker brand, is preparing for its New York IPO. The company is aiming for a valuation of over $2 billion, with fans and backers including Leonardo DiCaprio, Ashton Kutcher, Barack Obama, and Google founder Larry Page. However, as the discourse around “greenwashing” increases in volume, vegconomist takes a look at the brand to ask how eco-friendly Allbirds’ products are.
Although the Silicon Valley-based company uses cutting-edge sustainable materials derived from sugarcane and eucalyptus trees, it also champions the use of merino wool in its footwear, even in its bestselling Tree Runner line. Despite being biodegradable, merino wool cannot be viewed as a sustainable fabric when one considers the environmental impact of raising the required amount of animals, not to mention the cruelty inherent in such a system.
Allbirds is a certified B-Corp with a strong focus on sustainability, and earlier this year the brand launched a shoe with a sole made from carbon-negative green ethylene-vinyl acetate. Releasing more vegan-friendly products, moving away from harmful fibres like merino wool, and towards the innovative plant-based materials being developed might make sound business sense for the brand.
The company made the decision to go public following major financial losses — it reported a loss of $21.1 million for the six-month period through to the end of June, and has admitted that it is unlikely to make a profit any time soon. The trend is set to continue in this quarter, with losses of $15-18 million expected — something Allbirds blames on increased expenses. However, the company says net revenue is likely to grow by up to 32% as sales in its physical stores increase.