Adidas Group scores big with sustainability venture capital fund

If you are familiar with facility management, you may know that facilities have finite annual budgets, and demand for capital predictably exceeds supply. Some projects such as lighting controls may deliver carbon and financial savings, but quantifying these savings requires time and specialized training, two equally scarce resources.

Other projects, such as replacing carpets, don't deliver a return, but may still feel quite urgent to a facility manager. Without a trusted advisor to calculate and validate their economic and environmental benefits, energy-conserving lighting controls are stuck competing for the same funds as carpets.

We experienced similar issues at the Adidas Group and set up a dedicated team to look into it. After months of calculations and visits to our facilities, we established the company's greenENERGY Fund, our creative response to this universal corporate problem.

Launched in 2012, the pilot greenENERGY Fund is an investment fund with three goals: accelerate carbon reduction in our global properties, rigorously track project performance and deliver a healthy return on capital. After six months and seven projects funded, the pilot project is showing impressive results. It is forecast to deliver 36 percent return on investment and cut carbon by 1,401 metric tons of C02 -- that's like taking 256 cars off the road each year.

This pilot is scaling up -- way up -- with $2 million committed to energy efficiency projects across the globe.

Projects with attractive financial and carbon returns deserve preferential treatment. As manager of the Adidas Group greenENERGY Fund, I look at carbon reduction projects as a venture capitalist might: a portfolio of value-creating investments. I rigorously scout, evaluate and invest in efficiency projects because they deliver great financial savings and reduce our greenhouse gas emissions. Green investments are therefore seen as a business opportunity, delivering revenue for the business.

This is why the Adidas Group has worked with Environmental Defense Fund's Climate Corps program since 2010 to identify energy and money-saving opportunities across its portfolio. EDF, which examines efficiency opportunities for hundreds of companies across the map, is so enthused by the Adidas Group greenENERGY Fund that the organization is touting it to its audiences far and wide. Moreover, EDF asked us to present this new project at the recent Fortune Brainstorm Green Conference in California.

Next page: Fund takes a portfolio approach

Adidas image by TonyV3112 via Shutterstock.com.