On Track to Circularity: Assessment of Circular Strategies for On

Abstract

The apparel and footwear industry is estimated to produce around 8% of global climate change impact through high value chain emissions and waste. As companies face pressure to produce higher volumes of cheaper products as well as demands from activists and customers to assume more responsibility for their environmental impact, companies are turning to circular economics as a solution. On Holdings AG (On), a Swiss athletic footwear company, has partnered with University of Michigan to help achieve their goal of a fully circular business model by 2030. This project seeks to understand the current state of circularity in the industry, and identify feasible strategies across six stages of the value chain (materials, design, manufacturing and assembly, logistics, use, and end-of-life) to provide strategic guidance to On. Each set of value chain strategies was selected based on a literature review, a comparative analysis, interviews with On’s key sustainability and circularity personnel, and internal surveys with On employees. Using multi-criteria decision analysis, each strategy has been given a score based on an internal survey of its priority in supporting circularity at On. The impact of each strategy on Circularity Indicators that our team defined is also highlighted to further illustrate the potential opportunities and challenges that each strategy poses for circularity. This project is a guide for On as they build towards their 2030 circular goals, as well as a framework in complex decision-making for the larger footwear industry to consider when transitioning to a circular business model.