Allbirds walks back ‘sustainable IPO’ claims ahead of market debut


Allbirds, the self-styled ethical shoemaker that recently announced plans to launch the first “sustainable initial public offering”, has walked back some of the ESG commitments it made ahead of its planned market debut.

The San Francisco-based start-up said in its IPO prospectus in August that it would adhere to a “sustainability principles and objectives framework”, which was developed with a consultancy group advised by academics, rating agencies and charities.

However, in an update to the prospectus, filed with the Securities and Exchange Commission late on Monday, the company removed several key references to the framework. The number of references to the “SPO framework” in the document roughly halved, from 65 to 33.

In the latest version of the document, Allbirds removed the claim that it is “conducting this offering while following the SPO framework”, and also deleted a warning that doing so could increase the cost of the IPO.

Allbirds, which makes wool and eucalyptus-based shoes that have proven especially popular with Silicon Valley tech workers, was the first company to use the ‘SPO’ concept in an IPO.

The previous version of the prospectus had said Allbirds wanted the SPO framework to be used by other companies, and that it would help investors “better identify public companies that are committed to sustainability and positive outcomes for all stakeholders”.

However, the latest filing removed references to other companies and noted only that the framework would help investors better understand Allbirds.

The company declined to comment.

Allbirds was valued at $1bn in its most recent private funding round in September last year. The company is one of a wave of venture capital-backed consumer businesses planning to list this autumn with an emphasis on their ESG credentials.

Eyeglass maker Warby Parker was valued as high as $6bn after completing a direct listing last week. On Monday, clothes rental service Rent the Runway also published a prospectus for its upcoming IPO.

Allbirds has faced questions over the genuine sustainability of its business. Its sneakers are made from naturally-derived materials and the company claims the carbon impact of making each pair is about 30 per cent less than that of its rivals.

However, it does not include the impact of shipping in the carbon footprint calculation, despite transporting materials around the world several times during the manufacturing process.

Allbirds faces a civil class-action lawsuit in the New York Southern District Court that alleges the brand has misled consumers with its sustainability claims. It has filed a motion to dismiss the suit.

Allbirds is far from the only company facing increasing scrutiny of its green claims. Last month, the SEC wrote to a number of companies raising concerns about disclosures related to climate change.

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