Accounting Essay / Report
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2013_sustainability_report_adidas.pdf
SUSTAINABILITY PROGRESS REPORT 2013 PERFORMANCE COUNTS
Fair Play is the losing rugby team forming a guard of honour to applaud the winners off the pitch. Fair play is kicking the ball out for a throw-in so an injured opponent can receive treatment. Fair play is about being able to rise above the competition and remember that it’s how you play the game that really matters.
For us, succeeding in business is about more than making money. It is about treating our employees, our suppliers and their workers fairly, being straight with our partners and supporting our local communities. It is about respecting the environment and making the best products we can for our customers.
We are not perfect and we do not always get it right. But as we go about our work, we aim to honour the spirit of fair play in everything we do.
FAIR PLAY / Sustainability Progress Report 2013 2
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8 – Stories and activities 9 – Progress against milestones 18
PRODUCT 21 – Stories and activities 22 – Progress against milestones 26
PLANET 28 – Stories and activities 29 – Progress against milestones 33
PARTNERSHIP 36 – Stories and activities 37
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 3
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
FAIR PLAY / Sustainability Progress Report 2013 4
Dear all,
WELCOME TO THE WORLD OF SUSTAINABILITY AT THE ADIDAS GROUP.
As we have done each year since 2000, we have produced this report to give you open and factual information about our ambitions, projects and results in the area of social and environmental affairs. Our teams managing sustainability programmes within our Group, the brands and the markets together with many of the 50,000 employees at the adidas Group gave their best to ensure that we achieved our goals and continued to be rated an industry leader in this important field. And we are: in 2013, we won the RobecoSAM Sustainability Gold Class and Sector Leader Award, we were included in the Dow Jones Sustainability Indexes for the 14th time in a row and named industry leader for the tenth time. Furthermore, in January 2014, it was announced during the World Economic Forum in Davos that we are among the ‘Global 100 Most Sustainable Corporations in the World’ for the tenth consecutive time.
We are extremely proud of this external recognition. We are equally proud of the results of many of our projects in 2013. My personal highlights include the increased use of water-saving technologies for our products, such as DryDye; the opening of our daycare centre ‘World of Kids’ at our headquarters in Herzogenaurach, Germany; and our continued commitment to support human rights through our new third-party complaint mechanism.
While we had many successes to celebrate in 2013, we are aware that there is always more that we can do. For us, succeeding in business is about more than making money. It is about treating our employees, our suppliers and their workers fairly, being straight with our partners and supporting our local communities. It is about respecting the environment and making the best products we can for our customers. We are not perfect and we do not always get it right. But as we go about our work, we aim to honour the spirit of ‘fair play’ in everything we do. Therefore, let me assure you that we continue to take serious responsibility for our actions. And we continue to integrate sustainability into our business strategy.
In this ‘FAIR PLAY’ report, we use four pillars – people, product, planet and partnership – to explain our sustainability programme. The following article provides an insight into how we came up with this new approach and why we think it is beneficial for all of our stakeholders, including you.
As always, we are interested in your feedback. We believe that a transparent, continuous and constructive dialogue with our stakeholders, our partners and our people is a pre-requisite for improving our work and the sustainability of our industry. Please follow our strategy and our activities via this report, our corporate website at www.adidas-Group.com and our adidas Group Blog at http://blog.adidas-group.com/. Together they represent our reporting on sustainability. And now, enjoy reading.
Yours truly,
Herbert Hainer Chief Executive Officer adidas Group
5NEVER STOP / Sustainability Progress Report 2012
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 5
Those of you who have been following our sustainability journey may have noticed that this year’s adidas Group Sustainability Progress Report differs from our previous publications, both in structure and in content.
Make no mistake. The adidas Group’s commitment to sustainability has not changed. We continue to take serious responsibility for our employees, the people who produce our products, the environment and the communities we operate in. We continue to integrate sustainability into our business strategy.
But what does that mean, exactly? And how do we put sustainability thinking into practice every day?
This was the question we asked ourselves. To find a clear answer, we looked closely at our work, our Group and brand values, the company’s heritage and the company mission. Through this process, we developed a framework that encompasses the full range of our sustainability programme. We named it the ‘4Ps’ approach, for the four pillars on which it is based. These are outlined above.
In this year’s report, we have used these four pillars to explain our sustainability programme for the first time. All content, including key stories and highlights from 2013, fits into one of these categories.
‘Performance counts’ in this new framework as well. Each section of the report includes information on our performance against the 2015 targets we established a few years ago.
We hope that you like the new structure of our report. We are confident that it better suits the needs of our target audience of sustainability experts, our own employees and consumers. We also believe that it allows us to better explain what sustainability is for the adidas Group.
To complement the report, our corporate website at www.adidas-Group.com as well as our adidas Group Blog at http://blog.adidas-group.com/ include more details on our overall approach to sustainability. Together they represent our reporting on sustainability.
PEOPLE We positively influence the lives of our employees, factory workers and people living in the communities where we have a business presence.
PRODUCT We find better ways to create our products – mainly through efficiencies, increased use of more sustainable materials and innovation.
PLANET We reduce the environmental footprint of both our own operations and our suppliers’ factories.
PARTNERSHIP We engage with critical stakeholders and collaborate with partners to improve our industry.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
6NEVER STOP / Sustainability Progress Report 2012
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 6
2015 TARGETS – OVERVIEW
After thoroughly reviewing our previously published 2015 targets, we have decided to restructure our targets and milestones. This readjustment will allow us to better track our progress to 2015.
In keeping with our overall sustainability programme, this section contains our targets and milestones organised by the 4Ps: People, Product, Planet and Partnership, though we do not set our own targets and milestones for our partnership work (see below).
PEOPLE We have to show respect to the people we work with, whether that is treating our employees fairly, protecting the rights of workers in our suppliers’ factories or making a contribution to the local communities where we operate.
PRODUCT Consumers expect companies to make products that respect the environment. It is only right that we make every effort to reduce the resources we use, building this into the way we design and develop new products.
PLANET As a business, we have a responsibility to be fair to future generations, and improve our systems and processes so we and our suppliers cause less harm to the planet.
PARTNERSHIP Fair play means showing respect for the individuals and organisations we partner with, whether they are formal meetings with NGOs and trade unions to address their concerns, or initiatives with other brands to tackle industry-wide issues.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
PEOPLE TARGETS
60% of all direct suppliers to meet 3C (good) or better.
80% of strategic suppliers to meet 3C or better.
25% of our strategic suppliers to be in a self- governance compliance model (4C or better).
Enhance the workers grievance system.
Establish a common, industry-wide monitoring platform, methodology and tools to check and measure fair, healthy and safe workplace conditions.
PRODUCT TARGETS
50% reduction in colours used within the adidas Sports Performance division (excluding colours required by clubs or otherwise outside the control of the Design team).
Virtualisation project to drive reduction in samples.
Optimise packaging solutions.
Establish full traceability of more sustainable materials (apparel products).
Ensure all footwear – and an increasing amount of apparel – is created with sustainable materials and/or more sustainable manufacturing processes.
PLANET TARGETS
Extend environmental assessments to selected supplier groups and achieve a 30% improvement in average KPI for selected suppliers based on 2011 baseline.
10-15% reduction of energy consumption by product output at strategic suppliers.
Drive solutions for sound chemical management in the global supply chain.
Implement Green Design requirements for new buildings at suppliers.
PARTNERSHIPS TARGETS
The adidas Group holds and maintains strong relationships within the sustainability area. These relationships range from bilateral engagements with individuals, non- governmental organisations and interest groups to close partnerships with industry alliances or multi-stakeholder organisations. Important partnerships which inform and influence the development of our sustainability strategy are listed on our corporate website at www.adidas-group.com/en/ sustainability/partnerships/ partnership-approach/
As active and formal participants in these alliances and initiatives we are committed to supporting the goals, targets and related work programmes as agreed by their members under the respective governance principles of these organisations.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PL AY / Sustainability Progress Report 2013 7
PEOPLE TARGETS
Report cards for all eligible business entities managing our indirect suppliers to achieve an average performance rating of 70% or higher.
Raise the overall understanding and awareness of health and safety issues specific to the manufacturing process within the supply chain.
Activate and instil leadership excellence.
Systematically promote motivation and accountability through talent and performance management.
Create the foundation for open, innovative and collaborative learning solutions.
Actively contribute to the Route 2015 target of an 11% operating margin by creating centralised above-market service solutions.
For the stories behind these targets go to page 8.
PRODUCT TARGETS
Use of cotton: 40% Better Cotton by 2015, 100% ‘sustainable cotton’ by 2018.
100% of non-European leather volume to be sourced from tanneries that achieve Leather Working Group (LWG) Silver or above rating (based on the LWG audit protocol).
85% of non-European sourcing volume of leather should be certified at Gold level.
Support the Sustainable Apparel Coalition (SAC) to further develop the creation of the HIGG index.
For the stories behind these targets go to page 21.
PLANET TARGETS
Green Company Initiative (own operations):
• 20% relative reduction in energy consumption
• 30% relative reduction in carbon emissions
• 20% water savings/ employee
• 25% waste reduction/ employee
• 50% paper reduction/ employee.
Reduce the environmental footprint of IT infrastructure by 20%:
• 80% of all PCs to have ‘green’ power management options
• 30% less energy consumption by PCs
• 100% of requests for proposals to evaluate ‘green’ performance of possible vendors
• Virtualisation of servers and data centre consolidation.
For the stories behind these targets go to page 28.
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
FAIR PLAY / Sustainability Progress Report 2013 8
We positively influence the lives of our employees, factory workers and people living in the communities where we have a business presence.
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
A BETTER SYSTEM FOR ADDRESSING COMPLAINTS ABOUT HUMAN RIGHTS
We need to know whenever we are having a negative impact on someone’s human rights whether it relates to our employees, our customers, the workers in our suppliers’ factories or the communities in which we operate. The adidas Group reinforced this commitment to respect human rights by launching our improved Third-Party Complaint Mechanism in November 2013.
William Anderson, VP Social & Environmental Affairs at the adidas Group
We already had a good system for third-party complaints – that is, complaints from people and organisations who are outside of our company. This system was built on years of engagement with workers, trade unions and civil society groups but we wanted to strengthen it further. During the London 2012 Olympic Games, we worked closely with the London Organising Committee and were included in their complaint mechanism. We drew on this experience to modify our own approach.
Our new Third-Party Complaint Mechanism aims to investigate and resolve complaints more robustly and transparently. We hope to receive positive feedback from all those who use it to bring issues, including human rights concerns, to our attention.
To find out more about our Third-Party Complaint Mechanism, please go to www.adidas-group.com/ en/sustainability/supply-chain/critical-issues/#/ human-rights/
FAIR PLAY / Sustainability Progress Report 2013 9
IMPROVING FIRE SAFETY IN FACTORIES
Following a spate of factory fires and the devastating collapse of the Rana Plaza in April 2013, we felt it was important to review the building safety of our suppliers in Bangladesh. We started by commissioning an independent structural engineering company to visit each of the eight factories making goods for the adidas Group. Even though all passed the safety assessments and our internal fire safety reviews, we decided to go a step further.
brands committed to safety improvements in Bangladesh.
In October 2013 the adidas Group signed up to the Bangladesh Fire and Building Safety Accord. The Accord has more than 100 brands, local and international trade unions and non-governmental organisations (NGOs) as signatories. All are working together to improve fire and building safety in Bangladesh. With a multi-stakeholder format that allows for different viewpoints and inputs, the Accord supports and involves workers in addressing factory safety.
Harry Nurmansyah, Director Field Operations, Social & Environmental Affairs at the adidas Group
The Accord complements the work the adidas Group already does on worker safety through our technical fire and electric safety audits, training and worker outreach. We will be using our experience in working with the Accord in Bangladesh to test and strengthen our approach to building and fire safety in other parts of the world.
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
THE JOURNEY TO BECOME A SELF-GOVERNING LICENSEE
It has not always been a smooth ride but with dedication and perseverance our licensee Warson Brands is now ‘self-governing’: it is taking responsibility for how well its suppliers meet our standards without the support of our compliance team.
As well as direct suppliers, the adidas Group has dozens of licensees that manufacture products on our behalf. We monitor the compliance performance of our licensees by developing individual strategic compliance plans that each licensee uses to ensure sound compliance practices in their factories. The plans also contain a report card to evaluate the licensee’s own performance, with the goal that the licensee will be able to manage its suppliers without our help.
This is the journey that Warson has now completed. It began in 2008 when our brand Rockport entered into a business relationship with Warson Brands. This meant additional obligations for Warson around supplier compliance.
FAIR PLAY / Sustainability Progress Report 2013 10
Initially Warson engaged an external firm to provide training to its factories in China and to monitor progress. But while audit results were positive, the rate of progress was slow. And there were inconsistencies between how the external firm conducted reviews and how we at the adidas Group interpreted the audit results. Faced with these challenges, Warson responded by assigning responsibility for sustainability at factory level to someone who reported directly to the CEO, which created the necessary consistency in goal setting, training and communication.
To take things to the next level, Warson based two compliance personnel permanently in their factories. After a year of training, conducting practice audits and achieving professional certification, one was appointed to the position of Lead Auditor by our compliance team, and can now conduct audits independently from the adidas Group.
It all comes down to good business principles: obtaining commitment from senior management, establishing a strong team that understands the company’s goals, and allocating the necessary resources to carry out the work.
SUPPLY CHAIN STRUCTURE
SUPPLIER
SUB-CONTRACTOR
AGENT
SUB-CONTRACTOR
SUPPLIER
SUB-CONTRACTOR
SUPPLIER
LICENSEE
SUPPLIER
AGENT
SUB-CONTRACTOR
out of 57 licensees have achieved the self-governance level so far
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
FAIR PLAY FRAMEWORK
Fair play is the aspiration that a sport will be enjoyed for its own sake, with consideration for fairness, ethics and respect for one’s competitors. It is one of the few cultural values that is universally embraced and it underpins everything the adidas Group stands for.
Frank A. Dassler, General Counsel at the adidas Group
As a multinational company and a good corporate citizen, we are committed to establishing and maintaining systems to protect the company from harm. That is why, in 2012 we established the ‘Fair Play Framework’ – a new company- wide compliance management system. Introduced Group- wide in 2013, the framework consists of policies, regulations, tools and processes that help us to prevent, detect and respond to compliance violations. We have implemented the system across the company’s 3,500 locations worldwide.
FAIR PLAY / Sustainability Progress Report 2013 11
Works Councils
Human Resources
Manager
Compliance O�cer
Chief Compliance
O�cer
adidas Group
employee
Fair Play hotline
and email
HOW TO REPORT A COMPLIANCE VIOLATION
The system has been implemented across the company’s 3,500 locations worldwide.
As part of the Fair Play Framework, we established a network of local compliance officers who act as independent contacts for any questions employees may have about compliance. Any employee who knows of, or suspects, wrongdoing is expected to promptly report it so that an investigation can be conducted and appropriate action taken.
One way to report compliance violations is through internal dedicated contact persons, such as the Works Council or Chief Compliance Officer. If they prefer, employees can make their report to an external company by calling the toll-free ‘Fair Play Hotline’ or by sending a ‘Fair Play Email’. All information is treated in the strictest confidence and the calls and identities will only be disclosed with the employee’s consent. The Fair Play hotline is available 24/7 in multiple languages and calls are not taped or recorded.
In 2014, we will launch a phone app to encourage younger workers and remote workers to report non-compliance issues, as well as having access to compliance-related information on the go.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 12
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
SUPPORTING DISPLACED WORKERS IN TANGERANG, INDONESIA AFTER AN UNETHICAL BUSINESS CLOSURE
In April 2013 the adidas Group announced that a settlement had been reached to give additional aid to workers in Indonesia who had been displaced by an unethical apparel factory closure. This support came on top of $525,000 from the adidas Group in humanitarian aid as well as job placement services, and direct advocacy with the Indonesian government on the issue of workers’ rights. The PT Kizone factory produced adidas products up until 2010. However, it was unethically closed and abandoned by its owner nearly six months after the business relationship between the adidas Group and PT Kizone ended, leaving hundreds of workers without severance payments.
Representative of the Indonesian district labour union
Following the settlement, the focus now turns to the Global Forum for Sustainable Supply Chains, which, along with the adidas Group and other industry, labour and workers’ rights groups, will pursue sustainable solutions to address the complex issues surrounding unethical factory closures worldwide.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 13
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
ASSESSING WHETHER WAGES ARE FAIR
What is a fair wage? How much should it be and how should it be paid? Since 2012, the adidas Group has conducted a series of Fair Wage Assessments, qualitative case studies, management self-assessments and workers’ surveys in our supplier factories to help answer these questions. In 2013, initiatives took place in factories in the Philippines, Vietnam, Mexico, China and Thailand.
Many of the assessment findings were encouraging. Suppliers paid wages on time, complied with legal minimum wage rates, and the wage structure consisted of many non-monetary benefits. Different forms of communication to workers about their pay were noted, and there were no practices that allowed wage discrimination or wage disparity. Wage costs continued to rise as employers tried to meet increased costs of living.
Other findings were less positive. There were instances of under-payment of overtime, workers not being well informed of the current legal minimum wage, the piece-rate system
being the overly dominant method of calculating wages, and the lack of a direct link between the wages paid and the factory’s economic performance. The qualitative case studies confirmed these findings, and offered insights into the possible root causes.
Mitigating these root causes will be a main focus for 2014. Furthermore, we plan to develop a roadmap to drive effective wage-setting mechanisms at our suppliers’ sites. We also intend to integrate Fair Wage components into our own monitoring tools and suppliers’ Key Performance Indicators.
Number of workers interviewed in 2013 as part of the Fair Wage Assessments in 12 factories in five countries.
FAIR WAGE FRAMEWORK
FAIR WAGE
PAY SYSTEMS Ensure Balanced Pay Systems
WAGE ADJUSTMENTS Ensure Fair ‘Wage Adjustments’
WAGE LEVELS Ensure Fair ‘Wage Levels’
CSR ON WAGES
LEGAL REGULATION ON WAGES Ensure Full Compliance
LEGAL COMPLIANCE
COMMUNICATION & SOCIAL DIALOGUE
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 14
GETTING CLOSER TO WORKERS
In 2012 the adidas Group piloted an SMS Hotline project at a supplier’s factory in Indonesia. Following very positive feedback from management, workers and unions, we have now extended the service to four more factories and almost 35,000 workers in Indonesia are now covered by the SMS Hotline Service.
Lessons learned the first time round made rollout smoother. Once again, the process involved training management, installing appropriate devices, introducing the concept to workers and union representatives and conducting a short survey to gain worker feedback.
The SMS Hotline generates many more grievances and suggestions from workers than ‘traditional’ systems such as suggestion boxes. And because the system allows for direct, personal and easy communication, management responds to workers’ grievances more quickly.
Workers prefer the SMS system to other communication channels, as it is simple, accurate, avoids misunderstandings and makes them feel closer to management. From a management perspective, the SMS Hotline Service makes it easier to share information and obtain quick feedback from workers directly. Management also now feels more comfortable tracking and monitoring their communication with workers.
The continued success of the project has encouraged us to extend the programme further. In 2014 we plan to replicate the system in around 15 factories in Indonesia and Vietnam.
Percentage of workers who see the SMS Hotline system as a great channel to express their aspirations and grievances.
RESPONDING TO EVOLVING HEALTH AND SAFETY RISKS
As our products and processes evolve, potential new risks to workers inevitably arise. One such example is Hand-Arm Vibration Syndrome (HAVS), a debilitating occupational disease brought on by repetitive action and exposure to vibration. This condition, which is also known as white-finger disease, has affected a number of workers at a supplier’s golf manufacturing plant in Southern China. We are now working with an expert in this area to help our suppliers manage the risk of HAVS. And to ensure this issue is tackled collectively, we will be sharing this knowledge with others in the golf industry.
Factories vary in size and type, but all present potential risks to worker health and safety. We manage these risks by supporting our suppliers in adopting policies, developing systems, conducting training and following best practices to protect workers.
We believe that our efforts over the years have considerably reduced the potential harm that workers can face when making our products. The adidas Group was the first global brand to introduce a total ban on key hazardous chemicals in the workplace. We replaced hazardous glues with water- based chemicals in our athletic shoes and have led in the development of technical training to help build knowledge of health and safety in countries such as China and India.
The case of HAVS reminds us of the need to regularly review and update our guidance to suppliers on worker safety.
We were the first global apparel and footwear brand to introduce a ban on key hazardous chemicals in the workplace.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 15
SUPPORTING DIVERSITY AND EQUAL OPPORTUNITIES
The adidas Group offers its employees an inclusive working environment that respects any sexual orientation, skin colour, gender, age or looks. To us, diversity and equal opportunities are more than just following the rules. In 2013, we demonstrated this commitment both to our employees and the world at large.
Following interest from our employees, the adidas Group decided to get involved in the Sticks and Stones fair in Berlin – the largest career fair in Europe to actively address homosexual job seekers. The internal and external feedback we received following the event was overwhelming.
This initiative laid the foundation for setting up an internal LGBT network (lesbian, gay, bisexual, transgender) in 2014. It will be managed by our employees, and we are convinced it will contribute to employee satisfaction and engagement. To kick things off, the topic of LGBT was added to our annual Diversity Day at the adidas Group ś headquarters. Find out more on the adidas Group Blog at http://blog.adidas-group. com/2014/02/how-we-uncovered-our-lgbt-community/
In the USA, adidas America demonstrated our commitment to diversity and inclusion by publicly supporting the campaign to legalise gay marriage in Oregon.
At the adidas Group, each and every employee should feel welcome and enjoy being part of a greater whole.
INCREASING WORKER REPRESENTATION AT SUPPLIER FACTORIES IN CHINA
Since 2010, the adidas Group has helped establish worker representation in our direct suppliers’ factories in China. While the role of trade unions in China is often questioned, we were seeing a steady rise in the number of industrial disputes, and felt action was needed.
In 2010, we started a project with a Hong Kong based NGO to strengthen worker representation and improve communication channels and grievance systems in our supplier factories in South China. Initially working with only one supplier, by the end of 2013 the project covered 29 suppliers with 116 worker representatives. This represents almost 10% of the total number of direct suppliers we are working with in China.
Worker representative
Factories were selected based on their experience and involvement in industrial disputes, the number of cases or worker complaints reported through the hotline, and business plan requirements for closer engagement with workers.
A key achievement of this project is the ‘train the trainer’ programme we have established. Six trainers were selected to deliver training sessions to worker representatives from other factories. We expect that this programme will build capacity in other factories and sustain the worker representation project.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 16
NEW HEALTH MANAGEMENT SERVICE ESTABLISHED
In 2013 the adidas Group created a new Health Management department. Integrated into Human Resources, its goal is to create a sustainable, healthy community by providing employees with support and resources to help them achieve and maintain a healthy lifestyle.
To maximise their impact, the Health Management team integrates with other functions actively involved in creating a healthy adidas Group community, such as the Company Doctors, Health & Safety, Company Sports and Catering.
Employees have on-site access to medical services such as vaccinations, medical checks and ergonomic workplace adjustments. There is also a 24/7 SOS Crisis Hotline and a programme to manage employees’ return to work after long-term sickness. The Company Sports department at our headquarters in Germany delivers an outstanding sports programme, offering more than 200 courses in 2013.
Health Week 2013 in Germany was a very successful and engaging event, promoting a healthy lifestyle and raising awareness of topics such as nutrition and mental health. More than 1,200 employees registered for the various tests, courses and talks.
Read more about this topic on the adidas Group Blog: http://blog.adidas-group.com/2013/10/what%e2%80%99s- new-at-the-adidas-group-health-management-and- i%c2%b4m-part-of-it/
The Company Sports department at our headquarters in Germany offered more than 200 courses in 2013.
‘WORLD OF KIDS’ DAYCARE CENTRE LAUNCHED AT ADIDAS GROUP HEADQUARTERS
The adidas Group wants employees to maintain a sensible work-life balance to help ensure they stay healthy and motivated. To support this ambition, in September 2013 we launched our ‘World of Kids’ daycare centre at the adidas Group headquarters in Herzogenaurach, Germany.
The centre provides 110 places for children from three months old to school age. Activities are focused around movement, music, art and natural sciences, and foster learning through collaboration. There is a large gym and indoor playground, and healthy food is prepared on site, using mainly organic and regional ingredients. The centre is run bilingual (German/English).
World of Kids is operated by a non-profit organisation that specialises in supporting companies to set up and run childcare centres. It employs a higher number of daycare teachers than required by law.
Demand for quality daycare is high, and World of Kids has been fully booked since it opened. Feedback so far has been entirely positive, and underscores the need for more daycare provision. “If I had the chance to meet Mr Hainer, I would tell him how amazing this facility is. No other daycare in Germany compares to it,” said Alex B, mother of a two-year-old girl who attends World of Kids.
Find out more on our corporate website at www.adidas- group.com/en/sustainability/employees/work-life- integration/#/family-and-work-no-conflict-at-the- adidas-group/
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 17
WHY EMPLOYER BRANDING MATTERS TO THE ADIDAS GROUP
Our employer brand is simply those unique qualities that set us apart from other companies. It’s the reason employees join, stay and remain inspired. It is one of our greatest assets in attracting, engaging and retaining top talent as we shape the future of sport together. The adidas Group is rightfully proud of our employer brand and what it represents.
So how did we define what we have as an organisation? We did it by interviewing employees worldwide, asking them why they joined and what keeps them working for the adidas Group. Their responses have been distilled into five employer brand pillars that highlight the most powerful and consistent answers globally.
From Youtube video page – unattributed
These five pillars (above) – Sports Lifestyle, Globetrotter Careers, True Craftsmanship, Tribal Membership and Originality – exemplify the answer to one simple question: “What’s it like to work at the adidas Group?” They enable us to speak consistently about who we are and thus authentically represent ourselves as one company. Find out more on our adidas Group Blog at http://blog.adidas-group. com/2013/11/choosing-where-to-do-the-work-you-love -is-up-to-you/
In November 2013 we published a video of real adidas Group employees showing what they are passionate about. Watch the video at http://www.youtube.com/ watch?v=AaX7Z1c9PwU
Number of adidas Group employees worldwide at the end of the year 2013.
2 3 5
4 1SPORTSLIFESTYLEUnited by sports and fitness and the possibility it unlocks
ORIGINALITY Authenticity comes in countless forms, and we respect and
celebrate the range of our people in both what
they do and how they do it
TRUE CRAFTSMANSHIP
We thrive on the challenge of constantly improving everything
we do
GLOBE-TROTTER CAREERS
Our careers at this truly global player
know no boundaries
TRIBAL MEMBERSHIP
We work with people from all over the world and immediately accept
them as part of something greater
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 18
PROGRESS AGAINST MILESTONES
2015 Target Milestone 2013 Milestone 2014
60% of all direct suppliers to meet 3C (good) or better.
• 65% of all direct suppliers to meet 3C (good) or better.
54% of our direct suppliers met 3C rating (or better). Despite our support through capacity building, we faced challenges driving improvement in newly accepted supplier factories, and in factories where the adidas Group has limited business leverage (i.e. small business volume).
13% of our direct suppliers are in a self-governance compliance model (4C or better).
PARTLY ACHIEVED
1C suppliers to go up a grade (2C) or exited by end of 2014.
80% of strategic suppliers to meet 3C or better.
• 90% of strategic supplier factories to meet 3C (good) or better.
89% of our strategic suppliers met 3C rating (or better). Our capacity building initiatives proved effective and led to better results for long-term and strategic suppliers.
LARGELY ACHIEVED
1C suppliers to go up a grade (2C) or exited by end of 2014.
25% of our strategic suppliers to be in a self-governance compliance model (4C or better).
• 20% of our strategic suppliers to be in a self-governance compliance model (4C or better).
At the end of 2013, 43% of our strategic suppliers met 4C or better, which is a 6% increase compared to 2012. The improvement in KPI rating was achieved through providing intense capacity building to our suppliers. Overall, we exceeded not only our 2013 milestone, but also our 2015 target.
FULLY ACHIEVED
1C suppliers to go up a grade (2C) or exited by end of 2014.
Enhance the workers grievance system.
• Integrate the SMS hotline into worker grievance and communication systems by implementing it with four more suppliers in Indonesia and one pilot factory in Vietnam.
We introduced the SMS hotline system into four more supplier factories in Indonesia and one in Vietnam. The expansion went smoothly following the successful first pilot in Indonesia in 2012.
FULLY ACHIEVED
Expand the SMS hotline system in Indonesia and Vietnam.
Establish a common, industry-wide monitoring platform, methodology and tools to check and measure fair, healthy and safe workplace conditions.
• Integrate SCI methodology: support the development of the tool in the FFC; pilot the SCI core questions in the direct supply chain.
• Benchmark the adidas Group’s sustainability performance and practices against industry peers using the Equivalence Process of the Global Social Compliance Programme (GSCP) and review findings.
The adidas Group played a key role in developing the SCI core questions tool in the FFC. The tool was piloted in selected factories in all regions.
Self-assessments of our own policies and procedures against the GSCP reference tools were completed. These will be reviewed by an independent expert panel in 2014.
FULLY ACHIEVED
Roll out the Social Compliance Initiative (SCI) core question set with six key suppliers to inform the plan of broader implementation in the direct supply chain.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 19
2015 Target Milestone 2013 Milestone 2014
Report cards for all eligible business entities managing our indirect suppliers to achieve an average performance rating of 70% or higher.
• Report cards prepared for 92% of our eligible business entities; support them in achieving an average performance rating of 67% or higher.
• Complete the selection of a single service provider to manage the indirect suppliers and launch the programme.
We completed report cards for 100% of all eligible business entities with an average rating of 68%.
Openview was selected as the single service provider. The programme was launched in Q4 covering the Asia/Pacific region.
FULLY ACHIEVED
• Report card average score for eligible business entities to reach 70%.
• Migrate two business entities to self-governance (>80%).
• Add guidance on ‘responsible purchasing practices’ to the strategic compliance plan for business entities.
Raise the overall understanding and awareness of health and safety issues specific to the manufacturing process within the supply chain.
• Develop a comprehensive Occupational Health & Safety (OHS) strategy to address the incidence of vibration exposure in golf club production.
We developed an OHS strategy to address vibration exposure in golf club production. The implementation at factory level is still pending due to administrative reasons.
In 2013 we provided our suppliers with advisory notes and guidance to address the incidence of vibration exposure in golf club production, and delivered best practice training. We organised supplier summits and commissioned a third- party to conduct occupational health assessments, including risks related to vibration exposure, in our supply chain.
FULLY ACHIEVED
• Develop and implement a comprehensive OHS plan to address the incidence of vibration exposure in golf club production, in partnership with other brands.
• Implement the Bangladesh Accord on Fire and Building Safety in our factories.
Activate and instil leadership excellence.
• Launch and promote a new competency model – globally consistent mindsets and behaviours expected from all employees and leaders.
• Continue rolling out the Leadership Journey to further support our achievement of Route 2015 goals.
In 2013, we rolled out a model that defined the adidas Group’s behaviours and mindsets we expect from all employees and leaders. Employees and leaders are evaluated not only on WHAT they accomplish, but HOW they accomplish it, via these behaviours.
Additionally, 85 global leadership teams (700 leaders) have taken part in a ‘Leadership Journey’ during 2013. These journeys include intensive sessions of self-reflection of mindsets, and 360° feedback.
FULLY ACHIEVED
• Embed leadership mindsets and our ‘Way of Working’ in our daily life.
• Launch and promote our new people manager programme Fit2Lead.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 20
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
2015 Target Milestone 2013 Milestone 2014
Systematically promote motivation and accountability through talent and performance management.
• Launch and implement a new performance management approach.
• Strengthen our succession management through internal and external talent pools.
The Score – our new performance management approach – was rolled out in 2013, with materials provided in nine languages through eight e-learning modules. Over 91% of eligible employees completed their year-end appraisals in this first year.
In 2013, we also continued to refine our succession review framework and process across 700 positions globally, ensuring individual development plans are in place, and talent pool information is available to provide a clear picture of successor readiness.
FULLY ACHIEVED
• Proactively manage the readiness and availability of internal talent.
• Systematically increase the percentage of women in leadership positions.
• Bring our new performance management tool to life by facilitating open and honest feedback on performance and growth opportunities.
Create the foundation for open, innovative and collaborative learning solutions.
• Further implement and roll out the Learning Management System (LMS) as the basis for future learning needs.
• Conceptualise a Corporate University to address future learning needs.
The adidas Group Learning Portal (LMS) was successfully launched in 2013, with 10,500 employees having access to the Learning Portal by end of 2013.
The adidas Group Learning Campus (formerly Corporate University) was fully conceptualised in 2013 and will launch mid-2014 globally.
FULLY ACHIEVED
• Launch the adidas Group Learning Campus, the home of open, innovative and collaborative learning solutions.
• Broaden the application of commercial functional training.
Actively contribute to the Route 2015 target of an 11% operating margin by creating centralised above-market service solutions.
• Implement globally consistent HR reporting.
• Implement a payroll system strategy in core countries.
• Implement above-market shared services for talent acquisition and training.
In 2013 the HR reporting tool’s technical design and implementation was completed, and alignment across Finance and HR functional hierarchies was achieved. We also established global data model auditing routines and a global HR reporting network to ensure consistency worldwide.
We defined a payroll system strategy in North America and Greater China, which will go live in 2014.
In 2013 we developed the foundation for above-market shared services and will launch a Shared Service Centre in Germany in 2014. Upon further analysis, we determined that we needed to standardise our processes before implementing above- market shared services, and we will continue to define and standardise end-to-end HR processes in 2014.
LARGELY ACHIEVED
• Establish standardised, end-to-end, system- supported HR processes to reduce duplication of effort, create efficiencies and enforce discipline.
• Launch the first wave of the global payroll strategy – a consolidated payroll delivery system in North America and Greater China.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 21
We find better ways to create our products – mainly through efficiencies, increased use of more sustainable materials and innovation.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 22
DRYDYE TEESHIRT WINS INDUSTRY AWARD
Our DryDye technology is winning plaudits from both industry and consumers. In 2013, adidas received the OutDoor industry award for its Spring/Summer 2014 Terrex Swift DryDye teeshirt. The award recognises ‘products of high ecological and sustainable value’.
Since introducing the DryDye technology in our Fall/Winter 2012 collection, we have increasingly integrated it into our Sports Performance products. We have expanded the colours and fabrics available in DryDye, and use it in more sports categories. While it usually takes 25 litres of water to dye a teeshirt, the revolutionary DryDye technology eliminates the need for water in the dyeing process. By requiring no water, DryDye also uses 50% less energy and 50% fewer chemicals when compared to conventional fabric dyeing.
To date, we have used more than 2 million yards of DryDye fabric, saving 50 million litres of water, or 20 Olympic-sized swimming pools. As water shortages become more commonplace, we need to do what we can to responsibly manage this vital resource.
IT TAKES 25 LITRES OF WATER TO COLOUR 1 SHIRT
DRYDYE USES 50% LESS ENERGY AND 50% FEWER CHEMICALS
Martin Gottlob, Global Product Manager, adidas Outdoor
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 23
USING VIRTUAL IMAGES TO SAVE REAL RESOURCES
The adidas Group is reducing its environmental footprint by using virtual images to sell-in our products to our markets instead of creating physical samples. Between 2011-2013 we produced almost 1.5 million fewer physical samples.
Overall savings were achieved across all product ranges, with the apparel (more than 950,000 pieces) and footwear (415,000 pairs) categories contributing most. We aim to increase the amount of virtual sales samples used during the sell-in process every year.
Sustainability
Creativity
Cost savings
Innovation
Speed
GOALS OF VIRTUALISATION
Between 2011-2013 we produced almost 1.5 million fewer physical samples.
By reducing physical sample production, we not only save water, energy and greenhouse gas emissions in the production of samples, we also reduce our environmental footprint as fewer samples need to be transported globally.
We are also increasingly using virtual images instead of product pictures on our eCommerce website. At the end of 2013, we had approximately 500 virtual images on the site and we plan to gradually increase this number. By doing so, we are limiting the need for product photo shoots.
Renate Eder, Global Operations/Creation Technologies at the adidas Group
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 24
MAXIMISING PERFORMANCE WHILE MINIMISING WASTE
The adidas low-waste initiative, which aims to maximise performance while minimising waste, made great progress in 2013. The programme focuses on producing footwear and sports apparel with fewer parts, recycled materials and maximum pattern efficiency. Pattern efficiency compares the amount of fabric in a piece of clothing to the amount of fabric from which it is cut, with the aim of wasting as little as possible.
FALL/WINTER 2013 COLLECTION
We created a collection of men’s and women’s clothing with over 95% pattern efficiency.
We enjoyed some real successes in both apparel and footwear. One of our Fall/Winter 2013 clothing collections achieved more than 95% pattern efficiency. We used squares and rectangles in recycled polyester, paired with stretchy inserts to guarantee a high performance fit, while minimising environmental impact. Not only are we reducing material waste; we are also saving energy and water that would have gone into creating that fabric. The small amount of waste that was created went to a recycling factory to be converted into stuffing for teddy bears.
In footwear, we took on the challenge of creating a high performance shoe with the least amount of waste possible. The result was the Element Voyager, a streamlined, simplified running shoe that reached 95% pattern efficiency in the upper and contains 60% fewer components than a traditional running shoe. We also opted for environmentally preferred materials, such as recycled polyester in the upper and recycled rubber in the midsole and outsole.
Less fabric, fewer resources and same high performance makes low waste a real win-win: good for our consumers, our business and the planet.
60% fewer components than a traditional running shoe
Craig Vanderoef, Business Unit Director, Global Running at adidas
pattern efficiency 95%
SAME PERFORMANCE, LESS WASTE
SAME PERFORMANCE, LESS WASTE
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 25
ON TRACK FOR SUSTAINABLE COTTON
In 2013, the adidas Group sourced more than 23% of all our cotton as Better Cotton, clearly exceeding our milestone of 15%. This is a huge step towards our goal of using 40% Better Cotton by 2015. Our success is the result of clear target setting – both with suppliers and with internal teams who supported the sourcing of Better Cotton for our products.
By 2018 we have committed to source 100% of cotton in our products as sustainable cotton. Sustainable cotton in this sense means Better Cotton, certified organic cotton or any other form of sustainably produced cotton that is currently available or might be in future.
Percentage of all cotton we used as Better Cotton in 2013.
The Better Cotton Initiative (BCI) aims to reduce the use of pesticides, and promotes efficient water use, crop rotation and fair working conditions. A recent study by IDH (the Sustainable Trade Initiative) shows that the BCI is having a significant impact at the farm level. The study found a reduction in water use by up to 20%, a reduction in pesticide use of up to 67% as well as increased profitability for those farmers who have been licensed for Better Cotton*.
Through our commitment to the Better Cotton Fast Track Program (BCTFP), we are working with other leading brands and funders to help make sustainable cotton production mainstream. The BCFTP funds training for cotton farmers to help them adopt more sustainable practices, which encourages wider production of Better Cotton.
* Impact studies 2013: Sustainable market transformation in action: http://eudevdays.eu/sites/default/files/ Impactboek%202013.pdf
© Better Cotton Initiative
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 26
PROGRESS AGAINST MILESTONES
2015 Target Milestone 2013 Milestone 2014
50% reduction in colours used within the adidas Sports Performance division (excluding colours required by clubs or otherwise outside the control of the Design team).
• Continue our efforts within the Design team to increase product sustainability.
From Spring/Summer 2012 to Spring/Summer 2014, the Sports Performance division reduced its overall colours by 50%, from 360 to 180. With this our 2015 target is already fully achieved.
FULLY ACHIEVED
No new milestone was set because the 2015 target was already fully achieved.
Virtualisation project to drive reduction in samples.
• Further virtualise the design process.
By continuing our virtualisation efforts, we were able to decrease our samples by 28% between 2010 and 2013. Additionally, we continued to use virtual samples instead of pictures from product photo shoots in areas such as our catalogues, eCommerce and brand marketing activities.
FULLY ACHIEVED
Further expansion of the virtualisation process to reach a cumulated sample saving of 2.5 mio (pieces/ pairs) by the end of 2014.
Optimise packaging solutions.
• adidas China to trial the use of single wall cartons before rolling out to bulk orders.
In 2013, we successfully trialed the single walled cartons by adidas China. From October to December 2013, we saved a total of 6 tonnes of paper.
FULLY ACHIEVED
Use single wall carton quality for standard adidas Group apparel carton sizes globally.
Establish full traceability of more sustainable materials (apparel products).
• Continue to monitor process and suppliers’ compliance.
• Set a clear strategy on implementing the software solution for product tracking based on the results of the benchmarking study.
In 2013, the existing data tracking systems were replaced by a new internal adidas Group database solution (SMTT Sustainable Material Tracking Tool). The project was launched in April and the programme rollout to adidas suppliers took place mid-November.
FULLY ACHIEVED
• Implement Phase 2 for database solution SMTT: IT enhancement of the programme, based on needs and learnings identified so far.
• Sustain database quality by on-time, in-full data entry.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 27
2015 Target Milestone 2013 Milestone 2014
Ensure all footwear – and an increasing amount of apparel – is created with sustainable materials and/or more sustainable manufacturing processes.
• Ensure that relevant Sustainable Apparel Coalition topics are covered within internal Better Place tools.
• Design-led innovation to reduce the environmental impact of products within focus categories.
We further strengthened our systems to enhance the sustainability attributes of our products.
We expanded the use of design-led innovations such as Low Waste and DryDye.
FULLY ACHIEVED
• Continue to expand sustainable materials and sustainable manufacturing processes used to create our products.
• Increase the number of No Dye (use of materials in their natural ‘greige’ colour) products across our ranges.
• Increase our cumulative DryDye offering to 4 million yards in total.
• Expand our sustainable materials library.
Use of cotton: 40% Better Cotton by 2015, 100% ‘sustainable cotton’ by 2018.
• Use of 15% sustainable cotton in adidas Group apparel products.
By allocating more volume to suppliers within the Better Cotton supply chain, we significantly exceeded our 2013 target, using 23% Better Cotton.
FULLY ACHIEVED
Use of 25% sustainable cotton in adidas Group apparel products.
100% of non-European leather volume to be sourced from tanneries that achieve Leather Working Group (LWG) Silver or above rating (based on the LWG audit protocol).
85% of non-European sourcing volume of leather should be certified at Gold level.
• Work on further increasing our sourcing volume from suppliers who are Gold-rated.
In 2013, we sourced 96% of our non-European leather volume from tanneries that achieved a LWG Silver or Gold rating. Compared to 2012, we increased our sourcing from Gold- certified tanneries by 8% to 87%, and reaching our 2015 target.
FULLY ACHIEVED
100% of non-European leather volume to be sourced from tanneries that achieve Leather Working Group (LWG) Silver or above rating (based on the LWG audit protocol).
Support the Sustainable Apparel Coalition (SAC) to further develop the creation of the HIGG index.
• Participate in creating, testing, and launching of Higg Index 2.0.
We are a regular and an active participant in the task forces of the SAC. In 2013, the adidas Group supported the SAC with both content and technical expertise to ensure Higg 2.0 development, refinement, and completion.
FULLY ACHIEVED
• Higg Index: Support the SAC in creating a product module.
• ‘Higg 2.0 Brand and Facility Modules’ will be field- tested alongside existing adidas supply chain auditing systems.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PLANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 28
We reduce the environmental footprint of both our own operations and our suppliers’ factories.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PLANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 29
1500t of polystyrene waste diverted from
landfill per year
developing a new heel counter
material from food packaging
Quality, fit and wear testing
counter produced
A need to lower
costs
A need to reduce impacts
1500t
110m
A SUPPLIER INTEGRATING ENVIRONMENTAL THINKING INTO THEIR BUSINESS
Not only do we try to reduce the environmental footprint from our own sites, we encourage our suppliers to do the same. We want them to tackle the environmental impacts from the manufacturing process and be smart in their use of materials – while still meeting our quality standards. One supplier that has successfully risen to this challenge is our footwear component supplier ‘framas’.
We have had a long and fruitful business relationship with ‘framas’. In the last couple of years they have been facing rising prices for the thermoplastic rubber and polystyrene raw materials they use in the heel counter they make for us. These counter stabilise the heel and are present in almost every shoe. To address this, ‘framas’ developed a new heel counter material, replacing the virgin polystyrene component of the compound with recycled polystyrene from food packaging.
The Framaprene® ECO heel counter material passes the strict adidas quality, fit and wear tests. Most of the shoes in the spring/summer 2014 ranges will now contain them – with a total of 110 million pairs of heel counter delivered per year. This will divert 1,500 tonnes a year of polystyrene waste from landfill sites.
The Framaprene® ECO heel counter compound has helped ‘framas’ manage its costs and develop its business while being good for the planet too. Exactly the kind of innovation we love to see from our suppliers.
FRAMAS HAS DEVELOPED A NEW HEEL COUNTER MATERIAL THAT SAVES MONEY AND REDUCES NEGATIVE ENVIRONMENTAL IMPACTS
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PLANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 30
INVESTING IN GREEN COMPANY TO REDUCE OUR ENVIRONMENTAL FOOTPRINT
We are always looking for ways to reduce the environmental footprint of our own sites. In 2013 we drove forward our Green Company programme by extending our global shared environmental management system to more of our sites and by funding innovative carbon reduction projects through our sustainability venture capital fund.
Launched in 2008, Green Company draws together all our environmental initiatives across the world into one coherent programme to improve the environmental performance of our administration offices, manufacturing sites and distribution centres. Key to the success of Green Company has been the shared environmental management system for our sites, which has been certified to the international standard ISO 14001. In 2013, four more sites received certification – one administrative office and three distribution centres – bringing the total number of certified sites to twelve. We plan to extend certification to additional sites in 2014.
Number of adidas Group sites with ISO 14001 certified environmental management systems.
As we always strive to find new ways to make a difference, 2013 saw the continued development of our greenENERGY Fund. The first of its kind in the footwear and apparel industry when it was launched in 2012, this sustainability venture capital fund aims to accelerate investment in cost-effective energy and carbon-reduction projects – and make a profit. In 2013, the fund financed new lighting systems at five of our main distribution centres in Europe, North America and Asia as well as the retrofit of 118 retail stores with LED lighting. It also invested in a new solid oxide fuel cell at the TaylorMade-adidas Golf facility in Carlsbad, California. This alternate energy supply will reduce the facility’s carbon emissions by 28% and bring in net energy savings of almost USD 1.2 million over the next 10 years.
Fuel cell in Carlsbad, USA
Melissa Claassen, CFO TaylorMade-adidas Golf, Carlsbad
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PLANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 31
OUTDOOR JACKET
A BETTER WAY TO MAKE PRODUCTS WATER-REPELLENT
In 2013 we successfully developed a better way to make our products water-repellent, one that avoids using a particular group of chemicals that have been linked with potential risks to health and the environment.
The majority of water-repellent chemistry is based on fluorocarbons. Some long-chain fluorocarbons – known as C8 – can break down to chemicals that are known to be persistent, bioaccumulative and toxic. This is why in early 2013 the adidas Group decided to phase out all long-chain fluorocarbons from our products by January 2015.
The first step was to research the different possible alternatives to the C8 chemistry. In this screening process we worked with not only our strategic textile supplier but also several chemical manufacturers. By bringing them together, we were able to come up with a solution.
Jan Neckermann, Project Manager Strategy, Global Operations, adidas Group
By the end of 2013 we had already changed a large part of our production to the alternative water-repellent chemistry, without changing the aesthetics, the quality or the performance of the final product.
We had met our target for 2013. A great example of how a strong collaboration along the supply chain can have a significant impact.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PLANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 32
Lyn Ip, Senior Manager Environment, Health & Safety for Global Supply Chain at the adidas Group
These audits continue to be an important mechanism for both the Group and the supplier to understand and evaluate the supplier’s performance. We can identify the strengths and areas of weaknesses within the different facilities, develop specific corrective action plans, and work with the factories on improving performance. As with all our sustainability assessments, our environmental audits inform decisions about placing future work, which helps to focus suppliers on their performance.
More than three-quarters of the audited material suppliers improved their environmental performance within a year.
THREE-QUARTERS OF AUDITED MATERIAL SUPPLIERS IMPROVING THEIR ENVIRONMENTAL PERFORMANCE
While environmental aspects have been part of our factory audits since we launched our sustainability programme in 1998, it was in 2008 that we began dedicated environmental audits with an initial focus on how chemicals were managed. In 2010 we broadened our monitoring scope and audited material suppliers (fabric mills and dyehouses) for the first time. These audits cover a broad range of environmental topics. As well as reviewing the management systems and overall environmental controls in place, the audits look at waste, how waste water is treated and groundwater is protected, as well as health and safety issues and fire protection.
Results from dedicated audits with 24 material suppliers in 2013 showed that more than 75% of them improved their overall environmental performance within a year. Comparing results to the previous year, the score is also derived from assessing each supplier’s business plans and their commitment to setting targets to limit their waste, energy and water use.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PLANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 33
PROGRESS AGAINST MILESTONES
2015 Target Milestone 2013 Milestone 2014
Extend environmental assessments to selected supplier groups and achieve a 30% improvement in average KPI for selected suppliers based on 2011 baseline.
• Environmental KPI score to be increased by 10% for strategic suppliers that are rated 3E or above.
• Environmental KPI score to be increased by 20% for strategic suppliers that are rated below 3E.
• Collect and share learnings from detailed environmental audits conducted at suppliers operating high-risk processes.
For a number of factories, the 2013 E-KPI scores had to be readjusted due to data inconsistencies reported into our environmental data system in previous years. In addition, some factories failed to implement actions required by their Strategic Compliance Plan to improve the E-KPI score.
PARTLY ACHIEVED
A consolidated document with best practice initiatives has been developed and shared with our Global Sourcing Organisation.
FULLY ACHIEVED
1E facilities to move up by one level.
10-15% reduction of energy consumption by product output at strategic suppliers.
• Finalise and verify supplier data, complete benchmark and report on progress in reduced energy consumption per unit of production. Redefine target for energy savings for 2014 based on the results.
Supplier data was finalised and verified, and progress in energy reduction reported.
FULLY ACHIEVED
1E facilities to move up by one level.
Drive solutions for sound chemical management in the global supply chain.
• Align and integrate our ZDHC work with our overall Environmental Strategy 2015 priorities, as well as with our strong engagement within the Sustainable Apparel Coalition.
• Further build and strengthen the internal structures to support and drive the ZDHC work.
In collaboration with the other member brands in the ZDHC group, we have developed an industry-wide environmental audit protocol.
We have been successfully phasing out the majority of our long-chain water fluorocarbon water-repellent chemistry.
FULLY ACHIEVED
• Continue our phase-out plan for long-chain fluorinated chemicals across all divisions by the beginning of 2015.
• Engage with ZDHC, SAC and other industry partners to strengthen our input chemical management.
Implement Green Design requirements for new buildings at suppliers.
• Develop case studies to highlight the adoption of successful green building design practices and share these with other factories in the supply chain.
Case studies about successful green building design practices were incorporated into a document showcasing best practices.
FULLY ACHIEVED
No new milestone was set because the 2015 target was already fully achieved.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PLANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 34
2015 Target Milestone 2013 Milestone 2014
Green Company Initiative (own operations):
• 20% relative reduction in energy consumption
• 30% relative reduction in carbon emissions
• 20% water savings/ employee
• 25% waste reduction/ employee
• 50% paper reduction/ employee.
• Further develop the best practice sharing programme.
• Further expand the ISO 14001 system through certification of additional sites (over the next two years).
• Survey organic solvents used at our own sites (excluding laboratories).
In 2013 the internal best practice library was expanded with different examples from our own sites.
FULLY ACHIEVED
In 2013 our ISO 14001 system successfully achieved re-certification. The system was expanded to four new European sites in Germany and the UK. We plan to certify additional sites in 2014.
FULLY ACHIEVED
The few sites that still use organic solvents were asked to provide details on their plan to reach the 2015 target of phasing-out organic solvents (excluding laboratories). This is still an ongoing task in 2014.
PARTLY ACHIEVED
Details on the progress against our Green Company targets can be found in our Green Company Performance Analysis available on our corporate website.
• Further expand the best practice library and drive best practice sharing between our own sites.
• Further expand the ISO 14001 system through certification of additional sites.
• Continue to drive and support energy reduction projects at our sites through the greenENERGY Fund.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PLANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 35
2015 Target Milestone 2013 Milestone 2014
Reduce the environmental footprint of IT infrastructure by 20%:
• 80% of all PCs to have ‘green’ power management options
• 30% less energy consumption by PCs
• 100% of requests for proposals to evaluate ‘green’ performance of possible vendors
• Virtualisation of servers and data centre consolidation.
Workplace: • Use game-like experiences to encourage employees
to reduce their carbon footprint.
• Ensure workplace Green IT best practices are applied.
• Explore the use of paperless processes.
• Introduce green printing settings by default and printer energy management.
• Identify energy consumption and carbon footprint related to emails and employee data storage.
Data centre: • Introduce storage on demand at headquarters.
• Identify the carbon footprint of applications.
• Decommission physical servers (track percentage of decommissioned servers in regions EMEA, Asia Pacific and Americas).
• Improve virtual server ratio by 5%.
Communication, awareness: • Run awareness campaigns including posters, tips and
media assets.
• Continue employee communication to raise awareness on how to save energy.
Cloud computing and ‘data as a service’: • Evaluate the potential of cloud computing and ‘data as
a service’ to further reduce carbon footprint, energy and paper consumption.
In 2013, we worked on all milestones and assessed the overall environmental impact of the different initiatives. We decided to focus our future efforts on those initiatives with the most significant environmental impact.
Major achievements in 2013:
- Cloud storage: Storage efficiency was improved which will result in major energy savings from 2014 onwards.
- Printer: Due to a more efficient and smaller fleet of printers as well as new default printer settings, we achieved significant paper and energy savings at our headquarters in Germany.
- Communication: We continued communicating with employees around saving energy throughout the year.
FULLY ACHIEVED
• Explore the use of unused PC capacity to render 3D images for design and marketing processes.
• Reduce Power Usage Effectiveness (PUE) factor by 10-15% at our headquarters data centre in Germany.
• Explore the use of carbon neutral printing for our headquarters in Germany and other locations.
• Continue server consolidation in the Americas.
• Continue rollout of new printer concept.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 36
We engage with critical stakeholders and collaborate with partners to improve our industry.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 37
CREATING AN INDUSTRY-WIDE AUDIT TOOL TOGETHER WITH OTHER BRANDS
Brands may compete in the marketplace but there are areas where we can and should collaborate. One such area is in the way we audit our suppliers. Brands share suppliers, but historically we have used similar methodologies but unique and different audit tools. As we are all aiming for compliance with labour, health, safety and environmental standards, there is clearly an opportunity to harmonise our efforts. For some years now, we have been collaborating on creating an audit tool that is used by and shared with other companies. We worked closely with colleagues from two major brands, and towards the end of 2013 the tool was ready to pilot.
Selcuk Buyukozer, Global Programme Operations, Social & Environmental Affairs at the adidas Group
The project began in 2008 when the adidas Group, seven other brands and the Fair Labor Association (FLA) – a not-for-profit organisation dedicated to promoting safe and fair workplaces – started working on the Sustainable Compliance Initiative (SCI). The ultimate goal of the SCI was to replace the brands’ individual monitoring tools with one that was commonly used and globally accepted. This SCI audit tool was finalised and released by the FLA in 2012.
To make the new SCI tool even more efficient and convenient for any factory and audit type, we worked with two major brands to fine-tune it. We have now developed a core question set covering all minimum requirements. It can be used in every audit and clearly identifies the root causes of problems.
As a next step, the SCI audit tool will be integrated into the Fair Factories Clearinghouse (FFC), an industry-leading compliance data-sharing online platform. Piloting this in 2014 moves us one step closer to the goal of a universally accepted monitoring tool embraced by many other companies and brands.
DRIVING STANDARDS TOGETHER
major brands collaborated on fine-tuning the shared audit tool
Peter Borrows, Executive Director of the Fair Factories Clearinghouse
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 38
Employees were not only running for fun, but also to raise money for good causes. For example, at our headquarters in Herzogenaurach, Germany, around 400 employees raised more than 2,800 Euro to support the African based non-profit organisation SCORE. A long-term partner of the adidas Fund, SCORE empowers individuals though community development programmes involving sport and recreation. Together with the adidas Group, SCORE organises running camps and enables runners to participate in the Two Oceans Marathon in Cape Town.
Running is one of the adidas Group’s main product categories and important for the growth of the business, as set out in our strategic business plan ‘Route 2015’.
Daniel Juan Serna, Merchandising Specialist Global Sales at the adidas Group
ADIDAS EMPLOYEES ‘RUN AROUND THE GLOBE’ FOR A GOOD CAUSE
When the adidas Group designated 2013 as ‘The Year of Running’, employees responded by organising a range of activities, including an ambitious ‘Run around the Globe’. This worldwide run across continents involved staff at 36 locations, and proved once again that our employees are united by their true passion for sports. Find out more on the adidas Group Blog at http://blog.adidas-group. com/2013/10/and-we-keep-running-and-running-and- running-adidas-locations-worldwide-celebrate-the- %E2%80%9Crun-around-the-globe%E2%80%9D/
‘Run around the Globe’ involved staff at 36 locations worldwide.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 39
In addition to regularly publishing all our supplier and licensee factories on our website since 2007, we specifically have been disclosing details of authorised suppliers for major sporting events since the 2006 FIFA World Cup Germany™. Overall, this complements our annual reporting on our suppliers’ performance in meeting our workplace standards – a procedure we established in the year 2000. For more than a decade, we have practiced full disclosure to those stakeholders who have an interest in our supply chain information. Furthermore, we submit our programme to the Fair Labor Association for external evaluation and accreditation.
The list of 2014 FIFA World Cup Brazil™ suppliers can be downloaded here: www.adidas-group.com/en/ sustainability/supply-chain/supply-chain-structure/
The adidas Group has published an annual Sustainability Report since the year 2000.
DETAILED INFORMATION PUBLISHED ABOUT SUPPLIERS MANUFACTURING PRODUCTS FOR THE 2014 FIFA WORLD CUP BRAZIL™
In December 2013 the adidas Group published a complete list of the factories manufacturing adidas products for the 2014 FIFA World Cup Brazil™. As official sponsor, licensee and outfitter for the World Cup, we believe this demonstrates the importance we attach to sharing information around events of major global interest and our continuing commitment to transparency in general. The list contains names and addresses of each factory, and also shows the status of worker or trade union representation at the individual facility.
Frank Henke, Global Director Social & Environmental Affairs at the adidas Group
We accept the adidas Group is a global company with highly visible brands and so faces ongoing public scrutiny. Stakeholders have a legitimate right to information about where our products are made, and we believe that sharing that information openly enhances our credibility and also drives improvement in our global supply chain.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 40
GINGA SOCIAL – SPORT FOR SOCIAL CHANGE
In 2011, adidas Brazil partnered with the Brazilian NGO Gol de Letra to create ‘Ginga Social’, a sport-based after-school programme now attended by more than 1,500 children in five Brazilian cities. Sports offered range from futsal and athletics to capoeira and judo. In 2013, the sports fields in Belo Horizonte, São Paulo and Porto Alegre were refurbished, making it possible to offer activities into the evening, which improved access for families and the local community.
Gol de Letra helps local organisations implement the programme and trains them to use sport as a tool for social change, making an ongoing positive difference to the lives of young people in vulnerable neighbourhoods.
Drawing on values in sport such as respect for others and hard work gets results, the programme encourages self-confidence and personal motivation in the children. In an independent evaluation carried out in 2013, partner organisations all stated that Ginga Social positively impacts their work, attracting underserved children, and bringing parents closer. While the effect of the programme on the children attending will be further evaluated in 2014, the words of one of the programme participants speak for themselves.
“Nobody is born a winner, what makes the difference is our attitude. Judo means fighting even though you are losing, it means believing in your own capabilities, it means to fall and to stand up, but to never give up. With love and patience the Ginga Social team made us see what we want for our future. We believe that through sport this project can change our lives. Now it is up to us to make our choices.” Israele Rodrigues, 16 years.
More information about Ginga Social, including a video, is available on our corporate website at www.adidas-group. com/en/sustainability/community-engagement/projects/
GINGA SOCIAL IN BRAZIL
in
Rio de Janeiro
Belo Horizonte
Sao Paulo
Salvador
Porto Alegre
1,500kids cities
Israele Rodrigues (16), Ginga Social participant
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 41
At the adidas Group we know that performance counts. Measuring, assessing and publishing social and environmental data strengthens the credibility and trust in our company.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 42
On December 31, 2013, the adidas Group had
versus 46,306 in the previous year, which represents an increase of
50,728 employees
10%
At the end of 2013, we worked with
1,214 independent factories (excluding our own factories and those of our licensees) in
countries
The total number of licensees grew by
16% and their supplier factories by
46% to reach 401 facilities
Manufacturing agreements were terminated with nine suppliers for compliance reasons
9 For suppliers covered by our environmental compliance programme, a steady improvement has been seen of the environmental key performance indicators from
2011 — 2013
The total number of factories subject to our social compliance ratings in 2013 grew by
8.5% compared to the previous year
warning letters across 14 countries were issued to suppliers66 1,489 factory visits were undertaken at different levels in our supply chain, and 148 training sessions were
conducted with almost 3,000 participants attending
The audit coverage of our supply base in higher risk countries such as China, India, Indonesia, Thailand and Vietnam was greater than
75%
32 athletic footwear suppliers, producing around
of our global athletic footwear sourcing volume, are certified in accordance with ISO 14001 and/or OHSAS 18001.
Our athletic footwear suppliers reduced the use of VOCs from well above 100 grams per pair of shoes to below 20 grams. In 2013, we achieved an all-time low of 18.8 grams of VOCs per pair.
The adidas Group holds an ISO 14001 matrix certification for twelve of our sites. 12
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 43
SUPPLY CHAIN
1. NUMBER OF SUPPLIER FACTORIES In the course of any calendar year there is a notable movement of factories, as suppliers are added or removed, because business entities are created, bought or sold by the adidas Group, or intermediaries, such as agents, are hired or their services are terminated. The data we are reporting here is a snapshot in time, a static point capturing the situation at the end of 12 months of these movements. Data is presented on a year-on-year basis, as at 31 December.
At the end of 2013, we worked with 1,214 independent factories (excluding own factories and factories of our licensees) who manufacture adidas Group products in 65 countries. 67% of the factories are located in the Asia Pacific region, 20% in the Americas and 13% in Europe, Middle East and Africa (EMEA).
The total number of supplier factories has increased by 9% compared to 2012.
1,400
1,200
1,000
800
600
400
200
0
N u
m b
er o
f fa
ct or
ie s
NUMBER OF SUPPLIER FACTORIES (EXCLUDING OWN FACTORIES AND LICENSEE FACTORIES)
Asia Americas EMEA Total • 2011 833 242 157 1,232 • 2012 687 237 185 1,109 • 2013 810 241 163 1,214
Asia – 67%
EMEA – 13%
Americas – 20%
SUPPLIER FACTORIES BY REGION IN 2013 (EXCLUDING OWN FACTORIES AND LICENSEE FACTORIES)
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 44
2. FACTORIES BY COUNTRY In 2013, a total of 1,214 factories made goods for the adidas Group worldwide, an increase of 9% compared with 2012, but slightly less than the total number of manufacturing facilities reported at the end of 2011. New supplier factories were added in China and Vietnam, which are already major sourcing locations. Factories were also added in Cambodia, where trade benefits support the garment export industry. Following an earlier period of consolidation, the supply chain in India also expanded. Due to improved disclosure of sub-contractor factories, the number of factories in South Korea almost doubled. For many other countries there was no significant change in the number of factories making products for the adidas Group. A decline in the number of factories in Thailand was offset, in part, by our Thai garment producers opening new production facilities across the border in Laos. The factory numbers in the regions Americas and EMEA remained relatively stable in 2013.
NUMBER OF SUPPLIER FACTORIES PER COUNTRY1
Asia Total number of factories
2011 2012 2013 Australia 4 4 3 Bangladesh 7 3 4 Cambodia 13 16 25 China 349 289 339 Hong Kong 1 1 0 India 84 33 55 Indonesia 80 61 58 Japan 60 63 66 Korea 37 42 80 Laos 1 0 2 Malaysia 9 5 6 New Zealand 1 1 0 Pakistan 16 9 11 Philippines 18 17 17 Singapore 1 1 1 Sri Lanka 8 4 6 Taiwan 27 34 31 Thailand 38 31 23 Vietnam 77 73 83 Total Asia 8312 687 810
1 Independent supplier production sites of the adidas Group, excluding licensee factories and own production sites.
2 Restated numbers for regions Asia and EMEA. This is because in 2012 Mauritius moved from region Asia to region EMEA.
Americas Total number of factories
2011 2012 2013 Argentina 22 27 23 Brazil 63 56 49 Canada 33 33 34 Chile 1 2 2 Colombia 4 3 3 Costa Rica 0 0 1 Dom. Republic 2 0 0 El Salvador 4 3 4 Guatemala 4 3 4 Haiti 4 0 0 Honduras 5 3 5 Mexico 20 17 15 Nicaragua 6 4 4 Paraguay 2 2 2 United States 72 84 95 Total Americas 242 237 241
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 45
Global Total number of factories
2011 2012 2013 Total Asia 8312 687 810 Total Americas 242 237 241 Total EMEA 1592 185 163 Total Global 1,232 1,109 1,214
EMEA Total number of factories
2011 2012 2013 Belgium 1 2 2 Bosnia and Herzegovina 1 3 3 Bulgaria 1 3 1 Czech Republic 3 6 4 Egypt 2 2 3 Estonia 0 0 1 Finland 1 1 1 France 2 2 2 Georgia 1 0 0 Germany 27 31 25 Greece 0 0 3 Hungary 1 1 1 Ireland 0 1 1 Israel 1 1 1 Italy 20 20 18 Jordan 1 1 1 Lesotho 1 1 1 Lithuania 3 3 3 Macedonia 1 1 1 Mauritius 2 2 2 Moldova 1 1 1 Netherlands 0 1 1 Poland 8 9 3 Portugal 7 11 6 Romania 2 3 2 Russia 0 0 1 Slovakia 2 3 2 Slovenia 3 3 3 South Africa 10 6 7 Spain 11 12 9 Sweden 5 5 5 Switzerland 3 3 3 Tunisia 2 2 2 Turkey 17 13 16 Ukraine 0 2 2 United Kingdom 19 30 26 Total EMEA 158 2 185 163 1 Independent supplier production sites of the adidas Group, excluding licensee factories
and own production sites. 2 Restated numbers for regions Asia and EMEA. This is because in 2012 Mauritius moved
from region Asia to region EMEA.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 46
3. ADIDAS GROUP LICENSEES At the end of 2013, the adidas Group worked with 57 licensees whose suppliers manufactured products in 401 factories across 50 countries. As shown in the table below, there was a significant increase in adidas Group’s external licensing footprint compared to the previous year. The total number of licensees grew by 16% and their supplier factories by 46%.
ADIDAS GROUP LICENSEES
2011 2012 2013 Licensees 44 49 57 Factories producing for licensees1 269 275 401 Production countries 45 44 50 1 This may include factories that produce for both, the adidas Group directly and for
licensees/agents.
Hardware – 32%
Footwear – 3% Watches – 3%
Glasses – 4% Cosmetics – 2%Apparel – 56%
ADIDAS AND REEBOK LICENSEES DIVIDED BY PRODUCT RANGE IN 2013
AUDITS AND TRAINING 4. NUMBER OF FACTORY AUDITS/VISITS AND TRAINING SESSIONS During 2013, 1,489 factory visits (including 1,346 factory audits) were undertaken. These involved management and worker interviews; reviews of factory policies, practices and documents; facility inspections and training sessions at different levels in our supply chain. The SEA team conducted 148 training sessions and workshops for suppliers, licensees, workers and adidas Group employees.
1,800 1,600 1,400 1,200
800 1,000
600 400 200 0
NUMBER OF FACTORY AUDITS/VISITS AND TRAINING SESSIONS*
2011 2012 2013 • Factory audits/visits 1,591 1,564 1,489 • Training sessions 170 172 148
* Includes multiple audits/visits to the same factor y conducted by the adidas Group SEA team and external monitors, but excludes FL A audits. Includes audits in licensee factories; visits involving management and worker inter views, document review, facility inspections and training on-site.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 47
5. NUMBER OF TRAINING SESSIONS DIVIDED BY REGION AND TYPE Overall, the number of training sessions conducted in 2013 declined compared to the previous year, but the total number of participants remained constant, with some 3,000 people attending the training sessions. The training offered in each region covered basic, as well as long-term, strategic topics.
The reasons for the drop in the total number of training sessions were:
1. There were less individual but more group (i.e. more than one supplier) training sessions undertaken. This offers both higher efficiencies and opportunities for cross-learning and best practice sharing among suppliers.
2. Sustainability training is based on needs assessments. Specifically in Asia, the number of sustainability training events declined and more systematic and advanced group training sessions provided instead.
NUMBER OF TRAINING SESSIONS DIVIDED BY REGION AND TYPE1
Region
Type and number of training sessions Fundamental2 Performance3 Sustainability4 Total
2011 2012 2013 2011 2012 2013 2011 2012 2013 2011 2012 20135
Asia 34 34 35 31 32 18 53 62 38 118 128 91 Americas 32 34 42 4 1 1 5 7 7 41 42 50 EMEA 10 2 5 0 0 2 1 0 0 11 2 7 Total 76 70 82 35 33 21 59 69 45 170 172 148 1 Training sessions conducted for suppliers, workers, licensees, agents and adidas Group employees. 2 Fundamental training covers: Workplace Standards and SEA introduction; FFC training; SEA policies and SOPs. 3 Performance training covers: Specific labour, health, safety and environmental issues. 4 Sustainability training covers: Sustainable compliance guideline and KPI improvement; Factor y Self-Audits (factor y internal audits). 5 In 2013, nearly 3,000 people participated in these training sessions.
Fundamental – 55%
Sustainability – 31%
Performance – 14%
SUPPLIER TRAINING SESSIONS BY TYPE IN 2013
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 48
6. NUMBER OF AUDITS DIVIDED BY REGION AND TYPE In 2013, the SEA team conducted 1,345 social compliance and environmental audits, using in-house technical staff as well as external third party monitors, commissioned by adidas Group business entities and licensees.
The total number of initial assessments – the first approval stage for new entry factories – increased by a little over 9% when compared to the 2012 calendar year, while performance audits for our established suppliers showed a marginal decline. In contrast, the total number of environmental audits fell by 23 percent compared to the previous year. This was due to the realignment of supplier partners in the supply chain.
In addition to these audits, suppliers’ sites were visited multiple times by compliance staff to discuss specific remedial issues, to follow up project work or to conduct training sessions.
Meeting the demand for initial assessments remained a challenge in 2013, particularly in Asia Pacific where new factories were proposed in more remote locations and across a wide range of countries. There were a total of 370 initial assessments (including initial assessment follow-ups), 80% of which were undertaken in Asia, with China accounting for 37% of all assessments conducted. India was the country with the next largest number of initial assessments, representing 10% of all assessments. There was also a significant increase in new factory approval requests and the corresponding need for initial assessments in new Brazilian footwear assembly factory sites, in the lead-up to the 2014 World Cup.
Overall, 42% of all candidate factories were either rejected outright, or rejected but given the chance to remediate threshold issues in a timely manner. See also data on termination and rejections.
A total of 51% of all active suppliers were audited in 2013, which is the same figure as in 2012. Since suppliers in low-risk countries are generally excluded from monitoring activities, audit coverage would have been even higher if only mid- to high-risk countries were taken into consideration.
The audit coverage of all active suppliers in region Asia was 65%, down 6% from the coverage achieved in the previous year. However, higher risk countries like China, India, Indonesia, Thailand and Vietnam were subjected to more extensive monitoring and achieved greater than 75% audit coverage.
Our monitoring programme is characterised by a risk management approach – this means that we do not envisage 100% audit coverage in every country where our factories are located. Although there has been a decline in audit coverage in some countries, the intensity of engagement with factories has increased, particularly in those suppliers with problematic or open threshold issues, or those in need of support to improve their management systems.
NUMBER OF AUDITS DIVIDED BY REGION AND TYPE
Region Initial Assessments1 Performance Audits2 Environmental Audits Total 2011 2012 2013 2011 2012 2013 2011 2012 2013 2011 2012 2013
Asia 379 270 296 790 712 699 114 190 142 1,283 1,172 1,137 Americas 50 38 38 75 73 76 0 0 2 125 111 116 EMEA 47 30 36 46 47 52 0 4 5 93 81 93 Total3 476 338 370 911 832 827 114 194 149 1,501 1,364 1,346 1 Ever y new supplier factor y has to pass an initial assessment to prove compliance with the Workplace Standards before an order is placed. The data includes both ‘initial
assessments’ and ‘initial assessment follow-ups’. 2 Audits conducted in approved supplier factories. 3 Includes audits done in licensee factories.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 49
1,600
1,400
1,200
800
1,000
600
400
200
0 20092008 2010 2011 2012 2013
NUMBER OF AUDITS IN SUPPLIER FACTORIES
2008 2009 2010 2011 2012 2013 SEA Team 861 948 844 861 642 680 External monitor 400 500 506 640 722 666 Total 1,261 1,448 1,350 1,501 1,364 1,346
INITIAL ASSESSMENTS BY COUNTRY1
Asia 2011 2012 2013 Bangladesh 14 2 3 Cambodia 7 12 31 China 234 152 137 Hong Kong 0 0 1 India 19 21 38 Indonesia 27 21 13 Japan 2 0 1 Korea 8 9 0 Laos 0 1 0 Malaysia 4 0 0 Pakistan 7 9 20 Philippines 9 3 3 Sri Lanka 2 5 4 Taiwan 9 7 0 Thailand 7 5 7 Vietnam 39 23 38 Asia Total 3792 270 296 1 Including initial assessment follow-ups. 2 Restated numbers for regions Asia and EMEA.
This is because in 2012 Mauritius was moved to region EMEA from region Asia.
Americas 2011 2012 2013 Argentina 7 5 4 Brazil 5 4 13 Canada 2 0 1 Colombia 0 2 1 Costa Rica 1 0 1 Dom. Republic 2 1 0 El Salvador 3 5 4 Guatemala 4 5 2 Honduras 2 1 4 Mexico 12 10 7 Nicaragua 5 4 0 Paraguay 5 0 1 United States 2 1 0 Americas Total 50 38 38
EMEA 2011 2012 2013 Belarus 2 0 0 Bosnia and Herzegovina
1 2 0
Bulgaria 0 2 0 Egypt 9 3 5 Georgia 1 2 1 Italy 0 1 0 Jordan 1 2 0 Kenya 1 0 4 Lesotho 0 1 2 Mauritius 2 1 2 Portugal 0 0 1 Romania 0 0 1 Russia 1 0 0 South Africa 1 2 4 Tunisia 1 2 2 Turkey 10 12 13 Ukraine 1 0 1 United Kingdom 16 0 0 EMEA Total 472 30 36
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 50
7. NUMBER OF AUDITS CONDUCTED IN LICENSEE FACTORIES The number of factories manufacturing goods for licensees has increased steadily, as shown in Section 3. There was substantial growth in the past year, especially in Asia, as illustrated by the number of initial assessments conducted in that region. The number of performance audits has expanded significantly in all regions, with 51% more audits completed in licensee supplier factories compared to the same period in 2012.
NUMBER OF AUDITS CONDUCTED IN LICENSEE FACTORIES1
Region Initial Assessments2 Performance Audits3 Environmental Audits Total 2011 2012 2013 2011 2012 2013 2011 2012 2013 2011 2012 2013
Asia 54 59 73 142 127 187 9 15 14 205 201 274 Americas 6 3 9 15 10 16 0 0 0 21 13 25 EMEA 5 1 4 9 7 15 0 0 1 14 8 20 Total 65 63 86 166 144 218 9 15 15 240 222 319 1 This may include factories that produce both for the adidas Group directly and for licensees/agents. 2 Ever y new factor y has to pass an initial assessment to prove compliance with the Workplace Standards before an order is placed. 3 Audits conducted in approved factories.
300
250
200
150
50
100
0
NUMBER OF AUDITS IN LICENSEE FACTORIES BY REGION
Asia Americas EMEA • 2011 205 21 14 • 2012 201 13 8 • 2013 274 25 20
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 51
350
300
250
150
200
100
50
0
NUMBER OF AUDITS IN LICENSEE FACTORIES BY AUDIT TYPE
2008 2009 2010 2011 2012 2013 IA 122 109 77 65 63 86 PA 59 164 199 166 144 218 EA 0 0 0 9 15 15 Total 181 273 276 240 222 319
8. NON-COMPLIANCES IDENTIFIED AT SUPPLIER FACTORIES The charts in this section illustrate the non-compliance findings identified during initial assessments and initial assessment follow-up visits at new factories in our supply chain in 2013. Suppliers are evaluated against a number of critical compliance issues. Zero tolerance issues – such as forced labour practices – immediately disqualify a factory from further consideration, while threshold issues can be addressed in a specified timeframe.
The first chart presents the labour-related non-compliances identified in supplier factories. Two-thirds of the labour-related findings belong to the top three issues: ‘Wages’, ‘Benefits’ and ‘Working Hours/Overtime’.
‘Wages’ covers – among other things – policies and practices in the factory for the timely and full payment of wages, overtime payments and deductions. ‘Benefits’ relates mainly to policies and practices for benefits, social and medical insurances, leave and public holidays. ‘Working hours/Overtime’ covers management systems for working hours, policies and practices, excessive working hours, regular and overtime working hours as well as rest days.
Besides identifying non-compliances with our Workplace Standards at factories, the adidas Group compliance team particularly focuses on the existence and implementation of management systems on the supplier’s side. The team identifies any gaps in policies and procedures related to specific non-compliance areas such as forced labour, child labour, freedom of association or discrimination. As a result, these findings must be seen as broad categories. The percentages shown indicate the systemic shortcomings of newly proposed suppliers, rather than the confirmed presence of specific non-compliances, such as child labour, forced labour, or discrimination (see also the footnote on page 52).
Overall, the top four categories remain the same as in 2012, namely ‘Fair Wages’, ‘Working Hours/Overtime’, ‘Benefits’ and ‘General Principle’. Percentage changes compared to the previous year are only marginal. However, ‘Freedom of Association’ replaced ‘Disciplinary Practices’ as the fifth most common area of non-compliance.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 52
General Principle* – 13%
Benefits – 19%
Working Hours/Overtime – 22%
Fair Wages – 27%
Freedom of Association – 4%
Child and Juvenile Labour** – 3%
Disciplinary Practices – 3%
Employment Status – 2% Discrimination – 2% HR and Management – 1% Other*** – 4%
TOP 10 LABOUR NON-COMPLIANCE FINDINGS IDENTIFIED IN FACTORIES DURING INITIAL ASSESSMENTS AND INITIAL ASSESSMENT FOLLOW-UPS IN 2013
* ‘General Principle’ covers company policies, employee handbook, management attitude and transparency, employment contracts and filing systems. ** ‘Child and Juvenile Labour’ covers management systems, policies and practices to prevent the employment of child labour and the necessar y protections for juvenile workers, if
they are of a legal age to work. The 3% shown here mainly points to the lack of effective management systems to prevent child labour or effectively manage juvenile labour. *** For example, forced/compulsor y labour and privacy issues.
The second chart shows the health and safety non-compliances identified in supplier factories. Building, fire and electrical safety are critical areas for any potential new supplier and together accounted for 35% of the non-compliances identified in 2013. The way chemicals were stored and used, including the presence of banned chemicals, accounted for 14% of non-conformances reported. The third largest group of findings related to management systems, policies and procedures. 13% of the findings showed a lack of conformance with our Workplace Standards and expectation for effective health & safety systems, including the recruitment and retention of qualified safety staff.
Machine Safety and Noise – 8%Hazardous Chemicals in Production – 8%
Architectural Considerations – 9%
Management Systems for Safety and Health – 13%
Fire Safety – 21%
Chemical storage – 6% Electricity and Electrical Hazards – 5%
Sanitation and Hygiene – 5%
First Aid – 5%
Dormitory Conditions – 2% Other* – 18%
TOP 10 HEALTH AND SAFETY NON-COMPLIANCE FINDINGS IDENTIFIED IN FACTORIES DURING INITIAL ASSESSMENTS AND INITIAL ASSESSMENT FOLLOW-UPS IN 2013
* For example, occupational hazards risks, personal protective equipment, ergonomics and housekeeping.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 53
9. KEY PERFORMANCE INDICATOR (KPI) ASSESSMENT AND C-RATING We audit our suppliers against our Workplace Standards and rate them according to their performance. We have an innovative way to rate suppliers on their ability to deliver fair, healthy and environmentally sound workplace conditions. The following table shows the average assessment score by unit of measure for those active core suppliers that were rated against the six units of measure in the social compliance or C-KPI. Each unit of measure is scored out of 100%. We use a parallel system to measure environmental performance, which is described later.
Social Compliance Rating Compared to 2012, the average score of all C-KPI units of measure remained relatively stable in 2013. And overall, more factories were subject to a C-KPI assessment than in the previous year.
Generally, newly assessed factories start with a relatively low KPI score, and build and improve their management systems and compliance performance over a period of years. In 2013, this had an adverse impact on the overall KPI improvement of existing factories. We also noticed that it is more challenging for factories to continuously improve their rating score once they achieve 3C. We will address this issue in our ongoing factory monitoring and capacity-building programme for suppliers from 2014 onwards.
SOCIAL COMPLIANCE KPI ASSESSMENT AND C-RATING
KPI Unit of Measure – Average score in % 2011 20121 2013 Management commitment and responsiveness 48.51 59.02 58.76 Management systems 52.09 60.27 61.01 Worker-management communication and industrial relations 67.38 73.55 72.80 Compliance training for workers and management 61.55 69.24 70.82 Transparency in communication and reporting 72.29 77.57 78.24 Compliance performance 59.50 63.43 62.39 KPI Cumulative Score 50.37 57.74 58.28 1 The calculation method was changed in 2012 to better reflect actual supplier performance. Numbers are calculated using the latest KPI assessment rating of each active supplier.
The following bar graph shows comparable data for the past three years using the rating classification.
Between 2012 and 2013, the number of 1C category suppliers, which represents the lowest performing factories with serious issues and very weak commitment to compliance, has remained static at 3% of the KPI-assessed factories.
We continue to see a solid core of good performing suppliers with 3C ratings, and although this category shrank by 2% compared to 2012, the total number of factories in this category actually grew. With the influx of many new suppliers the 2C category expanded significantly, growing both in numerical and percentage terms. The 2C category accounted for 43% of the assessment pool in 2013, compared with 39% of the suppliers assessed the previous year. At the end of 2013, 54% of our direct suppliers had ratings of 3C or better, down 4% on 2012. This means that we have seen some slippage in meeting our 2015 mid-term goal of having 60% of our direct suppliers with scores of 3C or better. It is worth noting that the total number of factories subject to C-KPI ratings in 2013 grew by 8.5% when compared to those rated in 2012.
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0 1-C 2-C 3-C 4-C 5-C
PERCENTAGE OF KPI-ASSESSED FACTORIES BY C-RATING*
1-C 2-C 3-C 4-C 5-C • 2011 8% 53% 28% 9% 2% • 2012 3% 39% 43% 11% 4% • 2013 3% 43% 41% 10% 3%
*The clustering for our C-ratings is as follows:
KPI score (%) C-rating 0-29 1C 30-59 2C 60-79 3C 80-89 4C 90-100 5C
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Environmental Compliance Rating We adopt a risk-based approach to identify those suppliers that need to be enrolled into the adidas Group’s environmental programme. While we do not cover 100% of the supply chain, we focus our efforts on those suppliers that have potentially high environmental risk issues and those that represent a significant production volume for the Group.
To evaluate these suppliers’ environmental performance, we have developed the E-KPI rating, which uses the same approach and methodology as the C-KPI rating for labour compliance. The following table presents the E-KPI performance results from 2011–2013.
ENVIRONMENTAL KPI ASSESSMENT AND E-RATING*
KPI Unit of Measure – Average score in % 2011 2012 2013 Management systems 41.87 49.97 51.05 Risk compliance 50.35 55.76 61.43 Performance against targets 23.07 27.61 32.64 KPI Cumulative Score 38.11 44.93 48.60 * Numbers are calculated by using the latest E-KPI assessment rating of each active supplier.
There has been steady improvement across all sub-sections of the E-KPI and an increase in the cumulative E-KPI score from 2011 to 2013. This reflects the effort that has been put into working alongside all of the suppliers under coverage to drive continuous improvement in their environmental performance.
While there was a slight reduction in the total number of factories audited, overall there has been an upward trend in the E-KPI scores, with the greatest movement from 1E-scored factories to higher E-ratings, and an increase in the number of factories achieving a 4E score.
60
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0 1-C 2-C 3-C 4-C 5-C
PERCENTAGE OF ENVIRONMENTAL KPI-ASSESSED FACTORIES BY E-RATING
1-C 2-C 3-C 4-C 5-C • 2011 22% 56% 21% 1% 0% • 2012 8% 52% 37% 3% 0% • 2013 3% 42% 42% 13% 0%
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10. INDEPENDENT FLA AUDITS Since joining the FLA in 1999, more than 300 independent external audits and verification visits have been conducted at adidas Group suppliers. The number of conventional independent monitoring visits conducted by FLA accredited monitors has gone down over the years. This is because of a shift from conventional monitoring activities to engaging in value-added FLA projects that focus on reducing and eliminating chronic non-compliance issues or improving monitoring methodologies.
As of 2012, the FLA is no longer conducting conventional Independent External Monitoring (IEM) audits and verification visits (IEV). Instead, alongside other types of monitoring methodologies, the FLA began conducting factory assessments using the methodology from the Sustainable Compliance Initiative (SCI).
In May 2013, the FLA’s independent audit firm discovered cost overruns. Following this discovery, the FLA Board of Directors immediately conducted a broad review of the organisation’s finances with three goals: to ascertain the nature of the 2012 overruns, to identify and take intermediate actions to ensure that the FLA ended 2013 in balance, and to begin a process of identifying strategic and sustainable actions to ensure the FLA’s long-term capacity to achieve its 2014 mission and beyond.
The FLA continues to have a strong revenue base to support its mission, and it benefits greatly from the work of skilled and dedicated staff, an actively involved Board, and a broad range of affiliates and stakeholders who are deeply committed. Upon learning about the financial situation, the Board quickly and unanimously approved a revised 2013 budget to reduce costs and end the year with a balanced budget. This included a reduced assessment plan for 2013, with assessments carried out only on the supply chains of non-accredited participating companies and participating suppliers, and focusing mainly on those countries and regions where the FLA has existing capacity to conduct assessments. The FLA expects to return to customary levels of due diligence in 2014.
To help restore financial stability in 2014, a Board-level Management Committee was also established. It will work closely with the FLA staff to develop a strategic business plan that ensures the FLA has the greatest possible impact in promoting the rights and wellbeing of workers around the world. This plan was approved by the Board in October 2013, and is currently being implemented.
INDEPENDENT FLA AUDITS*
FLA Year Period No. of audits 7th Jan – Dec 2008 19 8th Jan – Dec 2009 16 9th Jan – Dec 2010 16 10th Jan – Dec 2011 12 11th Jan – Dec 2012 16 12th Jan – Dec 2013 n/a * As part of the FL A membership; the numbers include Independent External Verification audits.
ENFORCEMENT 11. WARNING LETTERS Warning letters are an essential part of our enforcement efforts and are triggered when we find ongoing serious non-compliance issues that need to be addressed by our suppliers. In 2013, we issued a total of 66 warning letters across 14 countries.
The largest number of warning letters continue to be issued in Asia, where more than 60% of all supplier factories are located. Compared to the previous year, the overall number of first warning letters increased by a fifth, with region EMEA issuing significantly more letters to non-compliant suppliers. The total number of second warnings also grew substantially in 2013, with 15 letters being issued. Suppliers who receive second warning letters are only one step away from being notified of possible termination of the manufacturing agreement and receive focused monitoring by the SEA team. The number of third warning letters issued to business partners (which result in factory terminations) fell by half in 2013, compared to 2012.
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It is difficult to generalise about the grounds for a warning letter, as it may be issued for a single unresolved non-conformance, or for multiple breaches of our Standards. The range of issues that resulted in warning letters in 2013 included poor management commitment; excessive working hours; non-payment of wages and benefits; poor electrical, fire or chemical safety; poor communication and transparency problems.
NUMBER OF WARNING LETTERS ISSUED TO ADIDAS GROUP SUPPLIERS BY REGION*
Region 1st Warning 2nd Warning
3rd and final Warning => recommended
termination Total Warning Letters 2011 2012 2013 2011 2012 2013 2011 2012 2013 2011 2012 2013
Asia 39 34 36 7 9 12 0 8 4 46 51 52 Americas 2 4 5 0 1 2 0 0 0 2 5 7 EMEA 0 1 6 0 0 1 0 0 0 0 1 7 Total 41 39 47 7 10 15 0 8 4 48 57 66 * Including warning letters issued by licensees and agents, but excluding warnings to main suppliers for the non-disclosure of subcontractors, which is issued either directly through
business entities, or by the adidas Group legal department where there is a breach of contract obligations under a manufacturing agreement.
12. TERMINATIONS AND REJECTIONS We work closely with our suppliers to help them improve their performance. However, where we face situations of severe or repeat non-compliance we can and do terminate business relationship with suppliers. In 2013, we terminated agreements with nine suppliers for compliance reasons.
We also work closely with our Global Sourcing Organisation and other business entities to pre-screen potential new suppliers. Our so-called initial assessments also uncover threshold or zero tolerance issues, which can lead to the rejection of suppliers.
In 2013, initial assessments were conducted in 283 factories. During 2013, 119 factories were either rejected directly after an initial assessment due to the identification of zero tolerance issues, or were ‘rejected with a second visit’, which means they were rejected but given the chance to remediate non-compliance issues in a specific timeframe. Overall, this so-called ‘first time rejection rate’ was 42% of all new factories visited at the end of 2013.
In addition to the ‘first time rejection rate’, we also capture the ‘final rejection rate’. This covers factories directly rejected after the first visit that have no chance of a second visit, as well as factories rejected after being visited a second time. At the end of 2013 we had a ‘final rejection rate’ of 7%. This shows the importance and impact that pre-approval screening achieves, and the effort taken by the suppliers to close out issues and come into conformance with our Workplace Standards. The remediation of factory issues is beneficial for workers; it raises the bar in terms of better and more timely pay, improved benefits, reduced hours and the legal protection of formal employment contracts, as well as significant improvements in basic health and safety within the workplace.
Suppliers who have threshold issues (that is, serious but remediable non-compliances) are given three months to remediate those issues before being reaudited for final SEA acceptance. As in previous years, China dominates the number of new supplier initial assessments, and corresponding rejection rates were high.
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NUMBER OF BUSINESS RELATIONSHIP TERMINATIONS DUE TO COMPLIANCE PROBLEMS
Region 2011 2012 2013 Asia 9 10 6 Americas 1 0 2 EMEA 3 0 1 Global 13 10 9
WORLDWIDE REJECTIONS AFTER INITIAL ASSESSMENT DUE TO COMPLIANCE PROBLEMS
2011 2012 2013 Total number of first time rejections1 171 113 119 First time rejection rate 48% 44% 42% Total number of final rejections2 34 21 20 Final rejection rate 7% 6% 7% 1 Factories that were directly rejected after first visit, i.e. with no chance being visited a second time, and factories that were rejected after initial assessments but which were given a
chance for a second visit. 2 Factories that were directly rejected after first visit, i.e. with no chance being visited a second time, and factories that were rejected after being visited a second time.
ENVIRONMENT 13. CERTIFICATIONS OBTAINED BY ATHLETIC FOOTWEAR SUPPLIER SITES PRODUCING FOR THE INTERNATIONAL
MARKET We have limited control over the direct environmental impacts of the manufacturing process and how our suppliers act. The best way to influence the environmental impacts at our suppliers’ factories is to encourage the introduction of environmental management systems, and we have made implementing such a system mandatory for all our core suppliers. Achieving certification to a management system requires factory managers to plan, manage and review their own environmental performance.
In 2013, we worked with 32 athletic footwear suppliers who are certified in accordance with the international environmental management standard ISO 14001 and/or the workplace health and safety management standard OHSAS 18001. These suppliers produced around 96% of the adidas Group’s global athletic footwear sourcing volume.
CERTIFICATIONS OBTAINED BY ATHLETIC FOOTWEAR SUPPLIER SITES PRODUCING FOR THE INTERNATIONAL MARKET1
Country Number of FW suppliers ISO 14001 OHSAS 18001
2011 2012 2013 2011 2012 2013 2011 2012 2013 Argentina 1 1 1 – – – – – – Brazil 2 1 1 – – – – – – Cambodia 1 1 1 – 1 1 – 1 1 China 13 10 10 10 10 10 10 10 10 Germany2 1 1 1 1 1 1 – – – India 1 2 1 1 – 1 1 – 1 Indonesia 8 11 8 6 8 8 6 8 8 Italy3 1 1 1 – – – – – – Vietnam 11 13 14 9 10 11 9 10 11 TOTAL 39 41 38 27 30 32 26 29 31 1 Excluding factories from the Rockport business segment and licensee factories. 2 The site is subject to regular occupational health & safety inspections by authorities, although it does not hold a formal OHSAS 18001 certification. 3 Health and Safety Management System in place that is regularly inspected by local authorities.
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0 ISO 14001 ISO 18001
CERTIFICATION OF ATHLETIC FOOTWEAR SUPPLIERS PRODUCING FOR THE INTERNATIONAL EXPORT MARKET IN %
ISO 14001 OHSAS 18001 • 2010 60% 58% • 2011 69% 67% • 2012 73% 71% • 2013 84% 82%
14. FREIGHT TYPES USED TO SHIP ADIDAS AND REEBOK PRODUCTS In 2013, we again tracked the environmental impact of transporting our goods. Compared to previous years, the modal split remained quite stable. All in all, the vast majority of our shipments are by sea freight, and we continue our work to further reduce the percentage of air freight.
FREIGHT TYPES USED TO SHIP ADIDAS AND REEBOK PRODUCTS1
% of product shipped 2011 2012 2013 Apparel Truck 13 15 12
Sea freight 80 80 81 Air freight 7 5 7 Sea and air freight 0 0 0
Hardware2 Truck 2 2 2 Sea freight 96 96 97 Air freight 2 2 1 Sea and air freight 0 0 0
Footwear Truck 1 1 2 Sea freight 96 97 96 Air freight 3 2 2 Sea and air freight 0 0 0
1 Figures are expressed as a percentage of the total number of products transported. Data covers products sourced through Global Operations, excluding local sourcing. 2 Accessories and gear.
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15. REDUCING VOLATILE ORGANIC COMPOUNDS (VOC) The Volatile Organic Compounds (VOCs) typically found in solvents used in our manufacturing process can – in high concentrations – cause breathing difficulties and other health problems for production workers. Therefore, for more than a decade, we have requested that our footwear suppliers significantly reduce the use of VOCs in their manufacturing.
By applying innovative and environmentally sound bonding and priming technologies and following the adidas Group guidelines on the use of chemicals, it has been possible for our athletic footwear suppliers to reduce the use of VOCs from well above 100 grams per pair to below 20 grams.
2013 sees our biggest success so far: we achieved an all-time low of 18.8 grams of VOCs per pair. The fact that performance improved in every single country compared to 2012 shows that this is the result of hard work and a true commitment across our entire manufacturing base.
In 2014, we plan to continue our success story by further expanding the technologies that lead to VOC emissions reductions, e.g. water-based primers and reactive hot-melt adhesives.
1999 2001 2003 2005 2007 2009 2011 2013
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100
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60
70
40
20
0
REDUCTION OF VOC EXPOSURE IN GRAMS/PAIR OF ATHLETIC SPORTS SHOES
grams/pair
16. GREEN COMPANY DATA The Green Company Initiative is the environmental programme for our own corporate facilities and plays an important role in the adidas Group’s Sustainability Strategy. In 2009, we defined ambitious targets that now drive the implementation of projects to reduce the environmental impact of our business operations. Our sites report on their progress towards these targets each year.
The adidas Group occupies more than 300 offices, own production sites and distribution centres worldwide. Some of these are owned by the adidas Group, while some are leased or rented. The majority of these are quite small and don’t cause significant emissions. In 2008, we started with a group of 24 sites that were asked to report on their environmental performance. In 2010, the reporting scope was increased significantly to cover around 80% of our total global emissions. However, due to relocations and openings of new sites, this reporting group continues to evolve slightly from year to year, especially as we have included not only owned buildings but also leased and rented sites in the scope. In 2013, we included 47 sites in the Green Company reporting. See a list of all sites that have reported for 2013 in the Green Company Performance Analysis 2013 available on our corporate website at www.adidas-group.com/en/sustainability/reporting-policies-and- data/performance-data/
The performance analysis of the 2013 data reported by our sites shows that we continue to improve our environmental footprint and have achieved considerable savings in our energy, water, paper consumption and reductions of waste and carbon emissions. The engagement and support of the brands and local teams has strengthened in recent years. And a closer look at progress towards our Green Company 2015 targets reveals that we already achieved our water and household waste reduction targets in 2013. Furthermore we are on track when it comes to paper consumption. In the areas of energy consumption and carbon emissions, we are progressing well, but must further intensify our efforts in order to reach our 2015 targets.
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We have achieved these savings by implementing tools and methods such as the ISO 14001 Environmental Management System, which is in effect at twelve of our sites so far. We also benefit from the greenENERGY Fund, a sustainability venture capital fund for energy efficiency and renewable energy projects that supported 25 projects in 2012/2013. In addition, local Green Teams are actively working towards the targets we have set for the adidas Group and sharing best practice across our sites. More details about the Green Company achievements and 2013 results can be found in the Green Company Performance Analysis 2013 available on our corporate website at www.adidas-group.com/en/sustainability/reporting- policies-and-data/performance-data/
Summary Report for 2013 The following table shows the 2013 results for energy consumption, carbon emissions, water consumption, reduction of household waste and paper consumption for the different administration offices, own production sites and distribution centres.
ENVIRONMENTAL DATA 2013 GROUP-WIDE FOR ALL LOCATIONS REPORTING
Type of site/Region
Total energy consumption
(MWh)
Total carbon emissions
(tonne)
Total water consumption
(m3)
Total household
waste (tonne)
Total paper consumption
(tonne) Administration offices Region EMEA 54,129 11,112 66,701 419 102 Region AMERICAS 44,927 15,791 130,086 781 81 Region APAC 5,963 3,692 7,085 not reported 32 Administration offices (total) 105,019 30,595 203,872 1,200 215 Own production sites Region EMEA 5,200 591 1,998 40 1 Region AMERICAS 27,737 10,246 40,600 523 66 Own production sites (total) 32,937 10,837 42,598 563 68 Distribution centres Region EMEA 20,131 5,548 26,947 262 44 Region AMERICAS 43,496 13,473 28,416 742 75 Region APAC 2,041 1,159 23,422 4 7 Distribution centres (total) 65,668 20,179 78,785 1,008 126 TOTAL 203,624 61,611 325,255 2,772 409 Note: All values in this table are shown as rounded values. Total values can differ from the actual sum due to the decimal place of individual values.
AGGREGATED TARGET RESULTS 2008-2013
Target follow-up per type of site
Energy savings MWh/m²
Carbon savings t/m²
Water savings m³/person
Household waste reduction t/person
Paper savings t/person
Target 2015: -20% Target 2015: -30% Target 2015: -20% Target 2015: -25% Target 2015: -50%
Target linear
Result 2013
Target linear
Result 2013
Target linear
Result 2013
Target linear
Result 2013
Target linear
Result 2013
Administration offices -12.3% -5.8% -18.5% -15.6% -12.2% -29.8% -16.1% -40.7% -30.4% -46.0%
Own production sites -14.3% -21.9% -21.4% -28.2% -14.3% 12.5% -17.9% -26.7% -35.7% -6.5%
Distribution centres -10.4% -7.0% -15.6% -9.5% -10.4% -22.0% -12.1% -27.2% -25.7% -16.0%
Total -11.6% -7.7% -17.4% -15.0% -11.9% -23.8% -15.3% -35.2% -29.8% -35.1%
Grey: annual linear target achieved Blue: annual linear target not achieved
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Environmental Management Systems One goal of the Green Company Initiative was to implement and certify an Environmental Management System (EMS) according to the ISO 14001 standard at our main headquarters of our brands. To accomplish this goal, one common system framework was implemented. Today, the adidas Group holds an ISO 14001 matrix certification for twelve of our sites. The certified facilities are located in Europe, Canada and the US. In addition, the central management of the EMS is certified and located in the adidas Group headquarters in Herzogenaurach, Germany.
In 2013, the ISO 14001 team succeeded in adding four European sites to the system. Furthermore, the entire EMS achieved a re-certification for another three years. We plan to continue with the further rollout of the certified ISO 14001 system and to include additional sites within the next years. A list of all certified sites is given in the table below.
IN-HOUSE EMAS AND ISO 14001 CERTIFIED SITES
Name of site Region EMS standard Certified since adidas Group Central Management for Green Company, Herzogenaurach, Germany
GLOBAL ISO 14001 2010
adidas Office, Portland, USA AMERICAS ISO 14001 2010 Reebok Headquarters, Canton, USA AMERICAS ISO 14001 2010 TaylorMade-adidas Golf Headquarters, Carlsbad, USA AMERICAS ISO 14001 2010 adidas Group Distribution Centre, Spartanburg, USA AMERICAS ISO 14001 2010 Reebok-CCM Hockey Headquarters and Distribution Centre, Montreal, Canada
AMERICAS ISO 14001 2010
adidas Group Headquarters, Herzogenaurach, Germany EMEA ISO 14001 2011 Sports Licensed Division Factory, Indianapolis, USA AMERICAS ISO 14001 2011 adidas Footwear Factory, Scheinfeld 1, Germany EMEA EMAS; ISO 14001 1998; 2012 European Distribution Centre, Scheinfeld, Germany EMEA ISO 14001 2013 Distribution Centre, Uffenheim, Germany EMEA ISO 14001 2013 adidas Office, Stockport, United Kingdom EMEA ISO 14001 2013 adidas Distribution Centre, Manchester, United Kingdom EMEA ISO 14001 2013
EMPLOYEES
17. EMPLOYEE STATISTICS Global employee base increases strongly On December 31, 2013, the adidas Group had 50,728 employees, which represents an increase of 10% on our 46,306 employees the previous year. This development is primarily related to the expansion of the Group’s own-retail store base, particularly in European Emerging Markets.
On a full-time equivalent basis, our Group had 43,537 employees on December 31, 2013 (2012: 40,168). Due to the high share of employees working on a part-time basis in the Retail segment, this figure is lower than the figure reported on a headcount basis.
At the end of 2013, 23% of our Group’s staff were employed in Western Europe (2012: 24%), 33% in European Emerging Markets (2012: 30%), 25% in North America (2012: 25%), 3% in Greater China (2012: 4%), 9% in Other Asian Markets (2012: 10%) and 7% in Latin America (2012: 7%). As a global company with less than 11% of our employees located in Germany, we actively encourage global mobility and offer our employees the opportunity to experience international assignments. To support adidas Group professionals and their families moving to new living and working environments, we provide, among other services, relevant language and cultural training as well as relocation assistance.
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KEY EMPLOYEE STATISTICS
Index/reporting unit 2011 2012 2013 Total number of employees 46,824 46,306 50,728 Total employees (in %) Male 50% 50% 51%
Female 50% 50% 49% Management positions held by (in %) Male 73% 72% 72%
Female 27% 28% 28% Average age of employees (in years)* 30 31 30 Average length of service per employee (in years) 4 5 4 Annual training hours by employee (in hours) 17 18 18 * At year-end.
55,000
50,000
45,000
40,000
35,000
30,000
25,000 2009 201320122010 2011
TOTAL NUMBER OF EMPLOYEES
2009 2010 2011 2012 2013 Total number of employees
39,596 42,541 46,824 46,306 50,728
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18. HEALTH & SAFETY STATISTICS FOR OUR MAIN ADMINISTRATION OFFICES, PRODUCTION SITES AND DISTRIBUTION CENTRES
Administration offices
2011 2012 2013
Injuries with >1 lost day
Lost days due to injury
Number of employees
Injuries with >1 lost day
Lost days due to injury
Number of employees
Injuries with >1 lost day
Lost days due to injury
Number of employees
adidas Group Headquarters – WOS Herzogenaurach, Germany 18 108 2,354* 22 142 2,919* 18 69 3,522*
adidas Group Headquarters – ADP Herzogenaurach, Germany 9 11 907* 3 19 874* 7 12 825*
adidas Group Headquarters – WOGIT Herzogenaurach, Germany 3 11 801* 0 0 862* 2 9 861*
adidas Factory Outlet, Herzogenaurach, Germany 1 18 150 3 14 180 3 14 96
adidas Office, Amsterdam, Netherlands 2 3 427 2 3 420 0 0 475
adidas Office, Stockport, United Kingdom 0 0 479 0 0 437 0 0 476
adidas Office, Landersheim, France 4 187 355 0 0 334 0 0 331
adidas Office, Monza, Italy 13 72 287 8 232 562 4 74 368
adidas Office, Zaragoza, Spain 1 33 230 2 65 237 1 10 215
adidas Office, Moscow, Russia 5 75 741 5 153 844 5 84 967
adidas Office, Portland, USA 0 0 781 0 0 798 0 0 786
Reebok Headquarters, Canton, USA 1 4 1,168 1 155 1,100 1 5 1,175
TaylorMade-adidas Golf Headquarters, Carlsbad, USA 13 7 948 23 118 1,014 26 760 1014
adidas Group Administrative Service Bldg. 3, Spartanburg, USA 1 0 189 0 0 193 0 0 200
adidas Office, Woodbridge, Canada 0 0 192 1 1 223 0 0 240
adidas Office Baueri, Brazil 5 64 221 0 0 245 1 85 288
adidas Office, Shanghai, China 0 0 580 0 0 680 1 1 779
adidas Office, Taikoo Shing, Hong Kong 0 0 397 3 3 339 1 2 325
adidas Hong Kong Ltd. Office, Kwun Tong, Hong Kong 0 0 135 0 0 140 0 0 149
adidas Office, Gurgaon, India 0 0 250 0 0 438 0 0 380
adidas Office, Seoul, South Korea 0 0 280 0 0 290 0 0 290
adidas Office, Taipei, Taiwan 0 0 128 0 0 150 n.r. n.r. n.r.
adidas Office, Singapore, Singapore 0 0 207 0 0 215 0 0 225
Administration offices (total) 76 593 12,207 73 905 13,494 70 1,125 13,987
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* number of workplaces, as actual number of employees is not available n.r. = not reported
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Own production sites
2011 2012 2013
Injuries with >1 lost day
Lost days due to injury
Number of employees
Injuries with >1 lost day
Lost days due to injury
Number of employees
Injuries with >1 lost day
Lost days due to injury
Number of employees
adidas Footwear Factory, Scheinfeld 1, Germany 1 1 190 5 25 209 9 86 204
Sports Licensed Division Factory, Indianapolis, USA 26 565 1,210 28 1,718 1,244 20 809 985
Sports Licensed Division Factory, Mattapoisett, USA 1 120 104 3 25 109 2 36 108
Sports Licensed Division Factory, Cedar Rapids, USA 1 6 150 1 7 152 2 33 142
Reebok-CCM Hockey Factory, St.Jean, Canada 5 709 138 1 1 56 0 0 56
Reebok-CCM Hockey Factory, St.Hyacinthe, Canada 0 0 154 0 0 154 1 2 152
adidas Canada Assembly Factory, Brantford, Canada 0 0 63 0 0 69 0 0 68
Own production sites (total) 34 1,401 2,009 38 1,776 1,993 34 966 1,715
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PERFORMANCE DATA 41
Distribution centres
2011 2012 2013
Injuries with >1 lost day
Lost days due to injury
Number of employees
Injuries with >1 lost day
Lost days due to injury
Number of employees
Injuries with >1 lost day
Lost days due to injury
Number of employees
adidas Distribution Centre, Scheinfeld 2, Germany 7 29 89 19 120 186 13 68 200
adidas Distribution Centre, Uffenheim, Germany 12 73 190 13 177 300 12 113 308
adidas Distribution Centre, Caspe, Spain 2 26 220 5 61 220 7 248 155
adidas Distribution Centre, Dettwiller, France 0 0 20 1 26 19 0 0 20
adidas Distribution Centre, Manchester, United Kingdom 1 2 157 2 7 172 1 14 159
TMaG Distribution Centre, Basingstoke, United Kingdom n.r. n.r. n.r. 2 3 195 n.r. n.r. n.r.
adidas Distribution Centre, Obukhiv, Ukraine 0 0 44 n.r. n.r. n.r. 0 0 35
adidas Distribution Centre, Canot, Israel 0 0 40 0 0 35 0 0 45
adidas Distribution Centre 1 (Apparel), Spartanburg, USA 1 27 38 0 0 42 0 0 39
adidas Distribution Centre 2 (Footwear), Spartanburg, USA 0 0 45 0 0 45 0 0 42
Reebok-CCM Hockey Headquarters and Distribution Centre, Montreal, Canada
22 1,053 179 17 489 93 30 435 475
adidas Distribution Centre, Adams Boulevard, Brantford, Canada 3 18 104 3 202 98 3 32 98
adidas Distribution Centre, Embu, Brazil 1 1 135 n.r. n.r. n.r. 0 0 135
adidas Distribution Centre, Pudahuel, Chile 18 105 128 21 106 150 22 138 170
adidas Distribution Centre, Suzhou, China 9 65 125 3 8 140 6 16 133
adidas Distribution Centre Tultitlan-Blokk, Mexico n.a. n.a. n.a. n.a. n.a. n.a. 3 190 241
adidas Hong Kong Ltd., Distribution Centre, Shatin, Hong Kong 2 46 41 0 0 46 4 142 50
Distribution centres (total) 78 1,445 1,555 86 1,199 1,741 101 1,396 2,270
TOTAL 188 3,439 15,771 197 3,880 17,228 205 3,487 17,972
n.r. = not reported n.a. = not applicable
FAIR PL AY / Sustainability Progress Report 2013 66
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 67
COMMUNITY AFFAIRS
19. COMMUNITY AFFAIRS STATISTICS In 2013, we saw an increase in donation requests compared to the previous two years. Donation requests varied significantly in nature and purpose. All requests were carefully reviewed against the adidas Group Corporate Giving Guidelines to ensure that we supported those requests that aligned with our policies, guidelines and budget framework.
Compared to 2012, the number of supported projects decreased slightly, as did the amount of product donations. This reflects our developing approach of focusing our support on fewer but more impactful organisations.
With our data tracking system we aim to fully cover activities from all subsidiaries worldwide. We are constantly reviewing our approach and the system to improve data quality.
COMMUNITY AFFAIRS STATISTICS*
Region Donation requests received Total number of projects supported 2011 2012 2013 2011 2012 2013
EMEA 1,748 2,103 4,855 206 232 237 Latin America 69 97 87 11 52 12 North America 7,763 7,961 6,591 983 802 700 Asia Pacific 112 639 187 38 99 65 TOTAL 9,692 10,800 11,720 1,238 1,185 1,014
Region Units of products donated Volunteer hours
2011 2012 2013 2011 2012 2013 EMEA 67,240 77,236 85,120 3,911 13,838 16,862 Latin America 3,639 185,000 6,825 920 200 858 North America 362,007 307,441 460,804 2,718 2,927 2,352 Asia Pacific 15,448 100,198 43,534 5,489 4,319** 2,284 TOTAL 448,334 669,875 596,283 13,038 21,284** 22,356 * Numbers include: brand activities, corporate activities, Reebok Foundation as well as worldwide adidas Fund activities. ** Restatement: Due to a system error, the 2012 volunteer hours for region Asia Pacific had to be corrected.
CONTENTS 3
CEO STATEMENT 4
OUR APPROACH 5
PEOPLE 8
PRODUCT 21
PL ANET 28
PARTNERSHIP 36
PERFORMANCE DATA 41
FAIR PLAY / Sustainability Progress Report 2013 68
CONTACT
We welcome your views about our efforts to be a more sustainable company.
YOU CAN CONTACT US AT: adidas AG Corporate Communication World of Sports Adi-Dassler-Straße 1 91074 Herzogenaurach Germany
Phone: +49 (0) 9132-84-0 Fax: +49 (0) 9132-84-2138
For inquiries to our social and environmental programme please send an email to [email protected] For media inquiries please send an email to [email protected]
CREDITS
This report has been prepared by the adidas Group Corporate Communication team.
Consultancy, editing and design: Adam Garfunkel – [email protected] Salterbaxter – www.salterbaxter.com
©2013 adidas AG. adidas is a registered trademark of the adidas Group.
- Cover
- Introduction
- Contents
- CEO Statement
- Our approach
- People
- Product
- Planet
- Partnership
- Performance data
