adidas: Business and Report Overview: Building credibility and trust

Challenge: Building credibility and trust

Some stakeholders have concerns about the credibility and effectiveness of an internal supply chain assessment programme. Their major point of criticism is the independence and impartiality of such programmes. They argue that we can make only limited progress in improving working conditions and even contribute to adverse impacts on them, such as peaks in working hours, through our own sourcing patterns. The fact that products are sourced from countries where freedom of association is legally restricted raises further concerns for some stakeholders.

In turn this leads to stakeholders' requests to become transparent in our compliance programmes and to involve third parties in the investigation and verification processes.

Response: Approach to transparency

Transparency, disclosure, and collaboration

We value transparency and stakeholder feedback. We report regularly on our compliance work, including the location of our suppliers globally. We also submit our programme to evaluation, accreditation and public reporting by the Fair Labor Association. Moreover, we continue to practise full disclosure to researchers, trade unions and other concerned NGOs, based on their specific requests. A practice we have followed for more than a decade.

In 2007, we continued in our practices to disclose factory names and addresses to several local union affiliates based on individual requests. A full list of our suppliers has been posted on our website and is updated on a bi-annual basis. The addresses of US collegiate-licensed suppliers were also disclosed to the universities in the United States that hold licensee agreements with us.

In 2007, we saw a number of factory closures among our footwear suppliers in Indonesia. As soon as we became aware of the factories' financial difficulties, we engaged with factory management, local unions and local industry associations. Local unions and the NGO community were regularly informed about the actions we took to cushion the social impacts of the closures on workers.

One innovative feature in our efforts to be a transparent company is the Group's participation in the Fair Factories Clearinghouse (FFC). The FFC is an industry-wide database that centrally gathers information from the whole supply chain, and records our monitoring results. By using this data system, there is now a higher level of transparency: for instance, compliance information in the FFC database can be shared with other companies and third parties.

Shareholders and representatives of the financial community nowadays request more detailed information about the company and how the business is managing risk. Corporate reporting aids, such as the Global Reporting Initiative, have been developed to promote corporate transparency and disclosure. Increasingly, publicly listed companies are rated against transparency benchmarks. Since the year 2000, the adidas Group annually publishes a social and environmental report. Our reports use the GRI reporting guidelines to inform us about what qualitative and quantitative information to disclose to meet stakeholders' interests.

Furthermore the corporate website of the adidas Group is regularly updated during the reporting period.

Working with others

We are involved in many multi-stakeholder initiatives because we believe that working collaboratively can create lasting change in factory and environmental conditions.

In Asia

In 2007, for example, we hosted a one-day workshop on Corporate Social Responsibility (CSR) and stakeholder dialogue in Hong Kong. The purpose of the meeting was to introduce the concept of CSR and its application within the adidas Group and to obtain feedback on a variety of topics to help inform the development of the Group's social and environmental strategies. The chosen topics were the environment, China's new Contract Labour Law and community relations. Sixty managers and directors from a cross-section of suppliers attended, including our manufacturing partners, material suppliers and international transportation and logistic operators. You can download a full report on our stakeholder dialogue from our corporate website.

In the Americas

In 2007, we extended our engagements with university licensing and labour committees, administrators and student groups at the universities of Wisconsin, Michigan, Notre Dame and UCLA. While many of these engagements were to brief the university communities on our activities, others addressed concerns of student activism. Several licensor universities requested, and were given, access to the auditing records of factories making their products.

Building on our outreach to governments, in late October 2007 we took the unusual step of publishing an open letter to the El Salvador government in two national newspapers. In the letter we asked the government to reopen discussions about the Hermosa factory case and to address its failure to enforce its own labour code and indeed the national constitution. Read more about this here.

In Europe

In 2007, we continued our engagement in the Multi-Stakeholder Initiative Pilot Project (Jo-In Project) in Turkey about workplace standards.

At a Group level

In 2007, the adidas Group played a key role in assisting the World Federation of Sporting Goods Industry in reinforcing the industry's position on zero-tolerance for child labour in the football stitching supply chain and supported the Federation in shaping its global CSR programme for 2008.

The adidas Group continued to support collaborative efforts to improve environmental standards by participating in the inter-brand working group AFIRM on restricted substances as well as in the Better Cotton Initiative (BCI) aimed at improving the environmental conditions of cotton production.

sitewide navigation