Adidas Group

Additional comments

Our target is for our Group business units (BU) and licensees, altogether known as our Business Entities (BE), to achieve an average report card score of 70% or higher by 2015. By the end of 2010, 55 report cards had been completed and the average score for all the BEs globally was 63%. By the end of 2011, 62 report cards were completed and the average global score improved to 67%.

SEA works with the BUs and Licensees to develop their strategic compliance plans (SCP) and report cards (RC). The RC evaluates the Business Entities’ performance over the previous 12 months in integrating the Group’s ethical sourcing policies into their daily operations and throughout their supply chain. Gaps embedding the policies and practices are identified by assessing responses for defined standards and requirements. The final step develops and implements a forward looking strategic action plan. Some of the report cards in 2011 remained desk top exercises and were not updated.

The RC assessment includes benchmarks to evaluate the Business Entity’s collaboration with the SEA team, the disclosure and accuracy of its supply chain data in the Fair Factories Clearinghouse (FFC), compliance with SEA standards and guidelines, and the effective management of supply chain audits and corrective actions. A final measurement benchmark assesses the overall compliance performance of its global supply chain. The report card score is a cumulative score up to 100%.

Low scores indicate serious shortcomings in the Business Entity‘s management of SEA requirements within their organisation and in the supply chain. The SEA team meets with low-scoring BEs more frequently to support the improvement of compliance processes and management systems. Business entities with high scores, in particular those who already have established a compliance programme and an internal audit team, operate in a self-governance mode. This means that they are allowed to enter the results of their internal audit findings in the FFC database. The SEA team conducts random audits in these factories to confirm the findings and to inform the regular KPI assessments.

Additional comments

Factories are required to prepare and keep updated a three-year strategic compliance plan (SCP) that directs their internal efforts to comply with the adidas Group Workplace Standards, through the development of sound management systems, monitoring processes and training. Recognising the need to align the environmental aspects of the programme into the SEA core tools, we revised the SCP to incorporate an environmental element allowing the factory to address sustainability as a whole. This is in line with the need for suppliers to be transparent in their approach to addressing their overall sustainable practices.

With the additional environmental element in the SCP, suppliers are now taking a closer look at their internal environmental programme and initiatives. They are also challenged to look at their activities in a more comprehensive manner – considering the interactions between labour, health & safety and environmental issues.