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Sustainability

The adidas Group must manage wide-ranging commercial and competitive pressures to deliver growth. Simultaneously, we have a responsibility towards our employees and the environment, to ensure decent working conditions and environmental standards are met throughout our global organization and supply chain. We always strive to manage both our own activities and our supply chain responsibly and to reduce our environmental impact. Moreover, we believe that acting as good corporate citizens will improve our corporate reputation and hence our economic value, helping us to be a sustainable company.

Open Dialog and Interaction with Stakeholders
We actively and systematically engage with our numerous stakeholders, involving them in key social and environmental decisions that shape day-to-day operations. In this way, we can balance interests, build consensus and enhance the transparency of our business. We pursue a policy of open dialog with stakeholders – debating issues and approaches and, where appropriate, forming partnerships to develop long-term solutions. We continue to drive and comment on industry best practice relating to stakeholders through our membership of organizations such as the World Business Council for Sustainable Development, Business for Social Responsibility, the World Federation of the Sporting Goods Industry and the Fair Labor Association. This provides the Group with the opportunity to work closely with top companies from various sectors to develop sustainable business approaches and to debate social and environmental topics on a global level. The adidas Group makes every effort to achieve open and transparent reporting. Comprehensive information on the Group’s social and environmental programs is provided on our website under www.adidas-Group.com/sustainability.

Merging Leading Programs
Both the adidas Group and Reebok have strong track records in transparent reporting about social and environmental performance and supporting third-party verification of our programs. With the acquisition of Reebok, the Group’s ambition is to combine the best of both programs in a new adidas Group Social and Environmental Affairs (SEA) team. During 2006, we revised our social and environmental program to incorporate new standards, guidelines and procedures, covering supplier guidance, initial factory assessments and compliance monitoring. Our assessments are now recorded in an industry-wide data management system (Fair Factory Clearinghouse) that Reebok helped establish. This facilitates the exchange and increased transparency of compliance-related information within our industry. The outcome is a more robust program that will deliver stronger results in improving social and environmental conditions.

Setting Clear Standards
The adidas Group’s Workplace Standards are based on the International Labour Organization (ILO) and UN conventions relating to human rights and employment practices, and follow the World Federation of the Sporting Goods Industry’s model code of conduct. Our Workplace Standards contain clear rules of conduct regarding environmentally sound, safe and healthy working conditions, fair wages and benefits, freedom of association, prohibition of excessive overtime, forced and child labor, and protection against harassment and discrimination. The Standards help us to select business partners that have workplace standards and business practices consistent with our values and to reject those that do not. As guiding principles they also help identify potential problems so that we can work with our business partners to address issues of concern as they arise.

Encouraging Self-Governance through Management Systems
Good management systems help factories improve their day-to-day operations and support the process of internalization and self-governance. Therefore, we support our business partners in pursuing the opportunity for certification with internationally recognized standards such as ISO (International Standardization Organization) 9000 and 14001 for quality and environmental management and OHSAS (Occupational Health and Safety Assessment Series) 18000. By establishing a certified management system, our suppliers demonstrate this commitment to continuously improve their performance. We help them build or improve human resources systems at factories to maintain good working conditions, including factory grievance systems to routinely find and fix non-compliance problems. Further, we empower workers to protect their own rights and take an active role in decisions that affect their lives. In 2006, there were 35 adidas Group footwear suppliers’ factories worldwide certified in accordance with OHSAS 18000, ISO 14001 and/or the ISO 9000 series.