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Statement on Disclosure and Transparency

September 13, 2005

Herzogenaurach, 13. September 2005 - In recent months we have fielded questions from the media, the investment community, international union federations and international NGOs, asking us whether we will make public the names and addresses of our suppliers’ factories. This has not been our practice in the past. Why? Our reasons are set out below.

1. Annual Reporting

Each year, for the past 5 years, we have produced a Social and Environmental Report. We were the first brand in our industry to do so. In our report, we list the number and location (by country) of each factory, as well as the aggregate worker population. According to the feedback we have received at stakeholder dialogues and through other forms of engagement, this level of information has been widely accepted as appropriate and useful by our stakeholders. Each year we have tried to improve the accuracy of the information, presenting a full account of our entire supply chain which comprises international export factories, local market production facilities, as well as suppliers producing for our licensees.

2. Selective Disclosure

Regularly, we make full disclosure of factory names and locations, when it is appropriate and useful to do so. For example, we provide such information to academics, researchers, unions and NGOs in cases where they have a legitimate interest and/or an active role in investigating issues relating to workplace conditions. We have also shared factory details with collegiate licensors where requested.

3. Accurate and Verifiable Data

When information is shared with the public, or with other stakeholders, it is important that it is reliable, by which we mean current, accurate and complete. This is particularly challenging when the supply chain is changing periodically and when local names and addresses may be translated a number of different ways into English or other languages. For information on factories to be reliable, it must be capable of verification. For this reason, we have been a strong advocate of the Fair Labor Association (“FLA”) which independently verifies our compliance programme. As an FLA participating company, we provide regular updates to this multi-stakeholder organization. Updates of our supply chain are provided at least twice a year.

4. Why Transparency is Important to Us

We believe that without sharing information we are not able to fulfill our duties and responsibilities as a multi-national business. Transparency is important for us in several ways:
a) To fulfill the needs and demands of our stakeholders, which ranges from general sharing of company information to detailed findings of supply chain monitoring, or the disclosure of our remediation efforts in specific facilities.
b) To manage more effectively communications within our company and to improve operational efficiency.
c) To obtain a fair judgment of our performance from our stakeholders based on the measures we set and the information we provide.

5. Providing Access to Factories

In addition to providing information relating to factory locations, workplace conditions and remediation efforts, we have also requested that our suppliers give access to their facilities and employees to a variety of stakeholders and other visitors. Such examples include:

  • Factory inspections by university students to footwear suppliers in the south of China.
  • Factory visits and interviews by international and local journalists.
  • Local and international NGOs who are investigating workplace problems, breaches of the adidas-Salomon code of conduct, the Standards of Engagement (“SOE”), or assisting with remediation.
  • Trainers, project partners and service providers who support the SOE Programme.
  • Government officers and the staff of international agencies, such as the ILO, to assist them in their own policy development and implementation of work programmes.

6. Next Steps

We will continue our existing practice of providing factory addresses and other information about our supply chain, where we receive direct enquiries to do so. In addition to this, we have asked the FLA to consider full disclosure of our supplier lists to the general public.