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Sustainability

Supply Chain Approach

As our supply chain is large, multi-tiered and varied, we have a detailed and systematic approach to managing the relationships with our suppliers.

Besides our own employees, workers in our suppliers’ factories play a central role in our sustainability program. It was our concern for their working conditions and well-being that led us to establish our "Workplace Standards", the supply chain code of conduct, which also covers workers’ health and safety and provisions to ensure environmentally sound factory operations. To enforce compliance with our Standards we have a multi-level monitoring and enforcement process in place, including the use of an innovative rating system for the assessment of our suppliers. The rating results are shared with our Sourcing teams and incorporated into the overall supplier rating that influences our decision whether and to which extent we continue the business relationship with a specific supplier. This transparency and integration with sourcing decisions is fundamental to the success of our efforts to drive improvements in workplace conditions.

In addition to our own monitoring activities, we value independent and unannounced assessments by independent third parties to demonstrate the credibility of and provide verified information about our program to stakeholders. As a member of the Fair Labor Association (FLA), adidas is subject to external assessment by independent monitors, participation in the FLA third-party complaint system and public reporting. In 2005, the monitoring program of adidas was accredited by the FLA for the first time; re-accreditation took place in 2008 and in 2017. This decision was based on independent factory monitoring and verification reports of supplier facilities and a thorough audit of monitoring protocols, training programs and auditing systems. 

The company’s global supply chain extends through various tiers from strategic manufacturing partners, to componentry and materials suppliers, to raw material sources, such as cotton, leather and natural rubber. Working closely with key strategic partners, the vast majority of our products are produced in 132 manufacturing partners worldwide. We value long-term relationships: By the end of 2020, 61% of our strategic suppliers have worked with adidas for more than ten years and 30% have a tenure of more than 20 years. The length of our supplier relationship is determined by specific performance criteria which is regularly measured and reviewed. adidas has outsourced most of its production. Overall, we work with around 500 independent factories from around the world that manufacture our products in more than 49 countries (Status: 2020). Our supply chain is global and multi-layered, with many different types of business partners, some of whom are directly contracted factories, while others are not. In 2020, the top four countries by sourcing volumes were:  Vietnam, Indonesia, China and Cambodia.







OUR APPROACH TO SUPPLY CHAIN MANAGEMENT


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