CEO Statement

Perhaps in years to come 2007 will be seen as the year the world really woke up to the challenge of climate change. Former US vice president Al Gore and the UN Intergovernmental Panel on Climate Change won the Nobel Peace Prize. And governments from around the world met in Bali in December to agree a way forward.

Certainly climate change is one of a number of key issues for our global society to face, along with disease, poverty and resource consumption. All of these issues stand in the way of a truly sustainable world.

While these challenges can seem overwhelming, it is important to remember that our efforts and energies need to be focused on what we can do, in our street, our town or our company, to make a difference.

As the adidas Group strives to improve its social and environmental performance, we recognise that we can, and must, take action and encourage others in our supply chain to take action if we are to make a difference and become a sustainable business.

Moving the boundaries

So what have we achieved in 2007? Based on our work in 2006 when Reebok joined the adidas Group, we rolled out our new programme standards, guidelines and procedures to all the people across the adidas Group who manage relationships with suppliers. We distributed written briefings and audio-visual materials and also ran training sessions, both face-to-face and over the internet.

All our brands' compliance data is now held on the Fair Factories Clearinghouse database. So we now have one Group-wide compliance data management system for our global supply chain. This will significantly improve information-sharing between colleagues about supplier performance.

And we have further strengthened transparency by publicly disclosing the merged adidas Group global supplier list on our corporate website.

Promoting self-governance

We took steps along the road to our long-term goal of self-governance for our supply chain by running innovative programmes for our suppliers. By raising awareness and helping our suppliers with the tools they need to drive improvement, we are convinced we will see more suppliers take responsibility for their own social and environmental performance.

We ran tailored training programmes on energy efficiency in China and Vietnam that emphasised the business case for sound environmental management systems. More than 100 suppliers attended and we will be extending these training programmes in 2008.

The safety officer registration programme in China and Vietnam was also successfully implemented. This programme is designed to give our suppliers access to the technical expertise they need to improve safety management in their factories.

New product development

One area where we can make a difference is in how we integrate social and environmental concerns into our core business practices. In 2007, building on an extensive research effort over the past three years, we made significant progress in embedding environmental considerations into product design and development.

In 2007 we developed a new range of footwear and apparel - adidas Grün -launched in spring 2008. Made with natural and recycled materials, we have minimised the environmental impact of its manufacture at every stage of the process. Our team - drawn from across the business - rose admirably to the design and production challenges we faced in developing this exciting new range.

Innovative engagement and outreach

We believe that business cannot succeed in a society that fails. Therefore we look for partnerships with suppliers that operate in a socially stable environment. We know that our practices contribute to the success of the societies in which we operate, through the employment we indirectly create, the social programmes we support and our efforts to protect worker rights.

In our outreach to governments in 2007, we took innovative and unusual steps to address shortcomings or weaknesses in the enforcement of national labour laws to protect worker rights.

For example we published 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. And I am pleased to report that the letter had the desired effect: discussions were reopened in December 2007 and we are hopeful that the ex-workers at Hermosa will receive the severance pay and health care coverage they are due.

Reporting

Stakeholders require businesses to be accountable for their actions and we are committed to acting responsibly and reporting transparently. Our 2007 online report provides a comprehensive description of the adidas Group social and environmental strategy, programme and performance. We have again referred to the Global Reporting Initiative guidelines to inform our reporting.

In our efforts to engage more deeply with our audiences, we have this year published a review, in addition to the online report. This review reflects on the efforts the adidas Group made in 2007 to be a responsible business. It discusses the social and political context for our work, covering four main topics: big business and sustainability, preparing for major sporting events, 'Made in China' and climate change.

Recognition

Our efforts have been recognised by market indexes. For the eighth consecutive year, the adidas Group is listed as a leading company in the textiles and apparel sector on the Dow Jones Sustainability Indexes and we are included in the FTSE4GOOD Europe Index and on the Vigeo Group's Ethibel Excellence, Ethibel Pioneer and ASPI Indexes.

Challenges to be tackled

While we can be proud of what we have achieved, we are not complacent and know we need to continue giving 110% to rise to the challenges ahead of us.

As our business develops, so our social and environmental programme needs to adapt. Now Reebok is part of the adidas Group, we place more orders with licensees and agents, so we must develop new approaches for monitoring how well their suppliers comply with our standards.

The adidas Group is a collection of highly visible, iconic brands that connect with people of all ages, but in particular with today's youth. This, combined with our position as an industry leader, means we have a responsibility to set an example in everything we do. By continuing to improve our business practices, we can inspire and influence our suppliers to address their own performance. This is particularly true of environmental issues. So in the coming year we will be looking more closely at resource use, waste and the climate change impacts from our own business.

Looking ahead

We have published our targets for the year ahead and also provide an overview of what we have achieved and where we have fallen short in our Progress and targets section. As always, there is more to be done. Becoming a sustainable business is a marathon, not a sprint. But I am always impressed by the dedication and hard work of our employees and am confident that, with continued focus, passion and team spirit, we can meet the challenges in the year ahead.

Herbert Hainer, CEO and Chairman of the Executive Board of adidas AG

  • Herbert Hainer, CEO and Chairman of the Executive Board of adidas AG