Environment

Production - Target 1

To identify and engage with appropriate technical, brand and NGO partners to support the reduction of energy, waste and water in our core supply chain.

Why was this target chosen?

Previous engagements with other brands and NGO groups have been over social issues (i.e. labour, worker health and safety, etc.). In light of the growing interest and concern in environmental issues within the supply chain, there is a growing need to regularly engage with other brands and NGOs to deal with these issues.

What was the approach taken?

An environmental practitioners' group was established with major brands in Asia, including a number of key sporting goods brands with which the adidas Group shares common suppliers. The first official meeting was held in March 2008.

It was intended that this network of practitioners could meet on a regular basis to discuss potential collaboration efforts and to share in best practices.

In addition, the team has reached out to organisations such as WWF in Europe and Hong Kong to identify areas of cooperation.

Score

50 percent

Barriers encountered along the way

A second meeting which was proposed for Q4 2008 did not take place due to other competing commitments. Discussions with individual practitioners about possible areas of collaboration did, however, take place.

In regards to the NGO outreach (in Hong Kong), some of the programmes that the NGO has proposed are restricted to Hong Kong or the Pearl River Delta only, thereby limiting the impact/coverage that it can have on the adidas Group supply chain.

Conclusion

There was regular discussion among various brands on a number of collaboration efforts, but a common direction and scope was not agreed.

The NGO discussions are still ongoing to see where potential partnerships can result in benefits to the supply chain.

Lessons learnt in 2008

Given the comprehensive preparations that are necessary to make the practitioners' group work effective, an annual calendar for the intended meetings is to be developed including a clear list of key discussion topics.

New target for 2009

We have an ongoing need to review industry best practices to help our suppliers manage their water and energy use, so we will be drawing upon the expertise in the environmental practitioners' group.

We will also continue to drive multi-brand initiatives through our participation in this group.

Production - Target 2

To enhance the internalisation of environmental metrics by core footwear suppliers to drive improvements in their reporting and defining reduction targets.

Why was this target chosen?

The adidas Group reports key environmental data from the manufacture of its products on its website on an annual basis. Some of this data is submitted to us by our footwear suppliers but they lack a sense of ownership of it, which compromises the accuracy of the data being reported.

What was the approach taken?

In order to cross-check that the data being reported by footwear suppliers is an accurate reflection of the production processes, the data of three footwear factories were verified on-site by the consultant appointed to conduct the Environmental Benchmarking Assessment (EBA). See Product Target 2.

In addition, we are currently reviewing an alternative data collection system, the Environmental Health and Safety Management Accounting System. This system has been designed to link environmental data to financial costs, an area which is critically reviewed by factory management and which should, indirectly, result in a greater awareness amongst management of the environmental costs of their operations.

Score

25 percent

Barriers encountered along the way

In a number of factories there is regular turnover of the staff who enter the data. This has resulted in a lot of time spent reviewing and verifying the data submitted by the suppliers.

The extension of the EHSMA pilot project in a factory in the Philippines was not completed on time, resulting in a delay in our assessment.

Conclusion

To further improve the internalisation of environmental data management new forms of incentives for factories have to be piloted and field-tested. One of these incentives is the significant savings in resources and costs that can be achieved by using mature data management systems.

While the EBA found that the data at three selected factories was acceptable, the review process did not allow for an assessment of how the data is collected from the point of production. Moreover, it was unable to show the level of internalisation of findings from data into factory management decisions.

Lessons learnt in 2008

There is still in general a lack of understanding within factories about the value of the environmental data collected or how they can use it to manage resources within their own production processes.

New target for 2009

Complete the review of an alternative data collection system.

Production - Target 3

To run four energy efficiency workshops for our suppliers in Asia and in the EMEA region to further drive the reduction in energy use.

Why was this target chosen?

The adidas Group is working towards building a more sustainable supply chain. One of the key focus areas to achieving this is helping suppliers manage their use of energy.

What was the approach taken?

Since 2006, the adidas Group has been working with external consultants to develop energy workshops tailored to the needs of our supply chain. Workshops have been held in China and Vietnam in 2007. We surveyed the workshop participants to understand the progress that had been made implementing energy management initiatives. Despite the intensive training efforts there had been only limited uptake of the ideas presented in earlier workshops.

In 2008, a training needs survey was conducted in factories in the Asia-Pacific region. At the same time, we gathered their feedback on past energy workshops. One of the key findings of the survey was the need to use local expertise to develop and deliver the workshops. As a result, the consultant who delivered the energy workshops already in 2007 in China and Vietnam, only conducted the workshops in Turkey and China in 2008. A local consultant was engaged to deliver the workshop in Indonesia.

Score

75 percent

Barriers encountered along the way

The lack of local energy specialists - particularly in most of the Asian countries - has been a key barrier to the successful delivery of the workshops. For this reason we could not run an energy workshop in Vietnam, and a second one planned for China was also cancelled.

Local consultants did not always clearly outline the technical level required of the attendees. In some cases, factories sent HR managers when engineers or other technical staff would have been more appropriate, given the nature of the workshop.

In Turkey the workshop was quite successful because of the technical understanding that most of the attendees had.

Conclusion

While the initial target was to hold workshops in four locations, only three workshops (South China, Indonesia and Turkey) were delivered in 2008 but with mixed success. In South China, where the attendees to the energy workshop were of a mixed level of technical understanding and the workshop delivered by an overseas consultant, the feedback and uptake of the workshop discussions has not fully met our expectations. For Indonesia, the format of the workshop was re-designed based on the observations and feedback to the workshop in South China and a local energy specialist consultant was engaged to deliver the workshop. The feedback from this workshop has been very positive.

Lessons learnt in 2008

Feedback received from the workshop participants in China and Indonesia clearly outlined the need for local consultants with energy management experience to conduct the workshops in the local language and to have the ability to follow up on-site at the factory.

The structure of the workshop has also been revised - following feedback - from a strictly theoretical, classroom based instructional format to one that includes hands on/practical homework which engages the participants more.

In Turkey, the group came together for a two day workshop with one classroom/theory day and one day practical work. On the second day small groups evaluated the actual situation in a factory with regard to individual energy areas such as heat processing and light. Subsequently the groups prepared individual presentations about their findings and suggestions for improvement, followed by feedback from the consultant.

New target for 2009

Run an energy efficiency workshop in Vietnam. Follow up the Indonesia energy efficiency workshop with an energy efficiency forum, to be held quarterly and run by an external consultant. A local energy specialist consultant will also be sought to deliver an energy workshop in North China.

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Within this report
KEY
  • 0%: no progress
  • 10%: initiated
  • 25%: partly complete
  • 50%: good progress
  • 75%: substantially complete
  • 100%: fully complete