Environment

Product - Target 1

In last year's report, this target was stated as:

To further increase the number of style developments within the adidas Sport Performance Division consisting of organic and recycled material components; product styles will be launched in 2009.

This was refined to a more specific target:

To launch the adidas Better Place programme internally, involving a minimum of 50% of the adidas Sport Performance Business Units in the programme during the first year. Develop a unified approach to the creation of sustainable products, involving sourcing, materials, innovation, design and product development departments.

Why was this target chosen?

Establishing adidas Better Place manifests our environmental initiatives in a set of adidas brand products, and serves as a platform for us to start a dialogue about sustainability with our consumers.

What was the approach taken?

adidas looked for champions in each business area, building a network of key individuals to drive the adidas Better Place initiatives in their department. These Better Place champions also fed information back into a central group, which ensured a consistent approach across the business.

As a result, 150 product styles primarily covering footwear and apparel were developed for launch under the Better Place programme from spring 2009 onwards.

The Better Place champions promoted the use of environmentally friendly materials such as organic cotton, recycled polyester and polylactide acid (a biodegradable polymer synthesised from processed corn). These materials all meet the adidas Group's own guidelines on environmentally preferable products, which we produced in the absence of any single global standard.

To understand the environmental conditions and level of risk at each of the factories that manufacture Better Place products, an environmental benchmark analysis was conducted.

For more information see Target 2 below.

Score

100 percent

Barriers encountered along the way

One challenge was the need for these champions to invest a significant amount of additional time on top of their existing workload, to evaluate and assess the environmental profitability of product materials. This is likely to diminish over time, once structured processes for integrating sustainability elements in the inline product creation flow have matured.

Conclusion

This champions approach was extremely successful as it kept information flow consistent and current.

Taking a holistic approach to infusing sustainability throughout product development, instead of targeting single environmental and social challenges retroactively, has accelerated the pace of change internally.

Lessons learnt in 2008

Codifying sustainable product under a specific product category (adidas Better Place), and communicating what that means internally, has helped our employees both to better visualise the challenges and to feel empowered to take action in their roles to create more sustainable products.

New target for 2009

We will launch adidas Better Place to the public in 2009. New goals are to both grow the number of adidas Better Place styles within the adidas Sport Performance Division, as well as increase the amount of sustainable materials used by adidas across all of its products.

Product - Target 2

To conduct an environmental benchmarking assessment (EBA) of factories nominated for the production of Better Place products.

Why was this target chosen?

This target was included to support the roll-out of the Better Place programme, due for public launch in early 2009. The purpose was to understand the environmental conditions and level of risk at each of the nominated factories as well as to benchmark against factories within the same industry sector. In addition, industry profiles and case studies will also be developed highlighting best practices within the adidas supply chain and areas of improvement.

What was the approach taken?

An environmental consultant was commissioned to undertake the environmental benchmarking assessment which was split into two stages:

Stage 1 - environmental self-assessment questionnaire were completed by factories to provide an overview of the environmental, health and safety conditions at the factory

Stage 2 - visits to selected factories were undertaken to review on-site situations against that reported in the questionnaire.

During the course of the Stage 2 works, the consultants were also tasked with verifying environmental data regularly collected from footwear suppliers and to review and revise risk ratings established during the Stage 1 assessment.

Both, factories producing the final garment or shoes ('Tier 1' suppliers) and suppliers providing product materials ('Tier 2' suppliers) are involved in the benchmarking assessment. The number of factories assessed is:

  • Accessories & gear Tier 1 - 2
  • Footwear Tier 1 - 7
  • Apparel Tier 1 - 24
  • Apparel Tier 2 - 16

Score

75 percent

Barriers encountered along the way

The timeframe for the execution of the benchmarking exercise was very tight and in the first stage many of the apparel Tier 2 embellishers were challenged in providing the requested information within the allocated time, which caused an overall delay to the programme.

There was only limited information available on the Tier 2 factories as these were outside the normal coverage of SEA compliance monitoring. Information was available on adidas Group nominated material suppliers which were already registered in the Fair Factories Clearinghouse database.

Conclusion

Through the EBA, key environmental issues common to core manufacturing sectors - footwear, apparel and accessories & gear - have been identified. These issues were considerably greater in Tier 2 facilities than in Tier 1 facilities, as expected. Furthermore, it has identified the need for us to streamline our internal tools and guidelines to ensure that a consistent message is delivered to the supply chain.

Lessons learnt in 2008

More advanced planning is required, if environmental conditions within the supply chain are to be properly mapped and assessed, as part of any product launch.

The adidas Group's indirect contractual relationship with Tier 2 apparel facilities meant it took more time and effort to engage them in this initiative than expected.

At the outset, the level of environmental awareness and understanding within long-term business partners was expected to be moderate to high. However, the information submitted by the factories for the EBA and the subsequent site assessments identified a range of gaps in the effective management of environmental issues at site level.

New target for 2009

The results of the benchmark will be used for a further maturation of the environmental assessment tools. These will be applied both to new factories and core suppliers that were covered by this benchmark analysis.

Product - Target 3

To commission an internationally recognised NGO to review and verify internal tools for the selection of environmental materials used in our products.

Why was this target chosen?

Making the right choice in using environmentally sound materials for our products remains a challenge. While we have extensive engagement with suppliers and scientific institutes on materials and their features, we also wanted a critical reflection from an NGO on the tools we use in selecting environmental materials.

Comments and recommendations from this review will serve to highlight any gaps and shortcomings in our rating tools and help us to address them. This would improve the approach we take to identify, classify and choose environmentally optimised materials for use in products launched under the adidas Better Place programme.

What was the approach taken?

An international environmental NGO was commissioned to study and review the material classification scheme that we developed to guide product development teams in using preferred materials for products under the Better Place programme. The NGO has been asked to review all materials that have been classified as environmentally preferable and to comment or raise questions related to areas of concern.

Score

50 percent

Barriers encountered along the way

Soon after the initiative was kicked off in early 2008, it became obvious that we had all underestimated the complexity of this project, in particular in terms of data availability and the technical and environmental expertise that is necessary to draw the right conclusions. There are various factors along the entire supply chain that need to be considered to be able to make a fair judgment about the environmental credentials of specific materials.

To tackle this challenge, it was decided that for the first stage the NGO would develop a list of core questions necessary to obtain more information and data about materials.

Conclusion

While there has been good progress in defining the project scope in 2008, the intended evaluation and assessment of the material classification scheme could not be conducted in the reporting period due to the lack of necessary information.

Lessons learnt in 2008

While the review of the classification scheme has not been finalised yet, material research and product development teams have gained a broader perspective on what they need to consider when making judgments about environmentally friendly materials. So, despite the unforeseen complexities of the proposed workplan, there was merit in beginning the process and engaging colleagues in the initiative.

New target for 2009

Once the review has been completed, core findings will be included in the material rating scheme and material selection processes. Further research capacities will be dedicated to support the environmental assessments of product materials.

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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