Challenges, vision and governance

The adidas Group is committed to becoming a sustainable company. But there is no ‘one size fits all' solution to achieve this.

Every company - depending on the nature of its business - needs to develop its own approach for responding to changes in the economy, society and the environment. So it is for the adidas Group too.

The challenges we face

As a global business we face a variety of challenges, as we strive to balance shareholder interests with the needs and concerns of employees, workers and the environment. The following overview summarises how we are responding to these challenges.

Challenge Response
Being a global business

Our brands are visible all over the world, through our presence at major sports events like the Football World Cup or the Olympic Games. This draws attention to the way we do business and the conditions under which our products are made.
Being accountable and open

To manage our business on a global scale we set clear standards, rules and procedures that apply to our operations and our supplier partners. We seek to be open about our operations, for example, by disclosing our global factory list to the public or submitting our global supplier compliance programme to evaluation and accreditation by the Fair Labor Association.
Being competitive …

We are required to respond to changing customer demands for a broad range of products. This means that we need a wide variety of suppliers. Ensuring consistent compliance with our social and environmental standards across a broad and complex supply chain is a challenge.
… But not at any price

As we have outsourced most of our production and source from a multi-tiered supply chain, the way we manage our suppliers is under scrutiny. The adidas Group Workplace Standards are fundamental to our relationships with our suppliers and are contractual obligations. While we have our own team that assesses how well our suppliers are complying with our supply chain code, we also work with external monitors to complement our measures. We strive to work with business partners who are fully committed to fair, safe and environmentally sound working conditions because we are convinced that it strengthens our - and their - position in the global marketplace.
Being environmentally responsible

Our products must be competitive in function and price but also safe. Climate change is on the top of the agenda of governments around the world. Environmental sustainability poses a number of challenges for our product management, innovation and development teams, facility managers, manufacturing partners and sales organisations.
Reducing our footprint

Building on our existing environmental programmes, in 2010 we have developed a Group-wide Environmental Strategy that determines targets and areas of actions within every part of our value chain to significantly reduce our environmental footprint by the year 2015.
Being an employer of choice

We operate all over the world and have to mirror the global marketplace with a multinational workforce. We know that our people are critical to our success. Our challenge is to recruit, retain and develop this diverse group of employees so that they achieve their full potential.
Managing our people

To address these challenges we have a Human Resources (HR) strategy in place that has the following pillars:
  • Create a working environment that stimulates team spirit, passion and engagement
  • Instil a performance culture based upon strong leadership
  • Be an employer of choice.
Being a good corporate citizen

Our business has an impact on communities around the world. We need to understand their local needs to design programmes that make a difference to people's lives.
Supporting local communities

We have adopted a largely decentralised and brand-oriented model for community involvement practices, recognising that people in our regional subsidiaries and Group entities best understand the needs of their local communities. Initiatives are managed through the Adi Dassler Fund, the Reebok Corporate Responsibility Programme and the TaylorMade-adidas Golf Charity Programme.

At Group level we support our suppliers' communities as well as make contributions to aid organisations that promote sustainable development practices within the industry.

Vision and values

Our commitment in managing our business in a responsible way is rooted in the Group's values and principles. Our understanding of becoming a sustainable company is outlined in the adidas Group Sustainability Statement:

Performance, Passion, Integrity, Diversity

These are the adidas Group values.

They help us to create brands that our customers believe in and they commit us to playing by the rules that society expects of a responsible company. Unlike sport, society's rules are not always written down.

We discover them by engaging with the people that our business touches, learning above all that companies are expected to be accountable for their actions. So we are committed to reporting publicly on the steps we take to have a more positive impact on society and the planet.

For the adidas Group, this means designing products that are environmentally sound, and reducing the environmental impacts of our day-to-day operations and in our supply chain.

It is about setting workplace standards for our suppliers to meet and helping them to ensure fair, safe and healthy conditions in their factories. Importantly, it also means looking after the well-being and careers of our employees - the company's biggest asset - and making a positive contribution to the communities where we operate.

Adhering to all applicable laws, directives and guidelines is a business imperative. But that is not enough. We are continuously striving to improve our performance and our standing in society. We set ourselves targets that stretch us, regularly review our progress and set ourselves new goals.

That is what the world's leading athletes do, and it is what we must do as a global leader in the sporting goods industry.

The Sustainability Statement outlines the guiding framework for becoming a more sustainable company, and informs our individual missions in Social and Environmental Affairs, Environmental Management, Human Resources Management and Community Affairs. These are further detailed in the respective chapters of the report.

Our proactive approach in managing sustainability issues is an inherent part of the Group's Corporate Governance framework and risk management system.

Corporate Governance

As a company we do not operate in isolation. We are a part of the global economy and society and have to follow various legal rules. We have set ourselves standards of good corporate management to effectively and responsibly manage risks and challenges.

Our actions are determined by the principles of responsible and transparent management and company control. Good corporate governance supports a sustainable increase in value and enhances the confidence placed in our company by our shareholders, business partners, employees and the financial markets. It is thus essential for the Group's long-term success.

We see corporate governance as an ongoing process during which values and principles continue to evolve in accordance with changing requirements.

We have established a corporate governance framework that addresses rights of shareholders, the responsibilities and duties of the Executive Board, including social and environmental considerations, and the Supervisory Board and how they collaborate information and disclosure obligations, and solutions for any conflicts of interest. The governing principles we have established ensure good management and control of the business.

Managing risk

A comprehensive risk management system addresses internal or external risks that may affect the Group's goals, strategies, brand image or financial performance and health.

The Group function Social and Environmental Affairs (SEA) is an integral part of the risk management system and provides the Executive Board with regular updates on social and environmental risks and developments. SEA strategic business plans support the development of business contingency plans and staff advisories for public health and safety issues.

For more detailed information on corporate governance and risk management, see the adidas Group website.

Special guidance for the organisation that derives from the governance framework includes:

  • Workplace Standards, the adidas Group's supplier code of conduct (see more in the Suppliers and workers section)
  • Labour Rights Charter, outlining the adidas Group's position on core labour rights within the company (see more in the Employees section)
  • Code of Ethics, defining rules for all employees with respect to legally compliant and ethical behaviour (see more in the Employees section)
  • adidas Group Environmental Policy, outlining the Group's position with respect to sound environmental management and its commitment in continuous improvement of its environmental impact (see more in the Environment section).

For a company that outsources most of its production and operates a multi-tiered supply chain, it is essential to develop an approach that covers its social and environmental responsibilities both inside and outside the company. In no way can a single corporate unit carry this out. Group Social and Environmental Affairs and Group Human Resources play a critical role in fulfilling our responsibilities in this area.

Social and Environmental Affairs - Roles and tasks

Group Social and Environmental Affairs (SEA) reports into the General Counsel of the adidas Group and is tasked with:

  • Ensuring compliance with the Workplace Standards within the supply chain
  • Leading, promoting and managing the development and implementation of environmental strategies across the Group's value chain
  • Extending and maturing the engagement and collaboration with others to drive changes in the industry
  • Managing the Group's Community Affairs programme at Group level
  • Managing the Group's corporate sustainability communication and reporting.

The SEA team consists of a diverse group of 65 people - engineers, lawyers, HR managers, environmental auditors, and former members of non-governmental organisations (NGOs). The team is organised into three regional teams covering Asia, the Americas and Europe, Middle East and Africa (EMEA), as well as the Group-wide functions of Environmental Services and Community Affairs.

As a cross-cutting function SEA collaborates closely with other global Group functions such as Sourcing, Legal, Facility Management, Human Resources and the Sales organisation but also with Brand Marketing and Product Development. The collaboration of SEA with Sourcing has been particularly important for improving workplace and environmental conditions in the adidas Group's supply chain. Over the years, SEA has established collaborative systems and processes to ensure Sourcing fully considers compliance with workplace standards. In 2010, SEA played a critical role in driving, developing and coordinating the Group-wide Environmental Strategy 2015.

By engaging directly with suppliers, government and other external stakeholders, SEA is informed about social and environmental issues at an early stage. It addresses any potential risks, and health, safety and environmental liabilities, in its monthly report to the Executive Board and Sourcing management. The team is directly involved in developing and updating corporate policies and operating procedures related to social accountability, product safety and compliance with environmental laws and regulations.

Social & Environmental Affairs team

Social & Environmental Affairs team organisational profile enlarge

Group Human Resources

Group Human Resources is a core function within the adidas Group's global organisation. It is led by the Chief Human Resources Officer who directly reports to the CEO. The Global HR organisation manages the following key tasks with:

  • HR Business Partner teams who support key functions in all relevant HR matters - Global Brands, Global Sales, Operations, Finance, IT, Legal and HR
  • HR Competence Centres who drive talent/succession management and learning, talent acquisition and employer branding as well as rewards, mobility and e-HR
  • Focus teams who manage our Company Sports programme and 'Diversity and Inclusion' initiatives at major Group locations.

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