Being a sustainable business is about striking the balance between shareholder expectations and the needs and concerns of our employees and consumers, the workers in our supply chain and the environment. We believe that acting as a responsible company will contribute to lasting economic success.
Our commitment to sustainable practices rests on the company’s mission: To be the best sports company in the world. Best means that we design, build and sell the best sports products in the world, with the best service and experience and in a sustainable way. We have a clear roadmap for 2020 and beyond, which is a direct outcome of our strategic business plan ‘Creating the New’. We believe that, through sport, we have the power to change lives. But sport needs a space to exist. These spaces are increasingly endangered due to man-made issues, including human rights violations, pollution, growing energy consumption and waste. Our holistic approach to sustainability responds to the challenges that endanger the spaces of sport and simultaneously our planet and people. Building on existing programs, it tackles these subjects that are most material to our business and our stakeholders, and translates our overall sustainability efforts into tangible goals for 2020 and beyond that have a direct impact on the world of sport we operate in.
We seek to ensure that we address the topics that are most salient to our business, our stakeholders as well as the challenges ahead. To identify these topics, we openly engage with our stakeholders and consider their views and opinions in decisions that shape our day-to-day-operations. In addition, we regularly conduct formal materiality exercises to confirm the selection of our material topics. We use insights gained from past assessments, categorize potential new topics and seek to validate these through in-depth discussions with experts across the entire business. Ultimately, we want to better understand the importance a topic has for our business performance and stakeholders but also gain more visibility about the impact we have on these topics. As a result of this ongoing exercise, employee diversity has emerged as an addition to this list of topics. We also make use of external frameworks to help support the selection of material topics. One of these frameworks is the UN Sustainable Development Goals (SDGs) which represent a global call for action to promote prosperity for all while protecting the planet. Although our current roadmap and underlying targets were implemented prior to the adoption of the SDGs, we see a clear correlation between the SDGs and our own commitment to sustainable development. Consequently, we have been able to link prioritized SDGs with both the environmental priorities related to the selection of materials, manufacturing, use and disposal of our products, and the needs and concerns of people in the adidas value chain. Non-financial statement
STAKEHOLDER DIALOGUE AND TRANSPARENCY
Engaging openly with stakeholders and establishing ways to increase transparency and disclosure has long been central to our approach. Our stakeholders are those people or organizations who affect or are affected by our operations, including our employees, consumers, suppliers and their workers, customers, investors, media, governments and NGOs. The adidas Stakeholder Relations Guideline specifies key principles for the development of stakeholder relations and details the different forms of stakeholder engagement. Through active participation in, for example, the Better Cotton Initiative (BCI), the Zero Discharge of Hazardous Chemicals (ZDHC) working group, the Sustainable Apparel Coalition (SAC), the Leather Working Group (LWG) and the Apparel and Footwear International RSL Management (AFIRM) Working Group, we work closely with leading companies from a variety of sectors to develop sustainable business approaches and to debate social and environmental topics on a global level. This is also supported by our active membership in organizations such as the World Federation of the Sporting Goods Industry (WFSGI), the Fair Factories Clearinghouse (FFC), the Fair Labor Association (FLA), the Bangladesh Accord on Fire and Building Safety and the German government-led Partnership on Sustainable Textiles (‘Textilbündnis’) as well as our assistance for the newly established RMG Sustainable Council (RSC). In addition, we build awareness, capacity and knowledge of laws and rights among factory management and workers by partnering with leading providers such as the International Labour Organization’s (ILO) Better Factories program in Cambodia. As an active participant in the Bali Process Government and Business Forum we have formally endorsed our commitment to the ‘Acknowledge, Act, Advance’ recommendations, that outline actions to advance long-term efforts to improve supply chain transparency, the treatment of workers, and ethical recruitment. -group.com/s/partnerships
In this spirit of collaboration, we also established a Hackathon series together with our partner Zalando back in 2018. Motivated by the ambition to better understand stakeholders’ expectations about supply chain transparency and find solutions using digital technologies, we support start-ups with our expertise so they can develop ideas and test their potential for scalability. In 2019 alone, we held three events supporting more than 30 ventures.
We believe transparent communication to our stakeholders is critical. For that reason, we regularly disclose important sustainability updates about our work throughout the year on our corporate channels including our corporate website. A key element is the publication of our global supplier factory lists. The lists are updated twice a year and complemented by lists of the factories that manufacture products for major sports events such as the FIFA World Cup or Olympic Games. In addition, we disclose the names of factories of suppliers who process materials for our primary suppliers or subcontractors, where the majority of are carried out. processes
A robust governance structure ensures timely and direct execution of programs that drive achievement of our voluntarily set goals for 2020 and beyond. The Head of Sustainability is responsible for the development, coordination and execution of our sustainability strategy and reports to the member of the Executive Board responsible for Global Operations. He will also lead the sustainability Sponsor Board that is composed of senior representatives from Global Operations (GOPS), Social and Environmental Affairs (SEA), Global Brands, and other relevant functions across the company. The Sponsor Board ensures cross-functional alignment, transparent end-to-end management and execution of agreed sustainability goals within their functions. This includes the review and sign-off of policies as required.
adidas continuously receives positive recognition from international institutions, rating agencies, NGOs and socially responsible investment analysts for its sustainability initiatives. In 2019, the company was again represented in a variety of high-profile sustainability indices and subject to comprehensive corporate sustainability assessments. OUR SHARE
For the 20th consecutive time, adidas was selected to join the Dow Jones Sustainability Indices (DJSI) in 2019, and was assessed to be among the global top 10% best-performing companies in its industry in economic, environmental and social criteria. In the annual assessment of the Carbon Disclosure Project, adidas was again awarded with a B score for its Climate Change approach (2018: B), and improved to a B score for its approach to water management (2018: B-). The company managed to improve its rating considerably in the annual Green Supply Chain Corporate Information Transparency Index (CITI), advancing from tenth to second place in 2019 in the textile industry. adidas further maintained its leadership position in the Corporate Human Rights Benchmark (CHRB) evaluation in 2019, coming in first overall across all industries assessed, and was placed in the Leader category in the first Children’s Rights Benchmark conducted by the Global Child Forum in collaboration with the Boston Consulting Group. -group.com/s/recognition
Wet processes are defined as water-intense processes, such as dyeing and finishing of materials.