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Adidas Progress Report – Great Pass but No Slam Dunk

Raz Godelnik
| Friday May 11th, 2012 | 4 Comments

Adidas’s 2011 progress report left me with mixed feelings. There’s no doubt Adidas is an industry leader when it comes to sustainability. The list of examples proving it is almost endless, from being no. 38 on the list of Corporate Knight’s list of the Global 100 Most Sustainable Corporations (you won’t find there Nike or PUMA) to being rated as industry leader in sustainability issues and corporate responsibility for the eighth time by the Dow Jones Sustainability Indexes (DJSI).

The problem is that such recognition also generates expectations. So while its 2011 progress report shows a number of achievements, it also gives you an impression that some elements are still missing in Adidas’s effort to “to meet society’s evolving expectations of business practices.”

One problem was more technical – Adidas doesn’t report on its progress to meet its goal to reduce its environmental footprint 15 percent by 2015. The reason is that the company started using a new data environmental reporting and management tool, but due to a range of deviations in data sets from previous years, this information is not included in the report. Another problem is more fundamental – while Adidas makes a lot of effort when it comes to makes its supply chain more sustainable, it seems to make far less effort when it comes to another important stakeholder group – customers.

Let’s start first with the good news.  Here are some of the main achievements Adidas reports about in its report:

Preparing for London 2012: According to Adidas, all London 2012 Adidas products and services must be sourced and manufactured to environmental, social, and ethical guidelines and standards set by the London Organizing Committee of the Olympic and Paralympic Games. The company reported that suppliers and factories have been briefed on these standards and regular audits are conducted to ensure that all products are sourced and transported in an ethical manner. Around 90 percent of all Adidas Olympic articles have some sustainable content.

Couple of days after Adidas’s report was released, the Playfair 2012 campaign, which campaigns for a sweat-free Olympics released a report (Fair Games?) with findings from an investigation in 10 sportswear factories in China, Sri Lanka and the Philippines. According to the report, “workers making Olympic sportswear for London 2012 for top brands and High street names, including Adidas and Next, are being paid poverty wages, forced to work excessive overtime and threatened with instant dismissal if they complain about working conditions, according to a new report.”

Adidas responded quickly saying that it is strongly disputes many of the claims made in the report in a 10-page detailed response and promised to launch an immediate investigation. It certainly looks like Adidas is taking these allegations seriously and generally the company’s effort to be transparent about its supply chain (it is the only London Olympic licensee to fully disclose its production locations) looks very impressive.

Improved performance of direct suppliers: At the end of 2010, Adidas adopted an aggressive policy to improve the lowest performing suppliers in its direct supply chain. Focused capacity building by its local compliance team led to a marked turnaround in 2011, with over 80 percent of its local suppliers now meeting the company’s 2C minimum (Adidas has a C-rating, on a scale of 1C-5C, where 5C is the highest rating). Those that have failed to meet Adidas’s expectations will be phased out in 2012.

Piloting the Apparel Coalition Index across many product categories: As a founding member of the Sustainable Apparel Coalition, 2011 saw Adidas participating in both the development and testing of a cross-industry apparel sustainability measurement tool. Nearly 20 products were piloted from brand adidas, Reebok and Rockport, and these covered all business units and global creation centers.

Publishing a roadmap to zero discharge: In November 2011, following Greenpeace’s Detox campaign, Adidas, Nike, PUMA and other companies released a joint roadmap towards zero discharge of hazardous chemicals (ZDHC) in the supply chain by 2020 for public consultation.

These achievements, as well as others, show that Adidas is making a real progress. Yet, as I mentioned two main issues seem to cloud its efforts.

First, there is the missing carbon emissions data that wasn’t included because of problems with the new data environmental reporting and management tool. Now, it’s not the end of the world and it can happen to any company, but the problem is that while Adidas is very proud of being very transparent you won’t find the explanation about the missing carbon data on its press release, update on the report on the Adidas employees’ blog, CEO letter, or even the 2011 highlights. To find it you really need to dig in the report. You might think it’s really a non-issue, but I believe that a transparent company shouldn’t have a problem to giving this issue more prominence.

The second issue is the fact that although Adidas is working hard to become more sustainable, it doesn’t seem to share these efforts with its customers. For example, the company has a sustainability website, but if you go to its regular website and it’s not easy to find. This problem is not unique to Adidas, but it is still not clear why the company doesn’t do more to share its achievements with customers. As leading sports footwear, apparel and accessories company, Adidas has the ability to engage in a conversation on sustainability with many young people and I truly hope it will take advantage of this opportunity. We’ll wait for the 2012 report to see if it happens.

Raz Godelnik is the co-founder of Eco-Libris, a green company working to green up the book industry in the digital age. He is an adjunct faculty at the University of Delaware’s Department of Business Administration, CUNY and the New School, teaching courses in green business and new product development.


▼▼▼      4 Comments     ▼▼▼

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  • Barclay Simpson

    Great article. Where is the Facebook share link button on your website? Either I’m blind or you guys need to get up to date…

    • http://www.triplepundit.com Nick Aster

      Hey Barclay, we were doing a server migration the last couple days so things got a little flakey.  The buttons should be there on the top.  Refresh a few times if you need to, an old page might be cached in your browser.

  • http://brosstumble.tumblr.com/ darcy_bross

    I find it hard to lend any credibility to a list of that type without Patagonia at least showing up on it. That being said, it was great to learn about some of these great sustainable initiatives that Adidas is working on. 

  • Nicole Sieverding

    Hi Raz,first of all I’d like to thank you for writing an article about our adidas Group 2011 Sustainability Performance Report. It definitely is interesting to read and the content is very balanced. You seem to be a follower of our sustainable activities, which we appreciate, and you acknowledge positive achievements but you also highlight areas for further improvement. And this is exactly how we like to engage with our stakeholders: in an open, honest and constructive way!Now let me comment on the two areas of concern that you mention in your article:1. Missing environmental dataIt is true that the timing didn’t allow us to integrate our Green Company Performance Analysis into the 2011 Sustainability Progress Report’s format. But nonetheless, we were able to publish the environmental data (energy use, water use and carbon footprint etc.) of our own sites on the adidas Group’s corporate sustainability website (www.adidas-group.com/en/sustainability/welcome.aspx) at the same day as we launched our 2011 Report, namely on 26 April 2012. You can read the detailed 18 page long Green Company Performance Analysis 2011 by clicking www.adidas-group.com/en/sustainability/assets/environmental_-statements/2011_Green_Company_Performance_Analysis.pdf.I agree that this environmental data would have made the 2011 Sustainability Performance Report more complete but we had to accept the constraints coming up. Therefore we decided to publish reliable data separately on the adidas Group corporate website once available to keep our commitment to transparent reporting.2. Sustainability communication towards customersYou are right – there is definitely potential for improving the way we communicate about our sustainability activities towards our customers. But let me explain one fundamental difference between the communication on Group and on Brand level. The adidas Group consists of the different brands adidas, Reebok, TaylorMade, Rockport, CCM, Ashworth and Five Ten, and the communication on Group level covers all brands likewise. We report about sustainable strategies, programmes, initiatives and data, and we highlight, where appropriate, sustainable products from the brands. On the other side, our brand communication, or what you call our regular websites (e.g. www.adidas.com, www.reebok.com or www.taylormadegolf.com) focus on product concepts and stories. For some products, this already includes also the topic of sustainability. But I can assure you that brand level communication on sustainability will increase!Once again thanks for your article!Best regards,Nicole