Germany's Adidas is a world leader when it comes to footwear and sportswear manufacturing. It's also a global leader when it comes to corporate social and environmental responsibility.
In 2013, Adidas garnered RobecoSAM Sustainability Gold Class and Sector Leader awards. It has been included in the Dow Jones Sustainability Indexes for 14 consecutive years and was named both industry leader and included among the “Global 100 Most Sustainable Corporations in the World” for the tenth time.
Fundamentally, enhancing the overall sustainability of a business enterprise is about corporate culture -- about instilling a set of social and environmental values and attitudes that fosters and encourages awareness, innovation and responsibility among employees, suppliers, customers, and in the communities where a company represents itself. Adidas recognizes this.
In its “Sustainability Progress Report 2013,” Adidas takes a new approach to its sustainability reporting, something it's done since 2000. Aptly adopting the short title “Fair Play,” in it Adidas frames its sustainability goals and reviews both its successes and challenges from within the overarching context of a new approach centered on four pillars, or 4Ps: People, Product, Planet and Partnership.
“While we had many successes to celebrate in 2013, we are aware that there is always more that we can do. For us, succeeding in business is about more than making money. It is about treating our employees, our suppliers and their workers fairly, being straight with our partners and supporting our local communities.
“It is about respecting the environment and making the best products we can for our customers. We are not perfect and we do not always get it right. But as we go about our work, we aim to honor the spirit of ‘fair play’ in everything we do. Therefore, let me assure you that we continue to take serious responsibility for our actions. And we continue to integrate sustainability into our business strategy.”
Adidas's four pillars, or 4Ps: People, Product, Planet and Partnership, provide a conceptual framework that enables Adidas stakeholders -- from its 50,000 employees on through to suppliers, customers and communities -- to better and more easily understand, assess and realize the multinational footwear and sportswear company's sustainability goals.
Surveying progress across Adidas's four pillars, sustainability initiatives range from working to support all suppliers, direct and strategic, in their efforts to achieve sustainability self-governance; sourcing and being able to trace more sustainable materials from the original source through the supply chain; extending environmental assessments to selected suppliers; reducing energy, water consumption, waste and carbon emissions and other pollutants; and establishing sustainability partnerships with individuals, NGOs and other social and environmental interest groups.
A veteran in Adidas's sustainability drive, Nicole Sievering summarizes some of the highlights included in the 2013 sustainability progress report:
“For 2013, again, we collected numerous sustainability stories from all over the business. The Report talks, for example, about diversity initiatives at the Adidas Group, an improved system to address human rights complaints, our employer branding project, the successful DryDye technology and virtualization projects, our ambition to reduce the environmental footprint with our Green Company initiatives and our community project in Brazil.”Highlighs of progress across Adidas's "Four Pillars of Sustainability” include:
An example: When it comes to Adidas's “People” pillar, a global network of local compliance officers “act as independent contacts for any questions employees may have about compliance,” Adidas explains in its 2013 sustainability report. “Any employee who knows of, or suspects, wrongdoing is expected to promptly report it so that an investigation can be conducted and appropriate action taken.”
Social and environmental awareness, sensitivity and values vary across cultures and within organizations. Moreover, actions taken by business managers in accordance with a company's social, environmental or economic standards and policies can be seen in a very different light by those affected, such as employees. A case study brief in Adidas's 2013 sustainability report clearly illustrates this issue.
The owners of the PT Kizone apparel factory in Indonesia unethically closed and abandoned the factory some six months after being unable to resolve differences with Adidas regarding its operations. That left “hundreds of workers” without jobs, income and nothing in the way of severance pay.
Adidas in April, 2013 reached a settlement with the apparel factory's displaced workers that gave them additional aid. This “came on top of $525,000 from the Adidas Group in humanitarian aid as well as job placement services, and direct advocacy with the Indonesian government of the issue of workers' rights.”
A representative of the Indonesian district labor union applauded Adidas's efforts.
“The union and the workers are very pleased that Adidas has made this settlement, which will have a real impact on the workers' lives.”
As part of the “Fair Wage Assessments,” Adidas interviewed 1,817 workers spanning 12 factories in five countries to gather information on how workers believe they are being treated, and what they believe is a fair wage.
On a positive note, Adidas found that its suppliers “paid wages on time, complied with legal minimum wage rates,” and compensation packages included “many non-monetary benefits.” In addition, it found “no practices that allowed wage discrimination or wage disparity,” and that “wage costs continued to rise as employers tried to meet increased costs of living.”
In response, Adidas management has made eliminating the root causes of these issues a primary focus of its 2014 sustainability efforts. It also plans to extend “Fair Wage Assessments” to suppliers in other countries, such as Cambodia.
“Furthermore, we plan to develop a roadmap to drive effective wage-setting mechanisms at out suppliers' sites.”
In reading through Adidas's 2013 sustainability report, it becomes abundantly clear that management isn't just paying lip-service when it says that caring for the well-being of people, both within and outside the company, is a core value and pillar of its “Fair Play” sustainability framework. The same can be said for the values that compose the other three pillars: Product, Planet and Partnership.
For more on Adidas and its sustainability drive, delve into “Fair Play,” Adidas's “Sustainability Progress Report 2013” for yourself.
Images courtesy of Adidas Group
An experienced, independent journalist, editor and researcher, Andrew has crisscrossed the globe while reporting on sustainability, corporate social responsibility, social and environmental entrepreneurship, renewable energy, energy efficiency and clean technology. He studied geology at CU, Boulder, has an MBA in finance from Pace University, and completed a certificate program in international governance for biodiversity at UN University in Japan.