Adidas 2002 Annual Report Download - page 108

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106 REPORTING
Sustainability /// WE ARE DEDICATED TO FOLLOWING
AND ENCOURAGING BUSINESS PRACTICES THAT ARE
SOCIALLY AND ENVIRONMENTALLY RESPONSIBLE. THIS
APPROACH APPLIES BOTH TO THE GROUP’S OWN ACTIVI-
TIES AND TO ITS SUPPLY CHAIN. WE BELIEVE THAT THIS
WILL ALLOW US TO ESTABLISH A SUSTAINABLE BUSINESS
MODEL, WHILE ENHANCING THE VALUE OF OUR BRANDS.
SETTING STANDARDS /// adidas-Salomon’s own code of
conduct, the Standards of Engagement (SOE), is based on
the conventions of the International Labour Organization (ILO)
and the model code of conduct of the World Federation of
the Sporting Goods Industry (WFSGI). The SOE details our
requirements regarding labor, health, safety and environmen-
tal issues in our suppliers’ factories and forms the foundation
for our international factory-monitoring program.
ENSURING COMPLIANCE /// Our department for Social and
Environmental Affairs (SEA) works to ensure that best prac-
tices are being followed. The SEA team is comprised of
30 experts with specialized knowledge of the labor laws and
safety regulations in the countries where they work. SEA
team members visit suppliers at factory and subcontractor
level internationally and locally to monitor and determine
compliance levels and identify common problems, with
particular emphasis on facilities which have been identified
as high-risk. Risk assessments cover a variety of factors,
including product type, number of workers, record of compli-
ance and commitment to standards. During 2002, 1,148 audits
involving management and worker interviews in their native
languages or with a local translator, document review and
facility inspections were conducted at different levels in our
supply chain. In the event of non-compliance with our SOE,
factory management together with our SEA team develops
action plans and sets deadlines for compliance and further
improvements. If a factory persistently fails to meet SOE
standards, business relations are terminated. This course of
action is a last resort and occurred 14 times in 2002. How-
ever, whenever possible, adidas-Salomon prefers to stay in
partnership and to work from the inside to help encourage
factory improvements.
NUMBER OF AUDITS
2000 799
2001 839
2002 1,148
NUMBER OF INDEPENDENT FLA AUDITS
AT adidas-Salomon CONTRACTED FACTORIES
Audits
1st FLA Year (1st half) August– December 2001 17
1st FLA Year (2nd half) January –July 2002 25
1st FLA Year (total) August 2001–July 2002 42
Sustainability