Adidas 2003 Annual Report Download - page 108

Sustainability /// WE BELIEVE THAT ACTING AS GOOD
CORPORATE CITIZENS LEADS US TOWARDS BECOMING A
SUSTAINABLE COMPANY. THIS APPLIES TO ALL PARTS OF
OUR BUSINESS INCLUDING OUR SUPPLIERS. MANAGING
THE GROUP’S OWN ACTIVITIES AND ITS SUPPLY CHAIN
RESPONSIBLY AND REDUCING OUR ENVIRONMENTAL
IMPACT IS A PRIMARY OBJECTIVE FOR adidas-Salomon
AND WILL IMPROVE OUR CORPORATE REPUTATION AND
HENCE OUR ECONOMIC VALUE.
OUR BENCHMARK /// adidas-Salomon’s own code of conduct,
the Standards of Engagement (SOE), is based on the conven-
tions of the International Labor Organization (ILO) and the
model code of conduct of the World Federation of the Sporting
Goods Industry (WFSGI). These are tools that assist us in
selecting and retaining business partners who follow work-
place standards and business practices consistent with our
policies and values. The SOE detail the Group’s requirements
regarding labor, health, safety and environmental issues in
our suppliers’ factories and form the foundation for our
international factory-monitoring program.
ENSURING COMPLIANCE /// Before our suppliers can be
approved business partners, they must show that their stan-
dards and conditions comply with the adidas-Salomon “Stan-
dards of Engagement”. The Social & Environmental Affairs
(SEA) Team is responsible for monitoring compliance and
promoting best practice among our suppliers. The SEA team
is comprised of 32 experts with specialized knowledge of the
labor laws, workplace safety and environmental 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 assess-
ments cover a variety of factors, including product type,
number of workers, record of compliance and commitment to
standards. During 2003, 906 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. When a
factory continually fails to meet SOE standards, business
relations are terminated. This course of action is a last resort
and occurred four times in 2003. However, whenever possible,
adidas-Salomon prefers to maintain partnership and to work
from the inside to help encourage factory improvements.
VERIFYING RESULTS /// Through our participation in the Fair
Labor Association (FLA), an independent monitoring organiza-
tion headquartered in the USA, adidas-Salomon externally
verifies the Group’s global compliance activities. adidas-
Salomon fully supports the FLA obligations including internal
auditing, independent and unannounced monitoring, consis-
tent tracking of remedial actions, and transparent communi-
cation of the process. During the second year of the FLA
monitoring program, independent auditors inspected
13 adidas-Salomon supplier factories. Following the FLA
obligations, adidas-Salomon also participated in the FLA
transparency program, which includes publishing findings
from independent audits of seven major footwear and apparel
brands, probing the protection of workers’ rights in their
global operations on a factory-by-factory basis. The FLA also
issued its first annual public report on the companies’ moni-
toring and remediation efforts as they seek to come into
compliance with the FLA’s Workplace Code of Conduct. The
annual report is posted on the FLA website www.fairlabor.org.
ENCOURAGING SELF-GOVERNANCE THROUGH MANAGE-
MENT SYSTEMS /// Our strategy is based on a long-term
vision of self-governance at our suppliers’ factories. Helping
them to become more sustainable requires building up ca-
pacities in their workforces and managements as well as in
independent local workers’ organizations. To achieve this, our
activities continue to move from a monitoring role towards a
more support-based role. This means working in partnership
with our suppliers and giving them guidance and training
where necessary. We believe that good management systems
help factories improve their day-to-day operations and sup-
port the process of internalization and self-governance.
Therefore, we actively encourage our business partners to
pursue the opportunity for certification with internationally
recognized standards such as those of the International
Standardization Organization ISO 9000 and 14001 for quality
and environmental management and OHSAS 18000 (Occupa-
tional Health and Safety Assessment Series). At our produc-
tion site in Scheinfeld, Germany, we established an environ-
mental and quality management system that obtained a
certificate in accordance with the Environmental Management
and Audit Scheme of the European Union (EMAS II) and ISO
9000:2000. There are three footwear suppliers’ factories in
Asia certified to OHSAS 18000 and ISO 14001.
104 REPORTING SUSTAINABILITY