Adidas was the first sporting goods company to disclose its social and environmental performance to the public in 2001. The group should be at the top of its game by now. Instead, the 2009 corporate sustainability report, entitled “Team Talk”, runs in the middle of the pack.
Adidas inadvertently leaves a clue to what may be holding them back.
“We report on our social and environmental performance every year because people want to know how we are doing,” management says. And elsewhere: “We are committed to striking the balance between shareholder interests and the needs and concerns of employees and workers and the environment, or in short to becoming a sustainable company.”
There is no recognition — much less any articulation — of the linkages between financial success and corporate social responsibility. Adidas is not alone. Few companies communicate how environmental, social, and governance issues might contribute to or subtract from bottom-line growth.
The course of events strengthens the impression that “Team Talk” overlooks the big picture. Adidas joined major footwear brands in discussing the role of leather sourcing in illegal deforestation after Greenpeace published an exposé “Slaughtering the Amazon” in June 2009. Before then, only the pollution from tanneries captured management’s attention.
Shortly after the release of the 2009 report, news came that the Grameen Bank and Adidas signed a memorandum to work on ways to bring low-cost shoes to the poorest markets. Yet not a word appears in “Team Talk” about the role consumers in impoverished societies might have to play in the company’s future.
The 2009 report has the identical structure as the 2008 edition. The information — and there is a goodly amount of it in “Team Talk” — is served up a la carte in four categories: environment; suppliers and workers; employees; and community. The first 40 pages contain narratives, including several on collaborative ventures with NGOs and stakeholder groups. The data is presented in a separate 30-page second part.
One step forward is a set of corporate targets for 2015. The goals are the result of the “Green Company Initiative” launched in October 2008 to reduce the environmental footprint of the sites owned by Adidas around the world.
Everyone with more than a passing interest in Adidas should dig into the online sustainability pages where much more information of strategic value is conveyed. Corporate statements are assembled chronologically in one place (for example, the letter to the US State Department regarding trade policy on Madagascar). There are summaries of stakeholder dialogues, documents containing corporate guidelines, and internal studies and fact sheets on various management topics.
Adidas has an unambiguous definition of sustainability. To them it means designing products that are environmentally sound. Plus, the company says, sustainability demands more: a reduction in the environmental impacts of day-to-day operations, workplace standards for suppliers, and care for the wellbeing of employees. The report addresses each of these points one at a time. The presentation is smooth and dutiful with no flowery language or distracting embellishments. But the selection of data is befuddling.
Four pages are devoted to country by country listing of the number of independent factories that the company worked with in each of the past three years. The roll call goes on until the total reaches 1,128 facilities in 68 countries. (Most are in Asia.)
More tables show resource consumption figures for the company’s 24 main administration offices, production sites, and distribution centres. So, for example, the Reebok hockey factory in St. Hyacinthe, Canada, emitted 530 tonnes of greenhouse gases vs. 1,200 tonnes for the hockey factory in St. Jean.
The point of providing these details is lost since none of the data is normalised. In any case the impacts of suppliers’ factories outstrips anything Adidas chooses to report for its own facilities.
The online information is more coherent and far more rewarding. There is a glossary of terms. An expandable table of contents appears down the left column of each web page. A double-wide centre column summarises the topic at hand. Links to downloadable files related to the topic are in the right column. The setup is logical and easy to navigate.
The report does not purport to follow any standard or guideline although the Global Reporting Initiative may still be used to steer thinking at Adidas. It did two years ago.
Adidas resorts to none of the other options available to assure the contents either. The sustainability report is not independently audited, nor is a stakeholder panel convened to render judgment. The question of assurance is simply never mentioned in the formal report.
An explanation appears online in the sustainability section though. Verification does not add value, Adidas says, except for workplace conditions. So the company subjects itself to the Fair Labour Association’s annual review.
1. Include hot links in the PDF when referencing additional information.
2. Do not use fonts that are too light or practically invisible when a page of the PDF is printed.
3. Give fresh thought to the basic proposition. Why do we report?
William D’Alessandro is president of Victor House News Co., an independent agency reporting on law and the environment for trade publications and executive newsletters. He also edits Crosslands Bulletin http://www.crosslandsbulletin.com covering strategic corporate environmental management and sustainability issues.