Company of the month:

Adidas AG

 

The Company of the Month is selected due to recent developments and in connection

with the topic ”Global Sporting Events”. The EAM Responsible Investments team analyses

the strenghts and weaknesses of the selected company in terms of ESG.

 

The Adidas group from Herzogenaurach, official partner of the FIFA World Cup Final 2014™ in Brazil, manufactures

under the labels of Adidas, Reebok, Taylormade-Adidas Gold, and Rockport. The company operates in sporting

goods and lifestyle as mass and niche provider. The product range encompasses sportswear, shoes, and sporting

goods for amateur and professional athletes, with a focus on football, running, basketball, workout, fitness, golf,

and outdoor.

 

With a B (“good”) in EAM’s current SRI rating, Adidas ranks among the top three companies in the area of Textiles,

Apparel & Luxury Goods. Companies that are active in this sector are under close scrutiny – especially if they are

as well-known as Adidas. The fact that a significant share of production originates in low-wage countries thus

harbours high risk for the company’s reputation. Also, suppliers from these countries continue to apply harmful

substances in the production of shoes and textile goods.

The company

 

Adidas AG recorded sales of EUR 3.5bn in the first

quarter of fiscal 2014. The group employs over 50,700

people in more than 160 countries. Adidas is among

the world’s leading companies in the sporting goods

industry.

CO2-emissions

Until 2015, the Adidas group wants to cut its CO2 emissions by 30%. The idea is to reach this goal via reduced

energy consumption, the use of energy with lower carbon emissions, and the offsetting of emissions by means

of specific projects. Adidas has provided the Carbon Disclosure Project (CDP) with a CO2 emission report since 2007.

 

Suppliers

Adidas’ suppliers have to comply with numerous specifications in terms of healthcare, safety, working rights,

and environmental protection. The compliance with said standards is ensured by visits and audits by internal

and external specialists. In the case of compliance shortcomings, steps such as for example written warnings

or the contacting of local authorities are taken. Repeated and/or grave non-compliance results in the termination

of business relations.

 

Social engagement

Adidas engages especially in countries and regions where the group has a larger supplier network in place. The

activities include relief operations e.g. in case of natural disasters; projects to grant underprivileged children and

adults access to education and sports activities; donations to support local charity organisations; the sponsoring

of a variety of local sports events; the organisation of clothing and toy drives; beach clean-ups etc. In addition

the “adidas Fund” offers employees the chance to volunteer for various projects.

 

(Alexander Osojnik)

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