By Katie Loden and Kristina Babbitt Adidas delivers on data but leaves reader enjoyment a poor second
Like a well-worn sports shoe, the Adidas sustainability report smells authentic. It is so single-minded in its emphasis on performance measurement that there is little attempt to make it interesting.
Adidas (owner of Reebok and TaylorMade) has more than 38,000 staff and is supplied by more than 1,000 independent factories in more than 60 countries. Sport Matters, as the sports clothing company’s eighth corporate responsibility report is titled, demonstrates a willingness to tackle the resulting tough and controversial issues head-on.
The report discusses concerns raised by Adidas stakeholders in 2008, including the company’s sponsorship of last summer’s Beijing Olympics. This made Adidas a target of human rights campaigns about the role of the Olympic host, China, in Darfur and Tibet. In the same section Adidas details Oxfam’s concerns about a lack of worker representation in its Indonesian supply chain. Honesty is disarming and Adidas gets instant corporate responsibility street-cred for its candour.
In a telling sign of the times, Adidas commits to “transparent management” of its supply chain in response to the global economic crisis. With pressure on sales there is a serious risk that workers in emerging markets will face lower wages and lose their jobs. Adidas may not be able to avoid this, but such frank recognition of the risk suggests it will do what it can to protect factory workers.
The report’s main issues are described as the company’s “direct and indirect” supply chain, environment, employees and communities. These are certainly important, but is the list missing something? Adidas says: “The major part of the environmental footprints of our products is predetermined through decisions made in the product creation, design and development stage.” But the report contains almost nothing about lifecycle impacts and how Adidas is applying its design talents to reduce them. It’s a material omission.
This is a macho report, available in a web version and as a pdf download of the same content. The structure of the report (particularly the website version) is clear and accessible. Of its 68 pages, 54 are devoted to data and targets. Adidas says: “This review does not include stories that illustrate the approach we have taken … there is more analysis of our performance.” This is a mistake. Credentials and commitment like Adidas’s need stories, pictures – anything to bring the data to life. It’s like covering the Olympics by publishing only the finishing times of the events. No blood, sweat or tears. No human-interest stories. Adidas’s material deserves much better communication.
Perhaps the least successful aspect is the way supply chain management is treated. Adidas has released all the numbers but not explained what they mean. For example, we read that 37 warning letters were sent to its suppliers, but we are not told why. Who did what to whom?
The company sources from more than 1,000 factories in three continents. To understand how the company is trying to effect change across different cultures we need more qualitative information. Are the issues the same in China, Mexico and Romania? What works with a supplier falsifying its records? What works when pregnant women are being victimised? The answers are not in the data.
Supply chain reporting is an area where there are few prime examples for Adidas to follow. Nike and Gap, usually cited as leaders, suffer from similar problems. There is an opportunity here for someone to take a fresh look at supply chain reporting on ethics.
The “progress” and “targets” section is excellent with a percentage scoring system of progress. For each issue, Adidas explains why it chose the particular target, methods for achieving it, barriers encountered, lessons learnt and how this influences its next target. This helps us to understand the company’s decision-making process and how it incorporates stakeholder feedback.
Adidas has an extensive engagement process and the report does a good job of representing views but only includes a few unattributed quotes. It would be more impactful to invite named stakeholders to contribute directly. Stakeholder voices would show just how confident the company is and demonstrate how much goodwill it has earned.
One of the most interesting features is easy to miss on the issues page. An interactive survey asks: “Which stakeholder group are you in?” At the time of writing, opinion leaders and customers are tied on 40%. It may be a surprise, but customers are a key audience and this report does not cater for them.
If, as the slogan goes, “impossible is nothing”, Adidas’s next sustainability communication should be targeted squarely at customers. Now that would be interesting.
Katie Loden and Kristina Babbitt are consultants at sustainability strategy and communications consultancy Context, in London and New York respectively.
Follows GRI? No.
Assured? No, but highly credible without it.
Materiality analysis? Referenced but not explained.
Stakeholder input? No.
Seeks feedback? Yes.
Key strength: Data and honesty.
Chief weakness: Too geeky.
Pleasant surprise: Online reader survey.