Performance Management System in Footwear Industry

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Performance counts
sustainability Progress report 2011

CEO STATEMENT Our ApprOACh TO SuSTAiNAbiliTy
Programme strategy reporting approach

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highlighTS 2011 SuppliErS
Direct suppliers Indirect suppliers systems and Guidelines stakeholder engagement

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ENvirONMENT
management Processes Innovation Design marketing Development sourcing own operations sales communication Human resources It

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EMplOyEES 2012 MilESTONES pErFOrMANCE
supply chain audits and training enforcement environment employees community affairs

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ceo statement our aPProacH to sustaInaBIlIty HIGHlIGHts 2011 suPPlIers envIronment emPloyees 2012 mIlestones Performance

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Ceo sTATeMenT
Growing our business brings with it many challenges. our strategic Business Plan until 2015 – called route 2015 - sets out ambitious targets for the growth of the adidas Group. While working towards these strategic goals, we also want to meet society’s evolving expectations of business practices. these include our responsibilities towards our employees, the people who make our products, the environment and the communities where we operate. In 2010 we set 2015 social and environmental targets that aim to shape how we will grow and meet our business goals in a sustainable way. targets are important because they give us a clear orientation and landmarks to reach and they spur us on to go further and achieve more. this report is focused on reporting our efforts to reach the milestones we set ourselves for 2011.

While working towards these strategic goals, we also want to meet society’s evolving expectations of business practices.

Progress in 2011
two milestones highlight the progress we are making in managing social compliance in our supply chain: 1. our direct suppliers’ performance is rated through a key performance indicator, or c-rating, on a scale of 1c-5c. In our direct supply chain, which accounts for fourfifths of our sourcing volume, nearly 40% of our direct suppliers and 62% of our strategic tier 1 suppliers were rated as 3c factories or better. so we are on track to meet our 2015 target to see 60% of our direct suppliers reaching at least 3c. 2. We aimed to improve the lowest performing suppliers in our direct supply chain and we had remarkable success: reducing the lowest rated factories (1c) from 19% of our supply chain in 2010 to 8% by the end of 2011. In the environmental area, we continued to increase the number of products containing environmentally optimised components. the amount of adidas footwear meeting our baseline environmental criteria more than doubled in 2011 and now accounts for 65% of all adidas athletic footwear. the starting point for delivering our environmental strategy 2015 is to have the right systems and guidelines in place. We have met our 2011 milestone to develop a format for these guidelines and we have introduced a new system to record and track our key environmental data covering around 80% of our own operations’ footprint. PERFORMANCE COUNTS / Sustainability Progress Report 2011

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ceo statement our aPProacH to sustaInaBIlIty HIGHlIGHts 2011 suPPlIers envIronment emPloyees 2012 mIlestones Performance

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We cannot reach our goals without engaged employees. following our global employee engagement survey, we began a comprehensive results-to-action process to maintain our top scoring areas and improve upon areas of weakness. We now have action plans in place covering more than 83% of the organisation.

In July 2011, we published a complete list of the names and addresses of the factories producing adidas clothes, shoes and equipment for the london 2012 olympic Games. the list also shows the status of worker or trade union representation and whether there is a collective Bargaining agreement in place at the individual facility.

engAgeMenT And CollAborATion
engaging...
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