Integrating Sustainability throughout the Value Chain

Lyn Ip
Regional Manager (EHS) – Asia Pacific
Social and Environmental Affairs (SEA) Department
Overview

Introduction

Sustainability in the value chain – our approach

Product: Better Place Program and

sustainable materials

Supply Chain

Own Operations

Conclusion

2
Environmental Sustainability at the adidas Group - a holistic approach
Introduction

The adidas Group

3
Environmental Sustainability at the adidas Group - a holistic approach
 Introduction

The Business Model

• Global sourcing and distribution

• Local market production by sales subsidiaries
• Cooperation with licensees

Suppliers C
Subcontractor Central Functions o
Marketing n
Suppliers Wholesale
Design s
Operations u
Human Resources
Own Retail m
Suppliers Legal e
Subcontractor Finance r
Suppliers s

4
Environmental Sustainability at the adidas Group - a holistic approach
Introduction

Corporate Sustainability Mission

The adidas Group strives to be the global leader in the sporting goods
industry.

Leadership means that we are dedicated to socially responsible, safe and

environmentally sound practices in the company and its supply chain to
enhance the value of our brands.

5
Environmental Sustainability at the adidas Group - a holistic approach
Recognition

• Dow Jones Sustainability Index: listed since 2000

- Super Sector Leader (2008 and 2009)

- Best Performer: Industry leader in the apparel and footwear sector
- Gold Class: Highest average performance
- Best Mover: Best development performance

• FTSE4Good Europe Index: Listed since 2000

• Ethibel Index: Listed since 2003

• Global 100 Most Sustainable Corporations (since 2005)

6
Environmental Sustainability at the adidas Group - a holistic approach
Sustainability in the Value Chain - Our approach

Sourcing/ Own Use &

Design Marketing Development
Manufacturing operations End of
Life

Sustainable resource use - Energy efficiency and climate change

- Water conservation
Environmental Aspects

- Materials
- Efficiency

Emissions - Water discharge

- Waste
- Air emissions
- Noise
- Soil and groundwater contamination

Risks and hazards - Chemicals

7
Environmental Sustainability at the adidas Group - a holistic approach
Sustainability in the Value Chain – Product creation

Sourcing/ Own Use &

Design Marketing Development
Manufacturing operations End of
Life

Product Creation and the development of sustainable

products

Encompasses for us:

• Design
• Marketing
• Development

8
Environmental Sustainability at the adidas Group - a holistic approach
 adidas Better Place

Concept

• Launched SS09
• Holistic, Life-Cycle approach on
sustainable product creation
• Better Place Guidelines
- Design
- Materials Products meeting this criteria are labeled as
- Construction (pattern efficiency) Better Place to the consumer

9
Environmental Sustainability at the adidas Group - a holistic approach
Sustainable Materials

Our approach:

• Innovate new sustainable materials through close

collaboration with suppliers

• Further improve our internal material assessment

tool

• Implement new sourcing models

• Collaboration with external organisations and

brands
- Organic Exchange
- Sustainable Roadmap of DEFRA (UK)
- European Outdoor Working Group

10
Environmental Sustainability at the adidas Group - a holistic approach
Sustainable Materials

LCA for rPES:

• Results have been compared with other commodity

fibers

• The LCA results of the study show that recycled

polyester fibres offer important environmental benefits
over virgin polyester.

non-renewable energy use (NREU) savings of 40-

85%
global warming potential (GWP) savings of 25-75%

11
Environmental Sustainability at the adidas Group - a holistic approach
Sustainability in the Value Chain – Sourcing

Sourcing/ Own Use &

Design Marketing Development
Manufacturing operations End of
Life

Managing impacts and risks in the supply chain

• Sourcing regions

• Workplace aspects

• Environmental aspects

12
Environmental Sustainability at the adidas Group - a holistic approach
Environmental aspects

Improving our Environmental Footprint

• Restricted substances
• Footwear factories:
- VOC management
- Reporting
- Environmental management systems
• Energy workshops for suppliers since 2007
• Auditing schemes for focus suppliers 140
VOC Consumption in grs/pair

• Improvement program and targets for apparel 120

suppliers
100

80

grs/pair
60

Supplier engagement 40

• Raising environmental awareness and

20

promoting best practices

99 F A J A O D F A J A O D F A J A O D F A J A O D F A J A O D F A J A O D F A J A O D F A J A O D

1999 - 2007

• Stakeholder meetings with suppliers

13
Environmental Sustainability at the adidas Group - a holistic approach
Sustainability in the Value Chain – Our own operations

Sourcing/ Own Use &

Design Marketing Development
Manufacturing operations End of
Life

Managing impacts in our own Operations

- Offices

- Own manufacturing

- Warehouses

14
Environmental Sustainability at the adidas Group - a holistic approach
Managing impacts in our own operations

• Development of Group-wide targets

- Energy consumption
- Carbon emissions
- Water consumption
- Waste

15
Environmental Sustainability at the adidas Group - a holistic approach
Reporting

Annual Social and Environmental Report

16
Environmental Sustainability at the adidas Group - a holistic approach
Thank you

17
Environmental Sustainability at the adidas Group - a holistic approach