Five Years Re-Engineering Plan

So while setting this target supports their ambitions to make their products more sustainable, the responsibility for meeting it rests with their Global Operations team and their sourcing strategy. 2. 0 Policy 2. 1 Analyzing the environmental policy of Adidas According to their re-engineering plan, Adidas targets in 4 major areas: 1. Recyclable Main Materials 2. Energy and Carbon saving 3. Emission and 4. Mobility. Main material includes leather and cotton what they called better cotton. BCI aims to promote measurable improvements in the key environmental and social impacts of cotton cultivation world-wide.

The Better Cotton Initiative (BCI) is to make global cotton production sustainable and they are also a founding member of the BCI. Adidas also founded the Leather Working Group (LWG) in 2005. LWG aims to improve environmental conditions in the leather supply chain. The Leather Working Group is a group Of brands, retailers, product manufacturers, leather manufacturers, chemical suppliers and technical experts that was created in 2005 to develop an environmental stewardship protocol specifically for the leather manufacturing industry (Adidas 2011 : 12).

Adidas is also a member and participating company of World Business Council for Sustainable Development (WBCSD) which forums to engage with other global companies concerned with sustainability. Carbon saving includes 30% for carbon saving: relative energy use by 20% and relative carbon savings through ‘greener energy sources’. In total it is 30% in all. Another impressive thing is 50% paper savings per employee especially in IT footprint. Energy saving mainly involves 20% water savings per employee. Adidas has over 46,000 all over the world, so it is likely to be a huge effect on the environment.

When it comes to emission, reduction of household waste by 25% per employee is set to its sustainability plan. The last category is mobility that is about business trip management which is set as educing emissions caused by business travel to 570 kg C02 per employee. However, this target was removed in 201 2 and Adidas dropped a short explanation grounded on the data received from third party is not forceful enough to follow-up on the target that they had set. Actually, they aim to reduce carbon emissions caused by the Company car fleet by 30% which is also known as Green Company Car Policy.

But, Adidas gave a reason that there is currently no data tracking system in place that allows them to monitor their progress on a global level when it comes to the car fleet. In my point of view, it is unacceptable. Adidas is not a small business group and I am sure that they are not stupid enough to depend on third party if they seriously want to activate this target. They can set up a device in every pipe that emits Carbon Dioxide through their society. But they are grounding on the other party which is not as strong as Adidas. 3. 0 Organisation 3. Organization Chart Here, we can see the old organization chart of Adidas before they re- engineer the 2010-2015 strategy. As we can see from this figure, there are a lot of weaknesses in this organization. The most responsible person according to this chart is Environmental Manager. It seems like he, only he can perform and adjust all the cases relating to sustainability. And the most amazing word in this chart is “Advice”. It is just advice from this manager. Let me say that, he advise to other department from Adidas. So, whether this department obey his advice or not, it is not a big deal.

It means that his advice does not really matter. How can he perform his job well? How can Adidas go on their environmental plan? And another weakness is dot-dot line from three areas: Environmental Policy, Coordination Control and Monitoring. The relationship between them is only dot-dot line and not full line. That means the connection between the lower level department and upper level department is not strong enough which is not likely to be Autocracy. I think, Adidas found out these weaknesses and so they reengineered this old environmental management plan and we can see their new organization chart below.

In this diagram, we can see that CEO of Adidas is leading the SEA team and all the relations are connected with fully straight lines which is seemly to be strong enough to perform the environmental strategy well. 3. 2 Responsibility However, there is an interesting point which is how they place the Head of Environmental Services. As we can see, this department is only in Germany and not in other countries. What does it mean? Does Adidas think that is it enough to cover all their factories around the world with over 46,000 employees? In my opinion, Head of Environmental Services should be placed under the Global Director of SEA.

Their climate change is on the top of the agenda of governments around the world. Environmental sustainability poses a number of challenges for our product management, innovation and development teams, facility managers, manufacturing partners and sales rganizations. 4. 0 Environmental Management System Documents Although it is a common assumption that textiles made from natural materials such as cotton and silk are more environmentally friendly than textiles made from man-made materials, the case for polyester fiber proves this to be incorrect.

Polyester is made from petroleum, a non-renewable resource that creates damaging environmental impacts during the extraction process. However, when considering the whole lifecycle of the fiber, from the raw materials, through the use phase to the end of the lifecycle, polyester is ot as environmentally damaging as believed. It has lower energy impacts during the washing and cleaning phase and is also completely recyclable at the end of its life. Polyester textile recycling has been developed using the clear plastic water bottles, or PET as the raw material, a source of plastic that would otherwise go into landfill.

Nevertheless, in 2018 the Adidas Group has committed to using 100% ‘Sustainable Cotton in all its brands. Why they don’t want to use a better source called polyester which is also recyclable and does not need as much care as cotton? They say that they will use 100% ustainable cotton in 2018 and in my opinion, it is non-realistic. It will also be removed in coming few years like they removed in Mobility and Green Company Car Policy. 4. 1 Environmental Aspects Impact on the environment, where they occur?

In short, everything along the value chain, crude oil is used in the manufacture of Polyester, cotton needs water to grow be growth and chemicals are also required used for dyeing fabric or leather tanning. Once the products have been made, there are emissions related with transportation, where they sell. At the end of its useful life they become waste. C02 emission, what does it effect to the environment? Generally, C02 causes Green House Effect which leads to global warming. Other problems with C02 are ozone depletion and natural disasters such as earthquakes and Tsunamis.

So, Adidas tried to reduce C02 emission but they terminated this process in 2012 grounding on the fact that is not acceptable. Here are the exact details for environmental impact categories mainly three parts: sustainable resource use, emission and hazards and risks. In the process of Adidas, They start with innovation and design and end with use and end of life. 4. 2 Control of Records This chart is about the control record of Adidas for suppliers. As their Environmental Strategy 201 5 was initiated in 2010, we can see that there are more many warning letters in 2010 than 2008 and 2009.

It seems like they are activating their plan seriously. However, be honest. It is just warning letter and even 3 times. In my point of view, 2 times is more than enough before termination. So, why even 3 times? On top Of that, it is interesting how they will manage the subcontractors which are a breach of contract obligations under a manufacturing agreement? It is very interesting. And another rating hat measures the performance of factories is KPI (Key Performance Indicator). With the rollout of the Environmental Sourcing Strategy (ESS), they required criteria to offer a logical way of measuring and ranking their suppliers.

So they developed an Environmental Key Performance Indicator (KPI) tool. The Environmental KPI is included of three key units of measure – management systems, risk and performance – all key drivers of their ESS. Each section is given a score which is then biased to give a total score out of 100. Adidas believes that KPI will perform covering best practice guidance, ools and key performance indicators (KPIs) will track environmental performance crosswise all functions and brands. These processes ensure that the Strategy is intelligible and that the targets accompaniment each other. . 3 Management Review This figure is about the KPI (Key Performance Indicators) assessment and C- Rating. According to the reports from Adidas, the KPI template and its function have been upgraded and several indicators were added. In addition, the tool has a link to the Global Sourcing organization’s supplier performance evaluation to bring about higher consistency. The revised tool has been launched and is being used. According to this figure, numbers of percentage which level up the KPI rating is increasing Y-O-Y. It is impressive.

But I have some points to complain this indicator. Look at the figure below. Gosh. Most of the factories are only in 2-C which means between 30-59 %. Let me say that if someone sits an exam, if he or she gets 2C which means between 30 and 59 mark, it can even be regarded as “fail”. Even he or she is around 50-59; it is not a good result. But Adidas says that they target all the factories to reach 3C rating in 2015. It is very interesting. As I explained before, how Adidas will manage the subcontractors which are a breach of contract obligations under a manufacturing agreement?

According to the Adidas Group, Trainings conducted for suppliers, workers, licensees, agents and Adidas Group employees. They approach to train their employees across the world. These figures show the number of employees who are trained by Adidas for three purposes: Fundamental, Performance and Sustainability. Fundamental training covers: Workplace Standards & SEA introduction; FFC training; SEA policies & SO Ps. Performance training covers: Specific labor, ealth, safety and environmental issues.

Sustainability training covers: Sustainable compliance guideline & KPI improvement; Factory Self-Audits (factory internal audits). In 201 1 , nearly 3,000 people participated in these trainings including 83 group training sessions, i. e. trainings with participation of more than one supplier, business entity or licensee. In 201 0, Adidas had 1 ,236 factories across the world including own factories and licensee factories. At the same time they already trained 1,350 audits in total. This means that Adidas can supply one person, who is trained well nough to sustain the environment, per factory of their own.

My question is, is it enough? Is it really enough to perform environmental cases by one person? However, these data were collected in 2010. So, let’s see how in the future before 2015. 5. 0 Conclusion In a net-shell, we can conclude that some of the strategies of Adidas are realistic and some are not realistic mainly because these strategies are set by their own. They can fix it, repair it, and even terminate it without any permission from any party or any person. If u asked me, I would like to say their main target is only profit.

So, there may be some murmurs that why they care the environment. It is very clear. Environment is their playground to earn money and to be popular around the whole world. Without a perfect environment, they will surely have to struggle to sustain their income. Adidas boss can fire any employees, but environment can fire all the bosses whose incomes rely on the environment. There is another proof that Adidas prefer to money than the environment that is the color Of Bayern Munich shirt. It is red color and generally they have to use more chemical known as Aluminium Oxide. ve no idea that Adidas use this chemical in their solvent to generate red color in their soya ink since I am not a chemist. But I am sure that red color needs more chemicals rather than black and white colors. Last but not least, there are many imperfections in the environmental strategy of Adidas 2010-2015, 5 years plan. Besides they already terminated 2 processes which is relating with mobility and carbon saving grounding on unacceptable facts in 2012. So, I am sure that Adidas will have to re-engineer again this strategy in 201 6 as they used to do in 2010 to achieve more profit.

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