Bank Sarasin’s Sustainability Spotlight: Progress by sporting goods companies still unsatisfactory26.06.2012
With only three matches left to play, the winner of the European Football Championships 2012 will soon be determined. Just one month later the sporting summer 2012 will be entering its next round with the Olympic Games in London with winners and losers. There are winners and losers among the sporting goods manufacturers in the sustainability rankings compiled by Bank Sarasin & Co. Ltd, too. Although famous brands achieve good ratings, there are still many unanswered questions. Pressure on the sporting goods companies is hardly likely to diminish in the future. Potential for improvement remains correspondingly high.
The current research paper "Sustainability Spotlight" deals with the famous sporting goods companies. Bank Sarasin's sustainability analysts come to the conclusion that, although famous manufacturers achieve good ratings, numerous problems have still not been resolved and have in fact actually only been upstreamed along the supply chain. However, initial progress has been made by the sporting goods companies compared with previous reports by Bank Sarasin published in 2006 and 2008. In the meantime it has become standard practice among the major manufacturers to disclose codes of conduct with social and environmental minimum standards for suppliers. Audits are conducted increasingly in supplier companies. Transparency has also been improved; leading companies now also publish information concerning their supply chains and the results of social audits. The greatest progress has been accomplished for environmental issues (including lower pesticide use, a reduction in water consumption in cotton farming and lower pollution from leather manufacturing).
Gold, silver and bronze for Adidas, Puma and Nike
In Bank Sarasin's sustainability ranking table the three winners are all close – whereby Adidas marginally leads the table. Compared with their competitors, Adidas, Puma and Nike have well developed Supply-Chain-Management systems. Suppliers are bound to extensive environmental and social codes of conduct. Environmental factors are integrated into the product development process. However, there is still scope for improvements with these three companies. The deficits identified within the existing supply chain are anything but overcome. Poor working conditions and human rights violations still exist. The classic problems of forced and child labour have been upstreamed by the first-tier suppliers to other sub-contractors along the supply chain. As a result, the problems have not been solved, but only pushed away and concealed.
Source: Bank Sarasin
Continued need for improvement
Although wages paid have increased in numerous manufacturing countries recent years – in particular in Bangladesh, China and India – these are still often not high enough to cover the workers' basic needs. Above all, the working conditions at the supplier companies within the supply chain have barely improved. This situation can, on the one hand, have consequences for the sporting goods companies' reputations. NGOs disclose these conditions very effectively in the public eye on a regular basis. The poor working conditions can, however, also have a detrimental effect on the product quality and security of supply. Low work satisfaction leads to high absentee levels at the work place, high fluctuation levels, work conflicts and finally also to high defect rates and low productivity.
Sustainability Spotlight "Sporting goods companies: Fair play in supply chains?"
The research paper "Sporting companies: Fair play in supply chains?" (author: Makiko Ashida) is available in German and English free of charge from: email@example.com