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SSC Peer Benchmarking Analysis - Athletic Wear Brands

In August 2014, SSC completed a peer benchmarking analysis of the athletic wear industry that examined the sustainability performance of five prominent brands: Adidas, Lululemon, Nike, Puma, and Under Armour. During this process, we focused on six different dimensions of sustainability with four categories as a part of each dimension:

-Governance - Materiality, Ethics, Risk, Communications
-Environment - Energy & Climate, Waste & Recycling, Water, Land Use & Biodiversity
-Workplace - Diversity, Health & Safety, Training & Education, Working Conditions
-Community - Philanthropy, Volunteering, Community Investment, Engagement
-Product - Life Cycle Management, Product Quality, Product Safety, Packaging
-Supply Chain - Materials Stewardship, Green Purchasing, Social Standards, Engagement
Not only did we assign four categories to each dimension, but for thoroughness we applied a three prong analysis to each dimension reviewing policies, programs, and performance to each category.

It is also important to note that SSC relies only on publically available data when conducting a peer benchmarking assessment.

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SSC Peer Benchmarking Analysis - Athletic Wear Brands

  1. 1. PEER BENCHMARKING ANALYSIS ATHLETIC WEAR BRANDS AUGUST 2014
  2. 2. PEER BENCHMARKING – ATHLETIC BRANDS In August 2014, SSC completed a peer benchmarking analysis that examined the sustainability performance of five different athletic wear brands:  Adidas  Lululemon  Nike  Puma  Under Armour These five companies generate over $50 billion in revenue each year with Nike pulling in the most at $25 billion. 140 120 100 80 60 40 20 0 Summary of Peer Performance Overall by Dimension Maximum Total Score = 144 Nike Adidas Puma Lululemon Under Armour Governance Environment Workplace Community Product Supply Chain
  3. 3. OVERVIEW: ATHLETIC WEAR PEER BENCHMARKING PROCESS SSC's peer benchmarking focuses on six different dimensions of sustainability with four categories as a part of each dimension: Governance • Materiality • Ethics • Risk • Communications Environment • Energy & Climate • Waste & Recycling • Water • Land Use & Biodiversity Workplace • Diversity • Health & Safety • Training & Education • Working Conditions Community • Philanthropy • Volunteering • Community Investment • Engagement Product • Life Cycle Management • Product Quality • Product Safety • Packaging Supply Chain • Materials Stewardship • Green Purchasing • Social Standards • Engagement Not only did we assign four categories to each dimension, but for thoroughness we applied a three prong analysis to each dimension reviewing policies, programs, and performance.
  4. 4. THE 3 PRONG ANALYSIS 1) Policies: Companies with strong policies have clear expectations for their corporation, their leaders, their employees, and their suppliers. 2) Programs: Companies with robust programs have sustainability activities integrated across the entire corporate structure and embedded into key functions (like product development). 3) Performance: Companies with high performance marks have data and metrics to back up their claims and measure progress over time—as well as quantitative goals for the future. In the athletic wear industry, companies are generally solid on sustainability policies, but programs and performance vary dramatically. 140 120 100 80 60 40 20 0 Summary of Peer Performance Overall by Aspect Maximum Total Score = 144 Nike Adidas Puma Lululemon Under Armour Policy Programs Performance
  5. 5. DIMENSION #1: GOVERNANCE The highest governance scores went to the large companies, who generally face higher pressure to disclose issues like sustainability risk and corporate ethics. Sustainability-related communications proved to be a strong point among all companies, with everyone at least having a page on their website dedicated to sustainability. Materiality is still an emerging issue, with two companies receiving no points in this area. 25 20 15 10 5 0 Dimension - Governance Maximum Total Score = 24 Nike Adidas Puma Lululemon Under Armour Communications Risk Ethics Materiality
  6. 6. DIMENSION #2: ENVIRONMENT In the environment dimension, energy & climate change and water are the leading categories with all five companies receiving points in each. For the companies that addressed waste & recycling, they reported strong, well-rounded plans that focused on policies, programs, and performance. Land use & biodiversity was the weakest dimension, with only two companies (briefly) addressing the issue. 25 20 15 10 5 0 Dimension - Environment Maximum Total Score = 24 Nike Adidas Puma Lululemon Under Armour Energy & Climate Change Waste & Recycling Water Land Use & Biodiversity
  7. 7. DIMENSION #3: WORKPLACE The workplace dimension is split into two groups: the top dogs and the laggards. Nike, Adidas, and Puma are all leading the way in this dimension. With strong results in the diversity, health & safety, and training & education categories, along with points in working conditions as well, these companies demonstrating workplace excellence. Under Armour and Lululemon are on the lower end of the spectrum, with the latter only briefly mentioning working conditions on their website. 25 20 15 10 5 0 Dimension - Workplace Maximum Total Score = 24 Nike Adidas Puma Lululemon Under Armour Diversity Health & Safety Training & Education Working Conditions
  8. 8. DIMENSION #4: COMMUNITY Dimension - Community It’s unanimous: philanthropy carries importance in all five companies. Each company has at least a program in place, with many companies having a set policy. Community investment and volunteering are more of a wildcard. Only Nike and Adidas mention both categories, with the remaining three companies addressing at least one of those two categories. But overall, engagement is a category that is only mentioned by two different companies and just briefly, too. 0 25 20 15 10 5 Maximum Total Score = 24 Nike Adidas Puma Lululemon Under Armour Philanthropy Volunteering Community Investment Engagement
  9. 9. DIMENSION #5: PRODUCT The product dimension is the weakest dimension overall. The only category to be address by all four companies was life cycle management. Product safety was either a big hitter (Adidas, Puma) or it was hardly mentioned or not mentioned at all. Only two companies – Nike and Adidas – received four points in all categories. They were also the only companies to report on packaging and product quality. 25 20 15 10 5 0 Dimension - Product Maximum Total Score = 24 Nike Adidas Puma Lululemon Under Armour Life Cycle Management Product Quality Product Safety Packaging
  10. 10. DIMENSION #6: SUPPLY CHAIN The supply chain dimension was strong overall, with each company recording points in the three categories: social standards, engagement, and materials stewardship. While green purchasing is a major theme for many companies, it is not highlighted as it should be and requires a lot of digging through websites to try and find a policy. 25 20 15 10 5 0 Dimension - Supply Chain Maximum Total Score = 24 Nike Adidas Puma Lululemon Under Armour Materials Stewardship Green Purchasing Social Standards Engagement
  11. 11. SUMMARY OF PEER PERFORMANCE 25 20 15 10 5 0 Summary of Peer Performance By Dimension Maximum Total Score = 24 Nike Adidas Puma Lululemon Under Armour Governance Environment Workplace Community Product Supply Chain
  12. 12. TREND ANALYSIS 1. The supply chain and environment dimensions are two of the strongest dimensions across all companies 2. While the workplace dimension is one of the higher-scoring dimensions for the top companies, it is one of the lowest-scoring dimension for the bottom companies 3. There is a significant drop off in points from the top three companies to the bottom two – there is no gradual decline, but rather an obvious decrease in sustainability performance
  13. 13. NOTES AND CAVEATS Makes our lawyers happy!  SSC relies on publically available data for our peer benchmarking process. Even though a company might be doing more with sustainability than meets the eye, if it was not publically available, we did not include that information in our analysis.  This analysis has been prepared in good faith on the basis of information available at the date of publication without any independent verification. Strategic Sustainability Consulting does not guarantee or warrant the accuracy, reliability, completeness or currency of the information in this publication nor its usefulness in achieving any purpose. Readers are responsible for assessing the relevance and accuracy of the content of this publication. SSC will not be liable for any loss, damage, cost or expense incurred or arising by reason of any person using or relying on information in this publication.  Products may be identified by proprietary or trade names to help readers identify particular types of products but this is not, and is not intended to be, an endorsement or recommendation of any product or manufacturer referred to. Other products may perform as well or better than those specifically referred to.
  14. 14. THANK YOU WWW.SUSTAINABILITYCONSULTING.COM INFO@SUSTAINABILITYCONSULTING.COM 1-202-470-3246 Want to see how your company stacks up against its industry peers? Contact us for more information!

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