AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 Amer Sports sustainability and business
CONTENTS
AMER SPORTS IN BRIEF...... 3 BUSINESS AND STRATEGY...... 4 MANAGING CORPORATE RESPONSIBILITY...... 9 STAKEHOLDERS AND COMMUNITY ENGAGEMENT...... 14 CONSUMERS AND PRODUCTS ...... 18 ENVIRONMENTAL FOOTPRINT...... 20 PEOPLE...... 23 SUPPLY CHAIN...... 28 ECONOMIC IMPACTS ...... 30 ABOUT REPORTING...... 31 GRI INDEX TABLE...... 32
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CONTACT: TEA LINDFORS | MANAGER, CORPORATE RESPONSIBILITY AND COMMUNICATIONS | P. O. BOX 1000 | 00511 HELSINKI | FINLAND | TEL. +358 20 712 2538 | E-MAIL: [email protected]
2 | AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 Amer Sports in brief
Amer Sports in brief
Amer Sports (www.amersports.com) is a sporting goods Amer Sports sells its products to trade customers company with internationally recognized brands, including (including sporting goods chains, specialty retailers, mass Salomon, Wilson, Atomic, Arc’teryx, Mavic, Suunto and Precor. merchants, fitness clubs and distributors) and directly to consumers through brand stores, factory outlets, and The company’s technically advanced sports equipment, e-commerce. In December 2014, the Amer Sports sales footwear and apparel improve performance and increase network covered 34 countries. the enjoyment of sports and outdoor activities. The Group’s business is balanced by its broad portfolio of sports and In 2014, Amer Sports net sales totaled EUR 2,228.7 million. products and a presence in all major markets. Amer At the end of the year, the company’s market capitalization Sports shares are listed on the NASDAQ Helsinki stock was EUR 1,880.7 million and the Group employed 7,630 exchange (AMEAS). people. Currently, the company’s largest geographical markets in terms of sales are the USA, Germany, France, Canada and Japan.
AMER SPORTS BUSINESS SEGMENTS AND BUSINESS AREAS:
Outdoor Ball Sports Fitness • Footwear: Salomon • Individual Ball Sports: Wilson • Fitness: Precor • Apparel: Salomon, Arc’teryx • Team Sports: Wilson, DeMarini, • Winter Sports Equipment: Louisville Slugger Salomon, Atomic • Cycling: Mavic • Sports Instruments: Suunto
More information about the company at www.amersports.com/about-us
MISSION VISION VALUES Amer Sports’ mission is to provide Amer Sports vision is to be the Amer Sports values are everyone from first-time participants industry’s leading sports company, • Determined to win to professional athletes with the fueled by authentic brands that • Team spirit world’s best sports and fitness inspire athletic achievement and • Fair play equipment, footwear and apparel. enjoyment. • Innovation
Read more about Amer Sports’ mission, vision and values at www.amersports.com/about-us/our-business/mission-vision-and-values
AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 | 3 Business and strategy
Business and strategy
The Amer Sports strategy emphasizes faster growth in apparel and footwear, excellence in consumer-centric product creation and brand marketing, and the strengthening of commercial fundamentals through sales and distribution development. The strategic cornerstones of Amer Sports’ development are:
• Clear portfolio roles and business synergies, integrated company • Winning in go-to-market • Faster growth in softgoods • Operational excellence • Winning with consumers
Read more about Amer Sports’ strategy at www.amersports.com/about-us/strategy and about the progress in specific focus areas in Amer Sports Financial Review 2014 on pages 2-3.
KEY FIGURES
FINANCIAL KEY FIGURES
EUR million 2014 2013 Net sales 2,228.7 2,136.5 Gross profit 979.0 932.2 Gross profit, % of net sales 43.9 43.6 EBIT (excl. non-recurring items, NRI) 168.3 154.9 EBIT % excluding non-recurring items 7.6 7.3 Non-recurring items -54.2 - EBIT total 114.1 154.9 Net cash flow after investing activities 53.5 42.5 Net debt/EBITDA excluding non-recurring items 2.0 2.2
EMISSIONS
tCO2 2013 2014 2013 Greenhouse gas emissions, Scope 1 13,420 12,084 Greenhouse gas emissions, Scope 2 20,307 20,888 Greenhouse gas emissions, Scope 3 12,345 13,767*
* Scope 3 - Indirect other: Selected upstream scope 3 gross emissions: business travel (e.g. flights, trains), paper, consumption, waste generated in operations (sent to landfill), water consumption and treatment, and fuel and energy related activities (transmission and distribution).
PERCENTAGE OF PURCHASING VOLUME, AUDITED
% 96.6% Audited factories (Asia, EMEA and Americas)
PERSONNEL BY BUSINESS SEGMENT
Headcount 2014 2013 Outdoor 4,966 4,742 Ball Sports 1,537 1,549 Fitness 932 874 Headquarters and shared services 195 165 7,630 7,330
All financial figures are available in Financial Review 2014 and at www.amersports.com/investors
4 | AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 Business and strategy
Amer Sports’ technically advanced sports equipment, footwear and apparel improve performance and increase the enjoyment of sports and outdoor activities.
AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 | 5 Amer Sports sustainability and business
CEO’S STATEMENT
At Amer Sports, we are dedicated to sports, fitness, and an active outdoor life. We promote active lifestyles and well- being and comply with the laws, regulations as well as safety and quality standards. Even more importantly, we promote “We promote sustainability, sustainability, and we always seek to do the right thing. and we always seek to do The demand from different stakeholders for sustainability the right thing.” reporting is increasing, e.g. the European Parliament and the Council have reached an agreement on an amendment to the existing accounting legislation to improve the transparency of certain large companies on social, environmental and diversity matters. This report assessment and participates in the Investor Carbon is our step toward increased transparency, and we have Disclosure Program (CDP), and in 2014 the company collected highlights of our sustainability effort into this improved both its disclosure score and performance rating report, including the guidelines, policies and actions to in the CDP. which we are committed. Going forward, in line with our company spirit and values, As examples of our major initiatives, at the end of 2014, we continue to strive for ongoing improvement in the Amer Sports’ third-party audits represented 96.6% different areas of sustainability, and our strategy remains of our total purchases in Asia. We also continued the based on what we call our Sustainable Growth Model: development and implementation of our Restricted Annual Growth, Annual Profit Improvement, and Investing Substances list to control hazardous substances used in for the Future. the production. In addition, Amer Sports is a bluesign® system partner, with the high commitment of our Apparel brands to use safe and responsible fabrics. Amer Sports Heikki Takala conducts an annual corporate-wide carbon footprint President & CEO
6 | AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 Business and strategy
“We promote active lifestyles and well- being and comply with the laws, regulations as well as safety and quality standards.”
AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 | 7 Business and strategy
KEY INDUSTRY AND SUSTAINABILITY opportunities based on the fact that populations are growing and their average disposable income and TRENDS standard of living are also expected to increase. These Amer Sports follows industry trends and global all connect to demographic and social change as well as megatrends, such as demographic and social change, health and fitness trends. as will be explained later, as well as climate change and resource scarcity that may have impact on Amer Sports Outdoor pursuits are often family experiences enjoyed by and its brand companies. Sporting goods industry trends participants of all ages regardless of gender. Outdoor is include changes in the demographic structure, and the the largest segment, representing 60% of Amer Sports’ health and fitness and outdoor trends. net sales.
Amer Sports’ internationally recognized brands Salomon, In addition to global megatrends, the outdoor apparel Wilson, Atomic, Arc’teryx, Mavic, Suunto and Precor industry continues to address the broader trend of provide technically advanced sports equipment, footwear, sustainability. Materials quality and ethics have been a apparel and accessories that enable users to improve major focus. Initiatives such as the Sustainable Apparel their performance and increase the enjoyment of sports Coalition, the Zero Discharge of Hazardous Chemicals, and and outdoor activities. With the selection of products the Chemicals Management Working Group have all led and initiatives to promote healthy and active living, Amer major efforts to develop safer materials for use in apparel Sports responds to the health and fitness trend. Amer products. The Amer Sports Apparel category is a member Sports’ products encourage people to exercise to stay of the bluesign® system partner network, which is a healthy throughout their lives. solution for a sustainable textile production. The past year has also seen the emergence of multiple standards for Amer Sports’ goal is to inspire people of all ages to sourcing ethically produced, traceable down. To provide discover the fun of exercise, helping them stay healthy examples of how we are actively involved with surrounding and active throughout their lives. Amer Sports believes communities, please read more on pp. 15-17. in the power of sports to help people stay motivated and achieve more in their lives, even away from their athletic endeavors.
One of the key question is how to help people maintain • DEMOGRAPHIC TREND an active lifestyle and a passion for exercising as sports and exercise are one of the most effective ways to prevent • HEALTH AND FITNESS TREND diseases such as cardiovascular diseases and type two diabetes. One current trend emphasizes both healthier lifestyles and seeking a balance between work and • OUTDOOR-INSPIRED TREND leisure. In developed markets, the average life expectancy is rising. As people in developed markets enjoy a high standard of living, they are more likely to stay active longer and invest in high-quality sporting goods. RISKS AND OPPORTUNITIES RELATED TO In emerging markets Amer Sports sees growth CORPORATE SUSTAINABILITY
Amer Sports has identified certain risks and uncertainties in its risk mapping process and those that are related to With the selection of corporate responsibility are described below. products and initiatives Amer Sports sources a significant proportion of its to promote healthy and products from suppliers located throughout Asia, which active living, Amer Sports exposes it to the political, economic, and regulatory conditions in that area as well as to a variety of local responds to the health and business and labor practice issues. Amer Sports implements its business strategy in a responsible manner. fitness trend. Key elements in this effort include:
8 | AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 Managing corporate responsibility
• Amer Sports is committed to the following policies that Amer Sports can be affected by unusual or severe guide all of its actions and operations: the Company’s weather conditions and climate change is anticipated to Code of Conduct, the Ethical Policy for Suppliers and increase the amount of unusual weather conditions. For the Social Compliance Policy (See p. 12). example, the sales of winter sports equipment is affected • The Ethical Policy is embedded into the supplier by snow conditions and Amer Sports has increased its agreement that is signed by suppliers to confirm their spring/summer product ranges, as well as its focus on compliance with the policy. footwear and apparel, which will balance its product • Amer Sports has an extensive third party audit program. portfolio and thus also decrease its dependency on • Social compliance audits are conducted by winter and weather conditions. Amer Sports participates internationally recognized companies, such as BV and annually in the Carbon Disclosure Project (CDP) to UL Responsible Sourcing Inc. gain a better understanding about its environmental • Amer Sports CSR team in Hong Kong is trained on impact from carbon emissions and achieve cost savings SA8000 social and environmental system program, by reducing carbon emissions and also become more which has equipped them with essential skills to work efficient. “Operational Excellence” is one of the strategic with suppliers. cornerstones as the company focuses on improving its operational efficiency and has initiated several projects in Since 2008, Amer Sports has conducted third party audits this area. In its own operations Amer Sports has a Lean to help our sourcing partners comply with industry program in place at every factory and distribution center standards and Amer Sports’ expectations. The audit to drive operational excellence (p. 22). In Winter Sports process is enforced by factory visits and pre-audit training Equipment, Amer Sports strives for better operational sessions with factory management to assist them in efficiency and flexibility in production, as well as a meeting the company standards. In Asia, the number of reduction in the complexity of raw materials. audits conducted until the end of 2014 represented 97% of total purchases. Read more at www.amersports.com/investors/ governance/risk-management
Managing corporate responsibility
In this report, Amer Sports provides an overview of the CORPORATE RESPONSIBILITY ORGANIZATION policies, guidelines and processes that are common to all of its brands and companies. All brands have some Amer Sports’ corporate responsibility has several group distinct characteristics that are opened up by providing guidelines and policies that steer its actions. Each some case examples. Amer Sports sourcing and supply brand, subsidiary and category is responsible for their chain management serves all brands and the Asian implementation as defined in the policies. Amer Sports’ Sourcing Office in Hong Kong is responsible for the sourcing and supply chain management are integrated social compliance of suppliers, vendor qualification, and have a common organization that serves all brands. product industrialization, contract management, price Each Amer Sports business unit reports to its respective negotiations, procurement process optimization and management team on matters of corporate responsibility export administration. Environmental guidelines provide and the Amer Sports Board of Directors reviews the areas common instructions to all the brands, and each brand related to corporate responsibility in its meetings. is responsible for applying these guidelines in its own operations. The Amer Sports Board of Directors has an Amer Sports brand companies have Green Committees annual review on corporate responsibility and regularly that are dedicated to the development of environmental reviews the areas related to corporate responsibility in its issues, and there is a company-wide network of corporate meetings if needed. responsibility champions representing Amer Sports’ main brands, regions and categories.
AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 | 9 Managing corporate responsibility
Amer Sports’ sustainability communication and its material aspects that were identified as important to development is organized under the Manager of Corporate stakeholders and having the biggest impact on the company. Responsibility and Communications, a part of the Amer These include mapping stakeholder expectations on Amer Sports Financial organization reporting to the Director Sports corporate responsibility to create a base for the of Corporate Communications and Investor Relations. indicators, structure and content of the current responsibility The role of corporate responsibility communication report. This was done by reviewing all the available material includes the coordination, management, development and the company has received about stakeholders’ expectations, communication related to sustainability. Furthermore, it including queries and ratings, analyzing relevant sector includes the coordination of the company-wide network media sources, and conducting an internal survey that was of CR champions representing Amer Sports’ main brands, tailored to people working close to customers, investor regions and categories. relations, human resources, and members of the corporate responsibility network. In addition, online workshops were SUSTAINABILITY IMPACTS AND FOCUS arranged. AREAS The expectations concerning the implementation of Amer Amer Sports focus areas in Corporate Responsibility Sports’ corporate responsibility principles in its business Amer Sports focus areas in corporate responsibility have operations can be divided in social and environmental been identified in the materiality assessment conducted areas, the key focus being on social issues and on supply in 2013. Amer Sports has several initiatives to formulate chain management. The key areas were:
EXAMPLE: IMPACTS IN THE AMER SPORTS VALUE CHAIN
• Impacts from raw material supply PROCUREMENT / • Impacts on a local level (economic, environmental & social) RAW MATERIALS • Raw material availability: steel, aluminum, rubber and oil-based materials
• Location of production facilities • Human rights PRODUCTION • Labour • Environmental aspects in production • Design & Innovation
• Impacts from transporting goods • Operational excellence LOGISTICS • Logistics optimization
• Consumer trends MARKETING & • Promoting healthy lifestyle & sports • Promoting outdoor activities > indirect impacts SALES
• Impacts of product usage CUSTOMERS / • Customer trends • Safe usage of products PRODUCT USAGE
• Product end-of-life impacts RECYCLING/ • Impact mitigation (e.g. waste) REUSE
10 | AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 Managing corporate responsibility
MATERIALITY MATRIX
HEALTH AND SAFETY OF DURABILITY OF PRODUCTS PRODUCTS MINIMIZING AND PRODUCT ENVIRONMENTAL COMPLIANCE IMPACTS OF CR PRODUCTS REQUIREMENTS FOR OUR SUPPLIERS MAINTAINING ACTIVE AND DEVELOPING ENVIRONMENTAL EMPLOYEE MANAGEMENT OF COMPETENCE
IMPORTANCE FOR STAKEHOLDERS FOR IMPORTANCE OUR OPERATIONS* PROMOTING HEALTHY LIVING
IMPACT ON THE COMPANY
Environmental Social * Minimizing energy consumption and emissions Minimizing waste
materials, minimizing the environmental impact of ENVIRONMENTAL products, active environmental management, and • Durability of products minimizing waste, energy consumption and emissions. • Active environmental management of operations • Minimizing environmental impacts of products CORPORATE RESPONSIBILITY STRATEGY The trend of healthy living offers Amer Sports many SOCIAL opportunities and shared value with the surrounding • CR requirements for the suppliers society as sports and exercise is at the core of Amer Sports’ • Health and safety of products and product compliance business. Sports can help people stay motivated and achieve • Maintaining and developing employee competence more in their lives, even beyond their athletic endeavors.
Amer Sports’ corporate responsibility aims to ensure These key areas contained several aspects that relate social compliance in the supply chain, reduce the to either the social or environmental area. The product environmental impacts of operations by using methods related aspects included the health and safety of products, that are both responsible and economically sound, product compliance and performance beyond customer ensure the quality and safety of products, make products and consumer requirements. The social aspects included durable while improving efficiency, and, naturally, with responsible procurement practices, promoting healthy the actions related to these areas, aims to respond to the living, requirements for suppliers and monitoring as well expectations of the stakeholders. The key elements and as maintaining and developing employee competence. objectives of the corporate responsibility strategy are: Environmentally central aspects included responsible
Amer Sports aims to ensure social compliance in the supply chain and reduce the environmental impacts of operations by using methods that are both responsible and economically sound.
AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 | 11 Managing corporate responsibility
• Promoting an active lifestyle & well-being commitment to reduce environmental impact, legal • Compliance with legal and regulatory requirements, compliance, accurate records, the avoidance of conflict of and safety, quality and ethical standards interest situations, the refusal to engage in bribery and • Minimizing waste corruption and in violations of intellectual property or • Striving for continuous improvement confidentiality obligations. • Communicating about our actions in this area
EDUCATED TO EMPLOYEES POLICIES AND GUIDELINES Amer Sports Code of Conduct was approved by the Amer Sports has several group-wide policies and Board of Directors at the end of 2010 and launched guidelines to steer its work. These include the Code and communicated to the employees in 2011. of Conduct, Ethical Policy, Social Compliance Policy, All employees were asked to conduct a Code of Restricted Substances List (RSL), and Environmental Conduct test utilizing a web-based e-learning tool. Guidelines. Read more at www.amersports.com/ 78% of all employees conducted the test by the responsibility/guidelines-and-policies end of 2012. During 2013 and 2014 the e-learning test was conducted by 376 new employees as part CODE OF CONDUCT of their onboarding process. The Code of Conduct is available in 13 languages. In 2013, an additional The Amer Sports Code of Conduct (CoC) defines the major competition compliance training was arranged for principles of its business conduct, based on Amer Sports salespeople. values. The content of the CoC focuses on the promises for consumers, shareholders and business partners Amer Sports has an internal whistleblower program and refers to International Labour Organization (ILO) to report misconduct, allowing for anonymous standards and the United Nations’ Universal Declaration reporting. These reports are treated confidentially, on Human Rights. CoC aspects include product safety, including a non-retaliation policy. Reporting on responsible marketing, accurate and transparent breaches are handled by the Group’s General Counsel. information, a healthy and safe workplace for employees,
AMER SPORTS ETHICAL POLICY and to be prepared to take immediate and thorough steps in cases where ethical performance is questioned. Amer Sports Ethical Policy sets out the core values of the sourcing operations. The company expects its suppliers SOCIAL COMPLIANCE POLICY to operate according to the principles in its Ethical Policy. Amer Sports expects its sourcing partners to respect In addition to the Ethical Policy, Amer Sports has a Social human rights in the spirit of internationally recognized Compliance Policy which provides suppliers with detailed social and ethical standards, including International information on how Amer Sports implements the supplier Labour Organization (ILO) Standards and the United monitoring program as well as requirements that include Nations’ Universal Declaration on Human Rights. but are not limited to the following issues: monitoring and documentation, child labor, forced labor, migrant labor, The Ethical Policy is available in 25 languages to ensure compensation and benefits, working hours, health and that supplier employees can familiarize themselves with safety, environmental and chemical safety, safe disposal the content of it in their local languages. of broken needles, discrimination, disciplinary practices, harassment and abuse, freedom of association, grievance The ethical standards contained in the policy are also procedure and sub-contracting policy. used as a tool to assist the company in selecting and retaining its suppliers. For instance, the Amer Sports AMER SPORTS RESTRICTED SUBSTANCES Ethical Policy prohibits use of child or forced labor, allows workers’ freedom of association and the right to collective LIST (RSL) bargaining, and forbids discrimination in employment and The RSL list defines Amer Sports guidelines for controlling provides employees with a safe and healthy workplace. and monitoring hazardous substances in its products. The The Ethical Policy requires suppliers to further monitor purpose of these guidelines is to ensure that the materials, the ethical performance of their suppliers and contractors components and finished products supplied to Amer Sports
12 | AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 Managing corporate responsibility
or for Amer Sports’ business comply with local laws and regulations regarding toxicology, the environment, and INNOVATIVE WASTE MANAGEMENT IN product safety. In addition, its purpose is to ensure that ALTENMARKT suppliers do not intentionally use the substances listed in the The Amer Sports Winter Sports Equipment facility RSL, comply with best practices and industry standards, and in Altenmarkt, Austria received recognition for the aim to improve the environmental impact of the materials efficient management of its environmental aspects, that they supply. Amer Sports RSL covers notably REACH, including waste management, awarded by the CPSIA and RoHs legislation. Amer Sports has developed Austrian Federal Ministry of Agriculture, Forestry, specific RSL guidelines to the Footwear category and Environment and Water Management (BMLFUW) is in the process of developing guidelines for the Apparel and the Austrian Water and Waste Management category for controlling and monitoring of hazardous Association (ÖWAV)) for the material recycling of substances in our products. production waste in 2014. For instance: the facility receives all its thermal energy from the power ENVIRONMENTAL GUIDELINES plant nearby which is 100% based on biomass and separates wood chips from the other exhaust In the Amer Sports Environmental guidelines, the company materials left over from the manufacturing process commits to reducing the environmental impact of its in order to make them recyclable or burnable for products and operations through the use of methods that are other power plants. both environmentally responsible and economically sound. Amer Sports strives to continuously improve its performance and assess the environmental effects of its decisions. It aims to promote and maintain environmentally responsible PRECOR MANUFACTURING practices that are beneficial to customers, consumers, FACILITY HAS LEED GOLD STATUS employees and the communities in which its companies Precor’s strength equipment operate. As environmental initiatives are brand-led, here are manufacturing facility in North Carolina has LEED some examples of these implementations: (Leadership in Energy and Environmental Design) (gold status) for Commercial Interiors. It has been operational since early 2010, and it has a reduced PRECOR ENVIRONMENTAL MANAGEMENT energy usage of 40–50 percent compared to the POLICY previous facility. The company worked together Precor has an Environmental Management Policy with the architects, developers, and contractors to statement that has established objectives to ensure the highest possible energy conservation in identify the environmental aspects and significant the new facility. impacts of its business, expanding its recycling program, leveraging innovative repurposing programs and achieving a zero landfill status by 2017, as well as the reuse of steel and aluminum in AMER SPORTS HQ AND AMER SPORTS the production of machined components. FINLAND PREMISES APPLY FOR BREEAM CERTIFICATION The Amer Sports HQ and Amer Sports Finland sales company moved to new premises SUUNTO ISO 14001 ENVIRONMENTAL during 2014. The building has been renovated MANAGEMENT SYSTEM by preserving the old one, and it respects Suunto received the ISO 14001 certificate in 2013 environmental values in many ways. The renovation and it is committed to preserving the environment work has been assessed against BREEAM through the responsible design, manufacturing and (Building Research Establishment Environmental delivery of high quality sports watches, instruments Assessment Method) certification, and it it reaches and services to outdoor and diving enthusiasts. the Very Good level, taking into account several The principles prefer environmentally sustainable environmental aspects of the building, such as materials and suppliers, efficiently reducing waste landscape and ecology, pollution, materials, and recycling, optimizing the supply chain and energy, waste, water and transport. saving energy in all of its operations. In 2014, Suunto held environmental training, and the topics covered efficient recycling and saving energy.
AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 | 13 Stakeholder and community engagement
Stakeholder and community engagement
Amer Sports key corporate responsibility stakeholders Sports and its brand companies have received several were identified when the first assessment for the enquiries related to corporate responsibility and these materiality matrix was conducted in 2013. The key enquiries have been collected and assessed for further stakeholders are presented in the chart below. Amer actions.
STAKEHOLDER ENGAGEMENT
Stakeholder Actions and responses Engagement activities Identified issues group resulting from engagement
Customers • Customer enquiries • Customer survey results, Amer Sports has renewed its • Daily operations and identified issues e.g. relating Ethical Policy in 2013. contacts products, group or brand To ensure the product • Feedback through daily related sustainability policy compliance, Amer Sports has interactions issues, customer requirements implemented its Restricted • Customer interviews and and expectations. Substances List to its suppliers. discussions
Investors • Roadshows • Interest in the reporting Amer Sports started to prepare • AGM • Interest in the commitment to the sustainability reporting. • Investor meetings multinational guidelines Amer Sports has explored the • ESG assessment reports alternatives for the commitment to the guidelines.
Personnel • Employee representation • Issues raised by employees Amer Sports has organized (committees) through various channels, participation in special days • Employee surveys e.g. regarding occupational involving personnel. • Informal forums and well-being, management and meetings remuneration. • Performance and development discussions • Training sessions
Suppliers • Daily contacts and • Problems within the supply Amer Sports has arranged meetings chain, e.g. HR issues, audit training on HR issues as well • Supplier guidance and results, streamlining of the as LEAN production training for policies supply chain, supply chain selected suppliers. Amer Sports has renewed its Ethical Policy • Audits collaboration needs. and implemented the Restricted • Membership in industry Substances List. organisations
Authorities • Regular contacts with the • E.g breaches of laws and Amer Sports started internal relevant authorities regulations, possible findings projects to prepare non-financial • Development actions from required audits, and reporting, e.g. identified its towards authorities legislative development. materiality matrix.
NGO’s • Regular meetings with • What issues concern NGOs, Amer Sports started internal representatives e.g. usage of specific projects to prepare non-financial • Common development materials, energy and water reporting, e.g. identified its projects consumption, and issues at materiality matrix. Amer Sports has renewed its production sites. Ethical Policy and implemented the Restricted Substances List
14 | AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 Stakeholder and community engagement
MEMBERSHIPS IN INDUSTRY MEMBERSHIPS TO IMPROVE WORKING COLLABORATION CONDITIONS Amer Sports and its brand companies participate in Fair Labour Association several industry-wide initiatives, including: Wilson is a category licensee B member of the Fair Labour Association. As Wilson’s parent company, Amer Sports is also monitored by FLA in its compliance system and an FLA representative reviews Amer Sports CSR monitoring system and how Amer Sports fulfills their criteria.
International Labour Organization: Better Work in Cambodia Since 2013, Amer Sports has engaged with the International Amer Sports and its brands participate actively in the Labour Organization’s (ILO) Better Work (BW) program conversation and development within the industry. in Cambodia. Amer Sports is a buyer participant of the Salomon and Arc’teryx are members of the European BW’s country program – Better Factory Cambodia (BFC) Outdoor Group and participate in its Sustainability working and can access the BW’s assessment and progress report group as well as its Sustainability Advisory Council. at their online portal. All assessments are conducted in compliance with equivalent national laws and international Amer Sports Winter and Outdoor located in Utah, USA standards with guidance on interpretation from the and Arc’teryx are members of the Outdoor Industry relevant national Ministries and the ILO. Amer Sports also Association (OIA), a trade association for companies in participates in the buyers’ forums to engage with Better the outdoor recreation business that provides services Work on social audit issues. Better Work is a well-recognized for manufacturers, distributors, suppliers, sales non-governmental organization (NGO) in the industry with representatives and retailers in the outdoor industry. many international buyers engaged in the program. Some of the key issues shared at the OIA are restricted substances used in apparel products and climate change. REDUCE CARBON EMISSIONS The OIA works to raise industry standards and represent member interests in the legislative/regulatory process, among other things.
A group-wide initiative: reporting to Carbon Disclosure Project (CDP) Amer Sports participates in environmental initiatives and is committed to reducing the environmental impact of Outdoor Sports Valley its operations through the use of methods that are both Salomon is one of the founding members of the responsible and economically sound. Amer Sports has Outdoor Sports Valley (OSV), a French Outdoor Industry established an ongoing corporate-wide process to evaluate Organization, actively cooperating together with other its annual carbon emissions and annually participates in the outdoor brands in several environmental initiatives, Carbon Disclosure Project (www.cdp.net) by disclosing its such as a common repair center for apparel. In addition, carbon emissions concerning its own operations. In 2014, OSV also develops environmental actions in Annecy, Amer Sports scored 84 disclosure points and earned a C France, for instance, when organizing events. Salomon as a performance rate. The annual global carbon footprint focuses on several aspects to make these events includes data on energy, travel, waste, paper, refrigerants more environmentally-friendly in order for them to be and also water. considered eco-events. Climate Alliance The “Innovation & Sustainable Development” committee Atomic is a member of the Climate Alliance, a European of the OSV gathers the actions to encourage projects of network of local authorities committed to the protection innovation and sustainable development, and fosters of the world’s climate. As a sports brand with roots in interaction. Since 2012, OSV has been widening its network winter sports, Atomic values the work towards preserving of scientific and technical structures in order to encourage glaciers and cold winters. The Climate Alliance’s European innovation within the outdoor industry. Secretariat, its Brussels Office and national coordination offices support the member cities and municipalities
AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 | 15 Stakeholder and community engagement
in their endeavor to protect global climate. They make • Several recognitions for Precor: recommendations, provide aid and tools for local climate -- King County (Washington State) “Distinguished change policies (e.g. local climate plans, individual Business in the Green” Award, King County themes and measures, CO2 monitoring, etc.). Industrial Waste “Gold Compliance” Award, King County “Model Metal Working Fluid Management Sustainable Ogden Program” designation Amer Sports Winter and Outdoor is a member of the -- Washington State Department of Ecology Metal Mayor’s Sustainable Ogden Committee. The major focus of Machining Sector “Best Practice” recognition, the committee is to reduce carbon emissions and improve Washington State Labor & Industries Model the air quality in Utah’s high adventure recreation capital. Ergonomic program “Ergonomics-in-Action” award
EAU, NEIGE & GLACE sous l’égide de la fondation de France SALOMON FOUNDATION Fondation Eau, Neige & Glace to preserve water Since 1999, the Salomon foundation has Salomon is a member of Fondation Eau, Neige & Glace. worked to facilitate the daily lives and The foundation was established in 2009 to improve the social and professional reintegration of management of mountain water resources. athletes and mountain workers who are physically disabled due an accident or illness. It is the Salomon Foundation’s way of thanking mountain professionals and athletes for their contributions to improving sports equipment and facilitating sporting activities. http://www.fondation-salomon.org Mountain Riders Salomon is a member of Mountain Riders, a French non-profit organization, which aims to raise awareness on environmental issues and promote sustainable COMMUTING WITH development in the mountains. LESS CO2 Salomon cooperates with Mouv’Eco, an association consisting of five other companies located in the area European Outdoor Conservation Association (EOCA) of Annecy, close to the Salomon and Mavic offices. Salomon is a member of the European Outdoor The aim is to encourage employee commuting Conservation Association, a group of businesses in the with less CO2 when travelling between home and European outdoor industry that have come together to workplace. Mouv’Eco organizes three events every raise funds to put directly into conservation projects year and these events may include initiatives such worldwide - to give back to the great outdoors. Read more as maintenance of bicycles, exhibition of electrical at www.outdoorconservation.eu vehicles and explaining their advantages, promoting the use of public transport and car sharing. SUSTAINABILITY INDICES AND AWARDS
• Amer Sports is included in the OMX GES Sustainability in Finland index and part of the Kempen SRI Universe • Amer Sports participates annually in the Dow Jones Sustainability Index assessment • Arc’teryx received a recognition as one of Canada’s Greenest Employers due to its active participation in the annual Bike to Work Week and Commuter Challenge
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PROMOTING SPORTS AND HEALTH
WILSON AND PERSONAL HEALTH AMER SPORTS HQ AND LIIKE TO INVESTMENT TODAY INCREASE SCHOOL ATTENDANCE Personal Health Investment Today THROUGH SPORTS (PHIT) is a cause and campaign dedicated to Amer Sports cooperates with LiiKe ry, a increasing physical activity and fitness to improve Finnish non-governmental organization, to the health of America. PHIT American was increase school attendance through sports. launched in 2013 with the support of 100 companies and organizations working together toward this The goal of the cooperation is to develop primary one goal. Wilson has provided expertise and education, gender equality, health, school attendance financial support to PHIT to help subsidize its and increased opportunities for secondary education in school-based programs designed to increase the Tanzania through sports. In 2014 Amer Sports and LiiKe physical activities offer to children. continued their seventh year of developing sports and education in Tanzania. Read more at www.liike.fi/en
PRECOR CARES PROGRAM FOR THE YMCA SPORTS AFTER SCHOOL LESSONS At Precor, we believe that tomorrow Amer Sports participates in supporting will be even better because of what we do today. a Finnish non-profit organization called Our fitness equipment - from the first Low Impact WAU by donating uniforms for sports Treadmill, which was introduced in 1989, to the first instructors. WAU dedicates to arrange sports and Elliptical Fitness CrosstrainerTM (EFX®] introduced exercise programs to school children, making sure in 1995, to the first Adaptive Motion Trainer® (AMT®), that all school children can afford enjoying sports and which debuted in 2007 - has enabled thousands of make it feasible at schools before or after lessons. individuals to pursue a healthier tomorrow.
Precor aims to enable meaningful change in people’s lives through physical fitness, which aligns perfectly WILSON AND THE BREAST with the YMCA’s commitment to strengthening CANCER RESEARCH communities through youth development, healthy FOUNDATION living and social responsibility. That is why we Wilson is the Official Sporting Goods Equipment support the YMCA through the Precor Cares program. and Apparel Sponsor of the Breast Cancer Research Foundation® (BCRF). For more than 17 years, Wilson Since 2012, Precor Cares has helped to advance the and BCRF have worked together to raise awareness YMCA’s mission of improving the health and wellness of breast cancer globally, and raise funds to support of communities across the United States. In 2014 cutting-edge research. Wilson is specifically funding Precor raised over $150,000 in grants that will be research on how nutrition and exercise affect breast awarded to local YMCAs across the country to support cancer prevention and development. the implementation of the YMCA’s Healthy Eating and Physical Activity (HEPA) standards. In 2004, Wilson developed the HOPE line as an extension of this partnership. Over the years, the HOPE line has grown to include men and women’s products, all of which feature the BCRF Pink Ribbon to continually grow consumer awareness.
To date, Wilson has donated nearly $3 million to fund BCRF’s global breast cancer research efforts Read more examples at www.amersports.com/ and support their mission of finding a cure. responsibility/social/citizenship-and-community
AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 | 17 Consumers and products
Consumers and products
Amer Sports’ strategy emphasizes excellence in Therefore, Amer Sports requires that its business consumer-centric product creation. Through continuous partners will make commitments on respecting and research and development, Amer Sports seeks to develop adhering to its policies and ensure that materials, new and better sporting goods that appeal to both components and finished products supplied to Amer consumers and trade customers. In line with Amer Sports’ Sports or for its business are in full compliance with local strategy, the company wants to provide consumers with laws and regulations regarding toxicology, environment head-to-toe solutions “surrounding the consumer”. and product safety.
To ensure product compliance, Amer Sports and all In addition, when sourcing the materials from animals its brands are dedicated to the company’s Restricted Amer Sports does not accept any unnecessary pain, Substances List (RSL) policy, which has been suffering or injury caused to these animals, whether implemented throughout to the supply chain in 2013. Amer wild or domesticated, i.e. farmed. Additionally Amer Sports RSL 01 contains the following environmentally Sports does not source material from any endangered or relevant information and requirements for the suppliers: threatened species. Amer Sports will accept only leather or leather parts that originate solely from animals which As a company, Amer Sports implements its business have been used for meat production in its products; wool strategy in an ethically, socially and environmentally or wool parts that originate solely from sheep which responsible manner and ensures that its products are have not been subject to mulesing; and down that has innovative and safe. Amer Sports chooses business partners been plucked from birds that are already dead, bred and who are committed to fair and sustainable business. slaughtered primarily for animal production.
APPAREL AND GEAR CATEGORY ARC’TERYX AND PRODUCT DURABILITY Amer Sports Apparel and Gear Category is involved Lifecycle thinking guides our approach to designing in several industry initiatives focused on materials the world’s most durable outdoor gear. Arc’teryx compliance and ethics. First of all, we actively strives to make the world’s best performing, participate on the steering committee of the longest lasting outdoor gear. Durability is the Chemicals Management Working Group. At the cornerstone of our design philosophy. Lifecycle product level, we continue to be a bluesign® system thinking guides our approach to product durability. partner and use this platform of inputs screening We look at our operations as a system, spanning in our materials compliance program. The apparel the creation of the materials we source, the brands have also begun sourcing down that is certified production processes used in manufacturing, the certified according to ethical production standards, distribution steps in our supply chain, stores and primarily via the Responsible Down Standard retail operations, product use and care, and end- managed by the Textile Exchange. In addition, the of-life. We seek to influence this cycle to reduce apparel brands have begun evaluating the Higg Index, energy, resource and material consumption while an industry sustainability metrics platform developed enhancing product quality. Extending the useful life by the Sustainable Apparel Coalition, using the index of the product effectively diminishes the impacts to assess internal practices and facilities and to associated with production by spreading them benchmark against industry leaders. over more years. External Life Cycle Assessment (LCA) studies support this conclusion, finding that product and transportation of a representative garment comprise approximately 65% of the environmental impact over the garment’s useable The bluesign® system is a solution for sustainable textile production life, and that extending garment lifetime had a and it eliminates harmful substances right from the beginning of the manufacturing process and sets and controls standards for greater effect than seeking to reduce the impacts environmentally friendlier and safe production. associated with the production sub-processes.
18 | AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 Our stakeholder and community engagement
Through continuous research and development, Amer Sports seeks to develop new and better sporting goods that appeal to both consumers and trade customers.
AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 | 19 Environmental footprint
SUUNTO AND CONSUMER ELECTRONICS QUALITY CONTROL We emphasize the importance of creating durable Quality specifications and quality assurance are of products and solutions that provide authentic prime importance to Amer Sports production processes. benefits for their users. We strive to design products Products are subjected to quality control tests before that will last for several years of outdoor use, and production commences and also before they are sold extend the product lifetime by providing an extensive to customers. Quality control tests are also carried out repair service even after the warranty period. during the production processes to ensure that the items High quality, repairability and minimized power meet the Group’s quality requirements. consumption are important drivers for our product design. In addition to product repairs, we also support In general, quality control is handled by Amer Sports’ own our customers via email, phone and in social media to quality control personnel who carry out extensive testing ensure that they get the full benefits of our solutions. and inspection procedures. The Group also requires its third-party suppliers to arrange for specific tests to be performed at each manufacturing site. In Asia, the company’s sourcing office subjects outsourced production FITNESS – TAKING CARE OF CUSTOMER SERVICE to close supervision to ensure that all products and • 97% of Precor service requests are dispatched components meet the specifications and quality control within 24 hours. standards of the respective brand. Should items be • 85% of service issues are resolved within 72 hours. returned or recalled, the products involved are analyzed • Off-the-shelf part availability is 97%. and investigated and Amer Sports liaises with third- • Over 90% of our customers rated their service party suppliers to ensure that related problems do not experience as good, better, or excellent. subsequently occur. • Our cardio and strength products have a historic uptime of 96%. In most countries in which Amer Sports operates, the Group companies provide product warranties based on local legislation. The scope and terms of each warranty varies in different geographic markets and product FSC CERTIFIED WOOD categories. One of the key raw materials of skis is wood and most of Amer Sports wood originates from Germany, Austria, Suunto has ISO 9001 certified Quality Management system. and Switzerland. All the key suppliers are FSC (Forest Stewardship Council) certified.
Environmental footprint
To guide its Group-wide actions, Amer Sports has created economically sound. In addition, Amer Sports brands are environmental guidelines to outline the commitment responsible for their environmental actions, based on the to reduce the environmental impacts of operations common environmental guidelines. through the use of methods that are both responsible and
Unit 2014 2013 Comments Direct energy consumption Non-renewable Fuel oil kWh 1,143,310 1,776,005 Natural gas kWh 38,300,113 35,089,772
20 | AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 Environmental footprint
Unit 2014 2013 Comments Renewable Wood biomass kWh 6,029,608 7,836,000 Indirect energy consumption Electricity kWh 52,145,765 55,181,773 Heating kWh 2,740,262 3,168,357 Cooling kWh 0 0 Steam kWh 0 0
Total energy consumption within the kWh 100,359,058 103,051,907 organization Total non-renewable energy kWh 85,706,639 78,986,900 Total renewable energy kWh 14,717,411 19,524,500 Reduction of energy consumption kWh n/a n/a
Emissions Greenhouse gas emissions, Scope 1 tCO2 13,420 12,084 Greenhouse gas emissions, Scope 2 tCO2 20,307 20,888 The scope 3 includes categories of business travel, purchased goods Greenhouse gas emissions, Scope 3 tCO2 12,345 13,767 and services (paper and water), fuel- and energy- related activities, and waste generated in operations.
Waste Recycling & reuse t 5,128 5,094 Composting t 34 50 Incineration (mass burn) t 861 572 Landfill t 2,086 2,136 Hazardous waste t n/a n/a Total amount of waste t 8,109 7,852 Waste recycled or reused % 63% 65%
ENERGY AND CLIMATE sources and estimate how to cut down emissions and Amer Sports annually assesses its corporate-wide carbon improve efficiency. Amer Sports has participated in the footprint measurement and participates in the Carbon CDP since 2011 and has been able to achieve steady Disclosure Program (www.cdp.net). By participating in improvement both in disclosure score and performance CDP’s Climate Change program, companies worldwide rating. In 2014, Amer Sports disclosure score was 84 and can gain more understanding on their carbon emission performance rating achieved a level C.
Intensity Ratios 2009 2010 2011 2012 2013 2014 (Gross Emissions) Emissions per €m 27.61 25.42 24.55 22.61 21.92 XX.00 Revenue (tCO2e/€m)
AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 | 21 Environmental footprint
Amer Sports has several carbon reduction initiatives and, as a result of these efforts, Amer Sports’ carbon intensity The Amer Sports Winter Sports Equipment facility has fallen every year since 2009. In practice this means in Altenmarkt was awarded for its exemplary waste that the operations have become more efficient. management by the Austrian Federal Ministry of Agriculture, Forestry, Environment and Water There are several ongoing actions and initiatives to Management and the Austrian Water and Waste reduce, for instance, energy, travel and waste, varying Management Association. The award is given to from day-to-day office practices to examples from companies that are particularly innovative in the manufacturing facilities. The most common improvements area of environmental protection and ecology. The in the office practices include recycling of waste, reduction criteria included material recycling of production of the actual numbers of printers by using shared printers waste in the ski industry and the Altenmarkt as well as printed papers, including targets to achieve a facility is able to shred 48% of the total waste for paperless office, as well as adopting lightning sensors and material recycling in chemical industry. Amer increased use of meeting services provided by Microsoft Sports tracks the progress on the environmental Lync, used for the most of the teleconferences reducing area by the annual group-wide assessment and necessity to travel. As an example of actions for energy gathers feedback on all the initiatives concerning savings, Wilson’s Ohio manufacturing facility has installed environment. Waste generated in the operations new windows and siding. has been reduced by 11% since 2012.
NEW HEATING SYSTEM ASSEMBLED IN BULGARIA In 2014, Wilson’s Ohio manufacturing facility started In the end of 2013, the Amer Sports Winter Sports to recycle its leather shavings and ship them to a Equipment facility in Bulgaria, Chepelare replaced its recycling company for further use. This saved 31,500 old heating system burning oil and replaced it with a lbs of leather that would have ended up in a landfill. new heating system using natural gas. As a result the annual energy consumption will fall by 30% with total of 1.640 MW, and at the same time carbon emissions will be reduced by approximately 190 tonnes. Precor upgraded its powder coating application equipment and was able to reduce spray-to-waste TRAVEL POLICY volumes in 2014. Through training and increased recyling awareness, Precor has improved its Amer Sports’ Travel Policy applies to all employee levels diversion rate (total diverted tonnage/total in all business areas and entities. The key elements of the tonnage) by 6 percentage points from 2013 to 2014. global travel policy are to estimate the necessity of travel and consider alternative communication methods.
MINIMIZING WASTE Precor evaluates its product packaging as an ongoing activity. For instance in 2014, Precor Reducing waste is relevant for Amer Sports’ business in implemented returnable packaging with two order to achieve cost savings while reducing environmental of the plastic suppliers and components on its impact. This is supported by all of the lean activities in its commercial treadmills and uses returnable pallets operations, as Amer Sports has a Lean program in place in for specific stamped sheet metal components. every factory and distribution center. Amer Sports and its Also, there are returning plastic bags and brand companies have several initiatives to reduce waste. cardboard to plastics vendors to reuse on plastic parts used on commercial bikes.
One of the objectives of the Precor’s Environmental management system is to achieve zero landfill status by 2017. As a part of this, Precor has OPTIMIZING DISTRIBUTION AND initiatives to reuse raw materials, such as selling excess pieces of metal for recycling. TRANSPORTATION Amer Sports’ objective is to optimize the transportation routes and methods as well as loading containers more
22 | AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 People
efficiently to achieve cost savings and carbon emission Amer Sports has five main regional distribution centers reductions. The company also seeks ways to reduce which support several brands: Überherrn in Germany, packaging material usage and the carbon emissions of Lyon in France, Altenmarkt in Austria and Irvine in the the distribution centers. UK serving the EMEA region and the Nashville facility in Tennessee serving the Americas. Amer Sports also works towards the standardization of containers to maximize efficiency, and uses centre of Amer Sports’ logistics facilities also include factory-specific gravity analysis to identify the best location for distribution warehouses and regional or country-specific warehouses. centres to reduce transportation. These primarily have Products are transported from the distribution hubs to trade an effect on scope three (all indirect emissions that customers and to Amer Sports’ own stores. Third-party occur in the value chain of the reporting company) transportation companies are employed to transport the emissions, which have been tracked on distribution and Group’s products by truck, rail, plane, and sea. transportation since 2013.
People
Amer Sports people are located in all continents and regions. in different areas of expertise. We have a wide range of On December 31, 2014, Amer Sports employed people in 34 professionals in various disciplines like sales, marketing, countries, and had over 7,500 employees. research and development, manufacturing, supply chain, sourcing and support functions. Amer Sports people are working with our sports brands
2014 2013 Personnel Personnel at year end 7,630 7,330 Average personnel 7,505 7,370
Personnel by business segment (headcount) Winter and Outdoor 4,966 65% 4,742 65% Ball Sports 1,537 20% 1,549 21% Fitness 932 12% 874 12% Headquarters and shared services 195 3% 165 2%
Personnel by function Manufacturing and sourcing 2,243 29% 2,219 30% Sales and distribution 3,184 42% 2,881 39% Support functions/shared services 931 12% 916 12% R&D 680 9% 691 9% Marketing 592 8% 623 8%
Personnel by country USA 1,735 23% 1,633 22% France 1,143 15% 1,144 16% Canada 820 11% 734 10% Austria 706 9% 706 10% Bulgaria 555 7% 573 8% Finland 417 5% 423 6% Germany 393 5% 370 5% China 362 5% 320 4% Japan 220 3% 189 3%
AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 | 23 People
2014 2013 UK 170 2% 185 3% Russia 179 2% 185 3% Poland 161 2% 138 2% Mexico 100 1% 83 1% Swizerland 83 1% 82 1% Taiwan 79 1% 77 1% Australia 65 1% 67 1% Italy 68 1% 66 1% Czech 58 1% 61 1% Korea 61 1% 57 1% Spain 64 1% 55 1% Other countries 191 3% 182 2%
Personnel by region EMEA 4,141 54% 4,125 56% Americas 2,662 35% 2,455 33% Asia Pacific 827 11% 750 10%
Hourly and salaried personnel Hourly 29 28 Salaried 71 72
Personnel by gender (%) Male 61 61 Female 39 39
Age diversity by age group 18-25 years 9 9 26-35 years 29 29 36-45 years 28 28 46-55 years 23 23 Over 55 years 10 10
Employees trained for Code of Conduct (%) 78 78
Read more about People on http://www.amersports.com/careers
Amer Sports age diversity 2014 Amer Sports headcount 2011-2014 Amer Sports age diversity 2014 Amer Sports headcount development 2014–2011 30 29% 28% 8000 827 7000 750 25 23% 564 685 6000 20 2 366 2 455 2 662 5000 2 312 15 4000
10% 10 9 % 3000 2000 4 185 4 135 4125 4141 5 1000 0 0 18-25 26-35 36-45 46-55 Over 56 years years years years: years 2011 2012 2013 2014 AGE GROUP Asia Pacific Americas EMEA
24 | AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 People
PEOPLE VISION AND STRATEGY 4. Resourcing Amer Sports People Vision highlights our passion and Strategic resource management plays a key role in our professionalism that enable great performance and company. Amer Sports resource management develops business success. We believe that proud and capable organizational designs, roles and responsibilities according people perform in the right roles led by great leaders. to Amer Sports’ strategy and direction. This creates Amer Sports Human Resources proactively partners opportunities for both organizational and personal growth, with our leaders to attract, retain, develop, and motivate and means that the human capital resources are utilized and our employees, and create a high performing working allocated to meet the demands of a dynamic organization. culture. Amer Sports Human Resources enables business success, drives global people processes and tools, and supports capability building in the organization. EXAMPLES ON EMPLOYEE DEVELOPMENT 1. Organizational and personal development Wilson has active organizational talent management At Amer Sports, we want to ensure the continuous and professional development programs. For organizational and personal capability development by example, identifying strategic development needs based on our • The Company hosts guest speakers on honing key corporation’s vision and strategy. Capability building at business skills, such as negotiating, innovation, Amer Sports is implemented by ongoing strategic reviews, creative thinking and collaboration. discussions and the exploration of options regarding • Wilson also holds lunch-and-learn activities for organizational and individual development. team members with functional area leaders and managers to share career experiences and best practices. • The Company provides internal training sessions “At Amer Sports, we want to increase team experience, expertise and to ensure continuous productivity, including SAP, Excel, and Finance overviews. organizational and personal capability development
by identifying strategic OCCUPATIONAL SAFETY AND HEALTH development needs based Amer Sports manufacturing facilities work to continuously improve the safety and working on our corporation’s vision conditions for all employees. Occupational Safety and strategy.” and Health Act (OSHA) standards are followed to ensure the workplace is free from any recognized hazards. All near-miss incidents, accidents, and reported unsafe conditions are investigated. 2. Performance management Any root cause is identified, and corrective and Performance management establishes the basis for preventative actions are implemented to avoid any our people management and at Amer Sports it is called future occurrence. Coaching for Success. Its cornerstones include setting clear goals, evaluating performance and fostering Precor’s industrial hygiene program focuses development planning with our people. on monitoring the workplace to ensure that employees are not being overexposed to chemical, 3. Employee engagement biological, or other environmental stressors such The Amer Sports employee engagement survey, Pulse as heat, light, and noise. During regular cell Meter, strengthens organizational dialogue and gives meetings, production employees, supervisors, and direction to organizational and personal development. It manufacturing engineers combine their efforts to focuses on key issues and drives our engagement and create more ergonomic tools and workstations. satisfaction. Survey questions are framed in terms of Amer Recent actions that have led to improved working Sports values and capabilities. The survey results include conditions include replacing air tools and lowering benchmark data and offer important information on how air pressures to reduce noise at the source. Amer Sports compares to other similar global companies.
AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 | 25 Supply chain
EMPLOYEE WELL-BEING As a sports company with a focus on sports and healthy BIKE TO WORK lifestyles, Amer Sports encourages its employees to Arc’teryx, Precor and Suunto encourage people to engage in an active lifestyle. Some examples: bike to work, using alternative commuting methods and involving exercise at the same time. WILSON Wilson offers team members a variety of wellness program opportunities, including free on-site health club membership at its Chicago headquarters office RENOVATED OFFICE ENVIRONMENT TO and participation in active lifestyle clubs such as the IMPROVE WORKING CONDITIONS employee walking club. The Company also provides free annual health screenings and flu shots on-site Salomon, Annecy at all its major locations. And for team members on Salomon has recently renovated its offices in the corporate medical plan, Wilson offers additional Annecy with a new setup of an open space concept programs through Blue Cross Blue Shield. in order to provide better working conditions with noise reduction and better sized meeting rooms. The new lighting system improves especially those areas in the office with a low level of natural light. PRECOR Employees have received ergonomic working Precor offers its employees a wide range of wellness stations and specific employees training program solutions, including campus flu shots, a trainer on to better manage their daily working positions. campus, gym facilities, “Rock and Roll” marathon sponsorship, health coach through healthcare New premises for Amer Sports HQ benefits with rewards, discounted benefits for non- Amer Sports HQ moved to new premises in spring smokers, a smoke-free campus, and an employee 2014. The new home for the HQ is a unique old purchase equipment program. All employees have building that has been renovated to give us an access to fitness equipment on-campus. opportunity to work at the modern environment inspiring creativity with its open space and ergonomic work stations, utilizing modern central heating and cooling systems, automated water ONE OF THE BEST EMPLOYERS tubs and lighting with sensors. The location is Arc’teryx was chosen as one of the best employers well served by public transportation with the in Canada by the British Columbia’s Best Employers near location of metro, bus and tram stops. Amer 2013 assessment. The criteria included initiatives Sports applies to achieve a BREEAM environmental such as in-house training programs, subsidies for certification of Very Good rating for the building, professional accreditation, maternity- and parental- the criteria of which has been taken into leave top-ups (adoptive parents included) and consideration in the reconstruction phase. extended health benefits coverage throughout leave.
COMPOSITION OF GOVERNANCE BODIES AND EMPLOYEE BREAKDOWN
Board of directors
YEARS FEMALE TOTAL % MALE TOTAL % Under 30 0 0 30-50 12.5 0 Over 50 12.5 75.0 Total 25.0 75.0
Executive Board Female total % Male total % Under 30 0 0 30-50 0 61.5 Over 50 7.7 30.8 Total 7.7 92.3
26 | AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 Our people Amer Sports sustainability and business
Amer Sports itself manufactures approximately 25% of its products and approximately 15% is produced by partially outsourced vendors. Approximately 60% of the production is outsourced.
AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 | 27 Supply chain
Supply chain
Amer Sports’ global operations encompass business Read more about supply chain in the Financial Review 2014 on functions from product development to product sourcing, p. 8 or at www.amersports.com/about-us/global-operations manufacturing and outbound logistics. Reliable, efficient and timely supply chain management and operations are MANUFACTURING important elements in the Group’s strategy. Amer Sports has 12 manufacturing sites. The most The supply chain function is organized under a single global important wholly-owned production facilities are located operations function, which includes integrated and shared in Austria, Bulgaria, France, Finland, Canada and the platforms of manufacturing, supply chain and sourcing practices. United States. In addition, Amer Sports owns all of the manufacturing assets such as tools, moulds, IT, etc., except the Amer Sports value of production is divided as follows: 25% building and labor force of six plants located in Eastern Europe. is in China, 33% elsewhere in Asia Pacific, 26% in EMEA and 16% in the Americas. Amer Sports itself manufactures Amer Sports purchases the raw materials it requires from approximately 25% of its products and approximately 15% a number of sources. The most common raw materials are is produced by partially outsourced vendors. Approximately steel, rubber, oil-based raw materials and components as 60% of the production is outsourced. well as wood. These raw materials are used to manufacture
2014 2013 Production (%) Sourcing 60 60 By partially outsourced vendors 15 14 Own production 25 26
Suppliers' employees in audited factories Suppliers' employees in audited factories 111,700 110,000 Number of countries where suppliers' employees in audited factories are located 17 16
Breakdown of supplier turnover by country risk1) (%) High risk countries (of total supplier turnover) 96 96 Low risk countries (of total supplier turnover) 4 4 1) Country risk level referring to BSCI definition
Suppliers covered by Supplier Code of Conduct (%) 92 Purchase value from suppliers signed the supplier CoC 92 89
Audits Factories audited2) 132 105 Audit visits by external third party 135 119 Remediation visits by Amer Sports' CR team 33 26 2) Some factories were visited more than once in 2014.
Breakdown of audit findings (%) Human Rights 1 2 Wages & Benefit 17 19 Health & Safety, Environmental issues 82 79
Audited purchasing volume (%) 96.6 98.1
28 | AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 Supply chain
Amer Sports actively monitors the performance of its sourcing partners and provides training to ensure that its standards are met.
plastic components for bindings, ski boots and wristop • Amer Sports has an extensive third party audit program: computers, and the metal parts used in fitness equipment, Amer Sports’ sourcing Office in Hong Kong ensures binding components and ski edges, apparel and bats. that suppliers follow Amer Sports’ standards for ethical operations. Amer Sports conducts third party audits to OUTSOURCING help sourcing partners comply with industry standards, regulations, and Amer Sports’ expectations in regards Approximately 60% of Amer Sports’ total production to health and safety, as well as environment and social value is outsourced. This includes the manufacturing of responsibility. all racquet sports and golf products, most team sport products and most of the apparel and footwear. The • Social compliance audits are conducted by internationally manufacturing of products and components for a variety recognized companies, such as Bureau Veritas and UL of winter sports equipment, cycling, sports instruments Responsible Sourcing Inc. (previously named STR). and fitness equipment has also been outsourced. • Amer Sports also holds training sessions with the audit Amer Sports’ sourcing office in Hong Kong is responsible firms to make sure that the auditors understand its for vendor qualification and product industrialization, audit standards. The company reviews and analyzes contract management and price negotiations, the audit findings to identify capacity building training procurement process optimization and export opportunities and organize different trainings to administration. By leveraging Amer Sports’ scale, the improve the factory management’s capabilities. The aim is to provide a competitive supply of goods with a trainings can be related to health & safety, employee minimized business risk, ensuring product quality, service relationship management and country labor code levels and that subcontractors follow Amer Sports ethical interpretations. standards. Amer Sports requirements with regard to labor standards and human rights for the suppliers are defined • The Ethical Policy is embedded into the supplier in Amer Sports Ethical Policy (See p. 12). agreement which is signed by suppliers in confirming to comply with the policy. Amer Sports has approximately 200 external suppliers in Europe and Asia. • Supplier CSR scores are part of both strategic vendor development plans and regular monthly performance SOCIAL COMPLIANCE review cycles. Amer Sports is dedicated to improving the working • Amer Sports CSR team members in Hong Kong are conditions in its supplier companies in cooperation with trained on SA8000 social and environmental management them as defined in Amer Sports Ethical Policy (Read more system program, which has equipped them with essential at www.amersports.com/responsibility/guidelines-and- skills to work with suppliers on the CSR audit program policies). The company actively monitors the performance and to uphold the company’s Ethical Policy. of its sourcing partners and provides training to ensure that its standards are met. The main features of Amer • Amer Sports cooperates with various NGOs: Wilson, one Sports Social Compliance approach are: of Amer Sports subsidiaries, is a category B affiliate of the Fair Labour Association (FLA). Amer Sports also engages • Amer Sports is committed to the following policies that with Better Work for the Better Factories Cambodia guide all its actions and operations: Company Code of program for the audits in Cambodia and regularly attend Conduct, Ethical Policy (available in 25 languages) for the ILO’s Better Work workshops. suppliers and Social Compliance policy.
AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 | 29 Economic impacts
• Amer Sports provides direct feedback channels for Sourcing Office in complete confidentiality. This is also supplier employees: communicated in the company’s Ethical Policy. Amer Sports publishes its Ethical Policy on its website and identical content has also been published as a • Amer Sports partners with the suppliers: poster printed in local languages and placed on the Amer Sports engages with its suppliers to develop a wall of supplier establishments. In cases of violation long-term partnership. This helps maintaining stable of standards defined in the Ethical Policy the poster product quality, securing capacity and creating a stable provides an email address (aso.csr@amersports. working environment for employees. com) and feedback is handled by Amer Sports Asian
Economic impacts
Amer Sports financial targets are: • Balance sheet structure: Year-end Net Debt / EBITDA • Growth: Delivering organic, currency-neutral annual ratio of 3 or less growth of 5% • Profitability: EBIT of at least 10% of net sales Read more on the progress versus Amer Sports financial • Cash flow: Annual free cash flow equal to net profit targets on Financial Review p. 3
Direct economic value generated and distributed 2014 2013 EUR % of value EUR % of value million generated million generated Direct Economic Value Generated 2,235.6 2,144.2 Economic value distributed 1,902.9 85 1,824.8 85 Suppliers 1,371.0 61 1,310.4 61 Employees 429.2 19 416.2 19 Public sector 18.0 1 27.5 2 Investors and shareholders 84.7 4 70.7 3 Economic value retained 332.7 15 319.4 15
Taxes by area1) (EUR million) 2014 2013 EMEA 8.5 14.3 Americas -0.4 3.3 Asia Pacific 10.0 9.9 In total 18.1 27.5
1) Including income taxes
Financial assistance received from government (EUR million) 2014 2013 approximately 2 approximately 2-2,5
More information at www.amersports.com/investors/reports-and-presentations/financial-reviews or www.amersports.com/investors
30 | AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 About reporting
About reporting
This first Amer Sports Corporate Responsibility Report environmental figures with the data availability of 85 - aims to give an overview of the Group’s sustainability 95%. The Group’s consolidated financial information has actions and help us develop Amer Sports’ sustainability been audited. The data covers year 2014 and comparative work as well as communications. data from 2013 is included. Report is conducted using the GRI G4 guidelines as a reference containing standard The sustainability report also prepares us for the external disclosures from the GRI Sustainability Reporting requirements for the non-financial disclosure defined guidelines. The GRI 4 Index table is presented at the end by the European Parliament and the Council to improve of this report on pp. 32-35. The reporting will be done the transparency concerning social, environmental and annually. diversity matters. For this reporting, we have identified the key areas of Amer Sports corporate responsibility, which The environmental data has not been assured externally. are explained on p. 11. When calculating carbon emissions, the principles used are the Defra Voluntary Reporting Guidelines and the Amer Sports corporate responsibility report covers IPCC Second Assessment Report (SAR - 100 year) as a environmental, social and economical areas. Information reference. While we are aware of the importance of the focuses on the Group level, but several case examples existence of this report, we know this is a work in progress from the Amer Sports companies, functions and and requires continuous development. We are, first, categories have been included in this report. All the working to create qualitative objectives in the selected major locations from 34 countries are included in the areas to then be able to link them to numerical targets.
Material theme Material area Material Aspect Indicators Economic impacts G4: Economic performance G4-EC1, G4-EC4 Active environmental Environmental footprint management of our G4: Energy G4-EN3 operations Active environmental Environmental footprint management of our G4: Emissions G4-EN15 - G4-EN18 operations Minimizing environmental Environmental footprint G4: Effluents and Waste G4-EN23 impacts of products Maintaining and developing People G4: Training and Education G4-LA10 employee competence Maintaining and developing G4: Diversity and Equal People G4-LA12 employee competence Opportunity Suppliers' employees in audited factories; Suppliers CR requirements for our Amer Sports topic: Supply chain covered by Supplier Code of suppliers Responsible sourcing Conduct; Audits; Breakdown of audit findings Health and safety of products Amer Sports topic: Health and Consumers and products and product compliance as safety of products and product Narrative description well as durability compliance
AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 | 31 GRI Index table
GRI Index table
General Standard Disclosures Page Comments Omissions Strategy and Analysis G4-1 CEO statement 6
Organizational Profile G4-3 Name of the organization 32 Amer Sports Corporation G4-4 Primary brands, products and services 3 G4-5 Location of headquarters 32 Konepajankuja 6 / P.O. Box 1000, 00511 Helsinki, Finland G4-6 Number and names of countries with 3 significant operations G4-7 Nature of ownership and legal form 3,32 Amer Sports Corporation is a public company G4-8 Markets served 3 G4-9 Scale of the organization 3, FR 7-8 G4-10 Employee information 23-24 Amer Sports reports the total number of employees by country and business segment and all personnel figures by age diversity and gender on www.amersports. com/careers. Amer Sports has significant seasonal variations in its number of employees. G4-11 Percentage of total employees covered by Amer Sports aims to report collective bargaining agreements the standard disclosure in the near future. G4-12 Description of supply chain. 28-29 G4-13 Significant changes during the reporting 32 No significant changes period regarding the organization's size, during the reporting period. structure, ownership, or its supply chain
Commitments to external initiatives G4-14 Addressing the precautionary approach 8-9, 32 Amer Sports' risk or principle management process and environmental guidelines enable Amer Sports to avoid harm to the environment. G4-15 Economic, environmental and social 15-17 charters, principles, or other initiatives endorsed G4-16 Memberships in associations 15-17
Identified Material Aspects and Boundaries G4-17 Entities included in the consolidated 32 All group companies are financial statements included in the consolidated financial statements. G4-18 Process for defining the report content 10
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General Standard Disclosures Page Comments Omissions G4-19 List of material aspects 31 G4-20 Aspect boundary within the organization Amer Sports aims to report the standard disclosure in the near future. G4-21 Aspect Boundary outside the organization Amer Sports aims to report the standard disclosure in the near future. G4-22 Restatements of information provided in 33 No restatements. This is previous reports Amer Sports' first Corporate Responsbility report. G4-23 Significant changes from previous 33 No changes. This is Amer reporting periods Sports' first Corporate Responsbility report.
Stakeholder engagement G4-24 List of stakeholder groups engaged by 14 the organization G4-25 Identification and selection of 14 stakeholders G4-26 Organization's approach to stakeholder 14 engagement G4-27 Key topics and concerns raised through 14-17 stakeholder engagement
Report Profile G4-28 Reporting period 31 G4-29 Date of the most recent previous report 31 G4-30 Reporting cycle 31 G4-31 Contact point for questions 2
GRI Content Index G4-32 GRI Content Index 32-35
Assurance G4-33 Organization's policy and current practice 33 The report has not been with regard to external assurance assured by a third party.
Governance G4-34 Governance structure of the organisation 3, FR 59-62
Ethics and Integrity G4-56 Organization's values, principles, 12-13 standards and norms of behavior
G4- Disclosures on management approach DMA Generic Generic DMA 9-12
AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 | 33 GRI Index table
Specific Standard Page Comments Omissions Disclosures Category: Economic Aspect: Economic Performance G4-EC1 Direct economic 30 value generated, distributed and retained G4-EC4 Financial assistance Amer Sports aims to received from report the information government. by country for the most significant countries. Category: Environmental Aspect: Energy G4-EN3 Energy consumption 21 No electricity, heating, cooling or steam sold. Total energy consumption within the reported in kWh. More organisation. detailed standards, methodologies, and assumptions to be included in the future reporting. Aspect: Emissions G4-EN15 Direct greenhouse 21 G4-EN15 – Direct GHG Emissions (Scope 1) gas (GHG) emissions • Consolidation approach: Operational control (Scope 1) • Methodology followed: ISO 14064-1: 2006 (based on the GHG Protocol) • Emission factors used: Defra (2014) • GHG Gases included: CO2 CH4, N2O, HFCs, PFCs, SF6 • Does not include biogenic gases (these are reported as “outside of the scopes”) • Sources included: Fuel combustion, vehicle fleet, fugitive/process emissions G4-EN16 Energy indirect 21 G4-EN16 – Energy indirect GHG emissions greenhouse gas (Scope 2) (GHG) emissions • Consolidation approach: Operational control (Scope 2) • Methodology followed: ISO 14064-1: 2006 (based on the GHG Protocol) • Emission factors used: Defra (2014) • Sources included: Purchased electricity, purchased heat, steam and cooling G4-EN17 Other indirect 21 G4-EN17 – Other indirect GHG emissions greenhouse gas (Scope 3) (GHG) emissions • Consolidation approach: Operational control (Scope 3) • Methodology followed: ISO 14064-1: 2006 (based on the GHG Protocol) • Emission factors used: Defra (2014) • Does not include biogenic gases (these are reported as “outside of the scopes”) • Sources included: • Purchased goods and services (water, paper), fuel- and energy- related activities, waste generated in operations (sent to landfill), business travel, upstream transport and distribution
34 | AMER SPORTS CORPORATE RESPONSIBILITY REPORT 2014 GRI Index table
Specific Standard Page Comments Omissions Disclosures G4-EN18 Greenhouse gas 21 G4-EN18 – GHG Emissions intensity (GHG) emissions • GHG Gases included: CO2 CH4, N2O, HFCs, intensity PFCs, SF6 (does not include biogenic gases) • Includes all sources of Scope 1, 2 and 3 emissions (as detailed in G4-EN15-17) • Intensity ratios calculated: -- Emissions per €m Revenue (tCO2e/€m) -- Emissions per FTE (tCO2e/FTE) -- Emissions per m2 GIA (tCO2e/m2) Aspect: Effluents and Waste G4-EN23 Total weight of waste 21 by type and disposal method Category: Social Sub-category: Labor Practices and Decent Work Aspect: Training and Education G4-LA10 Programs for skills 25 management and lifelong learning Aspect: Diversity and Equal Opportunity G4-LA12 Composition of 26 Data on minority groups governance bodies is not available. and breakdown of employees Amer Sports topic: Responsible sourcing Responsible Breakdown of 28 sourcing supplier turnover by country risk Responsible Suppliers covered 28 sourcing by Supplier Code of Conduct Responsible Audits 28 sourcing Responsible Audited purchasing 28 sourcing volume Responsible Suppliers' employees 28 sourcing in audited factories Responsible Breakdown of audit 28 sourcing findings
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