Amer Sports manufactures one third of its products itself, approximately two thirds of the production value is outsourced, and a minor percentage is produced by partially outsourced vendors.
Amer Sports sources its products from suppliers globally, however, a significant proportion of the suppliers are located throughout Asia. Amer Sports has approximately 200 external suppliers in Europe and Asia. Approximately 22% of Amer Sports’ production value is generated in China, 39% elsewhere in Asia Pacific, 28% in EMEA and 11% in the Americas.
The Amer Sports Vendor Sustainability team is responsible for vendor qualification and product industrialization, contract management and price negotiations, procurement process optimization and export administration. By leveraging Amer Sports’ scale, the aim is to provide a competitive supply of goods with a minimized business risk that ensures product quality, appropriate service levels and subcontractors who adhere to Amer Sports ethical standards.
Amer Sports has published a list of its major finished goods supplier. The list also includes some indirect suppliers, such as direct material suppliers.
Key features of the social compliance monitoring program
Amer Sports’ global supply chain is a complex network with employees in different countries who work diligently on the company’s products. This creates opportunities for improvements in the lives of the workers and their families. The political, economic, and regulatory conditions in these countries and the local business and labor practices may have room for improvement.
Amer Sports is dedicated to continuously improving its performance regarding labor, workplace conditions and environmental issues in its supply chain. The company aims to engage in business only with companies that meet its standards for ethical operations, and comply with the applicable laws and regulations for labor, workplace conditions and environmental compliance, as defined in Amer Sports’ Ethical Policy. This policy and the social compliance monitoring program also applies to the Amer Sports owned manufacturing facilities.
Amer Sports consults, for example, with advocate groups, customers, regulators and local communities and they share their expectations on how its products are made.
Commitment to Amer Sports’ policies
- Commitment to the following policies that guide all of its actions and operations: Company Code of Conduct (available in 15 languages), Ethical Policy (available in 25 languages) for suppliers and the Social Compliance Policy.
- The Ethical Policy is embedded into the supplier agreement which is signed by suppliers confirming their compliance with the policy.
- Amer Sports is committed to remediate issues that causes adverse human rights impacts, and engage relevant stakeholders into the remediation process where appropriate.
An extensive third party audit program
- The Amer Sports Vendor Sustainability team ensures that suppliers follow Amer Sports’ standards for ethical operations. Amer Sports conducts third party audits to help sourcing partners comply with industry standards, regulations, and Amer Sports’ expectations with regards to health and safety, as well as its environment and social responsibility. Before the audit, The Amer Sports Vendor Sustainability team provides pre-audit training to suppliers on its CSR program framework, Ethical Policy and audit standards. Suppliers provides written agreements to facilitate periodic assessment and actively contribute to remediation activities.
- Social compliance audits are conducted by internationally recognized companies, such as Bureau Veritas and UL Responsible Sourcing Inc.
- The formal third party audit includes the activities below:
- Documentation review includes government documents, compensation record and working hour records
- Management interview
- Factory tour for a visual inspection and health and safety review
- Worker interviews (independent from the participation of factory management)
- Consultation with unions or workers representative (where applicable)
- The Amer Sports Vendor Sustainability team is trained on an SA8000 social and environmental management system program, which has equipped them with the necessary skills to work with suppliers on the CSR audit program and to comply with the company’s Ethical Policy.
The Team further provides training to sourcing and purchasing teams on the company’s Ethical Policy and standards, social labor audit program, and responsible purchasing practices. With the help of these training, the sourcing and purchasing teams can better understand the relationship of their operations and social labor impacts. Supplier key performance indicators are also reviewed that the team can help influence our suppliers to work on improvements.
- Amer Sports also organizes training sessions with the audit firms to make sure that the auditors understand the company’s audit standards. This ensures the audit quality and that our Ethical Policy is fully integrated into the audit practice.
- The company reviews and analyzes the audit findings to identify capacity building training opportunities and organize different training to improve the factory management’s capabilities. This helps prevent repeated findings of non-compliance and drive sustainable improvements. The training can be related to health & safety, employee relationship management and country labor code interpretations.
Strategic vendor development and performance review
- Supplier CSR scores are part of both strategic vendor development plans and the regular monthly performance review cycles. The audit findings are categorized into different risk levels indicating the priorities of the corrective actions to be taken. Facilities have to take root cause analysis of the audit findings and develop corrective action plan to improve their performance. The practice is that the facilities need to submit a corrective action plan to Amer Sports within 10 days after the third party audit.
If suppliers need special support, The Amer Sports Vendor Sustainability team will also schedule a remediation visit to those suppliers to re-enforce the training and jointly work with suppliers to develop the corrective action plan. After that, a third party re-audit is still necessary to verify the improvements according to the Amer Sports’ program timeframe. The Amer Sports Vendor Sustainability team maintains a complete list of audited facilities and provides monthly updates to the sourcing team.
- Suppliers who receive a full compliance result in Amer Sports’ audit are presented with a trophy for appreciation of their efforts on the CSR program. The facility’s CSR performance is also part of the sourcing score card. Suppliers are re-audited based on their previously achieved sustainability score. The facility’s social performance is one of the criteria in our decision to retain business relationship with Amer Sports. If suppliers are not able to fulfill Amer Sports’ CSR standards, the company reserves the right to terminate the business relation with them.
- Amer Sports imposes annual improvement targets on suppliers’ social performance and add these targets to personal incentives of relevant staffs.
- In order to drive continuous improvement, Amer Sports imposes annual improvement targets on suppliers’ social performance and add these targets to personal incentives of relevant staffs. Amer Sports’ senior sourcing staff, e.g. senior sourcing directors are incentivized on social compliance based on general vendor performance and zero tolerance in findings.
This is part of the company’s annual performance review process called coaching for success. The actual performance is reviewed against the targets on a monthly basis and define corrective actions plan whenever necessary.
Co-operation and development
Amer Sports cooperates with various NGOs.
Amer Sports has been a member of Fair Labor Association (FLA) as a Participating Company since June 2020. Through the FLA membership, Amer Sports has access to supports from FLA to improve its social labor program. Amer Sports’ finished goods suppliers are subject to External Independent Assessments by FLA’s Sustainable Compliance Methodology every year.
Amer Sports also engages with Better Work for the Better Factories Cambodia program for the audits in Cambodia and regularly attend the ILO’s Better Work workshops.
In order to resolve systemic issues at suppliers, Amer Sports has cooperated with industry peers to raise common agenda and work on capacity building projects to support suppliers for continuous improvement. We also respect relevant Anti-trust guidelines in the cooperation.
Social Responsibility Awareness & Capacity Building Training:
- Ethical Policy training both face-to-face conferences and phone calls for suppliers to communicate the Policy and explain expectations of the company’s audit program. Amer Sports’ Asian sourcing quality teams were also invited to attend the training. This enabled the company Supply chain wide cross-functional support to more effectively work for continuous improvement with suppliers.
- Workplace communication training: Amer Sports collaborated with Better Work to deliver a workplace communication training in Vietnam for suppliers in South Asian Countries. This training is expected to build mutual trust in labor relationships at supplier facilities.
Amer Sports provides direct feedback channels for supplier employees. If there is a violation of any standards of the Ethical Policy, employees are encouraged to bring issues to Amer Sports’ attention by emailing to email@example.com in English or their native language. Amer Sports will keep all information strictly confidential. Employees shall be free from retaliation because of issues raised.
Amer Sports prohibits any retaliation against workers and other stakeholders (including those that represent them) for raising human rights related complaints or concerns. We commit to not impede access to state-based judicial or other available mechanisms for persons who make allegations of adverse human right impacts.
The Ethical Policy has been printed as a poster in local languages (available in 29 languages) and placed on the wall of supplier establishments and accessible to all production workers, managers and supervisors.