At Adidas Annual Meeting, Activists Demand Answers

Animal rights and labor activists descended upon Adidas’ annual meeting in Fürth, Germany, on Thursday, to demand answers about the footwear juggernaut’s use of kangaroo leather and allegations of wage theft in its Cambodian supply chain.

As members of People for the Ethical Treatment of Animals, a.k.a. PETA, carried out a registered protest outside the Stadthalle Fürth indoor arena where the shareholders’ assembly was being held, their counterparts from Animal Rebellion shook things up inside.

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Adidas is the only major footwear manufacturer still making soccer cleats from kangaroo skin, also known as k-leather. Both Nike and Puma have already phased out k-leather in favor of proprietary synthetic materials that they say perform better than the original. New Balance said in September that it will finish quitting the skin by the close of 2024. And last month, Britain’s Sokito revealed it will be switching to a vegan alternative “amid growing concerns over kangaroo population management practices, and population count discrepancies.”

In March, ASN Bank’s sustainability researchers removed Adidas from a list of approved companies it invests in. Among the reasons the Dutch bank gave was the triple stripe purveyor’s use of wildlife for commercial activities, which is in “direct violation” of its sustainability criteria.

“We have indeed excluded Adidas from our investment universe because Adidas sources kangaroo leather and continues to do so,” said Mariëtta Smid, senior manager of sustainability at ASN Impact Investors. “This was the main reason.”

Individual shareholders aren’t necessarily supportive of Adidas’s decision, either.

“The company continues to make poor decisions,” Daniel Schier, who attended the meeting to speak to executives about the issue, said in a statement through the Center for a Humane Economy, a Washington, D.C.-based nonprofit. “They say they use kangaroo leather in less than 1 percent of their shoes and yet they continue to do it when there is clear evidence it is brutally inhumane and not sustainable. From a shareholder perspective, I feel the company is not seeing the forest through the trees. Good comes to companies that care about people and the planet.”

Adidas said that k-leather comprises less than 0.1 percent of its footwear upper materials use and that “no kangaroo is killed for the creation of a soccer shoe.”

“Kangaroo hunting in Australia is necessary for population control, and the leather Adidas uses is a byproduct of this,” a spokesperson said. “We source the leather exclusively from suppliers that are monitored and certified by the Australian government, ensuring both animal welfare and the conservation of species.”

But activists insist that kangaroos are being “terrorized, maimed and killed” for their pelts, with the international sportswear trade a key driver.

“Adidas knows joeys are bludgeoned or left to die a slow, lonely death crying out for their dead mothers. They know and they don’t care,” said Louise Ward, state director of the Animal Justice Party in New South Wales, Australia. “We’ve reached out to executives countless times. Their sustainability division has been provided [with] reports, videos and eyewitness testimony. Sadly, they have lost their leadership status and have made a conscious decision to pursue profit above all else.”

Speaking up for 500 alleged wage theft victims in Adidas’s supply chain was Sithyneth Ry, president of the Independent Trade Union Federation (INTUFE) in Cambodia. His attendance at the annual meeting is part of a broader “speaker’s tour” ahead of major sporting events this summer, including the UEFA European Football Championship in Germany and the Olympics in France.

Ry spoke about Hulu Garment, a factory in Phnom Penh that suspended its entire 1,000-member workforce in March 2020, then “tricked” them into resigning so they wouldn’t have to pay them the $3.6 million they were owed by law. When the plant reopened months later, at least 500 of the workers weren’t rehired.

“Workers were left jobless and without the severance in the middle of a pandemic,” he said through the Clean Clothes Campaign, the garment industry’s largest consortium of trade unions and labor organizations. “They had been getting by on low wages for years and had no buffers to fall back on. This sudden unemployment without compensation meant they could no longer support their family, had to take out loans or sell their possessions.”

Adidas said that it rejects the allegations and that its dealings with Hulu Garment and one its licensees ended as “contractually agreed” in August 2020.

“All orders were processed and paid in full,” the spokesperson said. “An independent arbitration council hearing and a follow-up Fair Labor Association review of Adidas’ own investigations were also unable to find any legal non-compliance. In the last year of the relationship, our licensing partner accounted for around 5 percent of the supplier’s total production.”

Campaigners say that structural problems such as severance theft due to unexpected factory closures require structural solutions. While Covid-19 was an unprecedented event, they say, floods and heatwaves exacerbated by climate change will make supply chain disruptions more common. It is therefore up to companies like Adidas to take preventative action to reduce the risks of human rights violations in their supply chain, as per the existing German Supply Chain Act and the European Union’s upcoming corporate sustainability due diligence directive. This could include the binding severance guarantee fund endorsed by trade unions and labor organizations worldwide.

“Adidas is prioritizing shareholders at all costs, even if it has no money to remunerate them,” Mauro Meggiolaro, coordinator of Shareholders for Change, a European network of institutional investors that promotes shareholder engagement, said in a statement. “While the much-needed money to pay fair wages and severances to workers is apparently always missing,”