Companies and their senior managements act out of self-interest and Adidas is a case in point. The German footwear manufacturer knows that “social responsibility” is all the rage these days and that companies get favorable investor treatment if they can garner favorable ESG ratings. ESG stands for environmental, social, and governance and proponents of the measurement insist that companies that act responsibly will outperform the market.
Adidas a year ago issued this news release touting that the S&P rating agency gave the company “one of the highest (ESG) scores applied across all companies assessed globally.” Put simply, S&P ranked Adidas as one of the world’s most socially responsible companies.
“We have doubled down on our commitment to sustainability as a focus area in our ‘own the game’ strategy and are proud to see this being recognized externally,” said Martin Shankland, member of the Adidas Executive Board responsible for global operations.
Despite, or perhaps because of its historic links to the Nazi party, the former official outfitter of the Hitler Youth movement is taking a calculated gamble that there’s money to be made being linked to a celebrity Jew hater. Adidas has a near decade-long business partnership with the rapper and fashion designer Ye, better known as Kanye West.
Ye in recent weeks has gone public with his unabashed Jew hatred, promising to “Go death con 3 on JEWISH PEOPLE” in a tweet. To Ye’s credit, he has refused to put up a phony front and issue the obligatory apology feigning ignorance that his words were harmful and promising to commit to an intense regime of Jewish history studies.
Here ye, here ye! – Ye has no regrets.
As of this writing, Adidas is facing some pressure to sever ties with Ye, mostly from likely quarters like the Anti-Defamation League. Jonathan Greenblatt, the Democrat politico who heads the ADL, told the Washington Post that he spoke with senior Adidas executives and shareholders over the weekend, but the response was “insufficient.”
“At this point we are kind of flummoxed how Adidas has dropped the ball and failed to make a clear and cogent statement about their values,” he said. “Antisemitism should be unacceptable in any circumstance. The fact that Adidas has not made that simple point is shocking when one considers Adidas’s history as a company that once outfitted the Hitler Youth.”
Greenblatt, a former special assistant to President Obama and Director of the Office of Social Innovation, is either clueless, or naively believes that companies make their decisions based on morals and ethics. Adidas has issued a clear and cogent statement about its values; the company has made a calculated business decision that having ties to a celebrity Jew hater is good for business.
Even if Adidas opts to sever its ties with Ye, that wouldn’t demonstrate any pangs of conscience but rather a realization that the relationship is no longer potentially lucrative. Severing ties with Ye could further embolden Ye’s antisemitic rhetoric that Jews have undue influence and control.
The Post reported that footage resurfaced on Twitter this past weekend of an interview taped in early October in which Ye gloated: “I can say antisemitic things and Adidas can’t drop me. Now what?”
Being associated with Ye has been lucrative for Adidas thus far. According to the Post, the partnership began in 2013, made Ye a billionaire and helped Adidas reach a new customer base, one that Morningstar analyst David Swartz said helped generate the company an estimated $2 billion a year, or nearly 10 percent of its annual revenue.
The Post reported that Adidas is “drowning in excess inventory,” its business in rapidly declining in China, and the company last week lowered its profitability outlook for 2022.
Branding decisions typically rest with the company’s chief marketing officer. As best I can tell, the position is held by Vicky L. Free, whose title according to her LinkedIn bio is head of global marketing. Free is based in Nuremberg, an easy 10 mile or so jog from Adidas’ headquarters in Herzogenaurach.
Free, who will celebrate her two-year anniversary at Adidas next month, appears to be an American, as all her previous positions were with U.S. companies, including Novant, Disney, and BET. Free also is a director of VIZIO, based in Irvine, CA. Free’s bio says her leadership is “guided by the core values of innovation, data-driven decision making, collaboration, and strategic diversity and inclusion.”
Terminating its relationship with Ye could cause Adidas internal problems. As reported by WWD, employees two years ago repeatedly criticized Karen Perkin, an executive board member responsible for global human resources, for a racially insensitive comment. Perkin subsequently resigned.
In 2020, more than 1,600 employees at Adidas and Reebok signed a petition demanding change to ensure racial equality. The company held a virtual town hall meeting to address that and to discuss multiple initiatives to support the Black community and college students of color.
This past weekend a well-known Jew-hating organization called the Goyim Defense League hung a banner over a Los Angeles highway overpass that read, “Honk if you know Kanye is right about the Jews,” while offering Nazi salutes to oncoming traffic. I’ve previously written about the white supremacist group and its founder Jon Minadeo, whose former girlfriend prepared flyers for him at her Berkeley yoga studio. Minadeo is quite adept at social media.
Jew haters are making great strides, although their rhetoric is typically shrouded in attacks on Israel. An Israel-based watchdog group called HonestReporting in August revealed that three journalists and a photographer who freelanced for the New York Times and other publications had previously expressed support for Hitler and Palestinian terrorism.
While the Times said it wouldn’t continue working with these journalists, the publication doesn’t seem all that committed to vetting journalists since its 2018 HR debacle when it hired, then rescinded a job offer, to writer Quinn Norton after it was revealed that she proudly counted among her friends a writer for a neo-Nazi website. A year later, it was revealed that Times editor Tom Wright-Piersanti had repeatedly posted antisemitic tweets when he was a student at Rutgers.
Jew hating journalists understandably have a natural attraction to the New York Times. In her July 2020 resignation letter from the Times, Bari Weiss spoke of being bullied by colleagues, including repeated references to “writing about the Jews again.” Weiss’ 2019 book How to Fight Antisemitism seems especially timely these days.
Meanwhile, anti-Israel advocates appear to have gained influence with the ESG movement. Republican attorneys-general have alleged that Morningstar has skewed its ratings to promote anti-Boycott, Divestment, and Sanctions (BDS) principles. Morningstar has denied the allegations, and cites a report by White & Case, a global law firm it hired, that most of the charges are unfounded.
White & Case sponsored a panel discussion this past weekend titled, “Racism and the Crime of Apartheid in International Law,” featuring speaker Omar Shakir, a longtime Israel critic. Shakir works for the nonprofit Human Rights Watch (HRW), which is known as a leader in the anti-Israel advocacy world.
Israel boycotts are illegal in more than two dozen states. Spain’s top court recently ruled that the BDS movement represents “discrimination” that “infringes on basic rights.” The Spanish parliament has also passed legislation that bars public funding for organizations that “promote antisemitism.” The law uses the International Holocaust Remembrance Alliance definition of antisemitism, which cites as examples of antisemitism some forms of Israel criticism.
In the U.S., 17 members of Congress voted against condemning the BDS movement, most notably Michigan Rep. Rashida Tlaib, Minnesota Rep. Ilan Omar, and New York Rep. Alexandria Ocasio-Cortez.
As for companies with strong ESG ratings outperforming the market, Adidas’ stock is down 68 percent in the past 12 months, while the S&P is down only about 17 percent.