Environmental Impacts

Managing the environmental impacts at our own sites and along the value chain is a key focus of our work. We have developed an approach to address water efficiency and quality and are committed to steadily increasing the use of more sustainable materials in our production, products and stores while driving toward circular business solutions. We are committed to reducing our absolute energy consumption and CO₂ emissions, transitioning to clean energy and looking into energy-harvesting opportunities. 

To be able to quantify our environmental impact along the value chain, we developed an internal Environmental Footprint Tool (EFT). This tool uses data from various IT systems and departmental sources to calculate a monetized environmental footprint that accounts for the complete value chain from raw material production to product use and disposal. Currently, the EFT is primarily used for measurement as well as internal and external reporting. As such, it provided key insights for the development process of our new strategy ‘Own the Game’. A future objective is to directly interface the adidas systems with the EFT to enable real-time simulations to support business decision-making and further sustainability reporting.

Measuring and optimally managing our environmental footprint in our own operations and across our supply chain is only one way to respond to climate change. In addition, we are proactively addressing the impacts of climate change by supporting global initiatives that aim to drive change for our industry. For example, in the past two years, we signed the Fashion Pact presented at the 2019 G7 Summit and the UN Fashion Industry Charter for Climate Action. In addition, we committed to the Science Based Targets initiative in 2020 and are preparing to have our targets approved. adidas has been a member of the UN Climate Neutral Now Initiative since 2015 and is committed to the continued estimation and reduction of our emissions. It is our goal to reduce emissions across our entire value chain by 30% by 2030 (baseline 2017), thus paving the way for climate neutrality by 2050.

2030 goal: Reduction of CO₂ emissions by

30%

Own operations

Back in 2008, adidas introduced a program called ‘Green Company’ to drive continuous improvement and savings in energy, water and waste at its own sites globally. The program covers administrative offices, production facilities and distribution centers, equaling more than 97% of our global employee base in 2020 (excluding own retail). In 2015, we presented targets to be achieved by 2020 that centered around carbon emissions and water use reduction. These were calculated considering a scientific and context-based methodology.

One essential driver to achieve these targets is the implementation of environmental standards at our highest-consuming locations. adidas has successfully applied an Integrated Management System (IMS) which helps us to gain certification for key locations for their environmental management (ISO 14001), health and safety management (ISO 45001) and energy management (ISO 50001). Building on an overarching corporate IMS policy, adidas aims to further expand these certifications to more key sites every year and have them verified through both external and internal audits. By the end of 2020, 42 sites globally held an ISO 14001 certification, 39 sites held an ISO 45001 certification, and 53 sites held an ISO 50001 certification. Due to the coronavirus pandemic, the IMS implementation, as well as internal and external audits were mostly done remotely for the first time.

In 2020, we were able to cumulatively reduce our combined net emissions by 55% compared to 2015. This is a result of our energy saving initiatives, the use of Energy Attribute Certificates (EACs) at central sites, a company-wide energy monitoring systems, and the installation of photovoltaic systems at various locations. On top we offset the carbon footprint of our gas consumption for all our facilities in Germany. To calculate the overall footprint of all other sites, globally, we take the location-based emission factor provided by the Greenhouse Gas Protocol. In 2020, the lockdown due to the coronavirus pandemic also had a positive impact on the energy and water consumption at our sites. As a result, in 2020 our accumulated water savings amounted to 48% per employee compared to 2008. With these results, we have overachieved our targets of the last strategic cycle.

By 2025, we aim to achhieve carbon neutrality for our corporate and own-retail sites through implementing on-site energy production, improving energy use efficiency, sourcing renewable energy, and balancing our emissions through various partnership methods. We will also continue to monitor and improve the water efficiencies at our biggest consuming sites. We will further strengthen our sustainability foundation by increasing the environmental performance data coverage. Furthermore, we will continue to push implementing eco-efficiency standards through the IMS at key sites.

The progress toward all Green Company targets is tracked through an environmental data reporting system and is disclosed in detail in our annual Green Company Report, available on our corporate website as of spring 2021. adidas-group.com/s/environmental-approach

Supply chain

As our production is fully outsourced, a substantial portion of our environmental impact occurs, at different intensities, throughout the supply chain. Therefore, for adidas, sourcing is not only about ensuring high product quality and timely delivery, it also means working with our suppliers to ensure they are continuously reducing their environmental footprint by measuring their monthly progress toward yearly reduction targets for energy, water and waste. One way we provide support is to develop comprehensive policies and guidelines such as the newly added ‘Rooftop Solar Guideline’ and ‘Waste Co-processing Due Diligence’.

Already in 2019, we started to support our suppliers in scaling the adoption of on-site renewable energy in our supply chain. adidas funded and provided technical expertise for solar rooftop feasibility studies in key sourcing countries such as Vietnam, Cambodia, China, Indonesia and Myanmar, covering approximately 80% of our strategic suppliers. Even though 2020 was a challenging year due to the pandemic, we were able to intensify our efforts and have already seen the first positive results. In 2020, we confirmed that additional 27 MWp rooftop solar systems had been installed by our strategic suppliers. 

We want to ensure that our suppliers are a part of our low-carbon journey and have therefore actively supported our global suppliers by engaging experts, providing hands-on training and developing multiple tools and guidelines over the past years. The ‘adidas Environmental Good Practice Guide & Toolkit’ covers over 60 efficiency measures and provides good practices for identifying environmental impacts and carbon reduction opportunities within the factory’s operations.

Furthermore, adidas is working closely with key suppliers in Vietnam, providing the technical guidance and expertise to enrol and access the first off-site renewable energy pilot. The pilot program features direct power purchase agreement (DPPA) mechanisms between renewable energy developers/power generation companies and private power buyers/consumers. DPPA mechanisms are surging around the world as a new driver and catalyst for renewable energy projects.

We are co-developing an online climate action training program with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) which will be made available to all of the UNFCCC signatory brands and their supply chain. The aim is to upskill the fashion supply chain on greenhouse gas emissions, and how to set targets and identify reduction measures such as adopting renewable energy and improving energy efficiency.

Through our collective measures and technical support, our suppliers were able to exceed our five-year environmental targets on energy, water and waste.

As we accelerate our sustainability efforts, we continue to support our supplier partners to improve their performance and ensure that this is underpinned by sound environmental management systems and accurate data disclosure. In 2020, for example, 98% of our footwear sourcing volume was produced in factories that have been certified in accordance with the International Environmental Standards ISO 14001 and/or the Workplace Health and Safety Management Standards OHSAS 18001 (2019: 98%).

In 2021, we will transition to a set of environmental targets that are in line with our public commitment of reducing absolute CO₂ emissions by 30% by 2030 and our broader sustainability strategy. For the supply chain, we will focus on transitioning from energy efficiency to end-to-end carbon management, expanding on Tier 2 water savings, and driving further adoption of ZDHC-qualified chemicals and the delivery of cleaner effluent.

Supply chain targets for 2025

• Water: We have met and exceeded our previous five-year target on water savings for strategic Tier 1 and Tier 2 suppliers. We are expanding our water reduction efforts to include additional Tier 2 suppliers. Through the application of new technologies, our aim is to achieve a 40% reduction in water consumption against the 2017 baseline year by 2025.
• Chemicals: Building on our long-standing collaboration with ZDHC, which promotes sustainable chemistry, we aim to have 80% of supplier facilities that manage chemicals in their production process to achieve Level 3 compliance with the Manufacturing Restricted Substances List (MSRL) from ZDHC for their input chemicals by 2025.
• Wastewater: Pollution abatement is critically important for the textile industry and a basic compliance expectation. We aim for 80% of applicable suppliers that operate on-site effluents plants to achieve a ‘ZDHC Wastewater Foundational Level’ (direct discharge) by 2025.
• Energy: As part of our 2021 carbon priorities and goals, adidas aims to accelerate initiatives that drive low-carbon manufacturing within its supply chain. That is why, in 2021, we will focus on scaling the adoption of renewable energy at existing Tier 1 and Tier 2 facilities. Through the adoption and scalability of renewable energy and coal replacement, our aim is to keep our emissions flat against the 2017 baseline year by 2025.

Chemical management

Contributing to a better environment and a safer living space, adidas has been building and implementing a leading chemical management program in its supply chain for years. We have defined an end-to-end-approach spanning the management of chemical input, monitoring the chemical management in our supply chain, and reporting supplier performance data publicly to controlling the finished end product. adidas-group.com/s/chemical-footprint

Driving effective and sustainable solutions, it requires a strong collaboration with different stakeholders, including industry federations and chemical experts. Together with all industry partners, we continued to contribute to the development and updating of both the ZDHC Manufacturing Restricted Substances List (MRSL) and the ZDHC Chemical Management Guidance Framework (CMS). The publication of ZDHC CMS provides a critical link between controlling chemical input and monitoring output. It supports our supply chain chemical management program and helps to avoid hazardous chemicals entering the production processes.

We further improved our chemical input management, recording 83% of auxiliaries volume and 91% of dyestuffs volume from our strategic apparel suppliers as bluesign-approved in 2020. We also continued to be 99% free of poly- and perfluorinated substances (PFCs) in our products for the fall/winter 2021 season.

We believe establishing a sustainable chemical management in our supply chain has a material impact and requires strong competence and skilled personnel retained in production facilities. This year, we partnered with SGS Group to co-develop and roll out the adidas Chemical Management Academy (aCMA) to upskill our business partners on evaluating chemical hazards, and identifying the qualified chemicals to secure the foundation of chemical management systems in the facilities.

Even though 2020 was a challenging year due to the pandemic, our supply chain partners continued to regularly disclose chemical data and accept independent testing of their waste discharges. According to the latest results, the majority of our suppliers’ facilities meet national permitting requirements and 52% of the direct discharge facilities meet the ZDHC foundational level, an industry wastewater standard.

Transportation

We regularly track the environmental impact related to the transport of our goods. Compared to the previous year, performance remained relatively stable. As in previous years, the vast majority of our transportation takes place via sea freight.

Freight types used to ship adidas and Reebok products¹ in % of products shipped

Sustainable materials and processes

We are committed to steadily increasing the use of more sustainable materials in our production, products and stores. We push toward sustainable innovation and circular business solutions.

Synthetic fibers are widely used in our industry due to their unique performance properties such as elasticity, light weight, and high durability. We are aware that products made out of synthetic fibers can have a negative environmental impact during their use phase and acknowledge microfiber pollution as a complex challenge for our industry – one we are proactively addressing. We have established a cross-functional working group and closely collaborate with our suppliers and research institutes to raise awareness of the issue and drive joint solutions toward a global testing standard. adidas is co-founder of The Microfibre Consortium (TMC), which is operational as of 2019, and among others develops tools to minimize shedding and the release of microfibers into the environment, for example via a testing method that enables us to obtain results about the shedding potential of our materials. adidas-group.com/s/product-materials

Sustainable cotton

adidas has steadily increased the sourcing of cotton according to the Better Cotton Initiative throughout the last several years and already managed to source 100% sustainable cotton by the end of 2018. In 2020, we continued to source all cotton globally as more sustainable cotton. The Better Cotton Initiative aims to reduce the use of pesticides, promotes efficient water use, crop rotation and fair working conditions, and strives to transform cotton production worldwide by developing Better Cotton as a sustainable mainstream commodity.

Sourcing of sustainable cotton

100%

Recycled polyester

Using more recycled polyester is yet another way we seek to improve our environmental footprint while still making high-performance products for the athlete. Polyester is the most common single-used material in adidas products and, by 2024, we aim to replace all virgin polyester with recycled polyester in all products where a solution exists. We set clear internal milestones for product creation teams and have seen great progress throughout the last several seasons. In 2020, 71% of all polyester used for our apparel and footwear ranges was already recycled polyester. With that, we are ahead of our plan to use only recycled polyester from 2024 onward. The ‘Primeblue’ and ‘Primegreen’ labels, which were introduced in 2020, mark products made with recycled materials. While offering full functionality and durability in sports, they avoid waste and preserve natural resources. 

Share of recycled polyester

71%

Parley Ocean Plastic

Since 2015, adidas has partnered up with the environmental organization ,Parley for the Oceans’ and uses Parley Ocean Plastic as an eco-innovative replacement for virgin plastic. We continued to roll out Parley Ocean Plastic across key categories and introduced our own label in 2020 for products that contain a certain amount of Parley Ocean Plastic: Primeblue. In 2020, we produced more than 15 million pairs of shoes containing Parley Ocean Plastic. Our target for 2021 is to produce 17 million pairs of such shoes.  See Global Brands adidas-group.com/s/sustainability-innovation

Pairs of shoes containing Parley Ocean Plastic

> 15m

Waste and packaging

We are committed to reducing our plastic footprint globally and are proud of the success we have seen in recent years, such as the phase-out of plastic bags in our own retail stores globally in 2016 and the elimination of single-use plastics across the majority of adidas locations worldwide as of 2018. Where the use of plastics is still unavoidable, for example in transport packaging, adidas is working to find sustainable alternatives. For example, together with the global innovation platform ‘Fashion for Good’, the company is exploring the development of a recycling infrastructure for used polybags as well as innovative recycling processes for polybags, testing the technical feasibility of polybag circularity. In addition, the company aims to reduce its use of virgin plastic and is well on track to meet its goal to transition to the use of 100% recycled LDPE polybags by 2021.

Circular business solutions

adidas takes responsibility for the entire life cycle of a product and follows a clear game plan for moving toward a circular business model. Already in 2019, we successfully showcased proof-of-concept products against circular and regenerative loops by presenting our first fully recyclable and biofabricated products. Futurecraft.Loop is our first 100% recyclable performance shoe made entirely from one material (TPU), using no glue or solvent. To continue this journey, in 2020 we launched the Ultraboost DNA Loop as an evolution of the Futurecaft.Loop model and allocated 1,500 pairs to Creators Club members to help us develop the shoe further. The gained insights will help us refine the commercial launch of our first ‘made to be remade’ products in 2021. In addition, adidas is exploring infrastructure for product take-backs and recycling with partners and governmental bodies.  See Global Brands ADIDAS-GROUP.COM/S/PRODUCT-END-OF-LIFE

Product safety and integrity

Product safety is an imperative. As a company we have to manage the risk of selling defective products that may result in injury to consumers or impair our image. To mitigate this risk, we have company-wide product safety policies in place that ensure we consistently apply physical and chemical product safety and conformity standards. adidas-group.com/s/product-safety

The creation of respective adidas standards and policies is mostly a collaborative, cross-functional approach involving experts from the corporate Legal and Global Operations departments to ensure all aspects of a specific product are covered. This includes subsequent updates and training activities. Application and monitoring are ensured through our Global Operations function.

One of these policies is the Restricted Substances Policy (‘A-01’ Policy) that we pioneered in 1998. It covers the strictest applicable local requirements and includes best-practice standards as recommended by consumer organizations. The policy is updated and published internally and externally at least once a year based on findings in our ongoing dialogue with scientific organizations, and it is mandatory for all business partners. To ensure successful application of the policy across the business, we have established a Product Safety and Compliance workspace that serves as a platform for all employees involved in product creation by providing them with the necessary information and guidance to develop, produce and distribute products according to international regulations and best-practice standards. Both our own quality laboratories and external institutes are used to constantly monitor material samples for compliance with our requirements. Materials that do not meet our standards and specifications are rejected. As a result of our ongoing efforts, we did not record any product recalls in 2020.

Over the last several years, we have substantially contributed to the AFIRM Restricted Substances List, which harmonizes restricted substances lists across the industry. While the uptake of the list as an industry best practice matured further, an assessment approach was initiated in cooperation with international third-party labs in 2020, to evaluate the testing performance and accreditation level of the labs we work with. This approach will ultimately also be made available to other customers of the labs. These are for instance companies from the textile and sporting goods industry and their suppliers. We also continued our participation in several major public stakeholder consultation processes initiated by the European Commission (e.g. European Chemicals Agency) and US state legislative initiatives to inform governmental entities on implications and opportunities of drafted legislation.