Governance

GOV-1 – The role of the administrative, management and supervisory bodies

As a globally operating stock corporation with its registered seat in Herzogenaurach, Germany, adidas AG is subject to, inter alia, the provisions of the German Stock Corporation Act (Aktiengesetz – AktG). One of the fundamental principles of German stock corporation law is a dual board system, whereby the Executive Board is responsible for the management of the company and the Supervisory Board is responsible for advising and supervising the Executive Board. These two boards are strictly separated in terms of both members and competencies. However, both boards cooperate closely in the interest of the company.

We report on the composition of the Executive Board and the Supervisory Board, including expertise, skills and diversity as well as roles and responsibilities in our Annual Report. More detailed information can be found here: SEE EXECUTIVE BOARD SEE SUPERVISORY BOARD SEE SUPERVISORY BOARD REPORT SEE DECLARATION ON CORPORATE GOVERNANCE

The Executive Board is responsible for independently managing the company with the aim of sustainable value creation in the best interests of the company, developing the company’s strategic orientation, coordinating it with the Supervisory Board, and ensuring its implementation. Furthermore, it determines business objectives, the company’s policy, and the organization of the Group. In this respect, the Executive Board also systemically assesses risks and opportunities for the company linked with social and environmental factors, as well as the environmental and social impact of its business activities.¹

Additionally, the Executive Board ensures responsible management of business resources as well as compliance with and observance of legal provisions and internal regulations by the Group companies. For this purpose, the Executive Board sets up an Internal Control and Risk Management System adequate and effective in view of the scope of business activities and the company’s risk situation which comprises a Compliance Management System aligned to the company’s risk situation and also covers sustainability-related objectives. The Executive Board is tied to the company’s interests and obligated to strive for a sustainable increase in the value of the company.

More detailed information on the responsibilities and working methods of the Executive Board can be found here: SEE DECLARATION ON CORPORATE GOVERNANCE

The composition of the Executive Board is determined by the Supervisory Board and reflects the international structure of our company. Every decision by the Supervisory Board on the composition of the Executive Board is made in the best interests of the company and with due consideration of all circumstances in each individual case. It is composed of four members:

• Bjørn Gulden – Chief Executive Officer, Global Brands
• Mathieu Sidokpohou – Global Sales
• Harm Ohlmeyer – Chief Financial Officer
• Michelle Robertson – Global Human Resources, People and Culture

More detailed information on each member of the Executive Board, including their expertise, skills and experience relevant to adidas’ business, can be found here: SEE EXECUTIVE BOARD

The Supervisory Board supervises and advises the Executive Board on questions relating to the management of the company. The supervision and advice also include sustainability issues.

The Supervisory Board is responsible for the appointment and dismissal of members of the Executive Board, and for the allocation of their areas of responsibility and for monitoring and advising the Executive Board in its conduct of business and on questions relating to the management of the company.

The Executive Board reports to the Supervisory Board regularly, extensively, and in a timely manner on all matters relevant to the company’s strategy, planning, business development, financial position, and compliance, as well as on material business risks. Fundamental questions related to the corporate strategy and its implementation are thoroughly discussed and aligned with the Supervisory Board.

Moreover, the Supervisory Board determines the Executive Board compensation system, examines it regularly, and decides on the individual overall compensation of each Executive Board member.

The adidas Supervisory Board consists of 16 members. It comprises eight shareholder representatives and eight employee representatives in accordance with the German Co-Determination Act (Mitbestimmungsgesetz – MitbestG):

• Thomas Rabe (Chairman) – shareholder representative
• Paul Seline (Deputy Chairman) – employee representative
• Ian Gallienne (Deputy Chairman) – shareholder representative
• Birgit Biermann – employee representative
• Jackie Joyner-Kersee – shareholder representative
• Linda Evenhuis – employee representative
• Christian Klein – shareholder representative
• Bastian Knobloch – employee representative
• Oliver Mintzlaff – shareholder representative
• Nassef Sawiris – shareholder representative
• Bodo Uebber – shareholder representative
• Jing Ulrich – shareholder representative
• Petar Mitrovic – employee representative
• Thomas Sapper – employee representative
• Harald Sikorski – employee representative
• Guenter Weigl – employee representative

The shareholder representatives are elected by the shareholders at the Annual General Meeting and the employee representatives by the employees.

In accordance with statutory regulations, the Articles of Association of adidas AG, and the Rules of Procedure of the Supervisory Board, the Supervisory Board has formed five permanent expert committees to handle complex tasks in the most efficient manner:

• Steering Committee: Thomas Rabe (Chairman), Ian Gallienne, Paul Seline
• General Committee: Thomas Rabe (Chairman), Birgit Biermann, Linda Evenhuis, Ian Gallienne, Nassef Sawiris, Paul Seline
• Audit Committee: Bodo Uebber (Chairman), Christian Klein, Thomas Sapper, Guenter Weigl
• Nomination Committee: Thomas Rabe (Chairman), Ian Gallienne, Oliver Mintzlaff
• Mediation Committee pursuant to § 27 section 3 Co-Determination Act (MitbestG): Thomas Rabe (Chairman), Ian Gallienne, Bastian Knobloch, Paul Seline

More detailed information on the committees of the Supervisory Board, including their roles and responsibilities, can be found here: SEE DECLARATION ON CORPORATE GOVERNANCE

The objectives for the composition of the Supervisory Board are published on our corporate website: ADIDAS-GROUP.COM/S/BODIES

According to these objectives, the Supervisory Board should be composed in such a way that qualified supervision of and advice to the Executive Board are ensured. Its members as a whole are expected to have the knowledge, skills, and professional experience required to properly perform the tasks of a supervisory board in a capital market-oriented international company in the sporting goods industry. Therefore, it is ensured that the Supervisory Board as a whole possesses the competencies considered essential in view of adidas’ activities. These competencies include, in particular, in-depth knowledge and experience in the sporting goods and sports- and leisurewear industry, in the business of fast-moving consumer-oriented goods, and the areas of digital transformation and information technology (including IT security), production, marketing, and sales, as well as, in particular, the e-commerce and retail sector. Moreover, the Supervisory Board should possess knowledge and experience in the markets relevant for adidas, in particular, the Asian and US markets, and in the management of a large international company.

In addition, an adequate number of the shareholder representatives should have long-standing international experience.

The Supervisory Board members as a whole must be familiar with the sporting goods industry. Furthermore, the Supervisory Board as a whole must possess knowledge and experience in the areas of business strategy development and implementation, personnel planning and management, accounting and financial reporting, governance/compliance, and sustainability issues relevant to adidas, including ESG aspects. At least one member of the Supervisory Board must have expertise in the field of accounting, and at least one further member of the Supervisory Board must have expertise in the field of auditing. Accounting and auditing also include non-financial reporting and its audit and assurance.

In the Supervisory Board’s assessment, the Supervisory Board as a whole, in its current position, fulfills the objectives stated and the competency profile.

The Supervisory Board’s competency profile and the expertise of the individual Supervisory Board members are outlined under this link: SEE DECLARATION ON CORPORATE GOVERNANCE SEE SUPERVISORY BOARD

The composition of the Executive Board is determined by the Supervisory Board. The Supervisory Board is committed to promoting a culture of diversity and inclusion at adidas. Diversity is understood in the broadest sense, including age, gender, cultural origin, nationality, educational background, professional qualifications, and experience. For this reason, the Supervisory Board has adopted a diversity concept. The Supervisory Board already takes the diversity concept into account in terms of long-term succession planning and when selecting candidates for Executive Board positions.

The Executive Board consists of four members, of whom one is female and three are male (1:3). The share of female members in relation to the number of overall members of the Executive Board is 25% and of male members to the number of overall members is 75%. Thereby, the requirements of § 76 section 3a AktG, which stipulates that at least one woman and at least one man be appointed as members of the Executive Board, are fulfilled. In addition, an age limit of 67 years applies for Executive Board members.

The Supervisory Board is committed to a diverse composition in terms of age, gender, cultural origin, nationality, educational background, professional qualifications, and experience. The Supervisory Board’s diversity profile is outlined in the overviews under this link: SEE DECLARATION ON CORPORATE GOVERNANCE

The Supervisory Board currently consists of 16 members with four female members and twelve male members (4:12). The share of female members in relation to the number of overall members of the Supervisory Board is 25% and of male members to the number of overall members is 75%. It thereby fulfills the statutory requirements of § 96 section 2 sentence 1 AktG, that the Supervisory Board must be composed of at least two women and two men on the shareholder representatives as well as the employee representatives side, respectively.

In general, the age limit for the Supervisory Board members should be 72 years at the time of their appointment.

The Supervisory Board comprises eight shareholder representatives and eight employee representatives in accordance with the German Co-Determination Act (Mitbestimmungsgesetz – MitbestG).

Regarding the independence of its members, the Supervisory Board considers the following provisions to be appropriate: More than half of the shareholder representatives of the Supervisory Board should be independent within the meaning of the German Corporate Governance Code. From the company’s perspective, Supervisory Board members are to be considered independent if they have no personal or business relationship with the company or its Executive Board that may cause a substantial, and not merely temporary, conflict of interest. In the opinion of the Supervisory Board, all shareholder representatives qualified as independent in 2024. Consequently, the percentage of independent shareholder representatives is 100% – and accordingly 50% with regard to the whole Supervisory Board.

In addition, more than two-thirds of the shareholder representatives should be free of any potential conflicts of interest. This applies in particular to potential conflicts of interest that may arise as a result of an advisory or governing body function among customers, suppliers, lenders, or other third parties. As a rule, members of the Supervisory Board should not have a governing body or advisory function with any major competitor and should not have a personal relationship with any key competitor.

Finally, as a general rule with regard to independence, the length of membership of the Supervisory Board should not exceed twelve years or three terms of office.

More details and relevant independent Supervisory Board members can be found here: ADIDAS-GROUP.COM/SUPERVISORY-BOARD

Within adidas, there are various management and supervisory roles, that are responsible for overseeing different aspects of material impacts, risks and opportunities (IROs) management throughout our company. At the highest level are the Executive Board and the Supervisory Board.

The Executive Board determines business objectives, the company’s policy, and the organization of the Group. In this context, the Executive Board also systemically assesses the risks and opportunities for the company related to social and environmental factors, as well as the environmental and social impact of its business activities. The Executive Board members manage relevant IROs as part of their regular responsibilities and coordinate with each other on all cross-functional measures. Collaboration within the Executive Board is governed by the Rules of Procedure of the Executive Board and the Business Allocation Plan. These documents specifically stipulate requirements for meetings and resolutions as well as for cooperation with the Supervisory Board. ADIDAS-GROUP.COM/S/BODIES

The Executive Board put in place an Internal Control system and Risk Management system in light of the scope of the business activities pursued by adidas and in light of its risk situation. This comprises, in particular, the Risk and Opportunity Management System, the Internal Control System, the Compliance Management System and the activities of Internal Audit team.

With regard to the Risk and Opportunity Management System, the Executive Board ensures comprehensive and consistent management of all relevant risks and opportunities, including sustainability-related objectives. The Enterprise Risk Management department, reporting into the CFO, governs, operates, and develops the company’s risk and opportunity management system and is the owner of the centrally managed risk and opportunity management process on behalf of the Executive Board.

The Internal Control System represents a process embedded in the company-wide corporate governance system. It is designed to provide reasonable assurance regarding the reliability of the company’s external financial reporting, as well as the effectiveness and efficiency of operations, the reliability of non-financial reporting, and compliance with applicable laws and regulations. The effectiveness of the non-accounting-related controls is also regularly monitored by the Internal Audit department, reporting into the CEO, and the Global and Market Internal Controls teams.

The Compliance Management System is aligned to the company’s risk situation and also covers sustainability-related objectives. The adidas CCO oversees the company’s Compliance Management System and reports to the CEO. It establishes the organizational framework for company-wide awareness of our internal rules and guidelines and for the legally compliant conduct of our business. The Global Policy Manual provides a framework for basic work procedures and processes, and the Fair Play Code of Conduct stipulates that every employee and our business partners shall act ethically in compliance with the laws and regulations of the legal systems in which they conduct company business. The Compliance Management System is designed to support the achievement of qualitative and sustainable growth through good corporate governance, to reduce and mitigate the risk of financial losses or damage caused by non-compliant conduct, to protect and further enhance the value and reputation of the company and its brand through compliant conduct, and to support ‘Diversity, Equity, and Inclusion’ initiatives by fighting harassment and discrimination.

The Internal Audit department, which works independently from all other functions of the organization, provides the Executive Board and the Audit Committee with regular, objective assurance on the adequacy and effectiveness of the company’s internal control system and risk management system.

More detailed information on the Internal Control System and Risk Management System can be found here: SEE RISK AND OPPORTUNITY REPORT

In addition, a central ESG function, reporting into the CEO, has been established to steer adidas’ sustainability and ESG direction, including overseeing and monitoring the target setting relating to material impacts, risks and opportunities in collaboration with relevant functions, based on an ESG compliance framework.

The head of the central ESG function leads the Sustainability Sponsor Board (SSB). The SSB is composed of senior representatives from different functions across the company and ensures cross-functional alignment, transparent end-to-end management, and execution of agreed-upon sustainability goals. It aims to guide and embed sustainability and ESG within adidas’ functions, enable transformation, ensure regulatory readiness, enable related reporting and risk management, as well as drive communication and engage with stakeholders.

We also maintain a separate compliance function, which operates as the Social and Environmental Affairs (SEA) team, to monitor supplier-facing social and environmental compliance performance and human rights impacts, reporting to the CEO through the General Counsel. In 2022, we established a cross-functional ESG Regulation Board to ensure that we stay well on track of upcoming regulations for managing ESG topics and disclosures. The sponsor of the ESG Regulation Board is also a member of the SSB to ensure the best possible alignment between the two bodies. Notably, various ESG progress updates were provided to the Executive Board and Supervisory Board in 2024.

All of the above functions, as well as other functions that manage IROs at the senior management level, report regularly to the Executive Board and to the Supervisory Board, including on the setting and monitoring of targets relating to material impacts, risks and opportunities. The Supervisory Board is responsible for monitoring the effectiveness of the internal control system and risk management systems. These duties are generally undertaken by the Audit Committee of the Supervisory Board. ESG and sustainability topics at adidas are regularly discussed during Audit Committee meetings. The Audit Committee is also responsible for the preparation and oversight of non-financial reporting at adidas AG. The work of the Audit Committee is regulated by the Rules of Procedure.

More detailed information on the Audit Committee of the Supervisory Board, its members, responsibilities and rules of procedure as well as the focus of its work in 2024 can be found here: ADIDAS-GROUP.COM/S/SUPERVISORY-BOARD-COMMITTEES SEE SUPERVISORY BOARD REPORT

The Supervisory Board is responsible for the appointment and dismissal of the Executive Board members as well as for the allocation of their areas of responsibility. When appointing new Executive Board members, the Supervisory Board provides for the best possible, diverse, and mutually complementary Executive Board composition for the company and, together with the Executive Board, ensures long-term succession planning. This ensures a sustainable approach to identifying and evaluating successor candidates for Executive Board positions, while also accommodating the company’s diversity concept.

With regard to the Supervisory Board, when preparing proposals for the election of shareholder representatives to the Supervisory Board, it takes into account the objectives regarding the composition of the Supervisory Board and, in particular, aims to fulfill the competency profile developed for the Supervisory Board as a whole (see above), which also includes the skills and expertise for sustainability matters. In addition, the Supervisory Board and its committees regularly evaluate the efficiency of their work and resolve on individual measures to further improve the organization of the Supervisory Board’s work.

The members of the Executive Board and Supervisory Board are regularly informed by expert teams who are actively involved in managing all material impacts, risks and opportunities mentioned in this report (in particular, for sustainability-related matters, the central ESG function, the Social and Environmental Affairs team, the Governmental Affairs team, the Legal team, Brand teams, Sourcing teams, Investor Relations, Sales, Enterprise Risk Management, Internal Controls, Internal Audit, Group Policies, and Sustainable Finance), about, e.g., legislative changes related to sustainability, as well as risks and opportunities, in particular with regard to the increasing regulation of environmental/sustainability, social and corporate governance issues. This also includes relevant training opportunities. This ensures that sustainability topics are embedded into the company’s decision making and regulatory/reporting readiness and compliance.

In addition, regular communication with relevant stakeholder groups such as customers, suppliers, business partners, investors, NGOs, or employees further add to their understanding of different stakeholder perspectives.

GOV-2 – Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies

Each of the Executive Board members, including the CEO, is regularly informed about the material impacts, risks and opportunities (IROs), the results and effectiveness of policies, actions, metrics and targets adopted on an ongoing basis by their senior management teams responsible for managing these IROs. The mentioned topics are also an integral part of the meetings of the Supervisory Board and its Audit Committee. SEE GOV-1 – THE ROLE OF THE ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES

In the periods between meetings, the Chairman of the Supervisory Board and the Chairman of the Audit Committee maintain regular contact with the CEO and the CFO, conferring on matters such as adidas’ strategic orientation, business planning and development, the risk situation, potential trade-offs associated with IROs, control and risk management, and compliance. In addition, the Chairman of the Supervisory Board and, as applicable, the Supervisory Board is informed about events of fundamental importance for evaluating the situation, the development and management of the company, if required, also at short notice.

The Executive Board, the Chairman of the Supervisory Board and the Chairman of the Audit Committee report to the Supervisory Board regularly, extensively and in a timely manner on all matters relevant to the company’s strategy, planning, business development, financial position and results of operation, the adequacy and further development of due diligence processes, including updates on the internal control and risk management systems and compliance matters, as well as on special matters of company impacts, risks and opportunities.

Throughout 2024, we monitored our non-financial topics to be assessed as laid out by the ESRS through our 2023 and 2024 full-scope materiality analysis. A list of all assessed material topics that derived directly from IROs (as depicted in the topical standards) was presented to the Audit Committee. In addition, a further list of all immaterial topics that resulted from the assessment was shared with the Audit Committee, followed by a discussion on the immateriality for adidas. The material matters and related IROs can be found in the beginning of each topic chapter.

More detailed information on the content of the Supervisory Board and its committee meetings can be found here: SEE SUPERVISORY BOARD REPORT

GOV-3 – Integration of sustainability-related performance in incentive schemes

The Supervisory Board is responsible for determining, implementing, and reviewing the compensation and the compensation system for the Executive Board members. In case of material changes, however, no later than every four years, the Executive Board compensation system is presented by the Supervisory Board for approval to the Annual General Meeting.

The compensation of the Executive Board members is composed of non-performance-related (fixed) and performance-related (variable) compensation components and consists of a fixed compensation, an annual cash bonus (‘Performance-Bonus’), a long-term share-based bonus (Long-Term Incentive Plan – ‘LTIP Bonus’) as well as other benefits and pension benefits.

Sustainability-related performance criteria can be integrated into the performance-related (variable) compensation. The variable performance-related compensation is designed to provide the right incentives for the Executive Board to act in the interest of the company’s strategic direction, the shareholders, and other stakeholders, as well as to ensure a successful, sustainable, and long-term corporate management and development. When selecting the performance criteria, the Supervisory Board ensures that they are transparent, clearly measurable or identifiable and directly promote the implementation of the strategic direction, including from an ESG perspective.

Performance-Bonus

As the annual variable performance-related component, the Performance-Bonus serves as compensation for the Executive Board’s performance in the past financial year in line with the short-term development of the company. It incentivizes operational success within the established strategic framework. At the start of the financial year, the Supervisory Board establishes the respective weighted performance criteria. In the case of 100% target achievement, the target amount of the Performance-Bonus corresponds to 30% of the target direct compensation of the respective Executive Board member.

The amount of the Performance Bonus is determined based on the achievement of weighted criteria. Two of these criteria are financial performance criteria, which are the same for all Executive Board members and are overall weighted at 80% (‘financial criteria’). The other criteria are defined for the Executive Board as a whole or individually for the respective Executive Board member and are overall weighted at 20% ('other criteria’). These other criteria may comprise financial, non-financial or ESG targets and allow for further differentiation depending on the specific operating and strategic priorities. If several non-financial or ESG targets are selected, the Supervisory Board also determines their relative weighting.

The criteria for the 2024 financial year will be disclosed ex-post in the Compensation Report 2024. In this Compensation Report, the respective target achievements will be explained transparently, and the concrete calculation of the Performance-Bonus amount will be set out comprehensively.

Long-Term Incentive Plan

The LTIP is designed to link the long-term performance-related variable compensation of the Executive Board to the company’s performance and thus to the interests of the shareholders. Therefore, the LTIP is share-based and oriented toward achieving long-term targets. The LTIP consists of annual tranches, each with a term of four years. Each LTIP tranche consists of a three-year performance period followed by a one-year lock-up period.

In case of 100% target achievement, the LTIP target amount for the respective LTIP tranche corresponds to 40% of the target direct compensation of the respective Executive Board member. The amount of the LTIP Bonus is determined based on the achievement of uniform financial and non-financial performance criteria for all Executive Board members, which are derived from the long-term strategic direction of adidas.

During the performance period, a total of 80% of the target achievement is measured against financial criteria and a total of 20% is measured against non-financial or ESG criteria. At the start of the performance period of an LTIP tranche, the Supervisory Board also determines the non-financial or ESG criteria and target values for the entire duration of the performance period.

For the LTIP tranche 2024 (performance period 2024 to 2026), the following ESG-related performance criteria have been set with regard to the strategic targets:

• Reduction of carbon intensity per product²: 10% weighting. The target setting is derived from the CO₂e emissions intensity target per product for 2025 (–15% intensity reduction compared to 2017 and –9% intensity reduction compared to 2022) and is in line with our SBTi-approved targets for 2030 and 2050.
• Percentage of women in leadership positions³: 10% weighting. The target setting is derived from the goal of increasing the percentage of women in leadership positions worldwide to 50% by 2033.

The Compensation Report for each past financial year will include an outlook on the application of the compensation system for the current financial year. This outlook will transparently disclose ex ante the determination of the financial and non-financial or ESG criteria. After expiry of the respective performance period, the performance criteria and targets, as well as the respective target achievement will be outlined transparently and comprehensively disclosed in the Compensation Report. Therefore, the target values and target achievement of the performance criteria determined for the LTIP tranche 2024 and the related determination of the variable performance-related compensation will be disclosed in detail in the Compensation Report 2026.

With regard to the Supervisory Board, the compensation for Supervisory Board members consists of a fixed compensation for their work on the Supervisory Board and an additional compensation for committee work as well as an attendance fee. There are no performance-related targets that are measured against sustainability-related targets and/or sustainability-related metrics. The compensation system for the members of the Supervisory Board is set out in § 18 of the Articles of Association of adidas AG – in case of material changes, however, no later than every four years, the Supervisory Board compensation system will be submitted to the Annual General Meeting for approval.

A more detailed description of the Executive Board and Supervisory Board compensation, the key characteristics of the incentive scheme for the Executive Board, the target setting, and the target achievement can be found here: ADIDAS-GROUP.COM/S/COMPENSATION

GOV-4 – Statement on due diligence

The following table shows where information about our due diligence processes can be found throughout this Sustainability Statement:

GOV-5 – Risk management and internal controls over sustainability reporting

We recognize the importance of establishing robust risk management and internal control processes that support the integrity of our sustainability reporting. We are actively working to assess and integrate controls for ESG reporting into our existing internal control system.

Our risk management and internal control processes for sustainability reporting aim to cover the following scope areas:

• External reporting: Ensure the integrity of disclosed information, with a particular focus on quantitative data points and steering KPIs.
• Regulatory compliance: Ensure compliance with all relevant local, national, and international ESG regulations and standards.
• Internal and external audits: Consider the risks, deviations, and action items highlighted in both internal and external audits.
• Enterprise risk management: Consider risks and opportunities identified in enterprise risk management, which serves as a comprehensive record of our company-level risk-management efforts, including identified risks, their potential impact, their likelihood, and mitigation measures.
• Stakeholder engagement: Consider the expectations and concerns of our key stakeholders, including investors, customers, employees, and the community.

The Global Internal Controls team plays an active role in guiding the business in identifying risks, addressing process gaps, and enhancing controls related to sustainability reporting. Our internal control processes for sustainability reporting aim to include the following key components:

• Risk identification and assessment: Identify potential risks within the key processes and assess their impact and likelihood. A good understanding of the processes and risks is essential to guide effective mitigation efforts and controls.
• Control identification and assessment: Determine whether the designed controls meet the process objectives and are effective in preventing or detecting the risks (e.g., errors or fraud that could lead to material misstatements in reporting disclosures).
• Monitoring and testing: Determine suitable monitoring or testing procedures and assign responsibilities for each control activity formalized in the internal control system.
• Communication and reporting: Integrate ESG-relevant risks and control testing results into existing reports for the Audit Committee of the Supervisory Board.
• Continuous improvement: Enhance the quality and effectiveness of controls during planned revision cycles by re-evaluating regulatory requirements, capabilities, and processes.

From a sustainability reporting perspective, the main objective is to implement effective processes and controls to ensure that disclosed ESG information is complete and accurate. As we progress on our ESG journey over the next few years, we aim to:

• Highlight gaps: Continue to highlight gaps in processes, data, and systems to enhance the level of automation, consistency, and standardization (gap assessment).
• Expand the scope: Implement a phase-in approach to integrating ESG into our internal control system and expand our efforts to cover key business processes and regulations in line with our evolving ‘IC over ESG roadmap.’
• Optimize processes: Refine and optimize our risk management and the internal control processes to achieve greater efficiency and efficacy.

In 2024, the Global Internal Controls team focused on assessing the maturity of existing processes and advising the business on closing identified gaps. The gap assessment focused on the ESRS metrics for the 2024 Sustainability Statement based on the material IROs identified in our materiality assessment. The assessment evaluated the maturity of the underlying processes, data points, and reporting capabilities for each metric. This was achieved by gathering insights and conducting interviews with key business stakeholders. Our primary focus was to gain a thorough understanding of the risks associated with the data-collection processes needed to collect the ESRS quantitative metrics for reporting.

The main risks identified during the assessment include gaps in understanding of ESRS disclosure requirements, inconsistencies in calculation methodologies, data availability and collection issues, limitations in system capabilities, and insufficient process documentation.

The 2024 ESG Compliance Framework project, an internal initiative, has translated the identified gaps into requirements for capabilities and processes to advance ESG compliance and reporting in the coming years. To achieve this, we will invest in capabilities that mitigate risks and address gaps in processes, systems, and data. The Global Internal Controls team will synchronize its roadmap with the ESG investment plan and guide the business to implement the necessary governance processes and controls.

For the ESRS metrics disclosed in the 2024 statement, our primary focus was on documenting the underlying processes and formalizing the control activities in a standardized format (e.g., KPI one-pagers). This also included advising the business teams on mitigation actions for identified gaps, providing guidance on establishing processes and controls that ensure the completeness and reliability of the reported information.

For sufficiently mature processes, we initiated process walkthroughs to evaluate whether the risks are adequately addressed by the implemented controls. Once the design of the controls has been assessed, they will be integrated into our internal control system and are then subject to regular monitoring or independent testing to evaluate their effectiveness.

Once they are available, the ESG internal control testing will be integrated into the existing annual reporting to the Audit Committee of the Supervisory Board. This will include details on the effectiveness of the controls and observations on high-risk deviations. Throughout 2025, we plan to provide more detailed and transparent information on the status of internal controls for ESG to relevant Management as well as the Audit Committee.

1 More detailed information on material impacts, risks and opportunities (IROs) management can be found below.

2 CO₂ equivalent emissions allocated to an average adidas product. Calculated by dividing total emissions of Scope 1, 2, and 3 (without use phase) in kg CO₂e by the total number of products manufactured with regard to season Spring/Summer and season Fall/Winter. The internationally most recognized standards such as the GHG Protocol (Greenhouse Gas Protocol), SBTi (Science Based Targets initiative), and PEFCR (Product Environmental Footprint Category Rules Guidance) are applied for the calculation. This non-financial performance criterion is part of the combined non-financial statement, which is subject to an audit by an external auditor.

3 Global percentage of women in leadership positions on Director level or higher.