Strategy

SBM-1 – Strategy, business model and value chain

For information on our business model and value chain please refer to the ‘Our Company’ section. SEE OUR COMPANY

Headcount of employees by geographical area

As of the end of the reporting period, adidas employed approximately 62,035 people worldwide. The geographical distribution of our employees is as follows SEE ESRS S1 OWN WORKFORCE

Sustainability-related goals

Our commitment to sustainability is rooted in our purpose, ‘Through sport, we have the power to change lives.’ To underline this commitment, in 2021, we further sharpened our focus on sustainability and defined a roadmap for 2025 and beyond that allows us to create – and drive – positive impact. We will continue joining forces with the industry and peers to drive systemic change such as with the ‘T-REX’ initiative, and will focus on our decarbonization roadmap that covers our entire value chain. These efforts include measures to reduce our adverse impacts across major product groups such as footwear and apparel. We will continue to empower our employees to become sustainability ambassadors, just as we invite our consumers globally to engage and connect with us on the topic of sustainability, e.g., through our established running movement. Lastly, we also aim to uphold the highest standards in the area of social compliance across our supply chain. For further information on our individual targets, please refer to the topical standards in this Sustainability Statement.

Environmental impacts

In 2024, climate change, pollution, water, biodiversity and ecosystems, and resource use and circular economy were confirmed as material environmental impact areas for us to continue to focus on in the future. We continued to work on the reduction of our greenhouse gas (GHG) emissions across our entire value chain. We also assessed selected key materials potentially contributing to biodiversity risks and committed to a deforestation-free leather supply chain by 2030 at the latest. We further evolved our circularity approach to support the creation of an ecosystem needed to scale circular solutions in our industry. This included focused engagement in cross-industry projects aimed at unlocking circularity, such as ‘T-REX’ and ‘Sorting for Circularity.’ We also continued to address water efficiency and quality in our supply chain, with an advanced chemical management program and ambitious targets in place.

Engaging closely with our suppliers also remains critical to achieving our targets. We are therefore leveraging our long-term relationships with suppliers to ensure they contribute to achieving our decarbonization targets. We are furthermore working closely with partners to scale innovative materials, recycling technologies, and circular business practices across the value chain.

We believe that moving toward achieving the targets we have defined for 2025 and beyond will set us up for future success.

Social impacts

adidas recognizes its responsibility to respect human rights and the importance of managing the appropriate due diligence to fulfill this obligation as a business. We do this by striving to operate responsibly along the entire value chain, from raw material production to our own operations; by safeguarding the rights of our own employees and those of workers who manufacture our products through our Workplace Standards; and by using our influence on suppliers and our industry to bring about positive change wherever adverse human rights impacts are linked to our business activities. Detailed information can be found in the topical Social Standards. SEE ESRS S1 OWN WORKFORCE SEE ESRS S2 WORKERS IN THE VALUE CHAIN SEE ESRS S3 AFFECTED COMMUNITIES SEE ESRS S4 CONSUMERS AND END-USERS

Governance impacts

We are convinced that good corporate governance is an essential basis for sustainable corporate success and strengthens the trust placed in our company by our shareholders, business partners, employees, as well as the financial markets. Further information can be found on our corporate website as well as in the ESRS G1 Standard. SEE ESRS G1 BUSINESS CONDUCT

Business model and value chain

To achieve our mission of being the best sports brand in the world, our business model is centered around designing and developing performance and lifestyle products that resonate with our consumers. We aim to set trends, drive innovation, and respond swiftly to consumer preferences, ultimately creating brand heat. Our production is carried out in collaboration with independent manufacturing partners in our upstream value chain, which includes Tier 4 and beyond suppliers for raw material sourcing, Tier 3 and 2 suppliers for material manufacturing, spinning, coloring and finishing, and Tier 1 suppliers involved in assembling adidas products.

In our own operations within our business activities, we design and develop products, engage with consumers through marketing activities and sales, and tailor our global distribution network to meet the needs of our sales channels and consumers. We respond to consumer preferences, collaborate with investors, and partner with brands and creators to generate demand for our products. To drive these business activities, key input factors are essential to deliver value to our investors, consumers, and business partners by creating innovative products and sustainable offerings, responding to consumer demands and creating brand heat (output factors).

Our products are designed to create positive downstream value chain outcomes, such as improved athlete performance, enhanced consumer satisfaction, increased product demand, and the creation of brand heat. Additionally, we work to reduce adverse ESG impacts and risks of our business activities throughout our entire value chain, from sourcing materials to minimizing environmental and social impacts through applying our due diligence processes and Workplace Standards with strategic suppliers. While we strive for positive outcomes, we acknowledge that negative outcomes can occur. We remain committed to balancing attractive investments with reducing adverse ESG-related impacts to ensure long-term financial and brand success. An illustrative figure displaying the key inputs, outputs, and outcomes of our business activities as they relate to our value creation can be found in the Group Management Report – Our Company. SEE OUR COMPANY

SBM-2 – Interests and views of stakeholders

We seek to ensure that we address the topics that are most salient to our business and our stakeholders. To identify these topics, we actively engage with our stakeholders and consider their views and opinions when making decisions that shape our day-to-day operations as well as when setting targets. We continuously communicate with relevant stakeholder groups such as customers, suppliers, business partners, investors, NGOs, or employees to enable stakeholder feedback and act on stakeholder concerns. This is integral to our human rights and environmental impact due diligence activities and the shaping of our social and environmental strategies and plans.

Our stakeholders are those people or organizations who affect – or are affected by – our operations, including the following:

• adidas employees
• Authorizers: governments, trade associations, shareholders, and the Executive Board
• Business partners: suppliers, licensees, and service providers
• Workers in our suppliers’ factories
• Human rights defenders: trade unions and community activists
• Opinion formers: journalists, community members, academics, and special interest groups
• Customers: professional athletes, distributors, retailers, and consumers

Engaging openly with stakeholders and establishing ways to increase transparency and disclosure has long been central to our approach. The adidas Stakeholder Relations Guideline specifies key principles for the development of stakeholder relations and the different forms of stakeholder engagement. It highlights the importance of meeting the changing expectations of our stakeholders and encourages open, honest communication that fosters trust and cooperation. Our principles that guide stakeholder-relations development are:

• Those affected by adidas’ business have the right to be informed about our activities, participate in a transparent stakeholder engagement process, and be involved in issues and opportunities that affect them.
• Stakeholders will be provided with timely and accurate information about our business, and we will take their needs and concerns into account when making decisions on behalf of the company.
• We will actively seek stakeholder input and feedback on business decisions and will act on what we learn.
• We will encourage stakeholders to define how they wish to be consulted and strive to remain flexible and responsive to stakeholder preferences.
• We will identify, assess, and address potential risks of stakeholders and adidas to ensure a high-quality engagement process and outcome.
• Those acting on behalf of adidas must be willing to be influenced by stakeholders and, where appropriate, act on their input, even if this means changing the company’s business plans.
• We respect the values and culture of each stakeholder. When disagreements with stakeholders arise that cannot be resolved, our employees will always show respect for the diversity of views presented.

adidas’ stakeholders are diverse, which translates into a wide range of engagements, some of which are ongoing and span many years, and some of which are targeted, based on current issues or trends requiring critical feedback. Thus, our numerous stakeholder engagements range from basic communication, consultation and dialogue to more in-depth processes such as advisory panels or multi-stakeholder forums. The most frequent forms of stakeholder engagements we practice include:

• Holding formal stakeholder consultation meetings (stakeholder dialogue) with workers, union representatives, NGOs, and suppliers.
• Meetings with investors and investment analysts
• Employee engagement through surveys, internal information, reporting and induction programs, as well as grievance channels to the senior management and Works Councils
• Responding to enquiries from consumers, media, and authorities
• Collaborating with other brands and other companies in joint initiatives
• Participating in multi-stakeholder initiatives
• Engaging in outreach to the academic community, governmental organizations, and governments

Regardless of the form of engagement, we will seek to ensure that the approach, at a minimum:

• Addresses key stakeholder expectations,
• ensures that stakeholder concerns, perceptions, and viewpoints can be fully and accurately expressed and recorded, and
• enables us to provide a coherent response to stakeholder expectations and concerns.

adidas also participates in a variety of industry associations, multi-stakeholder initiatives, and non-profit initiatives, including the Apparel and Footwear International RSL Management (AFIRM) working group, Better Cotton (BC), Fair Factories Clearinghouse (FFC), Fair Labor Association (FLA), Fashion for Good, Federation of European Sporting Goods Industry (FESI), German government-led Partnership for Sustainable Textiles (Textilbündnis), Leather Working Group (LWG), Organic Cotton Accelerator (OCA), Textile Exchange, The Fashion Pact, The Microfibre Consortium (TMC), International Accord for Health and Safety in the Textile and Garment Industry, United Nations Fashion Industry Charter for Climate Action (UNFCCC), World Federation of the Sporting Goods Industry (WFSGI), Zero Discharge of Hazardous Chemicals (ZDHC) Foundation and the Organization for Economic Co-operation and Development (OECD) Forum on Due Diligence in the Garment and Footwear Sector, among others. Through these memberships and engagements, we work closely with leading companies from different sectors to develop sustainable business practices and discuss social and environmental issues on a global, regional, and local levels.

As stated above, our stakeholder engagement strongly informs our operational decision-making and is considered to improve our strategies, e.g., through our ongoing exchange with the investor and analyst community, we are well aware of their expectations and respond accordingly. Another example is the employee listening survey, the results of which are carefully analyzed and acted upon by the different internal business functions and teams. We also use collaborations and partnerships to build leverage for systemic change in our industry, such as for efforts in the textile and footwear supply chain to mitigate the GHG emissions, to strengthen chemical management practices, and to raise social and environmental standards. In addition, we build awareness, capacity, and knowledge of laws and rights among factory management and workers by partnering with leading providers such as the International Labor Organization’s (ILO) ‘Better Work’ program and the United Nations’ International Organization for Migration (IOM) with the objective of ensuring that the labor rights of foreign and migrant workers in the adidas supply chain are upheld.

During our double materiality assessment, we used internal management to represent key external stakeholder interests and views, as detailed in IRO-1. This approach allowed us to gain a clear understanding of the interests and views of our most important stakeholders and to have them represented in our discussions and evaluations of the materiality for each topic. Experts and senior management from all relevant teams were involved to represent the environmental perspective, such as our decarbonization and biodiversity experts and our SVP for Sustainability and ESG. On the social side, many teams of the Human Resource (HR) function were involved to ensure that the interests of our employees were understood and represented, e.g., on Diversity, Equity and Inclusion (DEI). Similarly, our Social and Environmental Affairs (SEA) team, which manages the human rights perspective with all involved stakeholders, was an essential contributor of the materiality analysis.

As consumer demand and all other stakeholder interests and views may change over time, we will adapt our approach accordingly to ensure we meet these expectations. Each function at adidas continuously adjusts its actions to stakeholder group expectations based on the results of stakeholder engagement and dialogue. In this way, we ensure that we address the topics that are most salient to our business and our stakeholders, and the challenges ahead.

We strive to keep up with our stakeholders’ views and interests regarding sustainability impacts. Due to the cross-functional nature of these impacts, each team that interacts with our key stakeholder groups informs its management teams and the Executive Board of any relevant major changes on a regular and/or ad hoc basis. The Supervisory Board reports publicly on the content of its meetings in each Annual Report. SEE SUPERVISORY BOARD REPORT

For further information on stakeholder engagement, please refer to the topical Standards or on the adidas website. ADIDAS-GROUP.COM/S/ENGAGEMENT WITH STAKEHOLDERS

SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and business model

Disclosures related to the SBM-3 data points as well as the list of material impacts, risks and opportunities (IROs) are displayed in each topical standard, where applicable.