Metrics and Targets

E1-4 – Targets related to climate change mitigation and adaptation

For setting our climate strategy targets, we follow the SBTi guidance to be aligned with the 1.5°C pathway. Accordingly, offsets and avoided emissions do not count toward our science-based targets. In addition, the following assumptions were applied:

• We calculated the absolute reduction needed based on a defined business growth assumption and corresponding production forecasts (aligned with the business growth assumptions used for the already presented scenario analysis).
• We made assumptions on how our main sourcing countries will evolve in the coming years, supplemented by insights derived from a third-party study on the development of the energy grid.

We also consulted suppliers to validate our climate strategy as well as increase their commitments and engagement. We monitor the effectiveness of these actions by tracking and reporting applicable milestones.

Further details on our GHG emissions accounting and target setting approach are included in the following section: SEE EXPLANATORY NOTES TO OUR REPORTED GROSS SCOPES 1, 2, 3 AND TOTAL GHG EMISSIONS

For a detailed description of our climate strategy levers and actions, please refer to the following sections: SEE E1-1 – TRANSITION PLAN FOR CLIMATE CHANGE MITIGATION SEE E1-3 – ACTIONS AND RESOURCES IN RELATION TO CLIMATE CHANGE POLICIES

E1-5 – Energy consumption and mix

Through solar PV plants on our facilities’ rooftops, we produced a total of 13,683 MWh of electricity in 2024 (2023: 10,697 MWh). Of this amount, 9,152 MWh was directly used by our own sites (2023: 7,144 MWh), and 4,530 MWh was supplied into the public power grid (2023: 3,553 MWh).

adidas is part of the high-climate-impact sectors ‘manufacturing’ (textile and apparel, leather, and footwear products) and ‘wholesale and retail trade.’ While we do not have significant own manufacturing activities, our business model is based on the sourcing, distribution and selling of finished goods produced by independent, third-party suppliers. In that regard, the net revenue related to high-climate-impact sector-activities is equal to our net sales discussed in the consolidated income statement. This results in an energy intensity of 21.0 MWh per million (2023: 23.1 MWh per million).

Our net sales amount generated by activities in our sector(s) is discussed in the consolidated income statement. SEE INCOME STATMENT

E1-6 – Gross Scopes 1, 2, 3 and total GHG emissions

Explanatory notes to our reported Scope 1, 2, 3 and total GHG emissions

Our GHG emissions are reported in alignment with the methodologies provided by the GHG Protocol and the requirements laid out by the ESRS E1-6.

• In the reporting year, there were no significant changes in connection with our value chain or scope of consolidation, which resulted in a change to the methodology used to present past progress in meeting our climate strategy targets. However, as described within this section E1, we changed our climate strategy target baseline to 2022 from 2017. SEE E1-1 – TRANSITION PLAN FOR CLIMATE CHANGE MITIGATION
• Scope 1 & 2 GHG emissions relate to our own operations including administrative offices, distribution centers, production sites, and own retail stores. The emissions are calculated based on 78% of reported environmental quantities (primary data) in the Health and Safety, Environment, and Energy (HSEE) own operations data collection systems. The calculation for the remaining 22% uses estimations by scaling up the primary data collected on facility or site level to a company-wide level on the basis of the gross lease area (in square meters). In addition, we apply emission factors from different sources in our calculation. For Scope 1 GHG emissions, we use emission factors published by the GHG Protocol, for Scope 2 we use emission factors from the International Energy Agency (IEA) related to emissions from electricity) and the Department for Environment, Food and Rural Affairs (DEFRA) related to emissions from district heating.
• Scope 3 GHG emissions relate to certain upstream and downstream value chain categories, which are significant due to their magnitude (see below). Wherever available, adidas uses primary data in the calculations (examples of primary data used are the annual material consumption, annual sales volumes, energy consumption of key suppliers, as well as shipping data for inbound logistics). Collected primary data is complemented by and matched with life cycle assessment (LCA) data in a tool, which was specifically developed for calculating GHG emissions. In addition, emission factors from different sources are used such as the DEFRA, IEA and the Product Environmental Footprint Calculation Rules (PEFCR).
• Scope 3 GHG emissions include the following significant categories:
• • Purchased goods and services: This category considers the production and processing of raw materials for which impacts are estimated based on quantities of materials and life-cycle analysis data. The reporting year values cover production seasons SS24 and FW24. All key production processes are factored in. Primary, secondary, and tertiary packaging material quantities are also included. The quantities are estimated based on sales volumes, using composition and weight assumptions from the PEFCR. Furthermore, this category also considers the assembly phase, for which impacts are estimated by applying emission factors to reported energy consumption from Tier 1 strategic suppliers. Sourcing volume data is used to estimate the impact of non-strategic suppliers (<20%).
  • Upstream transportation and distribution: This category considers inbound and outbound transportation of products. For calculating GHG emissions, quantities of shipped products for specified distribution routes are combined with transport emissions factors.
  • Business travel: This category includes emissions from air travel by adidas employees. Emission calculations are based on the business travel data system.
  • Use of sold products: This category relates to emissions caused by washing, drying, and ironing of sold products throughout their lifetime. The calculation is based average care cycles data from PEFCR and life-cycle analysis datasets. In line with our SBTi-approved targets, we exclude Scope 3 GHG emissions from use of sold products in our total (=Scope 1 to 3) GHG emissions calculation.
  • End-of-life treatment of sold products: This category relates to emissions caused by disposal of sold products and the calculation uses estimates based on sales volumes and typical waste disposal routes (e.g., landfill and incineration).
• Scope 3 GHG emissions related to the following categories are insignificant for adidas due to their estimated magnitude and excluded from the reported data, accordingly:
  • Capital goods
  • Fuel- and energy-related activities
  • Waste generated in operations
  • Employee commuting
  • Upstream leased assets
  • Downstream transportation
  • Processing of sold products
  • Downstream leased assets
  • Franchises
  • Investments
• adidas has no Scope 1 GHG emissions related to regulated emissions trading schemes.
• adidas has no Scope 1 and 2 GHG emissions related to unconsolidated subsidiaries or joint ventures under adidas’ operational control.
• Biogenic emissions in Scope 1-3 are not reported separately due to immateriality.

Our net sales figure is disclosed in the consolidated income statement. SEE INCOME STATMENT

E1-7 – GHG removals and GHG mitigation projects financed through carbon credits

adidas has no GHG removal or storage initiatives in place and does not plan to implement any in the mid-term future. In addition, adidas does neither purchase nor plan to purchase carbon credits in the foreseeable future to support its climate strategy and to account for in its GHG emission calculation.

Our climate strategy details our actions and targets to reduce future GHG emissions, which are aligned with the 1.5°C pathway and contribute to a net-zero future. As per the SBTi guideline, we will only consider the purchase and cancellation of carbon credits in the long term to remove and/or mitigate any potential residual GHG emissions for which reduction actions are not viable (with a maximum of 10%).

E1-8 – Internal carbon pricing

In order to achieve the targets of the adidas climate strategy, the various measures and actions as presented earlier are driven along milestones with clearly defined accountabilities. Progress against these milestones is monitored, tracked, and reported on regularly to ensure the timely and effective execution. In addition, embedding the carbon intensity target into the Executive Board’s LTIP provides for an adequate steering instrument to ensure that the impact on our climate strategy is a relevant factor in our decision-making (e.g., material selection, investment in renewable energy). We are confident that this approach is sufficient for implementing the needed actions. Accordingly, we do not consider the introduction of an internal carbon pricing scheme as adding value to the execution of the adidas climate strategy at this point in time.