Annual Report 2024

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Metrics and Targets

E2-3 – Targets related to pollution

We aim to proactively collaborate with our Tier 1 and Tier 2 suppliers to reduce environmental pollution resulting from our manufacturing activities wherever possible. We implement responsible water, waste, and chemical management approaches in our production processes through two approaches:

  • Precautionary approaches: Related targets focus on preventing pollution and minimizing its impact. This involves proactive measures to prevent pollution at the source.
  • Monitoring approaches: Related targets focus on continuous assessment and measurement of pollution levels. Through monitoring, we can identify the areas of improvement and track the progress over time.

adidas has set the following targets to prevent and minimize water pollution and the use of substances of concern, as well as to support the objectives of the Environmental Guidelines. Both targets were developed considering the applicable requirements and standards, baseline assessments and industry benchmark. Moreover, suppliers were involved through maturity and readiness assessments. Lastly, both targets apply ZDHC guidelines as their main guiding principle, as they are based on the latest scientific studies for the industry and are reviewed by the ZDHC Advisory Committee on a regular basis to ensure they meet the latest industry requirements.

Quality of wastewater discharge

By 2025, we aim to ensure that 90% of Tier 1 and Tier 2 suppliers operating on-site effluent plants attain the ZDHC Wastewater ‘Foundational Level,' which sets minimum requirements for testing and managing wastewater to ensure it is safe for the environment. In 2024, 85.5% of our Tier 1 and Tier 2 suppliers achieved the ZDHC Wastewater ‘Foundational Level,’ (2023: 84%) an important milestone towards meeting our 2025 goal.

Annual targets are also set at the facility level to foster continuous improvement in wastewater quality. Progress on these targets is monitored twice a year, through ZDHC Wastewater Test Reports, conducted by third-party accredited labs.

Chemical input management

In 2021, we established the measurement framework and implemented a data-collection system to collect accurate chemical inventory information from our suppliers. This laid the foundation for effective monitoring and tracking of chemical usage throughout our supply chain, which also enabled us to set up a chemical input management target for our suppliers. This target is designed to focus on eliminating the use of any restricted substances in our supply chain by increasing the use of Level 3 chemicals (chemicals that meet the highest conformance level according to the ZDHC MRSL standard).

By 2025, our target is to achieve Level 3 ZDHC MRSL standards for 80% of the chemical formulations used in our production (total number of chemical formulations).

Annual targets are also set at a facility level. Performance is evaluated annually, and suppliers are required to track their performance and report progress monthly. The evaluation processes are conducted by third-party auditors. Through strong collaboration with our chemical formulators via the ‘adiFormulator’ program (established in 2023), we have improved the quality of chemicals to meet ZDHC MRSL Level 3 requirements. The success of this program has further supported our suppliers in achieving 73.5% of the chemical formulations used in production to meet the ZDHC MRSL Level 3 standard in 2024 (2023: 66.6%). We see this optimization as a key step toward achieving our 2025 target.

Our Tier 1 and Tier 2 suppliers are required to fulfill local regulatory requirements as well as adidas specific environmental requirements. Pollution-related targets are mandatory for suppliers with a high environmental risk due to their production processes and significant business impact in a given year. These high-risk suppliers are reviewed annually to ensure the right coverage for the environmental measures.