Annual Report 2024

de

Topics Filter

Results

This is a photograph of two individuals. They both seem to be engaged in a conversation or observing something together that isn't visible in the photo. Both people are dressed in sport outfits and are standing near what looks like a fence of a stadium.

ESRS 2 General Disclosures

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

The apparel and footwear industry uses significant amounts of non-renewable and renewable resources. Extraction and growth of resources, as well as intensive manufacturing processes, negatively affect the environment. Equally, resource outflow has negative impacts, including waste generation during production, but also the disposal of products at end of life.

To mitigate such impacts, adidas applies criteria for responsible sourcing, follows product creation guidelines which mandate the use of more sustainable materials1 and provides waste guidelines for upstream activities and own operations. At the same time, our circularity strategy provides us with a long-term vision and sets priorities for our engagement.

SBM-3 – Resource use and circular economy and material impacts, risks and opportunities (IROs)

Sub-topic

 

Material IRO

 

Classifi­cation

 

Time Horizon

 

Value Chain

 

Description

Resource inflows

 

Negative impact

 

Actual

 

n.a.

 

Up-stream

 

The apparel and footwear industry is heavily dependent on the use of resources, both renewable and non-renewable, which leads to adverse environmental impacts.

Resource inflows

 

Risk

 

n.a.

 

Mid-term

 

Up-stream

 

The risk related to resource inflows in the upstream supply chain is due to potentially higher costs and/or unavailability of materials, as well as the risk linked to upcoming regulations like ESPR (Ecodesign for Sustainable Products Regulation) which may require the use of materials (i.e., high-recycled content) that could become scarce.

Resource outflows

 

Negative impact

 

Actual

 

n.a.

 

Down-stream

 

Currently, the lack of a circular economy ecosystem and infrastructure in the apparel and footwear industry means that most products have no circular end-of-life solution and end up as waste.

Resource outflows

 

Risk

 

n.a.

 

Long-term

 

Up-stream,
down-stream

 

The risks associated with resource outflows are:
Upstream: High uncertainty in the regulatory developments in different countries and potentially inconsistent approaches to circular product definition and related infrastructure (e.g., sorting and recycling infrastructure). Such fragmentation may be challenging for a globally operating company such as adidas, e.g., when defining circular product design guidelines.
Downstream: Cost of establishing a circular infrastructure for apparel and footwear is to be partly paid for by brands (e.g., upcoming EPR legislation in several countries).

Waste

 

Risk

 

n.a.

 

Mid-term

 

Up-stream

 

The risk related to waste in the upstream supply chain is potentially higher operational costs for our suppliers, as stricter waste management requirements are imposed on them (e.g., the need for improved processes for waste separation, handling, transportation, disposal, and/or treatment).

We do not expect any presented risks related to resource use and circular economy to result in any additional major risks for the forecast for the 2025 fiscal year compared to the explanations given in the Risk and Opportunity Report. SEE RISK AND OPPORTUNITY REPORT

1 We consider a material sustainable or sustainably sourced when it has a lower environmental and/or social impact than its conventional equivalent. Our materials are evaluated against a pre-defined set of impact criteria which is closely aligned with Textile Exchange’s Preferred Fiber and Materials Matrix (PFMM). Our validation framework and the respective governance is laid down in the Sustainable Ingredient and Concept Standard Definition SOP, see section E5-1.