Impact, Risk and Opportunity Management

G1-1 – Business conduct policies and corporate culture

We consider compliance with the law as well as with external and internal regulations to be imperative. The Executive Board sets the tone from the top, and every employee is required to act ethically and in compliance with the law as well as with internal and other external regulations while executing the company’s business. Our Fair Play Code of Conduct establishes high ethical standards that we are committed to upholding. adidas Fair Play aims to prevent a majority of potential compliance issues. For that reason, we have specific measures to detect and respond to any concerns. We realize, however, that no compliance system can prevent all violations.

Alongside our Code of Conduct, we implement our approach to corporate culture based, inter alia, on the policies and concepts described below:

Compliance Management System (adidas Fair Play)

Our Compliance Management System (CMS) is linked to both the company’s risk and opportunity management system and our set of internal controls and is overseen by the adidas CCO. As part of our global ‘Fair Play’ concept, the CMS establishes the organizational framework for company-wide awareness of our internal rules and guidelines and for the legally compliant conduct of our business. It underscores our strong commitment to ethical and fair behavior in our own organization and also sets the parameters for how we deal with others.

Our central Compliance team works closely with Regional Compliance Managers and Local Compliance Officers to conduct a systematic assessment of key compliance risks on a regular basis.

The adidas CMS is based on the OECD Principles of Corporate Governance and complies with the OECD Guidelines for Multinational Enterprises. It is designed to:

• support the achievement of qualitative and sustainable growth through good corporate governance,
• reduce and mitigate the risk of financial losses or damage caused by non-compliant conduct,
• protect and further enhance the value and reputation of the company and its brand through compliant conduct, and
• support diversity, equity, and inclusion (DEI) initiatives by fighting harassment and discrimination.

The adidas Fair Play Code of Conduct is accessible on our website, includes guidelines for employee behavior in everyday work, and is applicable globally for all business areas. ADIDAS-GROUP.COM/S/CORPORATE GOVERNANCE

Our CMS is organized around three pillars: prevent, detect, and respond.

Prevent

The Compliance team regularly reviews and updates the CMS as necessary. The management also shares compliance-related communication, and the Compliance department provides mandatory training to all corporate employees globally during onboarding and in regular, repeated cycles. The Compliance team and partners also provide targeted in-person compliance training, also including non-corporate employees. Dedicated trainings also cover anti-corruption and anti-bribery topics, thereby ensuring training-coverage of functions-at-risk with senior management and newly promoted or hired senior executives across the globe in order to further enhance the compliance ‘tone from the top,’ as well as the ‘tone from the middle.’

The training is available both virtually (self-led course for corporate employees) and in-person, providing a foundational understanding of employee behavior and conduct. Completion rates are tracked and reported to the Audit Committee. In addition, our Regional Compliance Managers and Local Compliance Officers offer tailored training sessions for specific functions (e.g. anti-trust training for marketing and sales organization).

At adidas, we have a zero-tolerance policy against bribery and corruption. Every reported incident is investigated, and appropriate consequences are applied. We have identified that sourcing, non-trade procurement and brand partnerships pose a particularly increased risk for corruption and bribery. To mitigate these risks, we have established additional rules for brand partnerships, non-trade (indirect) procurement of non-trade goods/services, along with a robust internal control system.

Executive Board and Supervisory Board members are upskilled on our Code of Conduct and compliance matters. This upskilling encompasses in particular:

• Their general duties as specified in the Articles of Association and Rules of Procedure of adidas AG (including those for the Supervisory Board committees and Executive Board business allocation plan),
• Regulation (EU) No 596/2014 (the “Market Abuse Regulation”) and associated responsibilities, such as insider trading, closed periods, and disclosure of managers transactions, and
• the general legal framework, including German Stock Corporation Law and the German Corporate Governance Code.

The upskilling is part of their onboarding process. Additional training sessions are provided as necessary throughout their tenure.

To ensure clarity and consistency in our operations, we further rely on our comprehensive set of rules comprising mandatory standards for all employees. They are provided via the Global Policy Manual (GPM) platform, which exists to help employees to find, read, and understand:

• the framework defining Dos and Don’ts set by the company,
• the right contacts in our organization for content-related topics, and
• regular communication of new policies and policy updates.

The GPM platform contains information on policies that are categorized as must-read policies, which are applicable to all adidas employees. All employees must be familiar with these policies. Short policy-summaries are provided where no further training is available through the GPM platform.

Moreover, we communicate updates to existing policies via our intranet, and in addition, each policy owner is ultimately responsible to ensure communication and training of their policies to the relevant target audience. Such communication regularly includes emails to the respective target audience and may include dedicated Q & A sessions or other formats to familiarize them with the new rules.

Detect – The Fair Play whistleblowing procedures

To promote transparency and maintain the highest ethical standards, we encourage our employees, business partners, and customers to report any potential violations of law, ethics, or our Fair Play Code of Conduct to our Compliance department.

adidas has whistleblowing procedures in place, accessible to both internal and external stakeholders, to ensure timely detection of potential infringements of statutory regulations or internal guidelines. Employees can report compliance concerns internally to their supervisor, the CCO, Regional Compliance Managers or Local Compliance Officers, the relevant HR Manager, or, where applicable, the Works Council. Employees can also report externally via the independent, confidential Fair Play hotline and webform, which also allow for anonymous complaints. The Fair Play hotline and webform are available in multiple languages at all times worldwide, including the services of interpreters, if required. They are promoted digitally and with posters to reach all our locations around the world.

The adidas Fair Play Code of Conduct as well as our Compliance Policy (see above for both) and our Anti-Harassment and Anti-Discrimination Policy[46] state that any adidas employee who in good faith reports a reasonable suspicion of a (potential) compliance concern is protected against any form of retaliation, regardless of the validity of the suspicion. Conversely, any employee who retaliates or attempts to retaliate against a fellow employee who has reported or intends to report a suspected or actual compliance incident or other concern in good faith – including by pressuring or threatening the reporting employee – may be subject to disciplinary measures. Additionally, any employee found to have made a report with malicious intent may be subject to disciplinary measures. Reasonable measures to protect whistleblowers from retaliation will be decided on a case-by-case basis. This may include, among others, confidentiality assurance based on the need-to-know principle, use of external meeting facilities or secured communication media, physical relocation or protection, involvement of public authorities, collaboration with Human Resources to avoid disciplinary action or other adverse employment consequences.

Since adidas AG is headquartered in Germany, the Fairplay Whistleblower hotline and web form comply with the German Whistleblower Protection Act (‘Hinweisgeberschutzgesetz’) transposing Directive (EU) 2019/1937. Training regarding the whistleblowing system is part of the onboarding training and provided through various communication measures.

Respond

Appropriate and timely response to compliance violations is essential. The CCO leads all investigations in cooperation with an established team of Regional Compliance Managers and a global network of Local Compliance Officers. We track, monitor, and report potential incidents of non-compliance worldwide. Most importantly, insights gained from the investigation of past violations are used to continuously improve the CMS. Where necessary, we react promptly to confirmed compliance violations, through appropriate and effective sanctions ranging from warnings to termination of employment contracts. Together with the Employee Relations (ER) organization, a key partner in many compliance matters, especially those related to harassment and discrimination, we use a case management tool allowing both Compliance and ER to effectively document and process cases as well as report on specific developments in more detail. SEE ESRS S1-17.103, S1-3 AR28FF, S2-3.27 AND AR27, S3-3.27 AND AR18, S4-3.25

The CCO regularly reports to the Executive Board on the further development of the CMS and on major compliance cases. In addition, the CCO reports to the Audit Committee on a regular basis.

G1-2 – Management of relationships with suppliers

Supplier management is a fundamental aspect of adidas success as we have outsourced the vast majority of the production of our products to independent manufacturing partners (trade-related supplier services), located mainly in Asia. Additionally, we have non-trade-related supplier services that support our operations but are not directly tied to product manufacturing (such as logistics services, media and marketing services, office supplies, consumer event services or store constructions etc.). With regards to all of our suppliers, the highest scored material impacts, risks and opportunities include human rights as well as environmental impacts and mainly occur in our upstream value chain and to a lesser extent in our downstream value chain. SEE ESRS S2 WORKERS IN THE VALUE CHAIN, SEE ESRS S3 AFFECTED COMMUNITIES, SEE ESRS E1 CLIMATE CHANGE TO ESRS E5 RESOUCRE USE AND CIRCULAR ECONOMY

Consequently, our human rights and environmental risk due diligence (HREDD) system encompasses our sourcing activities, as well as additional functions within our own operations, including Global Brands, Global Non-Trade Procurement, and Human Resources. Our HREDD framework guides internal risk assessment and risk management processes in accordance with the United Nations Guiding Principles on Business and Human Rights & OECD Guidelines for Multinational Enterprises, operationalizes our Human Rights Policy commitments, and meets other regulatory obligations including the German Supply Chain Due Diligence Act. Accountability for HREDD is assigned at a functional level, along with established internal risk assessment and reporting procedures.

The assurance and risk mitigation activities associated with our HREDD systems support the company in fulfilling its legal obligations, reducing the risks of penalties for non-conformance with relevant laws. More importantly, it fulfils adidas’ Human Rights Policy commitment to:

• take measures, based on due diligence processes, to avoid causing or contributing to adverse human rights impacts through our own activities, and to address and remediate such impacts when they occur.
• seek to prevent or mitigate adverse human rights impacts that are linked to our operations, products, or services by our business relationships, even if adidas has not contributed to those impacts.
• exercise our leverage, and increase such leverage where necessary, to address adverse human rights impacts arising out of our business relationships.

Trade-related supplier management

Our global supply chain extends through various tiers, with many diverse types of business partners, including directly contracted suppliers, as well as indirect relationships managed through intermediaries, licensee and agents.

While we provide our manufacturing partners with detailed specifications for production and delivery, they possess expertise in cost-efficient, high-volume production of footwear, apparel, and accessories and gear.

In 2024, we worked with 124 independent manufacturing partners (2023: 104) that were producing in 283 manufacturing facilities (2023: 237). The majority (78%) of our independent manufacturing partners is located in Asia (2023: 78%). We value long-term relationships: 68% of our independent manufacturing partners have worked with adidas for at least ten years, and 37% have a tenure of more than 20 years.

We have established the Responsible Sourcing & Purchasing Policy, which defines our approach to responsible sourcing and purchasing practices within ten buyer commitments we make to our suppliers. One important commitment is on fair terms of payment, including making on-time payment within agreed timeframes. Other commitments include building long-term partnerships with supply chain partners who share our values and commitment, e.g. to the adidas Workplace Standards. These ten buyer commitments are linked to the external and independent non-profit organization ‘Better Buying Institute’ which assesses and reports on the sourcing practices of participating brands of which we have been a member since 2019. This subscription allows us to collect feedback from our manufacturing partners – both anonymously and openly – which in turn, helps us to improve our purchasing practices.

Non-trade-related supplier management

In 2024, we continued to embed our HREDD system across the business to identify and manage high-risk human rights issues. This included the further maturing of internal risk management procedures in the area of non-trade-related supplier services as it relates to suppliers of non-trade goods and services to adidas. This has included expanding the use of the EcoVadis sustainability assessments tool to evaluate the sustainability management systems of non-trade suppliers – both upstream and downstream – and, where required, engage prioritized partners on performance improvement plans.

adidas has a Global Non-Trade Procurement Policy that outlines and standardizes the Global Non-Trade Procurement (GNTP) processes and roles and responsibilities when purchasing indirect/non-trade goods or services or when engaging with third-party suppliers in the scope of GNTP on behalf of adidas. Its objective is to optimize budget usage, ensure efficient purchasing processes, enhance transparency, minimize legal risks and improve supplier performance. To provide services to adidas, suppliers must have their data registered in our main Enterprise Resource Planning (ERP) system before any purchases or invoice payments can be processed. adidas’ standardized GNTP processes and policy thus create fair and equal opportunities as well as a stable business environment for all GNTP-related third-party suppliers, in particular for small and medium-sized enterprises that rely on contractual payments due to limited financial flexibility.

Social and ecological criteria in supplier selection

With our HREDD system, various supplier assessment tools such as the EcoVadis sustainability assessment tool, the Exiger legal compliance tool as well as our trade-related supplier selection practices, we believe we are well equipped to ensure that we select the right partner for the success of our business and to manage adverse impacts on human rights and on the environment. At the same time, these tools are also used to ensure that existing suppliers comply with human rights standards and environmental protection. In the case of suppliers not meeting the standards and/or not responding on critical assessment results within an appropriate timeframe – typically three months, depending on the case – adidas reserves the right to terminate the collaboration with the supplier.

Our Code of Conduct for suppliers, the Workplace Standards, are contractually binding requirements applicable to our suppliers’ factories, covering health and safety, labor rights and environmental protection. They are also applicable to our non-trade-related suppliers where relevant. The Workplace Standards draw from international law and the International Labour Organization (ILO) conventions and follow the World Federation of Sporting Goods Industry (WFSGI)’s Code of Conduct.

Supporting guidelines make the Workplace Standards understandable and provide additional guidance for our suppliers, to find effective solutions to workplace problems, including material risks and impacts such as occupational health and safety. These Guidelines provide practical guidance on how to implement the Workplace Standards e.g. in a factory. The Guidelines on Employment Standards, together with the Guidelines on Health & Safety and Environment, remain our essential guidance for business partners on managing issues regarding labor conditions and workplace practices.

G1-3 – Prevention and detection of corruption and bribery

In line with our Code of Conduct and our Compliance Policy, adidas strictly prohibits all acts of corruption and bribery, regardless of the identity or position of the parties involved: adidas does not and will not engage in bribery or corruption or any activities that could be perceived as such. This means that all employees must abstain from any acts of corruption or bribery, whether directly or indirectly via the means of any intermediaries.

This commitment is further reinforced by our Fair Play Code of Conduct and the related onboarding training, that all employees are required to complete. Therefore, 100% of the corporate employees, which include the material functions at risk, are covered by Fair Play Code of Conduct onboarding training (completion rate for new joiners in 2024: 97%). In addition, we offer comprehensive global training modules as well as specialized training on anti-bribery and anti-corruption topics by Regional Compliance Managers and Local Compliance Officers. Please refer to G1-1 for more information on the training. G1-1

As anti-corruption and anti-bribery are integral components of our CMS for detecting and addressing such cases, the established procedures (based on the three pillars prevent, detect, respond) also apply to incidents of corruption and bribery. Detailed information on our CMS can also be found under G1-1. G1-1

We conduct trend analyses to ensure that we learn from cases, provide necessary interventions, and strengthen our internal processes to prevent any reoccurrences. Additionally, we continuously update our training programs to reflect lessons learned.

We empower our Compliance teams to manage all cases, including allegations against senior leaders. Investigations are conducted with the highest level of professional skill, ensuring independence, including leveraging external resources where required.

The Compliance team is committed to conducting fair investigations with impartial investigators, ensuring that all parties involved are treated with respect. Any potential conflicts are managed promptly, and our CMS also includes built-in controls to restrict access of anyone who may be involved, including members of the Compliance team.

The Compliance team reports all cases of corruption and bribery to the CCO, the Executive Board, or the Supervisory Board/Audit Committee as appropriate.

1 Publicly accessible here: adidas-group.com/s/sustainability