Impact, Risk and Opportunity Management

S2-1 – Policies related to value chain workers

The policies described below are based on international law, including the conventions under the International Bill of Human Rights, the International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work and related conventions, as well as the other international and third-party standards and initiatives outlined in the table. As our governance framework related to value chain workers is very comprehensive, only the most important documents are listed in the table below.

Policies related to the Impacts, Risks and Opportunities in our Upstream Supply Chain

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. The Workplace Standards are based on international law and the International Labour Organization (ILO) conventions and follow the code of conduct of the World Federation of Sporting Goods Industry (WFSGI). They are also aligned with the Fair Labor Association (FLA) ‘Workplace Code of Conduct’ and ‘Principles of Fair Labor and Responsible Sourcing.’

Guidelines on Employment Standards and Health & Safety Guidelines

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 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 in our upstream supply chain. The guidelines encompass material topics including freedom of association, collective bargaining, social dialogue, health and safety, child labor and forced labor, and non-discrimination, among others. We ensure the guidelines are communicated to all suppliers during the onboarding process and they remain available on our corporate website. The SEA department is accountable for the guidelines’ implementation.

Environmental Guidelines and Environmental Good Practice Guideline and Toolkit

The Environmental Guidelines are based on international industry practice and standards for environmental management and resource efficiency measures and support compliance with adidas’ Workplace Standards.

Managing Supplier Compliance – Guidelines on Enforcement and Termination

The Enforcement Guideline sets out the SEA department’s enforcement approach in cases when a supplier fails to comply with the Workplace Standards. The guidelines provide an overview of how and where to find relevant information to assist in enforcement actions which maps out the process of investigation, remediation, and enforcement, as well as the parties involved in that process. It is applicable to all suppliers, licensees, agents, or other similar third-party business entities which source suppliers for the production of adidas product.

The Termination Guideline outlines the key requirements to be followed when terminating a business relationship and to ensure that the actions are undertaken in a transparent and ethical manner. The SEA department’s work is remedial in nature. SEA does not use punitive action as a first step for non-compliance. Opportunities are given to a supplier to remedy compliance issues before SEA, as a last resort, recommends to a sourcing entity to terminate a business relationship. As a result, the termination of a supplier solely for poor compliance is rare and usually the result of long-term inferior performance or a violation of specific zero-tolerance issues.

The Guidelines on Redundancy and Layoffs address cases in which secure employment may be at risk due to termination of a supplier relationship, downsizing, phasing out, or consolidation, which may result in substantial layoffs or the closure of a factory. These guidelines help mitigate the negative impact on their workforce.

We need to ensure that sourcing and purchasing decisions do not conflict with the fulfillment of the Workplace Standards. To this end, adidas has the Responsible Sourcing & Purchasing Policy in place along with the 10 Buyer Commitments. These documents are publicly available on our website. The policy outlines the processes to help reduce the potentially adverse business impacts that arise from suppliers’ inability to comply with adidas Workplace Standards, in particular with regard to working hours (e.g., overtime resulting from certain purchasing decisions).

We furthermore implement standard operating procedures to authorize, monitor, and manage business relationships in our supply chain. Core policies and procedures that are part of adidas’ policy framework include:

• Factory Approval Policy – describes the procedures for getting authorization from SEA for all production
• External Monitoring Policy – outlines requirements for external auditors conducting factory assessments on behalf of adidas business entities and licensees
• Remediation Guide – describes the approach for remediation of non-compliances to suppliers, including timelines, documentation and verification
• Termination Guideline – describes our approach to ethically terminate a relationship with a supplier
• Fair Factories Clearinghouse procedure – describes the responsibilities for disclosing and maintaining data in the company’s supply chain database

Human Rights in the value chain

adidas is committed to respecting and promoting the fulfillment of human rights throughout the value chain. Human rights are basic rights and freedoms for everyone based on dignity, fairness, equality, and respect. For more information on the adidas’ Human Rights Policy see ESRS S1 OWN WORKFORCE

The Human Rights Policy is operationalized through our human rights and environmental risk due diligence (HREDD) system. For an overview of our due diligence processes see ESRS G1 BUSINESS CONDUCT

Our approach to respecting the human rights of value chain workers is based on our Workplace Standards and our Human Rights Policy, which safeguard fair and safe working conditions. These policies help ensure fair compensation, protect workers’ right to freely associate, and maintain healthy and safe working environments. We actively monitor and engage our suppliers to enforce compliance with our policies.

Since its inception in 1997, our human and labor rights program has been built on the back of intense stakeholder outreach and dialogue, seeking to understand and define the most relevant issues to address. Our active engagement includes participating in specialist forums to share lessons learned and develop best practices for our industry. It is also vital to involve governments, policymakers, and local worker organizations, who can help normalize industrial relations and workers’ ability to organize and bargain collectively.

We use internal and third-party audits, worker hotlines and grievance processes as tools to monitor our suppliers’ compliance status and identify incidences of non-compliance with our Human Rights Policy and Workplace Standards. As both policies are rooted in the UNGPs (United Nations Guiding Principles on Business and Human Rights), the ILO Declaration on Fundamental Principles and Rights and Work, and the Organisation for Economic Co-operation and Development (OECD) Multinational Enterprises (MNE) Guidelines, in general, breaches of our Human Rights Policy and Workplace Standards are considered cases of non-respect of these international instruments. If we find evidence of non-compliance, we recommend remedial steps and support our suppliers to continuously improve and prevent further non-conformance. However, where a supplier fails to meet our expectations or to take the necessary remedial or preventive steps, they will be subject to enforcement action, up to and including termination of the business relationship. For more information on non-compliances identified in 2024 and steps to remediate and address these, please see section below on SEE PROCESSES TO REMEDIATE NEGATIVE IMPACTS AND RESULTS

adidas has a zero-tolerance stance on forced labor, human trafficking, and slavery, which are strictly prohibited by our Workplace Standards. Our approach to managing and eradicating forced labor and child labor from our business and business partners’ activities is outlined in our Modern Slavery Policy Framework & Strategy Implementation, first published in 2010 and updated in 2023. This document outlines our commitment to prevent forced labor and child labor in our business operations and supply chain as well as our approach to a tailored, risk-based due-diligence process, regular monitoring activities, and performance measurements as well as the design and provision of targeted training and capacity building.

adidas requires suppliers to apply our Responsible Recruitment Policy, as we recognize that foreign migrant workers employed in global supply chains are particularly vulnerable to the material risk of forced labor and other forms of labor exploitation, including ILO indicators of forced labor such as debt bondage and deception. In March 2023, we renewed our support of the joint American Apparel & Footwear Association (AAFA) and Fair Labor Association (FLA) SEE APPAREL & FOOTWEAR INDUSTRY COMMITMENT TO RESPONSIBLE RECRUITMENT, pledging to collaborate with our suppliers to ensure that no worker pays for a job.

adidas also supports and promotes the role of human rights defenders (HRDs) – including trade union organizers or labor rights advocates, and we expect our business partners to follow the same policy. Suppliers should not infringe on the lawful actions of a HRD or on their freedom of expression, freedom of association or right to peaceful assembly. For details on how we manage impacts to HRDs see SEE ESRS S3 AFFECTED COMMUNITIES

S2-2 – Processes for engaging with supply chain workers about impacts

adidas has several processes for engaging with workers in our upstream supply chain – directly and indirectly – about actual and potential material impacts which may affect their health and safety, wellbeing, or may otherwise adversely impact their fundamental human and labor rights. Such processes ensure that workers can voice concerns, complaints, or grievances related to material risks and impacts – as well as the full range of human rights and labor rights risks that workers in the upstream value chain may face.

Engagement occurs with supply chain workers through processes such as the Workers’ Voice (WOVO) platform and the Worker Pulse survey (see below), as well as through engagement with their credible proxies or legitimate representatives via trade unions that are active in the manufacturing facilities. Engagement occurs on a regular, ongoing basis, since the WOVO grievance platform is open to workers at any time. Worker Pulse surveys are carried out twice a year in strategic supplier factories. Worker interviews are a core part of the social compliance audit process, in which suppliers are audited at least once a year. Engagement with trade unions occurs on an ongoing, ad hoc basis, based on issues and/or concerns raised by trade unions in our supplier facilities.

A detailed overview of these processes for engaging with supply chain workers and their representatives about the actual and potential impacts on them are described below:

1. Workers’ Voice (WOVO) – digital operational grievance mechanism: A robust grievance mechanism through which workers can raise their concerns and secure remedies is essential. We have several channels in place such as local worker hotlines, which enable workers in our supplier factories to contact a local SEA team member by phone or email. As a complaint mechanism, we use the WOVO platform: a manufacturing facility-based digital grievance channel for workers to proactively raise complaints and grievances about any actual and potential impacts they face. For more detailed information, please see the section ‘Processes to remediate negative impacts and channels for supply chain workers to raise concerns’.
2. Worker Pulse – worker satisfaction survey: Complementing our grievance channels, we use the Worker Pulse survey which comprises digitalized short surveys to capture workers’ perception and awareness of their labor rights. These surveys are focused on areas such as communication, harassment and abuse, and also provide feedback on the effectiveness of our grievance systems. In 2024, 106 manufacturing facilities participated in the survey (2023: 109) across 16 countries (2023: 16). The survey presented six statements against which the level of agreement or disagreement was assessed. Topics included the willingness to speak up, to recommend the factory as a workplace to friends, and the comfort level when raising a suggestion or complaint or when talking to supervisors. The results show a steady increase in the number of favorable respondents across all questions since 2020, from roughly 78% to an average of nearly 90% in 2024 (with 100% representing ‘strong agreement’ and 0% representing ‘strong disagreement’).
3. Freedom of association, social dialogue, and industrial relations: We believe that worker-management communication is vital for the success of any business. Workers must have access to effective communication channels with their employers and managers, both as a means of exercising their social and economic rights and to help them resolve workplace issues and disputes. One important channel for worker-management dialogue is trade union representation. Our Workplace Standards clearly emphasize that our supplier partners must recognize and respect the right of their employees to join associations of their own choosing and to bargain collectively, and, when necessary, to participate in lawful strike action. No employee should be discriminated against because of their trade union affiliations. The direct feedback of workers and their elected representatives is a key indicator for us when checking the degree to which freedom of association is protected.

Our approach to effective workplace communication and ensuring freedom of association in our global supply chain is built around a framework of ‘respect, remedy, and promote’ and aligned with basic human rights concepts. We are a signatory to the INTERNATIONAL ACCORD FOR HEALTH AND SAFETY IN THE TEXTILE AND GARMENT INDUSTRY, which recognizes and prioritizes the importance of worker participation and commits adidas to promoting the respect for workers’ rights to freedom of association. Further, where we see evidence of governments failing in their duty to properly investigate and protect the freedom of association of workers in our supply chain, we will petition them and call for effective remedies. At times, we have taken steps to expand the space for the exercise of representative rights. For example, in Indonesia we were a leading party in a multi-stakeholder process with local trade unions, non-government organizations, and suppliers to develop a Freedom of Association (FOA) Protocol – a basic framework for the exercise of trade union rights in the workplace. Elsewhere, we have worked with labor officials, trade unions, and suppliers to run FOA awareness training sessions, to strengthen workers’ understanding of their associational rights to form and join organizations of their own choosing, and their right of access to trade union representation. To date, we still consistently implement the FOA Protocol in our strategic Tier 1 supplier facilities to strengthen industrial relations.

Over several decades of engagement with the global and local advocacy groups, trade unions, and individual workers, we have built deep knowledge and understanding of the impacts on supply chain workers and on those most vulnerable to exploitation, such as women, children, indigenous peoples, foreign migrant workers, and other minority groups. Consequently, we have developed specific programs and initiatives to address topics such as child labor, migrant labor, forced labor, human trafficking, and gender equality, to address the specific issues and concerns revealed through such stakeholder engagement.

We maintain an active and open dialogue with local and international non-governmental organizations (NGOs), labor rights advocacy groups, human rights advocacy groups, and trade unions, as well as investors, analysts, national and international government agencies, and academics. This stakeholder engagement helps us gain insights to identify and address the most important impacts that our upstream business activities can have on supply chain workers, as well as how we can most effectively mitigate and manage the potential and actual impacts that may affect them. adidas’ stakeholders are a diverse group, which translates into a diverse range of engagements, some continuous and spanning many years, and some targeted, based on current issues or trends requiring critical feedback.

We are attentive to worker concerns and issues and continuously review and assess the feedback received through the WOVO platform. We track the WOVO platform’s effectiveness by using KPIs and dashboard reviews, case satisfaction ratings, and on-site worker interviews. This allows us to evaluate the efficacy of the grievance channels, see major cases in real time, and undertake timely interventions, where necessary. It also helps us understand the main challenges and labor rights issues in a manufacturing facility and track how the facility’s management and their HR teams resolve cases and communicate their findings.

The SEA team has responsibility for the monitoring of social and environmental compliance of our suppliers’ factories and ensuring that our suppliers provide fair and safe working conditions to their workers. They are a specialist team within adidas’ Global Legal department, led by the VP Social & Environmental Affairs, who acts as the most senior role with oversight of the processes described in this chapter.

S2-3 – Processes to remediate negative impacts and channels for value chain workers to raise concerns

Processes to remediate negative impacts

We are committed to providing for, or cooperating in, the remediation of adverse impacts, including those which we have caused or contributed to through our business relationships. Whenever negative impacts are identified either through our audit process or through one of the various grievance channels available to workers, we engage directly with our business partners to support them in remediating the issue and addressing root causes within a specified period of time.

When an audit identifies that a supplier is not compliant with one or more of the criteria in adidas’ Workplace Standards, a corrective action plan is created with the supplier, outlining the required actions and deadlines. If the issues are not sufficiently addressed within the specified time, the supplier will either not be authorized for production if it is a newly proposed supplier or will trigger adidas’ enforcement process if it is an existing supplier.

adidas’ Remediation Guideline details the procedures, timelines, and parties that are responsible for remediating any non-compliances with our Workplace Standards that are identified during an audit. In all cases, the required remediation should directly benefit the workers, for example if they were underpaid or denied a legal benefit, or to improve the working environment to reduce the chance of workers being negatively impacted or injured in the course of performing their assigned duties.

We categorize Workplace Standards breaches into zero-tolerance issues and threshold issues. Zero-tolerance issues include child labor, forced labor, and prison labor, life-threatening health and safety conditions, and repeated or systematic abuse, among others. If a zero-tolerance non-compliance case is identified, it will result in immediate engagement with the supplier and, if verified, termination of the business relationship.

Threshold issues include serious employment issues, serious health, safety, or environmental issues (or any combination of these). The Enforcement Guidelines for threshold issues can disqualify a new supplier or lead to enforcement actions with existing suppliers. When suppliers fail to meet our Workplace Standards, we apply the sanctions and remedies from our Enforcement Guidelines, which include:

• Termination of the manufacturing relationship
• Stop-work notices
• Third-party investigations
• Warning letters
• Reviewing orders
• The commissioning of special projects to remedy compliance problems

Warning letters are an essential part of our enforcement efforts when we find ongoing serious non-compliance issues that need to be addressed. In 2024, close engagement with our manufacturing partners’ facilities limited the need to issue warning letters, with a total of seven (2023: nine) issued across five countries; six of these were active first warning letters, and a single second warning was issued in 2024. No third warning letters (which result in termination of the contract) were issued to our manufacturing partners in 2024.

We work closely with our manufacturing partners to help them improve their performance. However, in situations of severe or repeated non-compliance that cannot be resolved, we terminate business relationships with facilities. When making such a decision, we always seek to balance the adverse impacts arising from the unresolved non-compliance against the wider effects that a business termination can have on the rights and interests of the workers, especially if a termination triggers layoffs. In 2024, there were no instances in which a supplier agreement was terminated for social compliance reasons (2023: 0).

We work with our manufacturing partners to develop corrective action plans to remediate identified issues in a specific timeframe, and a process to verify completed remediation through a follow-up audit or a desktop review. All remediation measures are recorded in the factory’s account within the Fair Factories Clearinghouse (FFC) database used for adidas’ social audit program for both the direct and indirect supply chains.

All non-compliances must be sustainably remediated to help ensure that the issue does not occur again.

For specific issues that require additional remedial action due to their nature and complexity – such as child labor – we have developed specific guidelines. For example, there are GUIDELINES for the effective management of the recruitment process and for strengthening Human Resources (HR) systems at factory level to prevent child labor, ensure protection for juvenile workers, and to respond to violations, if they occur. If instances of child labor are found, we have issued guidance to suppliers on immediate measures to be taken, such as: verifying the identity and age of the child, removing the child from the production area, and providing accommodation, food, and care until a solution is found. This includes, among others, evaluating family circumstances and identifying opportunities to re-enroll the child in school. Further medium-term measures include: reviewing recruitment and personnel practices to identify gaps or failures, building a network of local organizations, trade unions, governments, and other parties to provide support services, and implementing a robust remediation program.

Channels for workers to raise concerns

To complement our due diligence processes, we have put in place a range of grievance channels to ensure we provide adequate access for workers in the upstream value chain to seek remedy. adidas suppliers are required to have grievance systems in place where workers can freely and – if they choose – anonymously submit any complaints or suggestions they may have. This includes the app-based WOVO (Workers’ Voice) platform, which is an operational grievance mechanism required at all our strategic Tier 1 supplier facilities (for further information see section ‘Processes for engaging with supply chain workers about impacts’).

WOVO has been deployed to all strategic Tier 1 suppliers. When WOVO is implemented at a new factory, on-site and/or remote training sessions are held with factory managers and workers to explain how the platform works, lay out the privacy aspects, and to reiterate adidas’ non-retaliation policy. adidas SEA team members regularly track not only the grievances received, but also the general usage of WOVO at a specific supplier in relation to the factory’s total number of workers. The sustained usage of WOVO and the high volume of cases received through the app indicate that workers have a reasonable level of trust in the system.

Close to 35,700 human and labor rights complaints (2023: around 42,000) were filed by workers through the WOVO platform in 2024, and 99% of these complaints were closed by the end of 2024. The top complaints received in 2024 were related to internal communication (more than 6,700), personal affairs (more than 5,800), and benefits (more than 5,300). The case satisfaction rate, workers’ level of satisfaction with complaint resolution, has almost doubled from 39% in 2019 to 76% in 2024. The increase in satisfaction is partly due to improved response times from factory management in addressing workers’ grievances. Response time decreased from 49 hours in 2020 to less than twelve hours in 2024 due to improvements in communication and transparency in the workplace. The management teams in the manufacturing facilities have also continuously engaged with their workers through newsletters and broadcast messages, which has improved workers’ engagement and encouraged feedback.

adidas also has a public external third-party complaint mechanism, which allows any external party, including workers or their credible proxies, to report any potential or actual harm – human rights and environment-related – linked to adidas’ operations, products, or services. It is open to any individual or community directly affected by an issue, or any organization representing them.

Trained and impartial employees of our SEA team are responsible for reviewing and investigating all submitted complaints through this third-party complaint mechanism. The basic steps of the complaint procedure are as follows:

1. Confirmation of receipt and appointment of a contact person within five working days
2. Check whether the complaint falls within the scope of the procedure and whether sufficient information is available for further processing; if necessary, collect missing information
3. Rejection with explanation, or acceptance of the complaint
4. Accepted complaints are forwarded to the relevant SEA team/competent Compliance Officer
5. Facts of the case are carefully examined in exchanges with the complainant
6. Internal or external investigation is conducted as appropriate
7. Implementation of suitable preventive or remedial measures, including amicable dispute resolution
8. Notification of the conclusion of the proceedings and a summary to the complainant
9. Ongoing monitoring of preventive or remedial actions
10. Feedback from the complainant on the resolution of their complaint

The complainant’s identity is kept confidential throughout the process. Open handling of the complaint, which can often contribute to problem-solving, is only done with the complainant’s consent. While in many cases the actual issues are resolved, our approach is to only close them in our systems when we have verified evidence of completion and established that corrective actions taken are sustainable, to avoid reoccurrence.

In 2024, we handled a total of 17 cases through our third-part complaint mechanism, of which nine were new cases received in 2024 and eight were cases that had remained open from the previous year. A total of eleven cases were successfully closed in 2024, and six cases remain ongoing pending further action or resolution, or a response from the complainant regarding their satisfaction on the case resolution. Most of the cases received through this process relate to freedom of association and collective bargaining, employment practices, and compensation and benefits.

Workers are aware of and trust the grievance mechanisms made available to them, particularly the WOVO app. This is evident by the consistent, widespread usage of the app within our supply chain. We have progressively improved and expanded the use of this grievance mechanism, and in 2024, more than 400,000 workers employed in 105 manufacturing facilities across 16 countries had access, reflecting 100% coverage of our strategic manufacturing partners. adidas tracks the input received through the WOVO platform using KPIs and dashboard reviews, case satisfaction ratings, and on-site worker interviews. This allows us to evaluate the efficacy of the grievance channels, see major cases in real time, and undertake timely interventions where necessary. It also helps us understand the main challenges and labor rights issues in a manufacturing facility and track how the facility’s management and their Human Resources teams resolve cases and communicate their findings. Our evaluation contributes to the facility’s overall S-KPI (adidas’ internal social compliance performance rating). adidas provides ongoing capacity building to enhance the facility teams’ capability to improve the grievance mechanism’s effectiveness.

We recognize the value of information received through all these channels in informing our due diligence processes and the development of effective remedies. We utilize feedback from workers and the experience gained from managing complaints processes to support the implementation of improvements in our own practices, processes, or remedial efforts.

Workers making complaints about their employment conditions or individuals raising issues related to human rights violations or environmental damage may face the risk of retaliation. adidas recognizes this and protects complainants from retaliation through our Non-Retaliation Policy, which states:

We prohibit any form of retaliation against persons who have filed a complaint with adidas. It is irrelevant whether the grievance or complaint proves to be justified or unfounded. If a person, group, or organization believes that they have been subject to retaliation due to their registering a complaint with adidas, they should contact us immediately and provide the specific details of what has occurred. We will investigate, and if there is evidence of retaliation, we will take action to remedy the situation. This could entail, for example, the issuing of a warning letter to a business partner, if they have retaliated against a worker or a worker representative for disclosing workplace issues. It may also demand government intervention if legal or administrative remedy is required. As retaliation can take many forms (loss of job, demotion, involuntary transfer, harassment, intimidation, etc.), we deal with each incidence on a case-by-case basis to find the appropriate solution.

adidas has further measures in place to remediate negative impacts that may be identified during an audit, including corrective action plans (CAPs) and further remediation measures. We further elaborate on these topics in the following paragraphs.

S2-4 – Taking action on material impacts, risks and opportunities related to workers

Human rights due diligence

One of the main ways we prevent and mitigate actual and potential negative impacts on our value chain workers is by performing robust human rights due diligence, which is part of our Human Rights and Environmental Due Diligence (HREDD) system. For an overview of our due diligence processes see SEE ESRS G1 BUSINESS CONDUCT

Risk mapping and mitigation

We have developed a risk-based due diligence approach that prioritizes high-risk locations, processes, or activities that require attention and where we are able to apply influence to mitigate or remediate issues where they occur. The risk assessments cover the specific risks and impacts identified as being material and include the full range of pertinent human rights issues and labor rights issues as identified in our Human Rights Policy and Workplace Standards.

To identify material risks, we create country risk profiles as well as combine processes to systematically monitor and support improvements, with tools that enable us to react quickly to critical situations with actions appropriate to the impacts and specific to the workers. Critical sources of information for risk-mapping exercises include the review of publicly available databases such as those provided by governments, as well as regular engagement with civil society organizations, unions, employer federations, and with workers directly.

We apply tailored risk-mapping approaches and tools as follows:

• Country-level risk assessment: Country profiles are developed based on in-depth due diligence processes. Countries are categorized as high or low risk. All suppliers located in high-risk countries are audited on a regular basis, at minimum on an annual basis, while low-risk countries with strong government enforcement and inspectorate systems are considered out of scope of our audit coverage.
• Factory-level risk assessments: Regular audits, S-KPI assessments, factory risk-rating analysis. This information determines the frequency of re-audits and engagement with the factory.

In addition to the risk assessment approaches described above, the following are the identified internal processes for managing and reporting risks:

• Crisis protocol: Used by business entities and factories to report the details of high-risk issues or incidents. Based on the information we receive, we may decide to conduct site visits, audits or other engagement with a business entity or factory on a case-by-case basis.
• Monthly reporting to executive management: Depending on the issue, this may also lead to additional action on a case-by-case basis.

Based on the risk-mapping processes described above, as well as the risk identification through the materiality assessment and grievance channels, priority areas for action to address identified risks during the reporting period included:

Occupational health and safety

• Building on the electrical safety refresher training for internal adidas Sourcing personnel in 2023 through further health and safety initiatives. In 2024, we launched a targeted occupational health and safety program to improve machine and electrical safety for factories’ compliance and safety teams for Tier 1 factories in Indonesia and Vietnam, including written guidelines and supplier training. In India, we conducted a pilot third-party assessment for machine and electrical safety for selected local sourcing factories.
• In Jordan, together with the ILO’s Better Work Jordan (BWJ) program and the Fair Labor Association (FLA), we hosted a SEE SERIES OF TECHNICAL SEMINARS on the importance of occupational health and safety compliance for Jordan’s Ministry of Labor (MoL) labor inspectors and for garment factory compliance officers.

Child labor and forced labor

• Mitigating forced and child labor risks in the upstream raw material supply chain through a multi-year effort to increase supply chain transparency and joint industry action (i.e., utilizing multi-stakeholder initiatives to extend our leverage.) All actions are ongoing.

Human Rights and Environmental Due Diligence (HREDD)

• Building accountability and capacity in operational areas, such as adidas’ Global Non-Trade Procurement (GNTP) function, through the effective deployment of EcoVadis’ sustainability assessments for the purpose of screening prioritized business partners – both upstream and downstream – for ESG risks. All actions are ongoing.
• Continuing to conduct enhanced human rights due diligence in conflict-affected sourcing locations, including Myanmar and Ukraine to uphold our business responsibility in preventing and addressing human rights impacts in contexts affected by conflict.

Gender equality

• Continuing the gender equality program for suppliers, which includes an annual self-assessment to help suppliers identify gender gaps in their operating practices and procedures and provide the building blocks they need to develop their own gender strategy, and an annual gender equality worker survey.
• Providing suppliers with the awareness and capacity to prevent violence in the workplace through a targeted training on gender-based violence and harassment (GBVH), covering topics such as GBVH policies and procedures, handling of cases of violence and harassment, and other related issues. All actions are ongoing.

Fair compensation

• As part of our efforts to provide fair compensation to workers in the supply chain, in 2024, we collected factory wage data for the prior year (2023) from in-scope suppliers¹ to measure wage progress against 2020 wage data (benchmark year). We also jointly commissioned, together with another brand, a gender pay parity training to be developed in consultation with SEE THE ANKER RESEARCH INSTITUTE and SEE IMPROVING WORKLIFE, a capacity building service provider. This training will be rolled out to all strategic Tier 1 suppliers in 2025.
• In Vietnam, we also continued our participation in a pilot led by the Fair Labor Association (FLA) to assess and improve adidas’ responsible purchasing practices and fair compensation interventions in a multi-buyer scenario.
• We continued to our efforts around transparency by expanding our data collection public reporting through our Annual Report, corporate website, and by engaging with benchmarking organizations such as the SEE PLATFORM LIVING WAGE FINANCIALS (PLWF). The PLWF is a collaborative initiative between 24 financial institutions that assesses and benchmarks investee companies’ efforts on living wages. In 2024, we were rated within PLWF’s second highest rating level, the ’Advanced’ level.

Freedom of association

• We also took several measures to address risks related to freedom of association during the reporting period. In Cambodia, we continued to engage key suppliers in a program that aims to reduce labor disputes and improve social dialogue between suppliers and their trade unions. In El Salvador, we provided training to all Tier 1 suppliers on Ensuring Respect for Freedom of Association in El Salvador, a guidance developed by The Americas Group (AG). And in Indonesia, we completed supplier training on the Freedom of Association (FOA) Protocol/implementation of circular letters for all suppliers in the country.

Training and skills development

• Providing regular training and capacity building to suppliers and workers employed at our suppliers’ facilities, including through digital learning tools and targeted in-person and online training on topics ranging from our Workplace Standards, guidelines, and supporting policies, through to specific training on specific labor, health and safety, and environmental topics.

Our strategies applied to preventing and mitigating human rights issues will be dependent on the relationship between adidas and the source of the risk, the severity of the issue, and our ability to influence the party responsible. We recognize the need to address all salient human rights issues we have identified, as our influence and ability to prevent and mitigate adverse impacts is greatest with our business partners. We have focused our efforts on the issues of fair labor practices, fair compensation, and safe working conditions in factories manufacturing on behalf of adidas.

Monitoring suppliers’ social compliance

We monitor social compliance of suppliers with a multi-level monitoring and enforcement process set out in our guidelines and policies. Opportunities to drive improvements and strengthen safeguards against harmful working conditions or human rights violations in our upstream value chain support, inform, and shape our business activities as a company. Components of our social compliance monitoring system include:

• Screening and prequalification of new suppliers, which disqualifies any supplier where zero-tolerance issues are found and only qualifies suppliers who have addressed, as a minimum, any identified threshold issues prior to onboarding and order placement.
• Annual assessments of our manufacturing partners on their ability to provide fair, healthy, and environmentally sound workplace conditions by conducting announced and unannounced audits by our own team and by accredited external auditors. Any cases of non-compliance identified during audits are given a clear timeframe for remediation.
• Continued engagement with our manufacturing partners’ and their factory-level trade unions on freedom of association and the promotion of workplace dialogue: This has reduced the risks of industrial relations issues in the supply chain, which can be sources of stoppages or strikes or other forms of disruption to business operations.
• adidas specifically tracks and seeks improvements in the management of our suppliers’ operational grievance systems. Early identification and resolution of issues in the workplace improves worker satisfaction levels, supports industrial relations, and increases worker retention and reduces fluctuation rates.

On-site factory audits are conducted by both internal monitors as well as by external third-party auditors to assess risks and identify the root causes of non-compliance. Audit results and other key performance indicators are incorporated into an overall social key performance indicator (S-KPI) rating tool, which measures several indicators including: accident rates, retention levels, or worker satisfaction and empowerment.

The rating results are shared with our Sourcing teams and are incorporated into the overall supplier rating that influences adidas’ decision whether and to which extent we continue the business relationship with a specific supplier. This transparency and integration with sourcing decisions is fundamental to successfully improving workplace conditions. Based on the audit results, the SEA team decides on the course of action, ranging from training to enforcement actions, such as sending warning letters or hiring external consultants to improve workplace systems or practices with the support from the Sourcing team.

adidas works to provide for and enable remedy for any negative impacts on workers through our remediation processes. For more information, please see the section above on PROCESSES TO REMEDIATE NEGATIVE IMPACTS. Through our social compliance monitoring program, and the grievance channels made available to workers in our supply chain, we are able to identify negative impacts on workers. We evaluate the effectiveness of the remediation of negative impacts on workers through the timely completion of corrective action plans and follow-up in the cases of non-compliances, and through securing complainant satisfaction in the cases of grievances received through the WOVO app or our third-party complaints mechanism.

We also oblige our licensees – intermediaries that independently manage production for adidas – to adopt our in-house monitoring approach to ensure compliance in the indirect supply chains. We commission audits by adidas approved external monitors that verify the outcomes of compliance plans and activities. We measure a licensee’s annual compliance performance using a comprehensive report card. In 2024, the EcoVadis rating of a licensee’s sustainability management systems as well as an evaluation of a partner’s supply chain management and purchasing practices have been integrated into this report card.

As a member of the Fair Labor Association (FLA), adidas is subject to external assessment by independent monitors, participation in the FLA third-party complaint system, and public reporting. In 2024, adidas received 3 FLA-led assessments which typically are conducted using a variety of monitoring models (e.g., in-person, virtual, or a hybrid approach of both in-person/virtual) that result in tailored ‘Sustainable Compliance Initiative’ (SCI) assessments. Our program has been accredited three times by the FLA and, in 2024, remains accredited based on the FLA’s annual evaluations, in which adidas was rated as a top performer.

In addition to regular compliance monitoring, in 2024 we continued to focus on our own purchasing practices, in accordance with our Responsible Sourcing & Purchasing Policy, to ensure that our sourcing activities do not negatively impact our manufacturing partners’ ability to comply with our social and environmental standards. To best understand potential impacts, we have sought feedback from our manufacturing partners, both anonymously and openly, through our subscription to Better Buying Institute, an independent organization that assesses and reports on the sourcing practices of participating brands (see below for more information), and through our own engagement with our suppliers. Leveraging this feedback, we have continued to improve our purchasing practices.

Results

In 2024, we worked with 388 (2023: 357) independent supplier facilities – Tier 1 facilities of manufacturing partners and their Tier 1 subcontractor facilities – located across 39 countries (2023: 40). The majority (67%) of these facilities were located in the Asia-Pacific region (2023: 63%). In 2024, we also worked with 34 licensees (2023: 37), manufacturing products in 223 facilities (2023: 251), some of which may produce both for adidas directly and for licensees, across 32 countries (2023: 33). A total of 85% (2023: 72%) of all direct and licensee facilities were audited in 2024. ‘High-risk’ locations in Asia, which is the most significant sourcing region for adidas, were the subject of extensive monitoring in 2024, with an audit coverage of 94% (2023: 89%).

When auditing our manufacturing partners against the adidas Workplace Standards, we utilize a range of audit tools. This includes adidas’ own initial assessments and performance audits, plus assessments conducted by the ILO’s Better Work program (2024: 11) and Social and Labor Convergence Program (SLCP) assessments (2024: 73, 2023: 79), which are initiatives designed to avoid repetitive social audits in shared facilities. A total of 592 social compliance audits were conducted in 2024 (2023: 499).

Of the 304 adidas performance audits (2023: 318) conducted, 95% were unannounced (2023: 82%), meaning the manufacturing facility is not informed in advance of the exact date of assessment. The number of audits in factories manufacturing goods for licensees in 2024 was 200 (2023: 223).

We increased the number of initial assessments – the first approval stage for new entry into our supply chain – to 160 prospective supplier factories (2023: 66), the majority of which were in Asia (2024: 77%, 2023: 64%) and China accounting for 31% of these (2023: 20%). Of the initial assessments, 41 factories (2023: 19) were either rejected immediately due to identified zero-tolerance issues, or were ‘rejected with a second visit’ due to identification of one or more threshold issues. Overall, at the end of 2024, the first-time rejection rate of new factories visited was 26% (2023: 29%). Manufacturing partners with threshold issues are typically given three months to remediate them before being re-audited for final acceptance. Through active support and capacity building, only two factories were subject to ‘final rejection’ (2023: 0), with the remainder having successfully closed their non-compliance issues and were onboarded.

Fire, electrical, as well as machine safety are critical areas for existing manufacturing facilities, and together they accounted for almost 35% of the health and safety related non-compliances identified in 2024 regular social compliance assessments. Building and structural safety, as well as the storage and use of chemicals, including the handling of hazardous chemicals, accounted for 17% of non-compliance findings reported. A further 9% of the findings related to management systems, policies, and procedures.

Shortcomings in health and safety identified during audits in 2024

Our social compliance monitoring also reviews the use and effectiveness of the facilities’ Human Resources management systems, including any gaps in policies and procedures related to specific risk areas, such as forced labor, child labor, freedom of association, or discrimination. Shortcomings in management systems for fair wages and working hours accounted for 34% of the labor non-compliances identified, and will require management systems improvements to reduce potential risks from materializing.

Shortcomings in labor identified during audits in 2024

We assess performance in providing a safe and fair workplace by measuring effective due diligence processes, as well as the ability to deliver positive social impact, through our S-KPI. In total, the S-KPI has 15 units of measures (UOM). These include compliance with threshold and zero-tolerance issues, completion of remediation plans, accident and absenteeism rates, as well as a range of worker empowerment measures such as resolution and satisfaction rate of workers’ grievances, participation rate in worker satisfaction surveys, and the ratio of females in mid-managerial positions.

The S-KPI assesses a factory’s performance in each of the UOMs based on the supplier data provided and, where applicable, validated during social compliance audits (conducted by internal monitors and in some cases by third-party verifiers), which are uploaded to a dashboard for each supplier. The result is a final score (in %) which is converted to S-rating levels from 1-5, with 5S being the best. For suppliers that have achieved a S-KPI of 5S, we reserve the possibility to exclude them from selected S-KPI compliance measurements for one year due to their low risk profile. In 2024, 82% of our 99 key manufacturing facilities achieved a rating of 4S or better, which is a slight decline in performance compared to 2023 (84%). Data considers a twelve-month period (November to October).

Social impact performance of strategic supplier factories by S-KPI rating (in %)

We also evaluate licensees’ social compliance performance through a Licensee Compliance Rating (LCR). All of our long-term licensee partners and/or those with the largest business volumes achieved at least 3S in 2024. Of these, 50% received a rating of 4S (2023: 100%). The reduction in 4S achievement is explained by a revised assessment methodology that has been applied in 2024. This now incorporates available third-party ratings, such as EcoVadis and the Better Buying Partnership Index (BBPI), to measure the maturity of our licensee partner’s governance and supply chain management systems, purchasing practices, and overall integration of our compliance requirements into their business practices.

Further actions

Tracking effectiveness of actions

Our actions to mitigate negative impacts and risks on supply chain workers and tracking and assessing positive impacts contribute to achieving our set targets (for more information on our targets, please see section SEE TARGETS RELATED TO MANAGING MATERIAL NEGATIVE IMPACTS, ADVANCING POSITIVE IMPACTS, AND MANAGING MATERIAL RISKS AND OPPORTUNITIES). Tracking progress against our targets is how we measure the effectiveness of our actions. adidas provides regular updates via its corporate website and its annual reports about its progress in achieving the targets it has set and the measures in place to track those targets as well as accompanying activities that support the fulfillment of those targets.

Training and skills development

Part of our continuous efforts to achieve awareness and understanding of key material issues by workers within the upstream supply chain (e.g., issues including health and safety, forced labor, other topics), includes a system of multi-level and cross-functional training sessions with our global supplier network. These training sessions are conducted for workers employed by strategic Tier 1 suppliers in our key sourcing geographies. The training supports our objectives of implementing an HREDD system across 100% of our value chain, as training and awareness are key components of any human rights due diligence management system. We will continue to conduct training on material topics and other human rights and labor rights issues for workers in our value chain on an ongoing, annual basis for an indefinite period.

We have three types of training content:

• Fundamental training: introductory training on the adidas Workplace Standards, Fair Factories Clearinghouse (FFC) data entries, new factory approval process, and the SEA operating guidelines.
• Performance training: detailed training on specific issues related to labor, health, safety, and environmental practices, as well as initial assessment monitoring methods.
• Advanced training: training on KPI and rating tools, sustainable compliance planning, and supplier self-assessment methods.

In 2024 we conducted 104 training sessions for 2,860 individuals across these 3 categories for manufacturing partners, licensees, workers and adidas employees (2023: 179). We have also continued to enable our licensees to have access to FLA’s e-learning materials, which include training courses covering topics such as human rights, forced labor, responsible manufacturing, and worker engagement, and provide access to the Better Buying Institute’s e-learning course on responsible purchasing practices.

We also continued our mobile-phone-based ‘Digital Training’ project for workers in the supply chain, which has been successfully rolled out at 104 manufacturing facilities in 15 countries. The digital tool assesses workers’ awareness of their labor rights and remedies, e.g., fire safety, harassment and abuse, and use of grievance channels. More than 68,800 workers took part in 2024 (2023: 50,000) and averaged a score higher than 92 out of 100 in the post-test questions, thereby demonstrating remarkably high levels of awareness of their core rights and available remedies.

Gender equality and equal pay for equal value, measures against violence in the workplace

We continue to implement measures that advance gender equality in our supply chain and meet our objectives to bring a gender lens to our strategic suppliers’ operations to ensure that all workers will have equal opportunities and rights, including the provision of equal pay for equal value.

Our projects to deliver positive impacts for supply chain workers include our Gender Equality strategy and programs including our Women Leadership Program and Fair Compensation. In the past year, we carried out the following measures:

• Gender Equality Worker Survey and Self-Assessments: The survey evaluates worker experience and perception on gender equality in the workplace, obtains worker feedback on gender equality practices in factories, and provides strategic suppliers with a reference point for continuous improvement. In 2024, more than 46,000 workers participated in the worker survey across 105 factories. Additionally, all strategic suppliers have submitted initial improvement plans to address gaps identified in their gender equality self-assessment tool and will continue to update their roadmaps for improvement.
• Women Leadership Program: Alongside facility-led training, we also offered tailored training under our Women Leadership Program. In 2024, more than 1,600 female supervisors from 76 factories in Cambodia, China, India, Indonesia, Myanmar, and Vietnam participated in the training. We closely track the progress of workers graduating from this training initiative and since 2016, approximately 350 female supervisors have been promoted to higher positions because of their participation in the program.
• Equal Pay for Equal Work: We are committed to upholding responsible sourcing practices, increasing gender equality, and creating pay equity, with the goal of providing fair compensation to workers in our supply chain, regardless of their gender. In 2025, we aim to see a progressive improvement in compensation and achieve gender wage parity for workers and their supervisors at our strategic Tier 1 suppliers. To support this goal, we will deploy a gender pay parity capacity building program across our supply chain, designed by ImprovingWorklife and the Anker Research Institute, in collaboration with another FLA member company. This program will focus on raising our suppliers’ awareness and understanding of the gender pay gap, in particular equal pay for equal work.
• Preventing Gender-Based Violence and Harassment at Work: In 2024, as part of our Gender Equality strategy, we implemented training for all strategic Tier 1 suppliers on preventing gender-based violence and harassment (GBVH) in the workplace. The training modules covered topics including introduction to GBVH, GBVH policies and procedures, training/communication to workers, effective grievance channels, conducting investigations, victim support, sex-disaggregated data collection, monitoring systems, and management review.

Fair compensation

As a responsible business, our aim is for workers in our supply chain to earn enough for themselves and their families’ basic needs and have income remaining to cover discretionary spending as well as savings. Our approach to payment of fair compensation in our manufacturing supply chain is built around five levers that influence wage development: legal obligations, responsible purchasing practices (RPP), productivity, government engagement, and industrial relations. For each lever we have a work program, which supports fair compensation and wage progression. To achieve our fair compensation ambitions, we deployed the FLA fair compensation assessment tools and guidance to our suppliers.

In 2024 we continued our multi-year wage data collection² across our strategic suppliers³. Wage data is being collected from suppliers from three different time periods: our 2020 benchmark year, our 2023 mid-term year, and our 2025 final year. The data reported for the 2020 benchmark year data was collected from 2021 – 2023, the 2023 mid-term year data was collected in 2024, and the 2025 data will be collected in 2026.

Our wage assessments conducted via the FLA fair compensation tools and dashboard are used to benchmark, track, and measure wage progress. The results of these assessments will also help to evaluate the links between pay and skills, pay and company performance, and the need for effective social dialogue in the workplace. We will also continue to build on our existing efforts with a focus on gender equality, pay equity, and responsible sourcing practices.

Cooperation with stakeholder groups

adidas works with industry-leading organizations to further improve its capacity-building efforts around supply chain-relevant topics:

• Anker Research Institute (non-profit organization): To leverage living wage and income benchmarks in our Fair Compensation program and collaborate in the development of capacity building training on gender pay parity. Corporate sponsor since 2022.
• Better Buying Institute (non-profit organization): To strengthen supplier-buyer relationships and improve purchasing practices in alignment with our Responsible Sourcing & Purchasing Policy. Member since 2019, member and participating company.
• Better Cotton (multi-stakeholder organization): To promote measurable improvements in the key environmental and social impacts of cotton cultivation worldwide. Member since 2004, founding member and participating company.
• Better Work (BW, multi-stakeholder organization): To improve working conditions and respect of labor rights for workers in the supply chain and build on the expertise provided by the BW collaboration between the International Labour Organization (ILO) and the International Finance Corporation (IFC). Member since 2023, member and participating company.
• Fair Labor Association (FLA, non-profit organization): Provides independent accreditation and oversight of our internal programs. Member since 1999, founding member and participating company; Board seat.
• German Partnership for Sustainable Textiles (government-led multi-stakeholder initiative): To promote measurable social, ecological, and economic improvements along the textile and apparel supply chain. Member since 2015, participating company.
• Open Supply Hub (industry association): To improve human rights and environmental conditions in and around factories and facilities by opening up supply chain data as a free, public good. Member since 2019, participating company.
• Responsible Sourcing Network (RSN, non-profit organization): To identify and eliminate cotton produced by forced labor from apparel supply chains. Member since 2024 of RSN’s YESS (Yarn Ethically & Sustainably Sourced) initiative.

As part of our approach to effective stakeholder engagement, in November 2024 we hosted an in-person stakeholder dialogue in Zurich, Switzerland. Chaired by adidas’ General Counsel and Human Rights Officer, and facilitated by adidas’ human rights and sustainability expert teams, the one-day event included representatives from intergovernmental agencies, global trade unions, non-governmental organizations, independent experts, key external partners (e.g., Fair Labor Association, ILO Better Work, FIFA), customers and suppliers.

The dialogue was framed around adidas’ approach to three focus areas: (1) mandatory human rights and environmental due diligence (HREDD), (2) biodiversity and deforestation, and (3) human rights and sports sponsorships. Stakeholders were also invited to raise any of their own additional topics of concern and questions for adidas. Through a series of interactive workshop discussions, stakeholders were invited to share their perspectives on adidas’ policies and systems in each of these areas to validate the effectiveness of current approaches, as well as to gain insights that will help to inform the evolution of adidas’ social and environmental programs over the coming years.

In early 2025 we will share a summary of key takeaways from the dialogue with participating stakeholders, with an invitation to validate that their feedback has been effectively captured, alongside an opportunity to provide additional input. Once finalized, the summary will be published on our corporate website. The feedback and insights gained through this engagement, will be shared with relevant internal stakeholders, and we will use the results to inform future strategy, policy, and systems development.

Material impacts identified during the reporting period

The primary focus of our efforts is to mitigate negative impacts and, through initiatives such as the Women Leadership Program described above, to influence the realization of positive impacts for workers in the supply chain, where we can do so.

However, despite our risk mitigation efforts, there are incidents of forced labor, child labor and severe health and safety incidents (i.e., fatalities) which occur in our supply chain. While rare, such instances typically occur beyond our strategic Tier 1 supply chain, where we have less visibility, leverage, and monitoring capacity.

Health and safety

In 2024, there were no reported fatalities in our Tier 1 supplier base, however one fatality was reported to us in a Tier 2 facility, resulting from a machinery fire. The process involved was not being used in the manufacture of materials for adidas. Nevertheless, in any serious safety event, including those resulting in fatalities, we conduct in-depth investigations into the causes of the incident and take action accordingly.

In response to occupational health and safety risks, we invested considerable time and resources to upskill and build awareness of the importance of electrical and machine safety in the workplace, continuing programs we launched in 2023. This includes safety capacity building programs for factories in Indonesia and Vietnam in 2024 with the objective to enhance machine and electrical safety. Moreover, we continued to support the Pakistan Accord on Fire and Building Safety which we joined in 2023. In 2025, we will shift our focus to fire and electrical safety risks in our Tier 2 materials suppliers, with the goal of driving improvements in safety systems and safeguards for workers employed in fabric mills, dyehouses, leather tanneries and component manufacturers. Selected high-risk Tier 1 suppliers will also be included.

Child labor and forced labor

To assess the risk of forced and child labor in our upstream cotton supply chain, adidas collaborated with the FLA in 2024 to evaluate, through a scoping study, the presence and incidence of these issues in cotton cultivation in India. This scoping study, supported by other international brands and labor rights advocates, responded to a third-party investigation that found evidence of child labor and forced labor, including debt bondage and abusive conditions, on farms linked to our supply chain in Madhya Pradesh.

To tackle these issues, adidas is supporting the FLA’s three-year project aimed at improving conditions for cotton harvesters in Madhya Pradesh. The project’s key objectives are to strengthen human rights due diligence, improve working and living conditions for farmers, and connect with local stakeholders to leverage ongoing advocacy efforts. These goals are supported by various activities, including supply chain mapping and monitoring, knowledge building, child protection initiatives, responsible recruitment practices, enhanced earnings strategies, and occupational health and safety measures. The project aims to create sustainable improvements and foster collaboration among all involved parties.

In 2024, adidas also received information related to incidents of forced labor occurring at several Tier 2 textile supplier facilities in Taiwan, which provide yarn and fiber inputs into materials used by adidas in its finished product. These allegations were raised by a third-party investigation, which found evidence of forced labor, including high recruitment fees, debt bondage, retention of identity documents, excessive overtime, and abusive working conditions. The investigation was shared with over 40 apparel and footwear companies, who have collaborated on implementing a remediation approach and corrective action for the findings identified.

We have allocated adequate human resources to the management of material impacts. The SEA team, which is a specialist group function within Global Legal, oversees human rights and environmental due diligence for adidas, and manages supply chain compliance with the Workplace Standards. The 37-person team is global in nature, with staff based in a dozen countries, mainly our major sourcing countries, as well as Germany and the United States. Each SEA team member is dedicated to due diligence and to maintaining social and environmental compliance at a full-time (100%) capacity.

1 Strategic suppliers as of January 2020.

2 Wage data for 2023 was collected in 2024 and is self-reported by suppliers. For data collection, we took a representative sample of strategic factories within our Fair Compensation strategy scope. For 2023, the representative sample included approximately 73% of strategic supplier factories.

3 Strategic suppliers as of January 2020.