Impact, Risk and Opportunity Management

IRO-1 – Description of the process to identify and assess material impacts, risks and opportunities

Conducted in 2024 and reconfirmed in 2025, our process and methodology for identifying material impacts, risks and opportunities (IROs) are based on the requirements of ESRS 1, section 3 and the application requirement of ESRS 1 AR16. The provided list of sustainability matters from ESRS 1 AR16, alongside our existing material topics, formed the basis for developing a comprehensive long list of potentially material sustainability matters. This list also formed the basis for the IRO identification process. To determine if a sustainability matter is material or not material, the analysis was carried out from both an impact materiality perspective and a financial materiality perspective (double materiality). Information on what kind of data and assumptions were applied can be found in the section ‘Data and assumptions’ in this ESRS 2 IRO-1 chapter. A sustainability matter is deemed material according to the double materiality concept if it is material from either or both perspectives. Other criteria have not been applied.

Impact materiality

Our impact materiality analysis followed the ESRS recommended process (please refer to ESRS 1, section 3.4) considering impacts in which adidas is involved through its own operations and as result of its business relationships. We identified, assessed and evaluated the impacts of all sustainability matters at the sub-topic level and, where applicable, sub-sub-topic level. To evaluate each impact, we first identified whether the impact was actual or potential, positive or negative, short, medium or long term, and at which value chain level the impact occurred. Based on this initial assessment, the materiality of actual negative impacts was evaluated based on the severity of the impact, while the materiality of potential negative impacts was evaluated based on the severity and likelihood of the impact. Severity was assessed using the following three parameters: scale, scope and irremediability. In the case of a potential negative human rights impact, the severity of the impact took precedence over its likelihood. For actual positive impacts, the materiality was based on the scale and scope of the impact, whereas for potential positive impacts, the materiality was based on the scale, scope and likelihood. Finally, we considered all topics described above and gave each respective topic a score ranging from 1 for marginal impact to 5 for significant impact.

Financial materiality

For financial materiality, we also followed the recommended ESRS process for assessing and evaluating the financial materiality of each identified risk and opportunity. We evaluated whether a sustainability matter causes or could cause a material risk or opportunity for adidas based on a combination of the likelihood of occurrence and the potential magnitude of the short-, medium- or long-term financial effects. This included material risks or opportunities affecting our net income and/or cash flows and/or our reputation or the health and safety of our employees. We aligned the financial materiality methodology with our enterprise risk management (ERM) methodology to ensure consistency in how we evaluate risks for internal management purposes and also in how we report them in this Sustainability Statement and the Risk and Opportunity Report. In general, our sustainability-related risks are assessed at the same level of priority as all other business-related risks. SEE Risk and Opportunity Report

Finally, we considered all aspects explained in this paragraph and applied a scoring from 1 (marginal) to 5 (significant) from a financial materiality perspective. The materiality threshold for both impact and financial materiality was set at 3, meaning that every topic with a score of 3 or higher is deemed material. We set the threshold at 3 to ensure that we reflect only material matters to our business model in this report, which was ensured by reviewing those matters that were close to the threshold in detail and validating the final list with internal experts and management.

Process of our double materiality assessment

After creating a long list of sustainability matters mainly based on ESRS 1, AR16 as well as on some entity-specific topics as a result of our prior materiality analyses and previous non-financial reporting, we identified generally relevant topics to potentially be reported on together with responsible internal content owners and expert teams. With them, we then proceeded to identify, assess, and prioritize potential and actual positive and negative impacts on people and the environment, as well as risks and opportunities that have or may have financial effects on our company.

Part of the process involved the mapping of affected stakeholders or users of information to identify and assess sustainability matters, integrating their perspectives and views. Although there was no direct involvement of external stakeholders, adidas teams acted as representatives of external stakeholder views and interests to ensure they were considered in the topic assessment. For example, affected communities and value chain workers were represented by the Social & Environmental Affairs team, the investor perspective by the Investor Relations team, the employee perspective by the Human Resources team, and the consumer perspective by the Brand team. Additionally, the Enterprise Risk Management team was involved in all discussions to ensure completeness and alignment in evaluating and assessing methodologies. It is important to note that both processes – ERM (enterprise risk management) and DMA (double materiality assessment) – inform each other so that identified material sustainability matters are reflected in the ERM process and all risks are reflected in the DMA process.

Through a series of workshops over a period of several months with internal stakeholders, including responsible experts and senior management, we identified, assessed and validated impacts, risks, and opportunities. This process included the assessment – performed by the experts in collaboration with the ERM department – of potential connections between our impacts and dependencies and the risks and opportunities that could arise from impacts and dependencies between sustainability matters. Further information on topical dependencies can be found in the respective topical standards as well as in the Risk and Opportunity Report. Generally, the success of our business model depends on our products, which are made of natural resources such as cotton, leather and rubber, as well as other materials such as recycled polyester. The availability and cost of these resources are critical to ensuring the supply of our products to consumers when and where they want them and at a competitive price level. The manufacturing process for our products is very energy intensive and still requires a high level of manual work provided by the workers in our upstream value chain. Similarly, the success of our business activities depends on the creativity of our own employees, impactful collaborations with designers and celebrities, and our marketing and sponsoring activities to ensure that we offer relevant products to our consumers. For the double materiality assessment, we considered all of these dependencies on natural, human, and social resources to evaluate the IROs.

Senior management and their expert teams are responsible for monitoring and managing our impacts, risks and opportunities from sustainability matters:

• Environmental: Material environmental impacts occur mainly in the upstream value chain. We have established teams that work in close collaboration with our suppliers to manage material impacts, e.g., GHG emissions, water, biodiversity, waste, and use of chemicals.

• Social: Material social impacts occur at every stage of the value chain and relate to the workers of manufacturing partners, our own employees, and our consumers. We have established teams and functions that manage highly material impacts, such as the Social & Environmental Affairs team in the Legal function to manage human rights and working conditions in the supply chain, the HR function to manage impacts, risks and opportunities related to our own workforce, and the Marketing and Sales function to manage consumer interests.

• Governance: Material governance-related impacts such as compliance and corporate culture topics are managed by the legal function, i.e., the Compliance team together with HR.

The senior management of these teams as well as experts in specific material topics were deeply involved in the double materiality assessment and provided final judgment on the results based on their subject-matter expertise. The involved senior managers also have a direct link to other internal decision-making processes up to the Executive Board level.

The Internal Controls team was involved in the entire materiality assessment process. Furthermore, for the collection and disclosure of material quantitative metrics, the team members worked together with content and data owners to ensure that data quality requirements for the metrics were met. For more information on internal controls for sustainability reporting, please see the general risk management process and the GOV-5 section. See Risk and Opportunity Report See ESRS 2 – Gov-5 – Risk Management and internal controls over sustainability reporting

Value chain

An in-depth definition of the adidas value chain served as the foundation for our double materiality assessment and identification of sustainability matters and IROs. Given our business model, which relies on outsourced manufacturing and production processes with independent partners, we have segmented the value chain into three distinct parts:

• Upstream: all of our suppliers, e.g., product manufacturers

• Own operations: our own offices, distribution centers (DCs), and retail stores

• Downstream: our wholesale customers and end consumers

For further details on the different players, input and output factors as well as outcomes related to our business model, please refer to our business model graphic in the ‘Our Company’ section of the management report. See Business Model Overview

Data and assumptions

For the double materiality assessment, adidas covered all its business activities globally and used existing internal data, focusing on its own operations as well as upstream and downstream value chain stages (e.g., ERM risk and opportunity overview, GHG emissions calculations, water usage data, chemical usage data, biodiversity assessment, material usage data, own workforce data, supplier risk assessments, financial data) alongside regularly collected data on consumption, social compliance, suppliers and consumer insights. Additionally, we incorporated external data, focusing on the latest scientific studies, benchmarks, regulations and other reporting standards such as GRI, SASB, and the GHG Protocol.

Revision of materiality assessment

In 2025, we continued to apply the results of our previous double materiality assessment (conducted in 2024), as no significant changes in our business model, stakeholder expectations or overall business context were identified. This conclusion is based on the experiences of our prior-year DMA process, in-depth benchmarking exercises of other companies’ 2024 sustainability statements according to ESRS, and, most importantly, discussions with our internal experts for each sustainability matter as preparation of the 2025 reporting process. In general, we plan to revise the assessment every two to three years or in the context of material changes, e.g., to our business model and/or stakeholder expectations.

Topic-specific processes

In addition to our general approach and processes for identifying and assessing our IROs, we conducted the following topic-specific processes, including actions and steps of the double materiality assessment:

IRO-2 – Disclosure Requirements in ESRS covered by the undertaking’s Sustainability Statement

We have determined the material information to be disclosed based on the impacts, risks and opportunities that we had assessed to be material and on the guidance of ESRS 1, section 3.2. The information presented reflects the full scope of these requirements. The assessment of the materiality of information did not lead to an exclusion of any disclosure requirement. The full list of ESRS disclosure requirements included in this report can be found here: SEE ESRS INDEX

In general, we followed the ESRS Disclosure and Application Requirements, including the Minimum Disclosure Requirements (MDRs) for policies, actions and resources, and metrics and targets for the material sustainability matters. Due to the overarching nature of some of the MDR-related data, general information is presented below and applicable to all topical standards. For detailed information on all existing policies, actions, and targets, please refer to the corresponding topical standard.

Minimum disclosure requirements – policies

Policies play a critical role in managing actual and potential impacts and risks as they provide a structured framework for guiding decisions and ensuring accountability. adidas has policies linked to most of its material IROs and they are implemented and monitored by the respective teams, according to their objective and scope, generally covering all activities and locations where adidas operates. The adidas Consequences Management Policy sets a four-step process to deal with any potential policy non-compliance. The process ensures that all parties involved – the employee, the investigation team, and the company as a whole – can trust the resulting consequences are fair, impartial, and consistent.

The four steps covered in the Consequences Management Policy encompass: determine the nature and severity of the policy violation; consider mitigating and aggravating factors; review prior similar cases; and determine appropriate consequences. The policy is applicable to all adidas employees and all material matters.

Minimum disclosure requirements – actions and resources

The management of the identified material IROs is supported by actions, which are presented in each topical standard. These actions are ongoing, unless stated otherwise.

Due to the nature of our business model, most environmental and social impacts related to human rights occur in our upstream supply chain. Consequently, OpEx and CapEx related to ESG topics mainly occur there. These include our independent manufacturing partners who might, as a consequence, increase their selling price for us. In this context, OpEx and CapEx in relation to the management of ESG topics for our own operations are not disclosed due to significance. This is well aligned with our disclosures around the EU Taxonomy provided in this Sustainability Statement. An overview of the teams responsible for managing the different ESG topics in the value chain can be found in each topical standard. See EU Taxonomy

Minimum disclosure requirements – metrics and targets

Metrics and targets are also an integral part of the approach we apply to managing our material IROs. Our metrics, unless stated otherwise, are not validated by an external body other than the assurance provider. As for our targets, our target setting process is led by the responsible teams internally, which apply not only the latest scientific evidence, but also best industry practice, internal benchmarks, and other sources of reliable data. They collectively aim at addressing the specific IROs and therefore contribute to the broader ESG agenda globally (local aspects are described in the topical standards, where relevant). Additionally, in the cases where certain stakeholders were involved in target setting, they are specifically mentioned in the respective topical standard.

For sustainability matters where no targets are currently established, we still track the effectiveness of our policies and/or actions through comprehensive processes for progress evaluation. The lack of targets is due to the nature of the matter (e.g., purely related to compliance) or the lack of accepted methodologies including industry standards to assess and manage the matter (e.g., microplastics), among other reasons. Where relevant, an ambition is set and also monitored. Targets and ambitions are explained in detail in each of the topical standards. For the targets where no baseline year or value is stated, the performance is measured on a yearly basis.

Overall, we systematically track and assess the effectiveness of actions, programs, and targets through several mechanisms that range from regular monitoring of applicable performance metrics and project management practices to after-action reviews. Furthermore, if any actual impact required the provision of remedy for those harmed by these impacts, a reference is given to relevant actions in the corresponding topical standard.

In instances where we made use of the exemptions outlined in ESRS 1 Appendix C – List of phased-in disclosure requirements (and Delegated Regulation (EU) 2025/1416), these are explicitly stated. Nevertheless, our commitment is to address all reporting requirements diligently and to provide the necessary context and information.

Datapoints from other EU legislation in accordance with ESRS 2 Appendix B

The following table provides an overview of all datapoints derived from other EU legislation listed in ESRS 2 Appendix B of this standard.