ESRS 2 General Disclosures

Impacts on water consumption occur either in the upstream agricultural or facilities’ operational processes. In agricultural processes, the impact comes mainly from the consumption of water, through plant evaporation, for raw material production (e.g., cotton cultivation). In facilities’ operational processes, the impact occurs with the use of water for personal consumption, hygiene and sanitation purposes. In severe cases, these impacts could lead to a reduced water availability for local communities.

Impacts on water withdrawal occur mainly during upstream water-intensive production processes, such as dyeing and tanning (mostly present at our Tier 2 suppliers). In severe cases, the combination of location and water-intensive processes could lead to a reduced water availability for local communities.

For adidas, the risk related to water withdrawal could be related to:

• Stricter regulation in the sourcing countries, potentially leading to higher operational costs for suppliers.
• Business disruption and/or reduced manufacturing capacity at our suppliers, due to the reduced availability and higher cost of water.

Impacts on water discharges occur during upstream production processes. They are mainly present during the dyeing and tanning phases as these are chemical and water-intensive processes. In severe cases, these impacts could lead to the pollution of bodies of water compromising living conditions for local communities.

For adidas, the risk related to water discharge could be connected to:

• Stricter regulation in sourcing countries, potentially leading to higher operating costs for suppliers and/or fines for non-compliance.
• Reputational risks, if adidas is linked to claims related to damage of living conditions by local communities due to improper water discharge.