Impact, Risk and Opportunity Management

E5-1 – Policies related to resource use and circular economy

adidas governs resource use and circular economy through policies, guidelines, and standard operating procedures (SOPs) across the entire value chain. These policies anchor our strategy in the business and ensure we steer the organization toward a lower impact on the environment. Our key resource inflows are regulated by material-specific SOPs and by product creation guidelines. Our key priority is to reduce our dependency on virgin fossil-based materials by increasing the share of recycled and sustainably sourced renewable materials.¹ Resource outflows and waste are also covered by several policies and guidelines implemented by our manufacturing partners (as most impacts occur upstream). However, guidance on circular product design and product end of life is still under development. This is due to a lack of technologies and infrastructure that can effectively sort, pre-process, and recycle different types of products at scale. Therefore, we are currently focusing our work in the field of circularity on understanding the full ecosystem needed to enable a transition from a linear to a circular value chain. SEE ESRS E5-2 – ACTIONS AND RESOURCES RELATEd TO RESOURCE USE AND CIRCULAR ECONOMY

Going forward, we will continue to adapt, widen, and substantiate our approach to circularity and resource use. Our approach is based on science but it will also be influenced by emerging industry standards and regulatory requirements that are becoming more concrete, particularly within the EU and in relation to its EU Strategy for Sustainable and Circular Textiles. We expect these regulatory requirements to become clearer in the coming years, which will help eliminate some of the ambiguity within our industry and set a common baseline for every brand and market participant to adhere to.

E5-2 – Actions and resources related to resource use and circular economy

Our actions regarding resource use and circular economy are in line with our Circularity Position Paper. We rely on internal resources (mainly from the Sustainability and ESG Team) to coordinate and monitor our actions. Topic owners and teams implementing the measures track their effectiveness. Unless explicitly stated otherwise, all actions are ongoing. SEE ESRS E5-3 – TARGETS RELATED TO RESOURCE USE AND CIRCULAR ECONOMY

Circularity strategy and resource use

In 2025, we launched our Circularity Position Paper, which outlines our updated strategy. It reflects our present status, the actions we are undertaking, and the direction we are heading. We recognize that both our internal capabilities and the external landscape, encompassing regulations, infrastructure, and consumer expectations, are evolving rapidly. Therefore, this paper is not static, but a living framework that will be evolved and strengthened as our circularity practices advance. We are convinced that sharing our position paper internally lays the groundwork for integrating circular practices throughout our value chain and steering our shift from a linear to a circular ecosystem.

Digital enablement: To ensure compliance with evolving regulations and to enable sustainable product development, we continued to invest in ESG regulatory readiness and traceability technology enablement efforts. These globally implemented digital solutions enhance transparency and accuracy in material and product data, supporting both internal decision-making and external reporting requirements.

Transition to recycled polyester: Polyester is the most widely used material in our materials portfolio. Therefore, transitioning to recycled polyester is a significant lever to lower our impact on resource use. By 2023, we had already reached 99% recycled polyester in our products, excluding trims. This brought us very close to our target of replacing all virgin polyester with recycled polyester, where technically feasible. Therefore, in 2024, we set ourselves a target aiming for 10% of our polyester volume to come from recycled textile waste by 2030, which reinforces our commitment to driving industry change. In 2025, we rolled out the adoption strategy to implement textile-to-textile recycled polyester in the seasons from 2026 onward.

Sourcing certified cotton: Since the end of 2018, 100% of the cotton we use has come from certified sources, including organic, recycled, and other third-party certified cotton. We are collaborating with key suppliers to increase the use of mechanically recycled cotton from our own post-industrial waste materials. Our Responsibly Sourced Cotton SOP, adopted in 2025, outlines our procurement expectations and evaluates environmental and social impacts. SEE ESRS E4-3 – Actions and resources related to biodiversity and ecosystems

Continued use of recycled EVA and rubber: We continue to increase recycled content in EVA and rubber components, while investing in alternative materials to enhance performance. We specifically tested post-consumer rubber waste from France to validate if it reaches the performance criteria required for application in our products. We are committed to sourcing certified natural rubber that meets our standards, supported by our new Responsibly Sourced Natural Rubber SOP implemented in 2025. SEE ESRS E4-3 – Actions and resources related to biodiversity and ecosystems

Animal-derived materials: These accounted for 5% of our total materials in 2025. All our leather, down and wool used for our products are certified through recognized standards listed above in the policy table. SEE ESRS E4-3 – Actions and resources related to biodiversity and ecosystems

Innovation: We continue to explore innovative materials that reduce environmental impacts, with a particular emphasis on bio-based solutions and advancements in footwear materials through collaborative initiatives. Our commitment to footwear innovation has led us to join the Next Stride project with Fashion for Good (FFG) in 2025. This partnership aims to research bio-based solutions for our footwear soles, paving the way for a potential transition to renewable feedstock options for footwear materials.

Circular economy

At adidas, we define circularity as maintaining the value of products and materials at the highest level for as long as possible. This definition aligns with that of the United Nations Environmental Program (UNEP), as outlined in their report, ‘Sustainability and Circularity in the Textile Value Chain – A Global Roadmap.’ By establishing clear guidelines and adapting to emerging regulations linked to the EU Strategy For Sustainable and Circular Textiles, we aim to promote circular practices in the sportswear industry to reduce environmental impacts and support long-term sustainability.

• Quality and Durability: As a sportswear company, product performance and quality are vital for our success. We continuously test apparel and footwear throughout development and production, aligning with ISO standards and using testing methods such as DIN, GB, ASTM, and SATRA. All products and materials undergo lab testing, and we validate performance with athletes. We also ensure consistent production quality by providing a framework for our partners and conducting annual audits for compliance.

• Recyclability: As part of the Made To Be Remade (MTBR) initiative, adidas has developed end-of-life solutions for a dedicated range of products, with the objective that once returned, the product components can be remade into something new. The first product was a running shoe called Futurecraft.Loop, which was launched in 2019, which then led to a broader MTBR collection by 2023. Based on the experiences from this initiative, we understand that effective circular services require collaboration across the value chain. Therefore, in 2025, we focused on supporting multi-stakeholder initiatives to create a circular ecosystem for the apparel and footwear industry, specifically the T-REX project, and industry research projects from FFG.

Circular ecosystem

We recognize that achieving a circular economy requires systemic change and collaboration across the industry. In 2025, we advanced several multi-stakeholder initiatives:

• T-REX Project successfully completed: T-REX is a publicly funded EU research project aimed at creating a blueprint for how household textile waste can be sorted and recycled in a closed loop across Europe. The three-year initiative, led and coordinated by adidas, brought together 13 key participants from the entire value chain. After its successful completion, the project generated insights that now shape our circularity strategy and industry advocacy. It revealed the urgent need for integrated pre-processing and automated sorting to improve recyclability and feedstock quality, as well as for refining chemical recycling technologies to match the quality of virgin materials. The project also produced clear, science-based technical guidelines for design to improve recyclability, focusing on using recyclable main materials and reducing parts that cause contamination. Finally, a techno-economic assessment underscored the need for stronger policies and investment into better infrastructure to scale textile-to-textile recycling across Europe. These findings inform adidas’ ambition to drive systemic change in the industry. Looking ahead, adidas will continue to build on the insights from T-REX through future projects and collaborations and plans to work closely with industry stakeholders and the EU Commission to shape future regulations.

• Through our partnership with the Fashion for Good innovation platform, we are contributing to the development of frameworks and guidelines to advance circularity in the industry:

  • Enabling textile waste traceability through the Tracing Textile Waste Project, also co-led by Textile Exchange: A major challenge in scaling the use of textile waste for recycled content is the lack of traceability for certifications such as the Global Recycled Standard (GRS) and Recycled Content Standard (RCS). Currently, tracking textile waste is manual and fragmented, leading to difficulties in data consolidation and sharing. This issue is increasingly critical as brands and regulators demand transparency to ensure material authenticity. To standardize data collection and sharing across the supply chain by validating a new Reclaimed Material Declaration Form (RMDF), adidas participated in a project involving three pilots – two for post-industrial waste and one for pre-consumer waste. This effort led to the development and adoption of the RMDF for GRS and RCS certifications². adidas plans to utilize the RMDF for our recycled content materials in the future to verify the feedstock source and type.

  • adidas participated in the Closing the Footwear Loop project, aimed at addressing systemic challenges to circularity in the footwear sector. The ongoing project focuses on overcoming barriers caused by fragmented and limited collection and recycling infrastructure in the EU as well as the absence of harmonized standards. We are convinced that by participating in this project, adidas has contributed to creating transparency around current post-consumer footwear sorting activities in the EU and developing industry insights from collaborative trials on end-of-life processes and impact assessment. The outcomes of this project inform adidas’s approach to footwear circularity.

  • The ReWear project, with adidas as a key partner, successfully concluded as a continuation of the Sorting for Circularity Europe initiative. This phase focused on the flows of rewearable textiles,³ providing crucial insights into the industry’s understanding of product pathways after consumer disposal. The project mapped the conditions and potential end destinations for rewearable textiles and analyzed the role of regulations and infrastructure in improving the flow of textiles into rewear value chains.

• The BIOTEXFUTURE innovation space program, funded by the German Federal Ministry of Research, Technology, and Space (BMFTR) and co-led by adidas AG and RWTH Aachen University, concluded in December 2025 after five years of exploring the shift from petroleum-based to bio-based textiles. By participating in ten projects, adidas contributed to the program’s key material innovations: a high-performance bio-based polyamide (PA 4.10) with improved stretch and breathability, a PFAS-free water-repellent finish, and a bio-based insulation material with enhanced warmth-to-weight efficiency. These innovations are being tested in garments and on athletes and are expected to be integrated into future adidas product ranges.

• adidas is participating in the Textile Loop pilot under CIRPASS-2, led by Avery Dennison’s atma.io platform, to advance the implementation of Digital Product Passports (DPPs) in its value chain. The pilot involves creating unique digital IDs for textile products, tracking them through downstream circular services for sorting and recycling, and enabling data exchange among all relevant stakeholders. For adidas, this engagement provides a framework for ensuring compliance with upcoming EU Ecodesign for Sustainable Products Regulation (ESPR), which includes Digital Product Passport (DPP) requirements to improve supply chain transparency, enhance the traceability of materials and product lifecycles, and enable more scalable circular business models.

• In 2025, adidas contributed to the development of the Global Circularity Protocol for Business (GCP) Version 1, led by the World Business Council for Sustainable Development (WBCSD), as well as to the Circular Transition Indicators (CTI) for fashion. These initiatives aim to establish a science-based, cross-industry methodology for measuring, comparing, and disclosing progress on circular economy strategies. By participating alongside leading companies from multiple sectors, adidas helps shape a standardized framework that enables more consistent evaluation of material flows, circular business models, and resource efficiency. This engagement strengthens adidas’s commitment to transparency and our belief that achieving circularity requires harmonized standards, a scientific approach, and collective action, and positions the company at the forefront of harmonized industry practice.

Circular services

At adidas, we are convinced that Circular Business Models (CBMs) strengthen consumer connections beyond sales, promoting product longevity and encouraging sustainable behaviors. We have learned from previous pilots, such as in-store sneaker cleaning, rental, and product take-back programs over the past decade, that a global approach to CBMs is not practical as consumer expectations and cultural attitudes vary by market. We are refining our approach to circular services to focus on impactful solutions that reduce waste and extend product life. These learnings are consolidated into an internal guidance document that we leverage to work with local teams to develop tailored solutions. This decentralized approach helps us remain relevant and ready to scale successful initiatives.

Supply chain waste management

Building on the progress achieved through our global waste reduction efforts, we have continued to advance waste disposal management across our supply chain since 2021. In 2025, we further strengthened our waste-handling process, including upskilling facilities to work with credible waste treatment vendors, collaborating with partners across industries to enhance waste segregation practices and improve data accuracy across various waste streams.

To advance circularity within our supply chain, we continued to review and implement our Waste Management Guideline, ensuring alignment with evolving industry expectations. We also expanded collaboration with partners in regions where waste management infrastructure is still developing. This includes our participation in the Circular Fashion Partnership (CFP) program, led by the Global Fashion Agenda, in Cambodia and Indonesia, which brings together brands, manufacturers, and recyclers to transform post-industrial textile waste into new recycled materials. This initiative aims to enhance textile waste management activities in supplier facilities, support proper waste segregation for the recycling process, and strengthen local recycling systems.

In 2025, we conducted an internal consultation with selected Tier 1 and Tier 2 suppliers based on their geographical locations to learn about the current gaps and challenges in transitioning from a linear to a circular waste management model. The insights and ideas gathered through these workshops have provided valuable input that has helped to shape our strategic roadmap toward 2030. Building on the learning from these workshops, we will continue our collaborative efforts with industry stakeholders to support the establishment of recycling systems for textiles.

1 Textile Exchange refers to these as fibers produced from renewable resources, such as plants or agricultural waste, using practices that minimize environmental impact throughout the lifecycle.

2 textileexchange.org.

3 Reports.fashionforgood.com.