ESRS 2 General Disclosures
SBM-2 – Interests and views of stakeholders
Our approach to engagement with our stakeholders is reported in ESRS 2 SBM-2. See ESRS 2 – SBM-2 – Interests and views of stakeholders
SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and business model
adidas operates a primarily outsourced global supply chain, extending from strategic manufacturing partners to component and raw material suppliers, including cotton, leather, and natural rubber. While our own operations – such as offices, retail stores, and distribution centers – pose limited direct risk to affected communities, our upstream supply chain presents greater potential for impact.
Through our materiality assessment and stakeholder engagement processes, we have identified actual and potential impacts on affected communities, particularly in relation to:
Access to water and sanitation (e.g., groundwater depletion, pollution near supplier facilities, generation of hazardous waste including chemical waste)
Human rights defenders (HRDs) (e.g., unfair dismissal, intimidation, or retaliation)
Indigenous Peoples and communities near raw material production and/or recycling sites
These impacts originate from our business model, which relies on outsourced production in regions where environmental and human rights risks are more prevalent. Any material negative impacts that occur are typically individual incidents. They also inform our strategy, leading to targeted due diligence, supplier requirements, and grievance mechanisms to mitigate and remediate harm.
Affected communities may include:
HRDs such as trade unionists, environmental advocates, and labor rights campaigners
Local populations near Tier 1 and Tier 2 supplier facilities
Communities impacted by logistics and distribution activities
Indigenous Peoples in proximity to the production of raw materials which enter our supply chain
We engage with stakeholders – including NGOs, trade unions, and advocacy groups – to understand community concerns and shape responsive actions. Our third-party complaints mechanism and community reporting protocols provide channels for affected communities to raise concerns, which are investigated and addressed in line with our Human Rights and Environmental Due Diligence (HREDD) system.
Material matter |
|
Material IRO |
|
Classification |
|
Time horizon |
|
Value chain |
|
Description |
|---|---|---|---|---|---|---|---|---|---|---|
Water and sanitation |
|
Negative Impact |
|
Potential |
|
Short-term |
|
Upstream |
|
There are potential adverse environmental impacts linked to our supply chain that may prevent community access to clean water and sanitation in the communities where our suppliers operate (mainly focusing on Tier 2 suppliers, which utilize water-intensive processes as part of their production). |
Impacts on human rights defenders |
|
Negative Impact |
|
Potential |
|
Mid-term |
|
Upstream |
|
Human rights defenders may be adversely impacted through intimidation, discrimination, or economic retaliation when raising their concerns (including those that may be linked to our business operations), particularly in regions where civic freedoms and human rights protections are limited. |