Impact, Risk and Opportunity Management

S3-1 – Policies related to affected communities

Community economic, social, and cultural rights (e.g., access to clean water and sanitation) are addressed through core policies including our Human Rights Policy, Human Rights Defenders Policy, and adidas Environmental Guidelines. These documents guide actions to minimize impacts on affected communities, including those related to climate change, biodiversity, water use, hazardous chemicals, and waste.

Our policies align with international standards, including the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, and the OECD MNE Guidelines. They also reflect guidance on vulnerable groups such as Indigenous Peoples, women, children, and migrant workers. adidas has publicly communicated our commitment to respecting Indigenous Peoples in accordance with the UN Declaration on the Rights of Indigenous Peoples and ILO Convention No. 169. This is further defined in our Biodiversity and Ecosystems Policy, which requires respect for the rights, lands, and cultures of Indigenous Peoples and obligates our suppliers to obtain free, prior, and informed consent (FPIC) for new developments near tribal or disputed lands. see ESRS E4-2 – Policies related to biodiversity and ecosystems

Monitoring compliance with these standards is detailed in ESRS S2 – Workers in the Value Chain. For affected communities, our primary monitoring mechanism is the third-party complaints procedure. see ESRS S2-3 – Processes to remediate negative impacts and channels for value chain workers to raise concerns

S3-2 – Processes for engaging with affected communities about impacts

adidas engages with stakeholders who represent affected communities to inform our due diligence and support effective remedies. While suppliers are typically the first point of contact for local concerns, adidas intervenes when credible reports or third-party complaints highlight potential or actual negative impacts.

adidas uses its stakeholder engagement, as stated above, to gain insights into the perspectives of affected communities. This especially includes vulnerable groups, such as women, migrant workers, Indigenous Peoples, and other minorities, or those whose circumstances open them up to exploitation or the abuse of their rights and who may be particularly affected by adverse impacts.

However, we recognize there are challenges in identifying and addressing all potential or actual adverse impacts on affected communities, including Indigenous Peoples, across our upstream value chain. These challenges stem primarily from such impacts being concentrated in the upper tiers of our supply chain – at the raw material or commodity level – where our visibility and direct engagement are limited. To address these challenges, we are committed to strengthening our due diligence and stakeholder engagement practices to ensure broader coverage and more effective management of community-related risks.

S3-3 – Processes to remediate negative impacts and channels for affected communities to raise concerns

Processes to remediate negative impacts

We operate processes to enable and provide remediation for adverse impacts on affected communities, with dedicated grievance channels for water and sanitation issues and human rights defenders (HRDs), integrated into our Human Rights and Environmental Due Diligence (HREDD).

For water and sanitation concerns, suppliers must report community complaints through our reporting mechanism, provide details (complainant, timing, nature of issue), and share investigation outcomes, corrective actions, and preventive measures, including communication with stakeholders.

For HRDs, we act directly where partners violate rights, engage constructively with governments when state actions impede HRDs, and address issues raised via our third-party complaints process. We are committed to being 100% responsive to complaints received and providing timely remedy for any breach of our Human Rights Policy or Workplace Standards. All cases are tracked, outcomes published annually, and processes reviewed for effectiveness using stakeholder feedback. A non-retaliation policy protects complainants.

Channels for affected communities to raise concerns

We provide multiple channels for affected communities and external stakeholders to raise concerns:

• Complaint Mechanism for Human Rights and Environmental Impacts: Enables any third party, including individuals and organizations, to report human rights or environmental harm. We publish annual updates on cases and outcomes on our corporate website.

• Supplier Self-Reporting: Under our Major Incident Report Protocol, suppliers must report community water and sanitation complaints, investigation plans, and follow-up actions to our Social & Environmental Affairs (SEA) team.

These grievance channels form part of our Human Rights and Environmental Due Diligence (HREDD) system. We monitor the nature, type and frequency of complaints received to gauge affected communities’ – or their legitimate representatives’ and credible proxies’ – trust and awareness of these processes. We review their effectiveness annually by reviewing the scope, nature and frequency of the complaints received through these channels, and we incorporate stakeholder feedback for improvement. All complainants are protected by our commitment to non-retaliation.

S3-4 – Taking action on material impacts on affected communities, and approaches to managing material risks and pursuing material opportunities related to affected communities, and effectiveness of those actions

adidas seeks to prevent material negative impacts on affected communities by enforcing supplier compliance with environmental standards, requiring free, prior, and informed consent (FPIC) for land-related developments in the rare instances where these occur in our supply chain, and conducting upstream human rights due diligence on raw materials. These measures aim to prevent noncompliance with international standards, such as the UNGPs, the ILO Declaration, or the OECD Guidelines. No severe noncompliances were identified during the reporting year. Isolated incidents in the supply chain – such as improper waste disposal impacting local communities – were investigated and remediated.

The actions taken during the reporting period were led by the Social & Environmental Affairs (SEA) team, a specialist function within Global Legal, which oversees human rights and environmental due diligence and ensures supply chain compliance with Workplace Standards. This 37-person team operates globally, with staff based in major sourcing countries, Germany, and the United States, all dedicated full-time to due diligence and compliance. The SEA team collaborates closely with the Sourcing Sustainability function, which focuses on remediating environmental impacts and tracking supplier performance against published targets.

Actions related to water and sanitation

Our actions to address actual or potential negative impacts on community water and sanitation are embedded in our Human Rights and Environmental Due Diligence (HREDD) process. We manage supplier-reported cases through our community complaints mechanism, aiming for effective remediation and preventive measures. In addition, we obligate our suppliers to adhere to strict environmental standards on air emissions, wastewater discharge, waste disposal, and water use to minimize risks to communities and ecosystems. These supplier obligations are embedded in our Workplace Standards and are monitored through a community complaints mechanism, audits and incident tracking. Where systemic issues arise, we collaborate with industry initiatives and local stakeholders to drive broader change.

In 2025, several Tier 1 factories in Indonesia were asked by local authorities to review their waste management practices, particularly regarding potential open dumping or illegal burning, after a community concern was raised through a local NGO. While most production waste was properly recycled or co‑processed, some residual waste had been improperly dumped due to local restrictions on landfill use. Corrective actions included clean‑up of affected areas, tighter oversight of waste vendors, and consultation with local environmental authorities to determine compliant disposal methods for non‑recyclable residues.

Separately, in October 2025, local media alleged improper handling of hazardous waste at one facility in Indonesia. Following a government inspection, the allegation was found to be unsubstantiated, with authorities confirming that the factory maintained appropriate procedures and documentation for hazardous waste storage and disposal.

We also continued to follow up on a community complaint reported in 2024 concerning a Tier 2 supplier facility in Indonesia. The complaint alleged that the facility’s operations contributed to localized flooding, which adversely impacted the surrounding community.

In response, adidas required the facility to implement measures to upgrade its rainwater runoff systems to prevent future flooding. The supplier completed the remediation actions, which were validated by an independent third party. Additionally, following an on-site inspection, the local government issued a confirmation letter. Based on these verified results, the case has been closed, and adidas has communicated the resolution to the complainant.

Actions related to human rights defenders (HRDs)

Our actions related to HRDs are case-specific and leverage our influence to drive change, including direct engagement with affected parties – such as labor organizations, NGOs, and authorities, in line with international human rights standards and local laws. We monitor potential HRD impacts through our third-party complaints mechanism and other tracking processes. In 2025, we neither identified nor were made aware of any HRD rights violations. As a result, no specific actions related to HRDs were required.

Reviewing effectiveness of our actions

Our primary focus is on addressing any identified adverse impacts on affected communities that may be raised through our third-party complaints mechanism and/or stakeholder engagement with credible proxies and/or legitimate representatives of affected communities. For the former, processes are in place to validate the resolution of the case with the affected party, which is a means to evaluate the effectiveness of the corrective/remedial action. Our incident handling procedure lays out guidance to factories on how to manage issues related to adverse impacts on affected communities regarding water/sanitation, and to track the management of such cases as they arise.