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Sustainability

Climate Change and Decarbonization

Managing the environmental impacts at our own sites and across the entire value chain is a key focus of our work. We are committed to decarbonization by reducing our absolute energy consumption and GHG emissions, and transitioning to clean energy.
Climate Change and Decarbonization

adidas is committed to achieve climate neutrality (CO2e) across the entire value chain by 2050 and has set up targets to help us limit emissions aligned with the 1.5°C benchmark:

  • Achieve climate neutrality (CO2e) across its own operations (Scope 1 and 2) by 2025. 
  • By 2030, reduce absolute greenhouse gas (GHG) emissions by 30% across the entire value chain (Scope 1, 2, 3) compared to a 2017 baseline (SBTi approved).

To ensure that the initiatives that we are implementing are having the desired impact and are reducing the carbon footprint of our products, we are tracking our carbon intensity reduction year on year and set up a target of 15% intensity reduction by 2025 from 2017. Our average Scope 1, 2, and 3 annual GHG emissions per product for 2023 decreased by 3% compared to the previous year. From 2022 to 2017 we achieved a reduction of 6,5%.

When it comes to decarbonization, we believe that data quality is critical. Therefore, in addition to developing a tool that enables us to quantify and monitor our carbon footprint across our entire value chain, we have put considerable effort into gathering more primary data from our suppliers over the last few years.

During 2023, we updated our carbon footprint calculation methodology to remain fully aligned with international methodology standards, e.g. provided by the GHG Protocol and SBTi, and to reduce the dependance on assumptions and generalizations typically presented by secondary data.

In 2023, we reduced our total GHG emissions by 24% compared to the previous year (excluding use phase emissions). This reduction was driven by the work we have done with our suppliers, such as continuing to phase out coal in our manufacturing facilities and increasing the use of renewable energy, as well as innovation effort in low-carbon manufacturing methods and materials, together with decreased production volumes due to high inventory levels in the market.


 

2023

2022

Scope 1 emissions (in tons CO2e)

21,779

21,856

Scope 2 emissions (in tons CO2e)

142,457

142,293

Scope 3 emissions (in tons CO2e)

5,894,811

7,635,785

Purchased goods and services

4,503,000

6,041,553

Upstream transportation and distribution

247,684

343,556

Business travel

43,753

36,158

Use of sold products

957,429

1,057,515

End-of-life treatment of sold products

142,945

157,002

Total emissions* (in tons CO2e)

5,101,618

6,742,418


*Excluding use of sold products


Reducing land-related emissions (‘FLAG’)

adidas recognizes the importance of reducing land-related emissions. Therefore, in 2023, we quantified our emissions resulting from Forest, Land and Agriculture (‘FLAG’) operations according to the SBTi FLAG Guidance. The results of our calculations show that FLAG emissions represent around 7% of adidas’ total GHG emissions, with the main impacts stemming from sourcing cow leather, cotton, and natural rubber. Although the FLAG emissions fall below the SBTi threshold for required FLAG target setting, adidas will continue to work on reducing those emissions.

Measuring our product footprint

Data and transparency have a pivotal role as catalysts for increasing awareness and informed decision-making to mitigate the environmental impact of our products. This impact, largely resulting from decisions made during the design phase, underlines the importance of strategic interventions. In 2023, we achieved a critical milestone with the development of an in-house, state-of-the-art tool that allows us to measure the environmental footprint of any footwear or apparel product within our portfolio. Aligned with international standards, the methodology adheres to ISO 14067:2018 and has undergone rigorous third-party verification.

Identifying ways to make lower-impact products requires a detailed and thorough approach that includes not only optimizing our own operations but also the manufacturing of each of our products. As most of our carbon emissions occur outside our direct control, we collaborate with our suppliers located across the globe, helping them improve their carbon footprint in their production processes.

DECARBONIZING OUR SUPPLY CHAIN

Working with our suppliers and helping them reduce their emissions is critical for achieving our decarbonization targets. As our supply chain is large and diverse, we benefit from setting and communicating clear ambitions and tangible goals for suppliers, while supporting them with expertise and training, and ultimately also measuring and rewarding them for the progress they make.

We have set clear expectations for developing a holistic approach to decarbonization in our ‘Decarbonization Manifesto.’ Our strategic Tier 1 and Tier 2 suppliers should:

  • Set approved SBTi targets by 2024.
  • Offer only new materials with sustainable content and produced with low-carbon processes.
  • Aim for an aggressive adoption of more sustainable and low-carbon materials.
  • Build in-house capacity to provide full transparency and traceability, from raw material to finished product.
  • Adopt clean energy, including rooftop solar energy, energy sourced through renewable energy power purchase agreements (PPAs), and other renewable alternatives.
  • Phase out coal by 2025 or earlier.
  • Adopt low-carbon technologies selected from the adidas low-carbon technology portfolio.

We incentivize suppliers for their decarbonisation performance, including priority in product allocation, opportunities for existing, high-performing supplier partners to gain market share, entry opportunities for new, disruptive supplier partners, as well as first-mover advantage and sustainability leadership position.

As a result of this work, our suppliers have already:

  • Phased out coal-fired boilers: By the end of 2023, more than 48 boilers were modified or replaced to use 100% low-carbon fuel such as biomass or natural gas.
  • Increased adoption of on-site renewable energy for electricity generation: The total capacity of rooftop solar projects at our key suppliers increased by 44% compared to the previous year to 267 MWp in 2023.
  • Increased purchase of electricity from off-site renewable energy (RE) sources: 35 supplier factories are now using more than 50% of their electricity from RE. Overall, our suppliers sourced more than 447,268 MWh from off-site renewable energy projects in 2023, reflecting an increase of 38% compared to the previous year.
  • Achieved their SBTi targets: In 2023, we initiated a strategic partnership with the Indonesian Chamber of Commerce and Industry and saw 20 of our Indonesian suppliers successfully graduating from their technical training program, which is designed to help them achieve their SBTi-approved targets.
DECARBONIZING OUR OWN OPERATIONS

We are committed to reducing our GHG emissions in our own operations, i.e., our administrative offices, distribution centers, and own retail stores.

We are following a clear roadmap across our own operations to achieve our GHG emission reduction targets, focusing on both steadily increasing environmental performance data coverage and continuing to implement eco-efficiency standards and processes through a holistic management system (‘Integrated Management System’ – ‘IMS’). We are working on measures such as improving energy efficiency, implementing on-site RE production, and sourcing renewable electricity.

We continued to invest in our own operations and offered ‘Green Funds’ to subsidize local energy efficiency and on-site renewable energy projects. One such measure in 2023 was an on-site solar project combined with electrification of gas infrastructure used for heating at our distribution center in Caspe, Spain. For 2024, we plan to implement several projects at our headquarters in Herzogenaurach, Germany, and at other own operation sites globally.

We further improved our coverage of energy data collection within our own operations. In 2023, we managed to increase our primary data coverage for our own retail sites by a further five percentage points compared to the previous year, to 41% globally.

As we continue our transition to renewable electricity in Europe, we have decided in recent years to shift our focus from short-term initiatives, such as the purchase of EACs for Europe and North America, to more impactful measures, e.g., securing long-term renewable electricity contracts such as PPAs.

In 2023, we signed a virtual PPA for Europe: For a period of ten years, adidas will be supplied with approximately 50 GWh of renewable electricity per year produced by a new solar project in Spain, starting in 2025. This will contribute to the long-term reduction of emissions from our European operations.

We continue to use certifications that require consideration of environmental aspects for interior design and construction of our own retail stores – including ‘Leadership in Energy and Environmental Design’ (‘LEED’) and ‘Building Research Establishment Environmental Assessment Method’ (‘BREEAM’) certifications. While we aim to obtain these external certifications for strategically relevant projects, we also apply a set of internal eco-efficiency standards that mirror the priorities of the LEED certification for all other projects. In 2023, seven of our own retail stores across the globe received LEED certification, with our retail store in Cape Town, South Africa, being awarded the highest level of recognition, LEED Platinum, for its advanced energy metering, indoor water use reduction and enhanced indoor air quality strategies.

CLIMATE-RELATED REPORTING AND DISCLOSURE

As part of our risk identification process, we monitor physical risks related to climate change as well as risks and opportunities resulting from the transition to a low-carbon economy.

In 2023, we established a core team composed of experts from several business areas. Its objective is to start building more granularity, ensuring high-quality data for more extensive external reporting for scenario analyses and setting up the base to support us to make informed business decisions – considering the medium- and long-term financial impacts of climate change across our value chain as well as the broader social and environmental impacts.

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