⌐ adidas’ purpose, ‘Through sport, we have the power to change lives,’ guides the way we run our company, how we work with our partners, create our products, and engage with our consumers. We will always strive to expand the limits of human possibilities, to include and unite people through sport, and to create a more sustainable world. We believe that acting as a responsible company will contribute to lasting economic success. However, achieving a truly sustainable business model is a marathon, not a sprint. ¬
Our commitment to sustainability is embedded into how we have done business for over two decades. To underline this commitment, in 2021, we further sharpened our focus on sustainability and defined a roadmap for 2025 and beyond that allows us to create – and drive – positive impact. adidas has committed to:
− achieving climate neutrality (CO2e) across its own operations (Scope 1 and 2) by 2025,
− reducing absolute greenhouse gas (GHG) emissions across the entire value chain (Scope 1, 2, 3)14 by 30% by 2030, measured against a baseline of 2017, and
− achieving climate neutrality (CO2e) across the entire value chain by 2050.
Greenhouse gas emissions resulting from energy use during manufacturing of products at our supplier factories are one of the major contributors to the carbon footprint of our entire value chain. Consequently, working with our suppliers and helping them reduce their emissions is critical for achieving our decarbonization targets. Key highlights of our suppliers’ progress during 2023 are as follows:
− Phasing out coal-fired boilers: Since 2022, we have prohibited our suppliers from installing new coal-fired boilers, heaters, or power generation systems, and remain committed to phasing out coal-fired boilers at all direct supplier facilities at Tier 1 and Tier 2 by 2025. By the end of 2023, more than 48 boilers have been modified or replaced (2022:18) to use 100% low-carbon fuel such as biomass or natural gas. Furthermore, six of our suppliers have now completely phased out the use of coal in their production.
− Increasing adoption of on-site renewable energy for electricity generation: We have been asking our suppliers to install on-site renewable energy sources, such as rooftop solar projects, for the last few years, and we are seeing steady progress. The total capacity of rooftop solar projects at our key suppliers increased by 44% compared to the previous year to 267 MWp in 2023.
− Preparing suppliers to purchase electricity from off-site renewable energy (RE) sources: We expanded the coverage and scale of our renewable electricity target in 2023. We supported our suppliers by conducting upskilling sessions on PPAs, Green Tariffs, and Energy Attribute Certificates (‘EACs’) or Renewable Energy Certificates (‘RECs’) and connecting them with providers of these solutions. As a result, 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.
− Support suppliers achieving their SBTi targets: We have asked suppliers to commit their own SBT through SBTi since 2022. Suppliers should conduct baseline mapping in 2023 and set targets that get approved by the SBTi by 2024.
Throughout the above effort, the average Scope 1, 2, and 3 annual GHG emissions per product for 2023 decreased by 3% compared to the previous year. This reduction has been driven by the work done with our suppliers, such as continuing with the phase-out of coal in our manufacturing facilities and the increased use of renewable energy. Our innovation effort, that has also enabled us to use low-carbon manufacturing methods and materials, as well as decreased production volumes due to high inventory levels in the market translated into a 24% reduction in total absolute GHG emissions17 compared to the previous year.
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