During the year end review metting a question was asked regarding what adidas was doing with regards to the environment. Currently, adidas' environmental efforts are being coordinated and implemented by the environment department in Germany. Globally, adidas has made, or is in the process of making, the following commitments towards reducing our impact on the environment:

1. Preparation of a German-based global technology center dedicated to the development of footwear technologies. These new technologies should help cut down on the impact of shoe manufacturing on the environment.

2. ISO 14000 certification for the entire adidas organization.

ISO 14000 is a set of international standards for implementation of environmental management systems. The standards are adopted by the International Organization for Standardization and are geared towards placing overall environmental performance directly into the mainstream management structure. The driving force behind adopting a voluntary ISO cercification is that improved environmental management creates enhanced environmental performance, efficiency and profitablility, while heoping to preserve our natural environment. Some of the guiding principles of ISO certification include:

• Establishing internal environmental policies, including a commitment to the prevention of pollution.

• Encouraging environmental planning throughout the full range of the company's operations from sourcing to product distrebution. Additionally, adidas has endeavored to develop management and employee commitment to the protection of the environment.

• Encouraging contractors and suppliers to establish environmental management systems.

3. Cutting waste and conserving resources in order to reduce our impact on the environment.

4. By promoting a culture of responsible outdorr athleticism and an athletic, healthy lifestyle.

5. Cutting back on and redesigning packaging to minimize waste.

adidas has teamed up with Business for Social Responsibility ("BSR"), a non-profit organization geared towards helping corporations develop more environmentally and socially responsible practices. One of BSR's initiatives has been to help adidas cut down on packaging materials. To that extent, adidas has begun using recycled shoe-inner boxes. adidas will continue to work towards cutting down on packaging and utilizing "earth friendly" materials in packaging.

6. Recycling bottles, paper and cardboard at the workplace.

A group called Cans for Kids picks up all of the glass, cans and plastic that are placed in adidas America recycling bins and uses the money for under privileged kids. Also, we currently recycle 2,800 pounds of cardboard and 3,200 pounds of paper product per week. Lastly, all of our copy machines and printers are equipped with energy saving features and we have installed long lasting, energy efficient lighting throughout the building.

7. Teaming up with progressive organizations to help us develop sustainable business practices.

As mentioned above, adidas has teamed up with BSR in an effort to continue to grow our environmental initiatives. On the international side, adidas is working with SATRA, an organization that provides information regarding environmental, health and safety services and information.

adidas continues to strive to not only be the best sports brand in the world but also to be environmentally sound. To that extent, if you have any ideas that you would like to share regarding corporate environmental initiatives, please do not hesitate to let us know.