Furthermore, in acknowledging the PUMA EP&L today as an innovative sustainability approach, the PPR Group, PUMA’s majority shareholder, announced that this groundbreaking economic valuation methodology1 for a company’s environmental impacts will be implemented across its Luxury and Sport & Lifestyle brands by 2015.

After publishing an economic valuation of € 94 million of GHG emissions and water consumption in May this year2, PUMA has now finalised its 2010 E P&L by adding € 51 million caused by land use change for the production of raw materials, air pollution and waste along its value chain. Only € 8 million of the € 145 million total derive from PUMA’s core operations such as offices, warehouses, stores and logistics while the remaining € 137 million fall upon PUMA’s supply chain. These costs, which will not affect PUMA’s net earnings, will serve as an initial metric for the company when aiming to mitigate the footprint of PUMA’s operations and all supply chain levels.

“The unprecedented PUMA Environmental Profit and Loss Account has been indispensible for us to realize the immense value of nature’s services that are currently being taken for granted but without which companies could not sustain themselves,” said Jochen Zeitz, Executive Chairman of PUMA and Chief Sustainability Officer of PPR. “At PPR HOME, we view the PUMA EP&L as an essential tool to help drive PPR’s sustainability development across its Group of brands because analysing a company’s environmental impact through an E P&L and understanding where environmental measures are necessary will not only help conserve the benefits of ecosystem services but also ensure the longevity of our businesses. The results of the PUMA E P&L underpin the urgency for a paradigm shift in the way we all currently do business and I have been pleased to also see that the release of PUMA’s first results has generated widespread interest among governments, corporations, NGOs and academics.“

The PUMA E P&L and the associated methodology3 were developed with the support of PricewaterhouseCoopers LLP and Trucost PLC, using recognised ecological and economic techniques and building on a large volume of work in the fields of environmental and natural resource economics. The valuation of the overall results shows:

• PUMA’s supply chain is responsible for 94% or € 137 million of its total environmental impact.

• Over half (57% or € 83 million) of all environmental impacts are associated with the production of raw materials (including leather, cotton and rubber) in Tier 4 of PUMA’s supply chain4.

• Only 6% or € 8 million derive from PUMA’s core operations such as offices, warehouses, stores and logistics; a further 9% (€ 13 million) occur in Tier 1, with the remaining 85% (€ 124 million) in Tiers 2-4.

• GHGs make up 90% of the total impact of PUMA’s offices, stores and warehouses.

Alan McGill, partner, Sustainability and Climate Change, PwC, said: “These values are enough to make any business pay attention. The PUMA E P&L offers a real insight into the environmental consequences of commercial decisions and at the same time highlights potential commercial consequences of the environmental realities unfolding around the world. This will make many companies consider how they can apply similar analysis in their own organisations. Companies – big and small – are now reliant on global supply chains, making their environmental footprint much larger than many realise. Assigning economic values to the environmental impact of a company’s operations enables a business to tackle vital questions now, not just about environmental impacts, but business risk, costs savings and finding new ways to become more effective. Without measuring them, the impacts cannot be managed, or reduced.”

E P&L Results Break-Down

Water Use and Greenhouse Gas Emissions

The impacts of water use and GHGs were found to be roughly equal, together making up just under two thirds of the overall impact (around € 47 million each)5. (For more details, please refer to the press materials of PUMA’s May 2011 announcement on http://about.puma.com/?p=6644)

Land Use

Negative impacts on biodiversity and ecosystem services as a result of land-use for agriculture and buildings in PUMA’s supply chain are valued at € 37 million or 26% of the total E P&L. More than any other impact these costs are concentrated in Tier 4 with just 1% arising in PUMA’s operations and Tiers 1-3. Because leather is used extensively in footwear – PUMA’s dominant business line – and it is the most land extensive raw material that PUMA sources, the use of leather is the greatest single factor contributing to impacts on land-use. As a result, footwear accounts for € 34 million or 91% of the overall land-use impact.

Air Pollutants

The environmental damage caused by air pollution (particulates, ammonia, sulphur dioxide, nitrogen oxide, Volatile Organic Compounds (VOCs) and carbon monoxide) amounts to € 11 million, representing 7% of the E P&L total. Tier 4 is responsible for the lion’s share of the air pollution impact, valued at just over € 4 million. The single most significant contributor to this impact is ammonia emissions from animal waste and fertilisers used in agricultural processes.

Waste

The environmental impact caused by waste generation (landfill and incineration) is valued at € 3 million, representing 2% of the total PUMA E P&L. More than half of this derives from Tier 1 with some 21,000 tonnes of waste, followed by Tier 2 suppliers with some 8,000 tonnes and PUMA Operations with some 6,000 tonnes of waste. The vast majority of PUMA’s overall waste is produced in Asia / Pacific where most of PUMA’s suppliers are located.

Dr. Richard Mattison, Chief Executive Officer, Trucost said: “The current era of volatile resource prices, growing consumer and investor interest and greater regulatory standards mean that environmental issues are increasingly core to the business strategy. Water supplies, access to raw materials, a stable climate and clean air are vital to business operations, but many companies struggle to assess these issues due to their long and intricate supply chains. The Environmental Profit and Loss Account approach provides a robust framework to help companies unlock this complex challenge and embed sustainability at the heart of business decision making. PUMA has demonstrated that accounting for the environment is no longer a ‘holy grail’ objective, but simply makes good business sense.”

Responses to the PUMA 2010 Environmental Profit and Loss Account

The PUMA E P&L findings from 2010 have revealed that the lion share of PUMA’s environmental impact occurs within its supply chain of external partners, which the company has limited control over. In order to reduce the environmental impact at the lower end of the supply chain, PUMA is dependent on the cooperation of other industry players. To tackle this issue, PUMA has already started to gain support from national governments, environmental organizations, and representatives of science and industry to push for a shift in the current business paradigm towards a more sustainable approach; one that acknowledges the indispensible services provided by healthy ecosystems and respects their limits. The first step to achieving this change requires the services to be given monetary values in order to account for them when doing business.

At the same time, PUMA has started to implement solutions at its Tier 1 suppliers and within its own operations, where the company is able to provide support for change, independently.

Jochen Zeitz commented: “Reducing the environmental impacts that derive from PUMA’s supply chain represents a real challenge for us, as we have limited control over these activities and on further Tiers, suppliers can be shared by thousands of companies. However, we recognise that in order to make a real change we, along with our industry peers, have to work responsibly to help reduce the impacts of external supplier factories and raw material producers. In addition to driving innovation in various areas along our own supply chain and with our consumers, we also need the support of policy makers and the engagement of the whole industry to implement a new model for businesses that works with nature rather than against it and ultimately supports social and economic sustainability.”

Raising Awareness Among National Governments, the Industry and Science

The release of the initial E P&L results in May generated extensive media coverage and attained significant interest among governments, industry peers and international organizations.

Having been nominated as a co-opted member of the German Council for Sustainable Development, which advises the German government on sustainability issues, Jochen Zeitz presented the results and benefits of the PUMA E P&L to 15 Council members and a representative of the Federal Government last month. As a result, the council will launch a project that aims at implementing standards for PUMA’s environmental accounting statement and will promote the E P&L approach as an innovative practice in public debates.

The UK government featured PUMA’s groundbreaking analysis as a best practices case study for sustainable business in the Department for Environment, Food and Rural Affair (DEFRA) Natural Environment White Paper in June 2011. White papers are documents produced by the UK government setting out details of future policy on a particular subject, often forming the basis for legislative reform.

Also, the Co-Chair of the Investment Commission and Treasurer for the UN Environment Programme Financial Initiatives referred to the PUMA E P&L when speaking at the 2011 UNEP Financial Initiatives Global Roundtable in Washington last month. Further references have been made by sustainability experts Pavan Sukhdev6 and John Elkington7, the Harvard Business Review8, the Stanford Social Innovation Review9 and the World Business Council for Sustainable Development to name but a few.

Stepping up internal Resources at PPR and PUMA

In support of these findings, PPR and PUMA have stepped up their internal resources, hiring additional staff on a group level as well as within the PUMA.Safe team in order to address the challenge of reducing the environmental impact. On a corporate level, PPR is adding an Energy Management Specialist to its sustainability team, who will immediately begin to investigate opportunities for reducing Greenhouse Gas emissions. PPR has also hired a Conservation and Ecosystem Services Specialist who will be investigating the development of broadly-accepted definitions of sustainable cotton and rubber and internal standards for their sourcing.

To better target and focus its efforts, the PUMA.Safe team, which ensures that supplier factories adhere to PUMA’s social and environmental standards, has created both a Humanity and an Ecology team. Five additional environmental and social auditors will be joining the existing 13 employees in the PUMA.Safe team, so that environmental impacts at PUMA’s Tier 1 and Tier 2 suppliers can be better addressed and solutions for their reduction more rapidly developed. PUMA is also hiring a Chemical Engineer to look at solutions to identify more sustainable materials as well as supporting PUMA in phasing out harmful substances within the supply chain.

Developing synergies and partnerships

PUMA and PPR HOME have shared the results of the E P&L with other industry players and corporations to leverage adopting a new business model that takes the costs of using natural resources and eco-system services within corporate supply chains into account. Furthermore, PUMA has collected information on the environmental performance of suppliers which can be used to provide benchmarks for supplier performance targets and the sharing of best practice. PPR HOME will also leverage the lessons learned during PPR’s Group EP&L implementation stages in order to provide case studies across the Group’s companies and brands to assist in broader adoption among businesses.

Building Capacity to Penetrate the Supply Chain

PUMA has already stepped up its capacity building programme for its suppliers such as the CONSERV project at apparel and footwear factories in Vietnam. The project, which was launched in cooperation with the German investment and development organization DEG and international capacity building organization Assist Asia, will support the factories of Tier 1, Tier 2 and Tier 3 suppliers to reduce greenhouse gas emissions, secure availability of natural resources and minimize the risks from waste and pollution through the implementation of resource efficiency practices.

To reduce waste and keep products out of landfills, the Sportlifestyle company PUMA has installed recycling bins in PUMA Stores and outlets in Germany for customers to return used shoes, clothing and accessories of any brand.

The PUMA “Bring Me Back” program, which is run in cooperation with global recycling company I:CO, aims at encouraging the recycling and re-usability of sportlifestyle products among consumers by providing a convenient and simple process: Consumers bring used shoes, clothing and accessories from any manufacturer to a PUMA Store and deposit them in the designated Bring Me Back bins. The used products are then sent off to be re-used or recycled. This means they are either broken down and re-used to create raw materials, or they will be re-used in case they are still in a suitable condition, or they will be recycled into new products. With this new initiative PUMA helps to protect the environment, aspiring to eliminate waste by recycling used products to create new ones. This effort is one more step forward toward the long-term goal of transitioning to a closed cycle loop for materials usage.
“On our mission to become the most desirable and sustainable Sportlifestyle company in the world, we areconstantly working on solutions that aim at reducing the environmental impact that PUMA as a company leaves behind on our planet,” said Franz Koch, CEO of PUMA. “With our Bring Me Back-Program, we are pleased to target for the first time ever the massive amounts of waste sportlifestyle products leave behind at their end-of-life phase when consumers dispose them and they end up on landfills or in waste incineration plants.”

PUMA has implemented several initiatives and programs within its long-term sustainability program that foresees a reduction of 25% of carbon emissions, energy, water and waste in PUMA offices, stores, warehouses and direct supplier factories by 2015. With the innovative packaging system Clever Little Bag, that PUMA introduced in 2010 and that replaced traditional shoeboxes, the company already reached a milestone in reducing PUMA’s – and its consumers’ – environmental footprint significantly by saving more than 60% of paper and water annually.

In 2011, PUMA published the first-ever Environmental Profit and Loss Account that assessed and valued the environmental impacts of the company’s core operations (PUMA offices, stores and warehouses) and along its entire supply chain of production factories – from the level of raw material production to the final manufacturing of PUMA products. This analysis helped PUMA to determine the impacts that arise from the point of cotton or leather production to the point where PUMA products are sold in a PUMA store. However, a considerable part of PUMA’s environmental footprint comes about through the consumer disposal phase. The Bring Me Back program now addresses PUMA’s impact at that level, reducing the waste generation of sportlifestyle products.

The program furthermore sets the foundation for an initiative on products which are designed for recycling as PUMA is currently looking into solutions to develop recyclable or decompostable products. PUMA’s entire team is also working on achieving the company’s goal of having 50% of the international collections made of more sustainable materials by 2015. In 2011, about 16% of PUMA’s total apparel products were made of more sustainable materials such as recycled polyester, organic cotton and Cotton Made in Africa, proving that the company is right on track to reach this target.

Bring Me Back launches in PUMA Stores and Outlets across Germany from the 17 April 2012. PUMA Stores and Outlets include among others Berlin, Düsseldorf, Munich, Hamburg, Augsburg and Herzogenaurach. The program will roll out to a handful of additional markets in October 2012, with a full global roll-out slated for January 2013.

More information can be obtained on the soon to be launched website www.puma.com/bringmeback.

Notes to the Editors:

I:CO is a global recycling company that works in conjunction with retailers to house collection bins and give consumers a place where they can return old gear and help give valuable resources another life.

For further information and to find the nearest collection bin, visit puma.com/bringmeback (launched soon).

The Guardian Sustainable Business Awards (GSBAs) reward best practice in sustainable business, showcasing innovative corporate initiatives that tackle the most pressing environmental and social challenges businesses face and that are part of a comprehensive sustainability strategy.

Both the “Biodiversity sponsored by Friends of the Earth” and the overall awards went to PUMA’s Environmental Profit and Loss Account (E P&L). Last year, the Sportlifestyle company published this worldwide unprecedented Environmental Profit and Loss Account for the first time, analyzing environmental factors such as water consumption and greenhouse gas emissions throughout its core business and supply chain operations. As part of PUMA’s long-term sustainability plan, the analysis was commissioned in recognition that producing and selling PUMA products has a wide impact along the entire supply chain. By identifying the most significant environmental impacts, PUMA will develop solutions to address these issues.

“In keeping with our mission of becoming the most desirable and sustainable Sportlifestyle company, PUMA is happy to take this pioneering step forward for the retail industry.”, said Franz Koch, CEO of PUMA. “Establishing a sustainable PUMA Store underlines our commitment to reduce CO2 emissions, energy, water and waste in PUMA offices, stores, warehouses and direct supplier factories by 2015.”

“The building is a true design marvel and incorporates a host of innovative sustainability features to make our sustainable PUMA Store a one-of-a-kind retail experience”, said Rajiv Mehta, Managing Director PUMA South Asia. “We are pleased to be a pioneer in sustainability again with setting new standards for an environmentally-friendly and resource-saving store concept in one of India’s best shopping locations.”

Features that meet the highest criteria for sustainability include:

• Recycled steel from old DVD players, bicycles and tiffin boxes has been used to construct the building of the PUMA Store.
• The surface layout of the building has been designed in a way that more than 90% of the interior spaces in this store have direct access to natural daylight so that less artificial light is needed.
• The artificial lighting used in this store is energy efficient with fewer watts being consumed for the same lumen output.
• The recessed first and second floor volume generates a stack-effect for natural cooling.
• The highly insulated building shell allows for cooling without an air conditioning. Soil temperature, at a depth of about 12 feet or more stays fairly constant throughout the year and is approximately equal to the average annual ambient air temperature. The ground will be used as a heat sink for cooling in the summer and as a heat source for heating in the winter. A simple method used in this store is to pass air through the underground air tunnel.
• By maintaining the temperature at a comfortable 24 degrees Celsius, PUMA leaves it warmer than in usual retail stores and thus conserves energy.
• The sustainable PUMA Store is 100% solar-powered as solar photovoltaic cells provide 10,384 kwh units of energy a year.
• The porotherm blocks used to construct the shell of the building have been made using silt from the lakes in Kunigal. These lakes are the only source of water for villages in Kunigal and hence are desilted every year to increase the water table. The silt usually ends up as waste, but has now been used as a valuable resource in the sustainable PUMA Store.
• Under Floor Air Distribution helps to save further energy. Floor Air Distribution works on the principle that air in any particular space needs to be cooled only for the first eight feet from the floor because convection currents cause hot air to rise automatically while cool air remains at the bottom.
• The furniture and fixture in this store were made of recycled wood while low volatile organic compound paint has been used to paint the Store’s walls.
• The Store’s roof garden keeps the building insulated from the direct heat of the sun and the plants keep the temperature lower at all times.
• A special insulation foam has been implemented in the roof which cuts down heat gains by reducing conduction.
• Occupancy sensors provide automatic on/ off control so that lights are used when the room is occupied. When the space is unoccupied, the lights are automatically turned off.

The store will retail a range of products made from organic cotton as well as PUMA’s Wilderness Collection – a collection primarily sourced and produced in Africa using sustainable materials. For the first time in India, the sustainable PUMA Store also introduces PUMA’s global ‘Bring Me Back” Program – an in-store recycling program for footwear, apparel and soft accessories.

The launch event was carbon-neutral with all the energy consumed during the party being produced by customers and invitees through pedal power. This is a novel initiative whereby people pedal on a special bicycle generator that feeds into the main power source. In this way, power can be created and stored in a battery bank thereby eliminating reliance on traditional power sources.

To generate awareness and appreciation for sustainability amongst the citizens of Bangalore, PUMA has embarked upon an ambitious initiative to involve the art and design community. The brand has partnered with Trapeze Design Studio as well as young installation artists from the city to create large-format installations using waste material. These will then be put up in key locations around Bangalore city later this month as a strong message to highlight the glaring need to reuse, reduce and recycle – the cornerstone of waste minimization strategies. The aesthetic and utilitarian installations will be donated to the Bangalore Municipality and remain as permanent artworks to beautify the city-scape.

The Joint Roadmap, Version 2, presents the ZDHC Group’s long term vision, interim 2015 milestones and 2020 goals. It builds on the previous Joint Roadmap document and sets out a new plan, incorporating and reflecting comments received from a wide range of stakeholders, including textile industry suppliers and associations, government agencies in Asia, Europe and the United States, non-governmental organisations, international development organisations and the chemical industry.

“To achieve the goal of systemic change and commercialisation of new, preferred alternative chemistries, we will need to transform the industry’s manufacturing inputs and processes. This requires full collaboration amongst thousands of organisations,” said Jessica Wollmuth, ZDHC Programme Manager. “Good progress has been achieved thus far, and the Joint Roadmap, Version 2, lays a firm foundation for creating an apparel and footwear industry that delivers high quality products using safe chemistries.”

ZDHC Group achievements in the past year include having:

• Completed chemical use and management surveys, and wastewater testing for approximately 150 analytes at 20 facilities in Bangladesh, China, India, Taiwan China and Vietnam
• Completed a chemical inventory that is the most complete, publicly available compilation of information on chemicals used in the textile industry
• Developed training materials in English and Chinese
• Developed and delivered training to suppliers
• Engaged with more than 350 potential stakeholders
• Completed system mapping, critical to the understanding of the interconnected issues, leverage points and stakeholders involved.
• Agreed to timelines for the phase out of C8 chemistry by no later than January 1, 2015
• Worked with suppliers to address the most pressing chemicals of concern, starting with APEOS, and will continue to do so in 2013
• Worked to identify safer chemistries and mechanisms to incentivise chemical suppliers to invest in these alternatives

“Building on the knowledge gained during the first full year of implementation, the Joint Roadmap, Version 2 provides an overview of the guiding principles and long-term vision of the ZDHC group, and defines key activities that will catalyse industry change,” said Wollmuth. By implementing tasks in seven workstreams defined in the Roadmap, specifically Chemical Hazard Assessment, Prioritisation and Action, Training, Right to Know, Assessment and Auditing, Management Systems Approach, Structure and Documentation Stakeholder Partnering, and Chemicals Management Best Practices Pilot. The ZDHC Group will develop and promote industry best practices to deliver a safer and cleaner environment. “Our goal is ambitious, and the ZDHC Group and partners are fully committed to working together to achieve it, “ said Wollmuth.

Michael has 25 years of hands-on experience in sourcing, product development and sales, having worked in various senior management functions for companies such as Decathlon, Tesco and COACH Leatherware. He is based in Hong Kong and reports directly to PUMA's Chief Operating Officer Lars Sørensen. 

Dr. Reiner Hengstmann, former Global Director Sustainability and Compliance, led the Safe Department since 1999. He has left PUMA to pursue career opportunities outside the company.

IFC will adopt a financing structure with tiered pricing of short-term working capital, offering lower costs for those suppliers that achieve a high score in PUMA's supplier rating, that is applied after PUMA has monitored a supplier's adherence to the company's social and environmental standards through an auditing process.

“This financing program enables our suppliers to leverage their relationship with us and benefit from PUMA's strong reputation and financial position," said Lars Soerensen, PUMA’s Chief Operating Officer. "This is the first program in our company that rewards a supplier’s rating within PUMA’s environmental and sustainability program through related fees."

"IFC is the perfect partner for us to implement this program”, stated Frank Wächter, Senior Head of Treasury & Insurance at PUMA. "They have a proven track record in designing such programs and implementing them in countries in Asia, where many banks are not as active.”

Sergio Pimenta, IFC Director of Manufacturing, Agribusiness and Services said: “This agreement with PUMA advances IFC’s efforts to encourage small and medium companies such as PUMA’s suppliers to improve environmental and social sustainability while achieving strong financial results”. 

Ball Planet, a Chinese supplier of soccer balls with production facilities in China, is the first supplier to join the program. “We are keen to start using this financing facility, since access to affordable financing is always a challenge," Ken Hong, General Manager of Ball Planet Industrial Ltd., said: "This innovative program will not only help us improve our cash flow, but will also provide us with a financial incentive to improve our environmental, health and safety and social standards, which will ultimately reduce our operating costs and enhance our performance.” Ball Planet has been a business partner of PUMA since 2010.  

PUMA and IFC launched this initiative in partnership with GT Nexus, a cloud-based business network and platform for global trade and supply chain management. The platform enables participants to operate against a core, real-time set of information across multiple supply chain functions. This optimizes the flow of goods, funds and trade information.

IFC provides financing to ready-made garment and footwear suppliers through its Global Trade Supplier Finance (GTSF) program, which provides working capital to suppliers backed by receivables from international buyers. Supplier finance is a scalable way for suppliers in emerging markets to access affordable financing for their receivables over a period defined by the terms of credit. Established in 2010, IFC’s GTSF program is a $500 million multicurrency investment and advisory program that provides short-term finance to emerging-market suppliers and small and midsized exporters.

What sounds like future visions are actually research results by Sports company PUMA and the MIT (Massachusetts Institute of Technology) Design Lab that will be showcased at the Milan Design Week 2018 in April. PUMA and MIT Design Lab have been conducting research in the field of biodesign since June 2017. Biodesign is the practice of using living materials such as algae or bacteria to create products. It makes possible a football jersey made from the silk of a spider or a shoe box grown from mycelium, the root structure of mushrooms. PUMA Biodesign explores the new frontiers of biological design and fabrication to bring advances in science and biotechnologies closer to our daily lives through sport products.  

The exhibition in Milan, which is powered by the Biorealize desktop bioprototyping platform, will focus on how the next generation of athletic footwear, apparel and wearables can adapt in real-time by using living organisms to enhance performance.

The exhibition will show four experiments: a Breathing Shoe, a Deep Learning Insole, Carbon Eaters and Adaptive Packaging.

The biologically active Breathing Shoe pushes the boundaries of biofabrication and enables personalized ventilation by growing its own air passageways that keep the foot cool.

The next generation Deep Learning Insoles improve the athlete’s performance through real-time biofeedback. The sole uses organisms to measure long and short-term chemical phenomena that indicate fatigue and well-being.

The microbially-active t-shirt responds to environmental factors by changing its appearance and informing the user about air quality.

The research has also looked beyond current wearables and produced biologically programmable materials that change their shape and structure to become new types of alive, biodegradable and adaptive packaging.

The Milan Design Week runs from 17-22 April 2018.