Puma's Eco-Impacts Report Kicks the Ball Forward on Transparency

Even as it airs what could be considered its dirty laundry, Puma continues to push the ball forward on corporate sustainability.

The apparel company has just published a detailed environmental profit & loss (EP&L) statement for 2010, valuing the costs to the planet incurred by its operations across its supply chain.

Update: In 2010, the company was responsible for €145 million in environmental impacts -- a big jump from the €94.4 million in impacts from Puma's water and greenhouse gas emissions that the company reported in 2011. The new figure reflects three additional areas of impacts: Land use impacts, waste and "other air pollution" -- everything emitted to the air in Puma's supply chain that is not a greenhouse gas, such as carbon monoxide or VOCs.

But in lifting the curtain on its supply chain impacts, Puma has done something extraordinary: It has published a granular map of how it affects people and the planet, and created a roadmap for Puma -- as well as its many suppliers and its competitors in the industry -- to focus their efforts to reduce those impacts.

"[I]f we treated our planet as we treat any other service provider, PUMA would have to pay €8 million to nature for services rendered to our core operations such as PUMA offices, warehouses and stores in 2010, alone," writes Jochen Zeitz, Executive Chairman of PUMA SE and Chief Sustainability Officer of its parent company, PPR, in the introduction to the EP&L statement. "An additional €137 million would be owed to nature from PUMA's supply chain of external partners that we share with numerous other companies, and where we have less influence. So if PUMA is to successfully reduce its environmental impact, we have to address the activities of our supply chain partners that generate 94 percent of our total environmental impact."

Working with its supply chain partners -- and with its competitors -- is a key focus of the EP&L. The report goes a long way to giving any company a step-by-step manual for how to define, identify and measure the eco-impacts of their operations.

It starts with a definition: "An Environmental Profit & Loss Account is a means of placing a monetary value on the environmental impacts along the entire supply chain of a given business."

And goes on to lay out each of the factors that informs the EP&L, as well as the benefits that Puma gets from creating the report. Those benefits include:

A strategic tool, helping to pinpoint areas to develop more sustainable materials and methods, such as more sustainable cotton and rubber and reducing greenhouse gas emissions.

• A risk-management tool that gives the company an early view of emerging risks, for instance around availability of water for production and costs associated with GHG emissions.

• A transparency tool that will, according to Puma, "enable us to make better, more informed business decisions that take account of environmental impacts as well as more traditional financial and operational considerations."

Next page: Where Puma's impacts lie