With our mission to be the Fastest Sports Brand in the world, we have the opportunity and the responsibility to ensure that our products are manufactured in decent workplace conditions where human rights are respected.
PUMA’s Sustainability Strategy is based on more than 20 years of Code of Conduct monitoring experience at our manufacturing partners as well as regular stakeholder communication, industry collaboration and expert feedback – both on a corporate and increasingly on a regional level.
Our latest full scale Materiality Analysis to identify our most relevant issues was conducted in 2013. The results are still valid and displayed in the graph F.1 below. 2015 was a year for us to focus on the UN Guiding Principles for Human Rights and Business. Therefore, we assigned the expert organization Shift to perform a human rights gap analysis for our global operations including our supply chain. The validity of our Materiality Analysis was also discussed and re-confirmed during our Annual Stakeholder Meeting Talks at Banz.
On the environmental side, we learned from the 2013 and 2014 results of the Environmental Profit and Loss account (E P&L), carried out by PUMA’s majority shareholder Kering, where we have to place the focus of our efforts to improve our global environmental footprint.
Looking back at PUMA’s sustainability targets from 2010 to 2015, we have certainly achieved progress in some areas, whilst realizing that the road to a sustainable development is long. We have merely walked the first steps on this journey.
In order to accelerate our pace in line with our company slogan “Forever Faster,” we defined ten target areas for the period ahead of us until 2020 (“10FOR20”), which are comprised of a broad range of topics including human rights, corporate governance and health and safety matters.
We assigned relevant Key Performance Indicators (KPIs) to each of the identified target areas in order to go beyond counting audits and failures, instead focusing on tracking and managing performance improvements.
The year 2015 also saw some significant changes in PUMA’s sustainability organization, namely a reorganization of the sustainability department from social and environmental teams into a supply chain and a corporate sustainability arm.
With more than 15 years of sustainability related work, sustainability has become an important value in our strategy and an integrated part of PUMA’s business. Our sustainability department, which is responsible for the execution of PUMA’s sustainability strategy, reports to Lars Sørensen, PUMA’s Chief Operating Officer 3.
Constant Review of Our Sustainability Performance
Our sustainability department is in constant exchange with PUMA’s Managing Directors and top management on sustainability topics through executive reports as well as in-person meetings. In addition, PUMA seeks frequent feedback from internal as well as external stakeholders.
The Board of Management reports to PUMA’s majority shareholders via the Administrative Board Sustainability Committee.
The highest governance body at PUMA in terms of sustainability is the Sustainability Committee at SE level. It is responsible for the supervision and setting-up of PUMA’s sustainability strategy. The Sustainability Committee convened once in 2015.
Current members of the Sustainability Committee are:
Reporting According to GRI G4
Since our sustainability report “Perspective” in 2003, PUMA has reported about its sustainability program according to the guidance of the Global Reporting Initiative (GRI), which developed detailed and widely recognized guidelines on sustainability reporting.
This report has been developed in accordance to the GRI G4 guidelines using the “Core” option. This option enables us to report on the impacts related to our economic, environmental and social and governance performance. It includes topics that are material to PUMA’s business and our key stakeholders and that constitute our sustainability targets. These targets have been systematically developed in accordance with the feedback from all of PUMA’s stakeholders as described in the following section.
Rankings and Ratings⁵
For PUMA, it is crucial to frequently engage with our stakeholders to reflect on our sustainability program, adjust to new requirements and, if necessary, to adjust our course. The continuous evaluation and assessment through external parties is an important indicator for our strategy and our actions going forward. During the year 2015, PUMA was assessed by a number of organizations including the following:
Carbon Disclosure Project
Disclosure Score 98%, Performance, Category C
Dow Jones Sustainability Index (DJSI)
Membership ceased after eight years of continuous membership due to low market capitalization of PUMA (not related to sustainability performance)
Member status confirmed for the tenth consecutive year
IFC Vendor Finance Program
PUMA SAFE compliance program accepted by the IFC as entry criteria
Institutefor Public & Environmental Affairs (IPE China)
Ranked 17th place out of 100 global companies in terms of environmental performance
Prime Status continued
Rank a Brand
Industry Leader Sustainability
Sustainable Apparel Coalition
Highest number of connections on SAC Higg Index for Europe
Verbraucher Initiative e.V.
Silver Rating on Sustainability Communication to Consumers
2015 saw a number of critical incidents involving PUMA’s external suppliers that required immediate action on our behalf. An example of this was a waste water compliance issue identified at a PUMA-nominated leather supplier in Taiwan. As part of a government-driven investigation by the regulatory authority in Taiwan, a tannery and PUMA-accredited leather supplier in Taiwan admitted breaching the local waste water regulations. Consequently, the tannery was temporarily suspended from the Leather Working Group and lost the PUMA-approved supplier status. We are following up on the situation with the help of the Leather Working Group to ensure these circumstances are promptly rectified. Future orders at this supplier depend on an effective remediation.
We were also challenged by a labor rights NGO when a Vietnamese factory suspended a larger number of workers after production came to a halt following a factory fire. We sent out local compliance experts to conduct interviews with some of the workers to ensure that all suspended workers received severance pay in line with Vietnamese regulations.
PUMA’s sustainability strategy is based on continuous feedback from its stakeholders from all over the world including customers and consumers, direct and indirect employees, suppliers, regulators, nongovernmental organizations, international agencies, foundations, academics, and many others.
Talks at Banz 2015
Having evolved from a small discussion “round-table” format to an innovative and forward-thinking debate, PUMA invited a group of external and internal stakeholders to the 12th Talks at Banz in November 2015 around the subject “Mainstreaming Sustainability.” More than 40 national and international stakeholders and sustainability experts as well as PUMA’s CEO Bjørn Gulden and COO Lars Sørensen attended. Discussion topics centered on, amongst others, the Climate Change debate that took place in the lead-up to the UN Climate Conference in Paris, as well as the UN Guiding
A list of participating stakeholders can be found ▶ here.
The key results of this stakeholder meeting, which provided us with valuable and constructive feedback on our sustainability strategy, are listed below:
▶ PUMA needs to expand its sustainability efforts deeper into the supply chain;
▶ An ambitious cotton strategy should be implemented;
▶ PUMA will develop a “science-based” CO2 target to support the limitation of climate change to a maximum of two degrees.
In addition to the Talks at Banz, PUMA’s sustainability team organized eight Round Tables for 273 factories in all major sourcing regions around the globe in order to engage with our regional stakeholders. Besides PUMA Tier 1 and Material Suppliers, several Round Tables also had NGOs and/or external experts participating to ensure the inclusion of external insights.
PUMA participated in a record number of international meetings and conferences on sustainability to exchange learnings with peers and catalyze collaborations. Some examples are listed below:
▶ SAC European and Global Meetings
▶ ZDHC Board Meeting and Global Meeting
▶ AFIRM Global Meetings
▶ FLA Board Meeting
▶ COP21: Train to Paris
▶ IPE Annual Conference
▶ WWF Meeting on Carbon Accounting
▶ German Partnership for Sustainable Textiles Meetings
▶ European UN Global Compact Meeting
▶ bluesign® Annual Conference
▶ Textile Exchange Global Conference
On a regional level, our compliance and sustainability experts participated in multi-brand forums and meetings in China, Vietnam, Turkey and El Salvador.
The UN Guiding Principles on Business and human rights (UNGPs) are the internationally accepted framework defining the respective duties and responsibilities for states and companies to protect, respect and remedy human rights impacts. For over two decades, PUMA has been working to ensure the respect of human rights not only internally, but also along its supply chain. In 2015, we decided to expand our approach and align with the UNGPs.
We asked Shift, one of the most renowned global expert organizations on the UNGPs, to conduct a high-level gap analysis of our policies and processes for managing human rights risks in our global operations against the expectations of the UNGPs and make recommendations on how to further implement the UNGPs. A summary report of this analysis can be found here.
The key findings, which have been incorporated into PUMA’s overall sustainability strategy, were:
1) Expand PUMA’s social/labor compliance program beyond direct suppliers and ensure that due diligence, grievance mechanisms and remediation processes cover the complete supply chain;
2) Conduct a risk assessment including the lowest tiers (such as raw material producers of cotton or leather) to identify potential human rights violations, for example child labor in cotton production in India or bonded labor in cattle ranching in Brazil;
3) Focus efforts on the most severe risks to people, including screening for higher-risk country contexts;
4) Involve local stakeholders, including our own employees, in high-risk countries like Bangladesh, China or India in the due diligence process;
5) Communicate possible salient human rights issues;
6) Where local law conflicts with human rights (including core labor rights), review how we seek to meet the spirit of the international standards, for example by ensuring alternative mechanisms to exercise the right to freedom of association in China and Vietnam.
We will follow up on those recommendations as part of our new “10FOR20” targets and sustainability strategy, which covers human rights in a dedicated target section 7.
After PUMA issued its first E P&L in 2011, we shifted the E P&L project to group level of our French majority shareholder Kering.
Since then, Kering has published two versions of the E P&L for the whole Kering Group for 2013 and 2014. We analyzed both the Group E P&L as well as PUMA’s individual E P&L performance to define our future sustainability strategy.
Looking at all three E P&L versions, it becomes obvious that the major environmental impact is centered on two main patterns:
1) Emissions of energy-related greenhouse gases along all tiers of the supply chain (and even beyond, i.e. during consumer usage phase for apparel).
2) Land use change, greenhouse gas emissions and related issues during raw material production stage.
In addition, the temperature and chemical intensive wet processing of fabrics and leather in fabric mills, dye-houses and tanneries offers the opportunity to work on resource efficiency and waste water cleaning technology.
While setting our new target areas (see section “New Targets 10FOR20”), we therefore focused on a more sustainable raw material usage as well as reducing our climate impact across the full product lifecycle.
For more information on Kering’s E P&L, please visit the link below: