Releasing a profit and loss statement on the environmental and social impact of a company’s performance is a bold move. First of all, quantifying these parameters can be daunting. How can you quantify the social and environmental impact of the number of liters you use in your manufacturing process, for example?
It’s not to say that you cannot and it becomes considerably easier if you just assign a dollar value for everything. This is what Puma has done in its latest environmental P&L statement.
Back in May this year, Puma released the preliminary results of its E P&L with Trucost and PricewaterhouseCoopers. The report found that if the company has to pay for the impacts of its GHG emissions and water use, it would have to shell out €94.4 million.
This week, Puma updated that figure to €145 million. At the launch, Jochen Zeitz, Executive Chairman of Puma and Chief Sustainability Officer of PPR said:
“The unprecedented Puma Environmental Profit and Loss Account has been indispensable 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.”
Some highlights of the report include:
- 94 percent of impacts, roughly €137 million (about $185.5 million), come from the supply chain.
- 57 percent of impacts, €57 million ($77 million), are related to production of raw materials, such as leather, cotton and rubber.
- 6 percent, about €8 (almost $11 million), are from core operations by Puma, including offices, warehouses, stores and logistics. GHG emissions make up 90 percent of the impact from facilities.
The company has attached a dollar value to its greenhouse gas emissions, water consumption and other impacts and compared that to the dollar value of the products it produces. Through their own admission, the company has said that it extracts more from the environment that it provides to consumers. The PPR group that owns Puma plans on releasing such a statement for all of its brands by 2015 – these include luxury names like Gucci, Yves Saint Laurent, Balenciaga, Alexander McQueen, Stella McCartney, Bottega Veneta, Volcom, Boucheron, Girard-Perrecaux and Sergio Rossi.
Puma took on a big challenge when it set out to measure the cost of its environmental impact, since there is no clear-cut way to actually price out the cost of pollution. One can focus on the cost of clean-up, or one can focus on the value of environmental services– but in either case there is a lot of guesswork and fuzzy math involved.
However, Puma should be commended for starting the conversation because the accounting will only become more robust as other companies get on board. The reason why Puma is running ahead of the pack with its sustainability commitments is that it acknowledges, more can be done. In releasing the E P&L, the company makes a brave and forceful statement that business as usual is not holistic and definitely not sustainable.