Puma and PPR HOME, the sustainability initiative of PPR Group, recently got the initial results of its Environmental Profit & Loss Account. It found that the production of raw materials has the highest greenhouse gas emissions and water usage among the various aspects of Puma's operations and supply chain. Puma is the first company to provide such details, assigning economic value to the environmental impacts of greenhouse gas emissions and water consumption. As the project continues, Puma will include more environmental key performance indicators, and then expand to include social and economic impacts. It will analyze these impacts to try to minimize them.
The first results of the account show that the direct ecological impact of Puma's operations translated to the equivalent of €7.2 million of the overall impact valuation in 2010. An additional €87.2 million fell on four tiers along the supply chain. So in total, the overall environmental impact of greenhouse gas emissions and water consumption was €94.4 million, 15 percent of which was directly attributable to Puma. By putting a monetary value on the environmental impacts, Puma is preparing for potential future legislation such as disclosure requirements. These costs will serve as a metric for the company as it tries to shrink the footprint of Puma's operations and all supply chain levels. It will not affect the company's net earnings.
Puma chose to focus on greenhouse gas emissions and water usage because it considered those to have the biggest environmental impacts. PwC valued the emissions, and Trucost evaluated the worth of water consumption. They estimated a value per ton of CO2e at €66 and an average water value of €0.81 per cubic meter. Of the €94.4 million total, €47.0 million was for greenhouse gases and €47.4 million was for water. The production of raw materials accounted for 36 percent of the total gas emissions and 52 percent of water consumption.
The final results of Stage 1 of the account, to be released this autumn, will see the inclusion of additional environmental key performance indicators such as acid rain and smog precursors, volatile organic compounds, waste, and land use change. Puma will use these findings to better direct its sustainability efforts and initiatives, and focus more attention on collaborating with other industry players to help raw material suppliers improve their environmental performance.
Stage 2 will look at social factors in sustainability such as fair wages, safety and working conditions. Stage 3 will value the social and economic benefits of Puma's operations through the creation of jobs, tax contributions, philanthropic initiatives and other value-adding elements, and that total will be used to offset the costs unc overed in Stages 1 and 2.
