PUMA’S 10FOR25 SUSTAINABILITY STRATEGY

Our 10FOR25 sustainability strategy is an evolution of our previous sustainability strategy which was built on creating maximum positive impact. Following an extensive materiality analysis process and stakeholder dialogue, we decided to merge our Human Rights and Social Compliance categories, upgrade our Material targets to Product targets and add the new target categories of Circularity, Plastics and the Oceans, Fair Wages, and Biodiversity. In order to keep the number of target areas manageable, we removed Stakeholder Dialogue, Environmental Profit and Loss (EP&L) accounting, and Corporate Governance from our target matrix. Stakeholder Dialogue and EP&L will be continued as important tools to measure and finetune our sustainability targets. Because corporate governance is growing in importance, it will be reported separately in future.

With our new 10FOR25 sustainability strategy we continue our path to fully integrate sustainability into all our core business functions. Sustainability targets are included in the bonus arrangements of every member of our global Leadership team, from the CEO to the team heads.

After working hard on our sustainability performance in the background rather than center stage, we decided to communicate our sustainability efforts more actively in the future and have added this new focus to the strategic priorities for PUMA.

Stakeholder DIALOGUE

During 2020 we continued our active stakeholder dialogue, although in a different way. Because all sustainability-related conferences and meetings in our industry had to be conducted virtually, we also held our Regional Supplier and Stakeholder Round Table Meetings in the form of virtual events. As we were deeply involved in global industry-level stakeholder meetings about social compliance, climate change, and chemicals, we decided to postpone our own global stakeholder meeting scheduled for 2020. This freed up resources for our top management to participate in the annual event of the UN-lead Fashion Industry Charter for Climate Action (attended by our CEO), and the Industry Summit on Social Compliance (attended by our CSO). Other PUMA business leaders participated in the Copenhagen Fashion Summit. In addition, we trained our design and product teams on the concept of circularity with the help of the expert organization Circle Economy.

We also engaged in regional one-on-one consultations with key organizations including Better Work Vietnam, Bangladesh and Indonesia, the Fair Labor Association, the Fair Wage Network, the International Organization for Migration, other brands, and critical suppliers to review our workplan on human rights, health, safety, and fair income for 2025. Next year, we plan to engage in even more partnerships for training courses on women empowerment and to continue to open up our hotline to include migrant workers by using specific guidelines and tools.

Despite tight budgets due to the implications of the pandemic, we retained our partnerships with all relevant sustainability organizations and even added new memberships with the formalization of the Fashion Pact and the Industry Summit into own organizations.

G.01 Matrix of key partnership initiatives

AFIRM: Apparel and Footwear International RSL Management, BCI: Better Cotton Initiative, CDP: Carbon Disclosure Project, FESI: Federation of the European Sporting Industry, FFC: Fair Factories Clearinghouse, FSC: Forest Stewardship Council, FLA: Fair Labor Association, GIZ: German Corporation for International Cooperation, IFC: International Finance Corporation, ILO: International Labor Organization, IPE: Institute of Public and Environmental Affairs, ITC: International Training Center, RMG: Ready Made Garments, SAC: Sustainable Apparel Coalition, SLCP: Social and Labor Convergence Program, UNFCC: United Nations Framework Convention Climate Change, WRI: World Resource Institute, WWF: World Wide Fund for Nature, ZDHC: Zero Discharge of Hazardous Chemicals Foundation

Most Material Aspects

For the new target period, we reviewed our most material aspects based on a detailed materiality analysis conducted in 2018/2019, including external and internal stakeholder interviews, a survey, and a stakeholder dialogue meeting. Coordinated by Business for Social Responsibility (BSR), the process resulted in the materiality matrix displayed in Graph G.02 below. Although the Water and Air target is not specifically identified in the formal materiality analysis process, we retained this target, the only one we did not achieve in the last reference period. Honoring our commitment to the Fashion Pact as well as the growing importance of the issue, we also included a new target: Biodiversity.

G.02 MOST MATERIAL ASPECTS

G.03 PUMA’S 2025 SUSTAINABILITY TARGETS

^*SDG: United Nations Sustainable Development Goals

PUMA 10FOR25 Sustainability Targets Performance Summary

T.01 PUMA 10FOR25 SUSTAINABILITY TARGETS PERFORMANCE SUMMARY

Target	Baseline	Action scheduled for 2021	Target for 2025	Status
01 Human Rights	Equal gender distribution in almost all PUMA entities; no specific training yet in factories	ITC-ILO training on harassment and violence at work for local sustainability staff (train the trainer)	Target 1: Train 100,000 direct and indirect staff members on women empowerment	Not started yet
	T2 supplier mapping ongoing; subcontractor mapping not yet started	Complete T2 supplier mapping; start comprehensive T3 supplier mapping	Target 2: Map subcontractors and T2 suppliers for human rights risks	In progress
	19,000 community hours (some activities paused due to COVID-19)	Increase level of community engagement to 23,000 hours	Target 3: 25,000 hours of global community engagement per year	In progress
02 Health and Safety	Zero fatal accidents since 2018	ITC-ILO training on OHS for sustainability staff (train the trainer)	Target 1: Zero fatal accidents (PUMA and suppliers)	Achieved for 2020
	Supply-chain injury rate reduced from 0.5 to 0.4	ITC-ILO training on OHS for sustainability staff (train the trainer)	Target 2: Reduce accident rate to 0.5 (PUMA and suppliers)	Achieved for 2020
	Bangladesh Accord in transition; other activities paused in 2020 due to COVID-19	Resume Building Safety Assessment Program in 2021; conduct building inspections in India and Pakistan	Target 3: Building safety policy operational in all high-risk countries	In progress
03 Chemicals	0.59% of RSL failure cases at the product level among all products	Pilot OEKO-TEX®-certified polyester used in footwear; continue staff and supplier training	Target 1: Ensure 100% of PUMA products are safe to use	Achieved for 2020
	1.2% RSL failure rate	Reduce RSL failure rate to below 1.1%	Target 2: Reduce Restricted Substances List (RSL) failures to under 1%	In progress
	VOC index of 15 gr/pair	Continue VOC Reduction Program	Target 3: Reduce organic solvent usage to under 10 gr/pair	In progress
04 Water in Air	Target achieved for all parameters (90% compliance with ZDHC Wastewater Guidelines on parameter level)	Roll out supplier chemical conformity reports	Target 1: 90% compliance with ZDHC Wastewater Guidelines	Achieved for 2020
	Draft ZDHC Air Emission Guidelines issued; supplier mapping completed	Start air emissions testing	Target 2: 90% compliance with ZDHC Air Emissions Guidelines	Not started yet
	2% water reduction in textile production YOY	Expand Water Efficiency Program	Target 3: 15% of water reduction per pair or piece based on 2020 baseline	Not started yet
05 Climate	Initial mapping of 1.5 degree alignment completed	Execute alignment as part of wider industry target (Fashion Industry Charter)	Target 1: Align PUMA’s Climate target with 1.5 degrees global warming scenario	In progress
	100% renewable electricity for PUMA entities (including RECs)	100% renewable electricity for PUMA entities	Target 2: 100% renewable electricity for PUMA entities	Achieved
	Solar Photovoltaic Feasibility Programs in place; first suppliers started purchasing off-site renewable electricity	Finalize feasibility studies and start installing solar panels; accelerate off-site renewable electricity purchase	Target 3: 25% renewable energy for core suppliers	In progress
06 Plastics and the Oceans	400 tons of plastic bags used in PUMA stores	50% reduction to 200 tons	Target 1: Eliminate plastic bags from PUMA stores globally	In progress
	Joined Microfiber Consortium	Test PUMA’s main synthetic fabrics for microfiber shedding	Target 3: Support scientific research on microfibers	In progress
	Internal circularity training and workshop; biodegradability standards introduced	Continue research until standards are met	Target 3: Research biodegradable plastics options for products	In progress
07 Circularity	Task force launched under leadership of PUMA Retail team	Pilot takeback scheme in one market	Target 1: Establish takeback schemes in all major markets	In progress
	Apparel: 1.6 gr/piece Footwear: 17.1 gr/pair Textiles: 8.9 kg/ton Leather: 0.2 kg/m2	Expand program to reduce production waste to landfills	Target 2: Reduce production waste to landfills by at least 50%	Not started yet
	0.6% recycled cotton used; recycled leather and rubber used at pilot scale	Expand use of recycled cotton, leather, and rubber; add recycled nylon	Target 3: Develop recycled material options for cotton, leather, and rubber	Target achieved; usage figures will be reported going forward
08 Products	Target achieved for cotton and down, and 99.5% for polyester (apparel and accessories). Leather (footwear) close to target 97.9%.	Maintain cotton, polyester, and down performance; achieve target for leather; increase percentage of certified polyester used in footwear	Target 1: Procure 100% of cotton, polyester, leather, and down from certified sources	Achieved for 2 out of 4 materials
	16.7% of recycled polyester used	Implement developed material strategy; explore opportunity to recycle pre-consumer apparel waste	Target 2: Increase recycled polyester use to 75% (apparel & accessories)	In progress
	81% of apparel and 47% of accessories classified as more sustainable 24% of footwear with at least one more sustainable component	Increase percentage further Use more sustainable materials for each part of our footwear	Target 3: 90% of apparel and accessories classified as more sustainable 90% of all footwear contains at least one more sustainable component	In progress
09 Fair Income	Bangladesh and Cambodia assessed during previous period; work paused in 2020 due to COVID-19	Assess one additional country (Indonesia)	Target 1: Fair-wage assessments for top 5 sourcing countries	In progress
	33% core T1 factories have elected workers' representative	Conduct supplier and staff training on workers’ committees; develop tool to assess the efficiency of workers’ committees	Target 2: Effective and freely elected worker representatives at all core suppliers	In progress
	90% of core T1 and T2 suppliers use bank transfer payments	Follow up on factories with no digital payment	Target 3: Ensure bank transfer payments for all core suppliers	In progress
10 Biodiversity	Attended Fashion Pact’s biodiversity webinars	Learn more about biodiversity SBTs	Target 1: Support setting up a biodiversity SBT	Not started yet
	Cotton target achieved; leather target (97.9%) achieved; viscose target achieved (sourced exclusively from a reliable supplier (Lenzing)	Achieve target for leather	Target 2: Procure 100% of cotton, leather, and viscose from certified sources	2 out of 3 materials achieved
	No exotic skins or hides used	Publish new Animal Welfare Policy	Target 3: Zero use of exotic skins or hides	Achieved
ILO: International Labor Organization, ITC: International Training Center, OHS: Occupational Health and Safety, REC: Renewable Energy Attribute Certificates, RSL: Restricted Substances List, SBT: Science-Based Target, SLCP: Social and Labor Convergence Program, T2 Supplier: supplier of materials or components, T3 Supplier: supplier of yarn hides, etc., VOC: Volatile Organic Compound, ZDHC: Zero Discharge of Hazardous Chemicals

The 10FOR25 targets also are linked directly to the four main sustainability-related risks identified in our due diligence process:

A. Potential human rights violations or incidents in our supply chain (T1 and T2*)

B. Potential incidents of environmental pollution in our supply chain (T1 or T2)

C. Potential non-compliance with chemical regulations during production (T1 or T2)

D. Negative effects of climate change

Further details on PUMA’s overall risk management can be found in the Risk Management section. Net risks as outlined in the CSR Directive Implementation Act (§315c in relation to §289c, section 3, number 3 and 3 German Commercial Code (HGB), were not identified in 2020.

^*T1 manufacturers of PUMA products; T2 manufacturers of materials and components

G.04 PUMA SUSTAINABILITY ORGANISATION 2020

Scope of data collection

In this report we cover the PUMA Group. We have provided separate reports for PUMA SE and the PUMA Group within the “Governance and our People” section only. Our materiality analysis and EP&L clearly indicate that a major aspect of our impact originates in the manufacturing of materials and components, not in the assembly of finished goods. We therefore have extended our data collection to include our core suppliers of components and materials.

Data Sources

To ensure a high level of transparency and promote the sharing of environmental and social data with our industry peers, we have chosen to use external databases, most of which are publicly accessible:

The Fair Factories Clearinghouse for sharing compliance-audit data with other brands
The wastewater platform from the Zero Discharge of Hazardous Chemicals Foundation (ZDHC) for sharing supplier data on wastewater testing
The ZDHC Chemicals Gateway for the use of safe chemicals (pilot)
The China-based NGO IPE for the publication of suppliers’ environmental data
IPE’s Green Supply Chain Map of environmental performance data of some of our core suppliers in China http://wwwen.ipe.org.cn/GreenSupplyChain/Main.html
The HIGG Index Platform from the Sustainable Apparel Coalition
https://apparelcoalition.org/the-higg-index/

Also, we use our sustainability data collection tool to record social and environmental performance data from PUMA-owned and -operated sites and from the core suppliers that manufacture our products.