ENVIRONMENT

The purpose of our environmental efforts is to ensure that PUMA and its suppliers are in full environmental compliance and any negative impact on the environment is minimized.

We frequently conduct efficiency audits at our own entities. Compulsory in the European Union, these audits help us identify energy saving opportunities at our offices, stores and warehouses and roll them out on a global basis.

As far as our suppliers are concerned, our PUMA compliance audits (detailed in the Human Rights section) contain a dedicated section on environmental and chemical compliance. For example, during each audit we inspect environmental permits, waste management and effluent treatment plants.

PUMA has moved from individual brand environmental audits to the use of industry-wide tools, such as the Higg Index Facility Environmental Module (FEM) 3.0. PUMA requires an annual external verification of the self-assessment FEM modules. This external verification may be completed by approved verifiers from PUMA’s internal team, other credited brands, or third-party organizations on the approved list from SAC. 100% of verifications are announced.

*L&P: Label and Packaging

PUMA’s Environmental Performance Rating System is based on the ratings developed from the factories’ Higg FEM scores verified by SAC approved verifiers: A, B+, B-, C and D. The minimum passing grade from the environmental perspective is 40% (i.e., only A, B+ and B- ratings are passable) and C and D are failure ratings. This rating system was presented during suppliers and sourcing team meetings in 2020 and will be implemented gradually from 2022. Our environmental handbook has been updated accordingly. This rating system will be included in our vendor supplier scorecard along with social and chemical ratings in the future.

Further data on the environmental performance of PUMA and our suppliers can be found in the Climate and Environmental KPI sections.

*FEM 2020 PUMA average: 146 factories

Industry median FEM (4409 factories): filter used industry sector (Apparel, Footwear, Accessories includes handbags, jewelry, belts and similar products) and Facility Type (Final Product Assembly, Printing, Product Dyeing and Laundering, Material Production including textile, rubber, foam, insulation, pliable materials)

The Higg FEM assesses:

• Environmental Management Systems
  - Energy Use and Greenhouse Gas Emissions
  - Water Use
  - Wastewater
  - Emissions to Air (if applicable)
  - Waste Management
  
• Chemical Management (FEM chemical module is explained under the Chemical section of this report)

In 2020 and 2021 we communicated to our core factories our expectation to improve their score by 10 points and use our new grading system. In 2021 we facilitated a training session conducted by SAC certified trainers. This training was compulsory to attend for low performance factories and for those not familiar with this industry tool. We then monitored closely to make sure the factories would complete the verification of their self-assessment timely.

We saw the positive impact of cleaner production and renewable energy projects, wastewater treatment training and chemical management training on the scores of factories that joined these programs.

Overall, our core factories have a score above 60% on wastewater, water, energy and environment management system. This has been aligned with our focus and work for many years. The highest score increase was observed in the area of target and improvement plan setting.

We see topics such as chemicals, air and waste as a key focus. In 2021 we conducted a risk assessment for chemicals and waste and identified actions to be taken in the coming years. As a founding signatory of ZDHC, we follow up closely on the development and the progress of ZDHC air emission standards and guidelines and will apply these in the supply chain as applicable, once details are available.

SUPPLIER TRAINING

CLIMATE

Target description:

Existing science-based CO₂ emission target:

• Reduce greenhouse gas emissions from PUMA’s own entities (Scope 1 and 2) by 35% compared to the 2017 baseline (absolute reduction)
• Reduce emissions from PUMA’s supply chain (Scope 3: purchased goods and services) by 60% relative to sales

Additional 1OFOR25 targets

• Align PUMA’s CO₂ emission target with a 1.5-degree scenario (that is, what is required to limit global warming to 1.5 degrees))
• Move 100% of PUMA’s own entities to renewable electricity
• Expand the use of renewable energy at PUMA’s core suppliers to 25%

Relates to United Nations Sustainable Development Goals 7 and 13

Examples of the 10FOR25 action plan:

• Work with industry peers on climate action through the Fashion Industry Charter for Climate Action and the Fashion Pact
• Join industry-level energy efficiency programs for suppliers in our top five sourcing regions
• Join industry-level programs for renewable energy in our top five sourcing regions
• Replace all coal-fired boilers at PUMA’s core suppliers
• Reduce emissions from the transport of goods by transitioning to more carbon-efficient modes of transport
• Gradually transition to materials with a lower carbon footprint such as recycled polyester
• Switch all PUMA offices, stores, and warehouses to renewable electricity tariffs or renewable energy attribute certificates
• Gradually move PUMA’s fleet vehicles to alternative engines (electric, or hydrogen)

KPIs:

• Direct CO₂ emissions from own entities (Scope 1*)
• Indirect CO₂ emissions from own entities (Scope 2*)
• Indirect CO₂ emissions from manufacturing, business travel, and transport of goods (Scope 3*)
• Percentage of core suppliers covered by energy efficiency programs
• Percentage of core suppliers covered by renewable energy programs
• Percentage of core suppliers with coal fired boilers (Tier 1 and Tier 2)

*The GHG Protocol Corporate Standard classifies a company's GHG emissions into three “scopes" as below.

Scope 1: Direct GHG emissions occur from sources that are owned or controlled by the company (offices, stores, warehouses) e.g., office building heating, car fleet emissions.

Scope 2: Indirect GHG emissions from the generation of purchased electricity, steam, and heating/cooling consumed by the company.

Scope 3: All other indirect emissions not covered in scope 2, such as extraction and production of purchased materials; transportation of purchased fuels; and use of sold products and services, business travel, employee commuting etc.

During the UN Climate Conference in Paris in 2015, PUMA agreed to set a science-based CO₂ emissions target. In 2018, PUMA co-founded the Fashion Industry Charter for Climate Action, an industry-wide coalition which aims to align the fashion industry’s emissions with the targets included in the Paris Agreement.

One year later, PUMA agreed and published its science-based emission target (SBT) with the SBT Coalition and joined the Fashion Pact, which also includes a climate action commitment.

We combined our SBT agreement with an increased effort to support the use of renewable electricity by purchasing RECs for countries where PUMA has a major presence and renewable electricity cannot be purchased directly. We purchased RECs worth 50% of PUMA’s emissions from electricity for 2018 retroactively and increased that figure to 74% in 2019 and to 100% in 2020 as well as 2021.

In this way, we managed to reduce our combined Scope 1 and 2 emissions significantly, despite an increased business volume. Compared to our baseline 2017 our combined Scope 1 and 2 emissions were reduced 88% (market-based). Taking our RECs purchase into account, we already have exceeded our science-based emissions target of 35% for Scope 1 and 2 emissions. We also exceeded the absolute 50% reduction required to align our target with a 1.5-degree scenario.

After having achieved 100% renewable electricity for the offices, stores and warehouses under our control, we continued to source only green electricity in 2021 through renewable energy tariffs and the purchase of renewable energy attribute certificates (RECs).

To further reduce our Scope 1 emissions, which can be attributed largely to the vehicles in our fleet, we increased the number of zero or low emission cars globally to 108, or 15% of our global PUMA car fleet. For the future we plan to increase the number of cars with alternative engines by 10% each year.

During the UN Climate Conference in Glasgow, PUMA CEO Bjørn Gulden confirmed PUMA’s commitment to the new targets of the Fashion Industry Charter for Climate Action, released on the 5th of November 2021. UNITED NATIONS (unfccc.int)

Over the coming years we will aim to replace the RECs certificates with renewable energy tariffs and/or power purchase agreements where possible, and, as mentioned above, expand the percentage of cars equipped with alternative engines by 10% each year.

For our Scope 3 emissions, we decided to focus on purchased goods and services, since this is also the category in which most of our indirect emissions are created. In addition, we set a target to reduce emissions from the transport of goods by 20% relative to the volume transported, mainly through reducing our air-freight ratio by 5% each year on a 2019 baseline.

To reduce the emissions from the production of our PUMA goods, we worked with our suppliers on several programs ranging from energy efficiency to installing on-site solar photovoltaic power plants to generate renewable energy.

PUMA CDP SCORE

The Carbon Disclosure Project (CDP) is an investor-led coalition that ranks global companies and cities for their climate strategies and disclosure. PUMA has been a long-term participant with the CDP and we make our answers to the CDP questionnaire publicly available via the CDP website. In 2021, for the first time in our PUMA history, we received an A- score for our climate disclosure with CDP for the reporting year 2020, as well as a supply chain score of A.

PUMA’s rating is better than the average performance of the sector (textile and fabric goods) with an average rating of C. The overall global average rating stands at B-.

Our improvement in the CDP rating came as recognition of various climate actions initiated during 2020 and 2021. This includes various emission reduction initiatives undertaken, including a detailed climate action roadmap, expansion of cleaner production projects in key sourcing countries, feasibility studies for onsite renewable energy opportunities and subsequent adoption of renewable energy by some of the PUMA core suppliers. Furthermore, we also received higher ratings in our improved governance system for climate action, risk disclosure and reduction in Scope 1 and 2 emissions.

TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURE (TCFD)

The Taskforce for Climate Related Financial Disclosures (TCFD) is an international financial initiative, aiming for more transparency between companies and investors on climate- related topics. At PUMA, we have mapped our existing climate disclosures against the TCFD recommendations, and provided a summary in table T.11 below.

CLIMATE ROADMAP AND RISK ASSESSMENT

In 2021 we developed a climate roadmap and conducted a risk assessment using our risk assessment methodology.

We see a regulatory landscape with unfavorable policies for renewables in some countries as a high risk. Furthermore, unstable business in our industry overall can restrain suppliers from investing in technologies and upgrading their facilities with low carbon machinery.

Below are key focus areas for the coming years. Some actions have been taken in 2021 and are reported in this report.

• Raise awareness: We see the need to increase internal awareness and thus are developing eLearning on climate action for our staff. We have already started to train 50 sourcing leaders. We will continue to conduct further basic GHG accounting to suppliers.
• Knowledge of impact: We conduct Life Cycle assessment of our top 5 products, 3 LCA results are reported under the product section of this report. We selected some core suppliers to set up science-based targets and developed climate target tools for the remaining core suppliers.
• Internal action: We translated Higg FEM into a PUMA grading system to include our supplier environmental performance in our vendor score card used by our sourcing leaders. We will strengthen climate data collection by increasing the frequency. We will maintain our focus on increasing the use of recycled material in our products and explore opportunities to use more biosynthetics. We aligned Scope 3 calculation with the GHG protocol. We will align our science-based targets with a 1.5-degree scenario. We will enroll more factories in cleaner production programs and renewable energy programs.
• Collaboration and partnership: We will keep our active engagement in the Fashion Charter to drive climate action and influence policy makers for our suppliers to source renewable energy.

SUPPLIER TRAINING

In 2021, PUMA joined hands with other brands and key suppliers under the UN led “Fashion Industry Charter for Climate Action" to develop a standard training program on climate action for Apparel and Footwear suppliers in Asia, in partnership with the German Development Agency, GIZ. This online training program provides foundational knowledge to suppliers on global decarbonization efforts, GHG emissions accounting, climate target setting methodology and solutions to reduce emissions and achieve these targets. The training is available in English and other local languages such as Khmer, Mandarin, Bengali and Vietnamese. We encouraged our suppliers to participate in this self-paced online training course available free of cost.

We also nominated 36 participants from 13 core suppliers in Vietnam, Cambodia, Bangladesh and Pakistan to join a tutor-assisted training program by GIZ; 92% of participants obtained a certificate with an average score of 72% with the final exam.

In addition to the above 34 participants for the tutor-guided course, so far 30 participants from 25 supplier factories have completed the course and attempted the final exam. 86% of the participants have successfully passed the exam and obtained the certificate from GIZ, with an average score of 75%.

We developed a training module with the objective of creating awareness among PUMA sourcing colleagues so that we can integrate climate change into business discussions with suppliers. 50 of our sourcing colleagues learned the basics of climate change, international agreements, PUMA’s climate change targets and roadmap, and suppliers’ target-setting. Refresh training will be conducted in 2022.

During 2021 we developed two training modules for our core suppliers to drive forward climate target-setting. One module focuses on the group of suppliers which need to establish science-based targets, and the other one targets the group of suppliers which need to establish climate targets based on a simplified tool developed in-house. To identify each group, we conducted a readiness level mapping of Core T1 and T2 suppliers with a survey based on the following criteria:

• The supplier works with other brands with commitments to climate change similar to ours.
• The supplier already has ambitious climate change targets (but not SBT).
• The supplier participated/participates in a cleaner production program.

In line with the survey outcome, we identified 10 T1 suppliers which contribute towards 60% of business volume and 23 T2 suppliers, which account for 51% business volume to join our climate action programs in 2022.

Furthermore, to improve the awareness level of employees, we have developed a foundational eLearning training module for all employees. This module is in the final stage of development and is expected to be rolled out in the first half of 2022.

Our core suppliers are involved in different climate action programs (details in the table T.12 below). Overall achievements are:

• Greenhouse gas reduction: 72,745 tCO₂e per year
• Renewable energy: 66 MW (including renewable energy procurement through Direct Purchase Agreement and off-site wind power)
• Water saving: 2,424,800 m³ per year
• Energy saving: 156,160 MWh per year

Cleaner Production / Coal phase out programs

Renewable energy programs

In a time when the global COVID pandemic has wreaked havoc in the fashion sector, the climate crisis has only become more urgent and serious. The support and visible commitment demonstrated by PUMA’s CEO, Björn Gulden’s participation in the Charter’s event at COP 26 in Glasgow, therefore sent a strong and positive signal of commitment that also helped the wider fashion sector to join hands in moving faster into a climate smart future. Stefan Seidel, PUMA’s Head of Corporate Sustainability, has also competently and with great passion guided the Charter’s work in his role as co-chair of the Fashion Charters steering committee. PUMA is one of many leading fashion companies that have now made an ambitious, and necessary, commitment to align its operations with the Paris Agreement goal to keep global warming below 1.5 degrees C. The eyes of the world will now look to PUMA and is peers in the Fashion Charter to continue to show leadership and make good on those commitments. UNFCCC is looking forward to continuing working with one of the truly leading fashion brands in the area of real climate action.

NICLAS SVENNINGSEN
Manager, Global Climate Action, United Nations Climate Change

* Including renewable energy attribute certificates

As indicated in T12 and G12, PUMAs own emissions from Scope 1 and 2 (market based) have been reduced by 88% between our baseline year 2017 and 2021. Therefore, we already exceeded our Science Based Target of 35% reduction until 2030. The reduction is mainly due to purchasing renewable electricity where available, and renewable energy attribute certificates where no renewable energy tariffs are available.

* Emissions from the respective Scope 3 categories were reported under Scope 1 and 2 before 2020.

** In 2020 upstream outbound values were adjusted to fully cover e-commerce business and exclude B2B express volumes.

1. PUMA’s greenhouse gas reporting is in line with the GHG Protocol International Accounting Standard.

2. Methodological changes over the last three years have influenced results. In 2020 updated emission factors were applied and the consolidated structure changed due to full alignment with the GHG Protocol.

3. The consolidation scope follows the operational control approach, including PUMA-owned or operated offices, warehouses, stores and own industrial sites (Argentina).

4. Outsourced Tier 1 production is accounted for in the Scope 3 emissions under purchased goods and services, covering CO₂ emissions from all three product divisions (Accessories, Apparel and Footwear).

5. PUMA applied emission factors from internationally recognized sources, such as the International Energy Agency (IEA) (2019) and DEFRA Conversion Factors (2020). For some Scope 3 emissions, emission factors are based on supplier and industry-specific emission factors.

6. For sea freight transportation, PUMA follows the recommendation and new methodology of the Clean Cargo Working Group that has transitioned from the use of tank-to-wheel (TTW) CO₂ to well-to-wheel (WTW) CO₂-equivalent emission factors for all fuels.

SCOPE 3 EMISSIONS BEYOND TIER 1 MANUFACTURING

Scope 3 emissions come from PUMA’s indirect business activities, mainly in the supply chain.

In previous years we reported our Scope 3 emissions for the production of PUMA goods by our suppliers only at Tier 1 supplier level in our Annual Report. In addition, we also used the PUMA EP&L calculations and results for our science-based CO₂ target setting and tracking.

In 2021 we engaged lifecycle expert company Sphera to conduct a comprehensive assessment of our supply chain emissions beyond Tier 1 manufacturing, including Tier 2 manufacturing of fabrics and components as well as material production. With this data we aim to set a new baseline for our most important Scope 3 category 1, “purchased goods and services”.

We can therefore see in the table below that our absolute emissions from the purchased goods and services category have decreased by 12% from 2017 to 2021 while our business has grown by 65%. Due to efficiency improvements and the use of renewable electricity at factory level, as well as the usage of more sustainable materials, our emissions relative to sales have decreased by 46% in the same period, in line with our Science based target of 60% reduction relative to sales until 2030.

Note:
Scope 3 category 1 estimation includes GHG emissions associated with goods and services purchased by PUMA from its suppliers related to PUMA products and associated packaging. This excludes emissions associated with other goods and services acquired by PUMA offices, stores and warehouses.

Scope 3 category-1 emissions mainly originate from two sources; the raw materials and the energy consumed by our Core T1, T2, T3 (production of raw material) suppliers to produce finished materials and components, as well as finished goods. The breakdown of total GHG emissions by sources is presented below.

We are currently working with the Sphera team to also quantify the GHG emissions for the years 2018 and 2019 as well as additional Scope 3 categories.

ENERGY USE COMING FROM RENEWABLE SOURCES IN THE SUPPLY CHAIN (E.G. AT MANUFACTURING AND PROCESSING FACILITIES, FIBRE PRODUCTION LEVEL)

The share of renewable electricity sourcing by Tier-1 and Tier-2 suppliers has increased from 0.35% in 2017 to 4.3% in 2021, which marks a 1673% jump in renewable electricity sourcing. Looking at the tiers in the value chain the share of renewable electricity has increased from 0.18% in 2017 to 4.8% in 2021 by T1 suppliers, while it has increased from 0.74% to 3.1% for T2 suppliers during the same period.

Note:
The total electricity does not include captive electricity generation from fossil fuels such as natural gas, diesel etc.

The renewable energy includes iREC certificates purchased by core leather, polyurethane, textile factories in 2021, but excludes renewable energy sourced by the Tier 2 core factories e.g., packaging & labelling, trims, footwear bottom and knitted upper

CARBON FOOTPRINT IN THE SUPPLY CHAIN

Note:
T1 & T2 emissions are estimated based on actual energy consumption collected from Core T1 and T2 factories and extrapolated to cover all T1 and T2 supplier factories.

T3 emissions are estimated by Sphera by using its GaBi database

With a closer look at the emissions from our supply chain, we see that absolute GHG emissions from T-1 and T-2 suppliers have been increasing by 4%, while the GHG intensity relative to the sale turnover has declined by 37% from 2017 to 2021.

Absolute GHG emissions from T-3 suppliers increased by 13%, while the GHG intensity relative to sales turnover declined by 32% from 2017 to 2021. This is mainly achieved through better material selection by gradually switching to more sustainable materials and probably due to better material efficiency. Starting in 2022, we plan to closely track the material efficiency of our products.

We see opportunities to further scale up cleaner production and renewable energy programs to more T1 and T2 suppliers, and also to launch them at some of the spinners (T3).

Drilling down into product divisions, the absolute emissions are reduced at the leather tanneries by 33%, followed by Footwear T1 factories by 14%. Whereas the emissions from synthetic leather and Textile T2 factories is increasing by 214% and 15% respectively. The increase in emissions from synthetic leather factories and decrease in emissions from leather tanneries is mainly due to the increasing replacement of leather with synthetic leather. The GHG contribution by product divisions is presented below.

Note:
T1: Apparel, Footwear & Accessories factories

T2: Leather, textile, polyurethane factories

CARBON FOOTPRINT AT MATERIAL LEVEL

Absolute GHG emissions from raw material consumption are decreasing by 26% as the total material consumption itself is increasing by 19%, while the GHG intensity of materials is reducing by 55% since 2017. This is achieved due to our continuous endeavours to shift towards more sustainable materials, for example. More sustainable cotton and polyester increased from 40% and 47% respectively in 2017 to 99% and 80% respectively in 2021.

Assumptions: During the Scope 3 assessment, it was observed that the material data collection has improved over time and recently we are able to comprehensively collect material data. For example, for 2017 material data was not available for all type of materials and some material data were incomplete. In the absence of comprehensive raw material data for 2017, material data is extrapolated from 2020. Furthermore, we observed that the polyester consumption data for Footwear was exceptionally high for 2020 and possibly erroneously overestimated. Therefore the polyester data for Footwear for 2017 and 2020 are extrapolated from 2019 data.

A breakdown analysis as shown in the chart below indicates that rubber contributes the most, followed by leather and polyester. The emissions share of polyesters has reduced from 12% in 2017 to 8% in 2021 and that of leather has reduced from 21% to 20%, whereas the share of rubber has decreased from 33% to 27%. Hence it confirms that our focus on increasing the usage of recycled polyester and offering recycled alternatives to conventional rubber and leather, as defined in our 10FOR25 targets, will help to reduce greenhouse gas emissions.

We started collecting data for transit plastic packaging from 2021, and 100% are recycled.

Downstream impacts are not covered in category 1 (purchased goods and services) and will be reported in our 2022 annual report.

Note:
Others include viscose, acrylic, linen, lycra, metals, adhesives etc.

Leather is natural leather while polyurethane is imitation leather, also known as synthetic leather.

CHEMICALS

Target description:

• 100% of all PUMA products are safe to use
• Maintain RSL compliance rate above 90%
• Reduce organic solvent usage to under 10 gr/pair

Relates to Sustainable United Nations Development Goals 3 and 6

KPIs:

• Percentage of RSL compliance rate per product division
• Percentage of core suppliers with chemicals inventory and MRSL conformance report (ZDHC Incheck reports)
• Suppliers’ chemical performance (verified FEM scores under chemical management section)
• VOCs used in footwear production (VOC index for shoes)

PUMA follows the precautionary principle and takes measures to prevent harm to human health and the environment from its products and operations.

All the materials used in PUMA products are subject to our Restricted Substance List (RSL) Testing Program to ensure compliance with global chemicals regulations. Rather than applying internal testing standards, for our tests, we rely on the AFIRM Group’s Product RSL and on the Manufacturing RSL developed by the Zero Discharge of Hazardous Chemicals Foundation (ZDHC).

In 2021 we changed our target from less than 1% RSL failure rate to maintain the RSL compliance rate above 90%, to allow for increased new material development and innovation, where each material is tested, and hence more failures can happen. In any case, no material with a failed RSL test can be used for PUMA products until the failure has been corrected and the material has successfully passed the test. In this way we mitigate the risk of product-level RSL failures. We will still track our RSL failure rates to identify improvement opportunities and prevent such failures from occurring in the future.

At the manufacturing level, as part of our Zero Discharge of Hazardous Chemicals commitment we continued to ban the intentional use of priority chemical groups classified as particularly hazardous under ZDHC standards. This phase-out was supported by the widespread use of bluesign^® and OEKO-TEX^®-certified materials. While the use of most of these chemical groups was never intentional, poly-fluorinated and per-fluorinated chemicals (PFCs) were used until 2017 for water repellent finishes on Apparel and Footwear products. In 2021 we re-started to use Gore-Tex bluesign^®-certified membranes and finishes which are either completely PFC-free or free from PFCs of environmental concern. In February 2017 Gore announced the “Goal and Roadmap for Eliminating PFCs of Environmental Concern (PFCEC)” from the lifecycle of its consumer fabrics products following discussions with Greenpeace. Gore Fabrics Division is still fully committed to the PFCEC-free goals for its consumer products and is now on track to transition the vast majority of its portfolio by the end of 2025.

Our phase-out of hazardous substances is also reflected in the results of wastewater tests performed by our wet-processing suppliers. The tests show compliance levels of over 93% for the 14 MRSL parameters listed in the ZDHC MRSL. Most parameters show compliance rates of 100% or close to 100%. Some MRSL chemicals were still found in certain samples because we share production lines with other brands and retailers.

There is a total of 179 ZDHC Gateway accounts connected with PUMA. 34 are Core T1 and 65 Core T2 factories and the remaining are non-core factories. These factories are part of different ZDHC programs, depending on what applies to them: InCheck reports for MRSL conformance, ClearStream reports for wastewater conformance and the Supplier To Zero program for chemical management.

CHEMICAL RISK ASSESSMENT AND NEXT STEPS

In 2021 we conducted a risk assessment using our risk assessment methodology.

We used the Higg FEM chemical management 2020 score with our core suppliers and engaged with AFIRM and the ZDHC foundation to review our risk assessment.

We see a high risk for upcoming regulatory requirements. We will keep our engagement with AFIRM and FESI as the platforms to engage with policy makers in different regions and countries, such as the EU and US.

PUMA has had a long-lasting program to ensure compliance with industry standards, we also updated our chemical handbook and increased the number of supplier trainings in 2021. These are the reasons why we see a low risk to factory workers’ and communities' health and medium risk of product claim.

We will keep using the China IPE database to screen any environmental violations by factories located in China producing PUMA products or materials. We will keep monitoring the compliance with the ZDHC wastewater guideline, ZDHC MRSL and AFIRM RSL. We developed a tailored-made program for factories with lower RSL compliance rate, to improve their efficiency for materials to pass tests and optimize their testing procedure.

FEM CHEMICAL MODULE

PUMA has moved from individual brand chemical and environmental audits to the use of industry-wide tools, such as the Higg Index Facility Environmental Module (FEM) 3.0. PUMA requires an annual external verification of the self-assessment FEM modules (verification visits are announced). This external verification may be completed by approved verifiers from PUMA’s internal team or other brands, or third-party organizations on the approved list from SAC. The FEM Chemical Management Section measures factory performance from inventory and purchasing, to production, storage and waste. PUMA’s Chemical Performance Rating System is based on the ratings developed from the factories’ verified Higg FEM scores under Chemical Management Section as verified by SAC approved verifiers: A, B+, B-, C and D.

This rating system was presented during suppliers and sourcing team meetings in 2021 and will be implemented gradually from 2022. Our chemical handbook has been updated accordingly. This rating system will be included in vendor supplier score cards along with social and environmental ratings in the future.

AGGREGATED VERIFIED FEM SCORE FOR PUMA FACTORIES BENCHMARKED WITH INDUSTRY

The table below shows the aggregated verified FEM2020 chemical module scores (median) for PUMA core factories with industry benchmarking. Compared to the industry, the verified FEM score overall for our factories is higher than the industry score.

* FEM 2020 PUMA average: 146 factories

Industry median FEM 2020 (4409 factories): filter used industry sector (Apparel, Footwear, Accessories includes handbags, jewelry, belts, and similar products) and Facility Type (Final Product Assembly, Printing, Product Dyeing and Laundering, Material Production including textile, rubber, foam, insulation, pliable materials)

In 2021 PUMA also facilitated our core factories to participate in the ZDHC Supplier To Zero program, which contains a chemical management checklist to help factories identify opportunities to improve their chemical performance. A total of 50 Core T1 and Core T2 factories have completed the ZDHC Supplier To Zero assessment: 48 are at foundational level while 2 are at progressive level. PUMA will continue reviewing progress and map good practice to share with our suppliers. In addition, we have conducted a good practice sharing session in chemical management at a suppliers’ meeting.

In 2022 we will continue to engage with our PUMA Core T1 & T2 factories in capacity building activities and projects in chemical management. Our target is to improve each factory’s verified FEM score for the chemical module to above 40%. We will continue together with industry expert groups like ZDHC and AFIRM to organize training webinars and to develop training videos in local languages. Supported by organizations such as GIZ (The Deutsche Gesellschaft für Internationale Zusammenarbeit – German Corporation for International Cooperation), and chemical experts, we will deliver more practical training and one-on-one coaching sessions. In 2022 PUMA will join the PIE (Program for Improvement of Environmental performance of factories) of GIZ in countries such as Vietnam, Pakistan and Bangladesh. PUMA will partner with other external consultants in China.

SUPPLIER TRAINING

To help our suppliers better understand the requirements set by PUMA and the industry, we trained suppliers in standards, guidelines and tools, as well as methodology for nonconformance investigation and remediation. Case studies of conventional parameter failures have been used in the training.

In 2021, chemical management training sessions covered MRSL, factory chemical management (FEM), RSL, Wastewater and corrective actions for non-conformance. A total of 17 training sessions were conducted in 6 different languages. More than 470 factories and 1,400 participants were invited. More than 80% of participants were satisfied with the training arrangement and content.

Here are training sessions that have been organized in 2021:

RSL

Since 2019 we have increased the number of RSL tests from 6,605 to 8,184 with the overall RSL compliance rate maintained at above 98%. When materials fail an RSL test, they cannot be used for PUMA products until the failure has been corrected and they successfully pass the test. In this way we mitigate the risk of product-level RSL failures.

RANDOM TESTING

Every year, PUMA performs random RSL testing for high-risk materials on finished products. In 2021 we tested 160 materials from 23 finished products from Footwear, Apparel, and Accessories from different suppliers in different sourcing regions. The pass rate was 96.9%.

In case of RSL failures, we check all products met all legal requirements in the selling countries. We also ask factories’ management to trace the concerned material to segregate it, so it is not used for production. To prevent further test failure, we work with our T1 factories to increase material test frequency for high-risk test failure before product manufacturing, and to improve the manufacturing process at T2 factories.

RSL ZERO FAILURE RATE PROGRAM

This program has been formulated based on the industry standards and PUMA requirements, focusing on input, process and output as defined in chemical management. Through this program we monitor closely the factory chemical management system (based on SAC FEM and ZDHC Supplier To Zero) and materials test protocol (especially for material with a high risk of RSL test failure). Factory materials’ testing process is then reviewed and optimized.

In 2021 the program was piloted with 7 suppliers (5 Footwear and 2 Accessories). In 2022 we will keep monitoring the performance of these 7 suppliers and expand the program to more suppliers.

MRSL

In addition to testing materials and products via the RSL from the AFIRM Group, we also adopted the ZDHC Manufacturing RSL at supplier level.

GoBlu International has created an easy-to-use app (BHive) for chemical management in the supply chain. This app uses OCR technology which allows manufacturing facilities to take smart phone photos of chemical product labels, in order to generate a full and accurate chemical inventory. Within seconds, it identifies which chemical products meet MRSL requirements adopted by many brands/retailers. Facilities management can then see which chemicals they should keep using and which they should phase out — all at a glance.

During 2020 we successfully piloted BHive. As of end of 2021, 66 of our core factories used either BHive, CleanChain or E3 tools to track MRSL compliance.

Out of 146 core factories, 18 factories do not use chemical and/or water during the manufacturing process.

This means that 55% of T1 factories and 44% of T2 factories within the scope of our MRSL program have an Incheck report. We will follow up and support those factories to improve their MRSL conformance rate.

In 2022 we will focus on the remaining core factories. We will map if they use CleanChain or E3 tools to track their MRSL compliance, and if not, we will request them to use BHive by Goblu. We will also start launching this tool with non-Core T2 factories with wet processes.

VOLATILE ORGANIC COMPOUNDS

With the help of our Footwear suppliers, we managed to further reduce the volatile organic compounds (VOCs) in grams per pair of shoes to 13.6 grams in line with our target for 2025. This reduction was a direct result of our long-standing VOC Program, which saw the first targets achieved as early as 2003. We are confident that the increase in use of hotmelt or water-based adhesives, and less VOC content in the products of major adhesive suppliers will help us achieve our VOC target of below 10gr/pair by 2025.

* Since 2019 figure-based for core suppliers in alignment with the general reporting scope

WATER AND AIR

Target description:

• Industry good practice for effluent treatment is met by 90% of core PUMA suppliers with wet-processing facilities
• Industry good practice for air emissions is met by 90% of core PUMA suppliers with significant emissions
• Reduce water consumption at PUMA core suppliers per pair or piece by 15% (based on 2020 baseline)

Relates to United Nations Sustainable Development Goals 6, 14 and 15

Examples of the 10FOR25 action plan:

• Ensure regular wastewater testing at relevant suppliers
• Ensure regular air-quality assessments at relevant suppliers
• Support the development of an industry-wide air quality standard

KPIs:

• Percentage of core suppliers meeting good practice standards for wastewater
• Percentage of core suppliers meeting good practice standards for air emissions
• Percentage of water saved per pair/piece

WATER ROADMAP AND RISK ASSESSMENT

In 2021 we developed a water roadmap and conducted a risk assessment using our risk assessment methodology.

Water risk across PUMA supply chains was assessed referring to the WWF water stewardship criteria: Basin Risk and Operational Risk. Basin Risk was analyzed by the WWF Water Risk Filter. The Operational Risk was based on the water management in Higg FEM water management 2020 by our core suppliers. Those scoring under 50% were ranked with a high level of operational risk.

According to the analysis from WRI Aqueduct and WWF Water Risk Filter, some of our core suppliers in China, Vietnam and Bangladesh have some risks such as flooding, poor water quality or water depletion.

Below are key focus areas for the coming years. Some actions were taken in 2021 and are reported in this report.

• Raise awareness: We see the need to increase internal awareness and thus will develop an eLearning on water for our staff.
• Knowledge of impact: We conduct a Life Cycle assessment of our top 5 products. 3 LCA results are reported under the product section of this report, 2 LCAs are still being finalized. PUMA also adopted the ELEVATE intelligence or “EiQ”, a comprehensive suite of supply chain analytics, to:
  - Assess our supply chain risks by geography, commodity and issue.
  - Complete a risk assessment for suppliers, factories and sites.
  - Manage risks that are material for each supplier, factory or site.

We will prioritize core suppliers for further action by using the Water Risk Analysis tool.

• Internal action: We translated Higg FEM into a PUMA grading system to include our supplier environmental performance in the future in our vendor score card used by our sourcing leaders. We will strengthen water data collection by increasing the frequency. We will maintain our focus on increasing the use of recycled material in our products. We will continue to enroll more factories in cleaner production programs to improve their water efficiency. We asked our core suppliers to set their own water reduction targets.
• Collaboration and partnership: We will map further water governance in our key sourcing countries and conduct local key stakeholder mapping to explore opportunities for a collaborative approach.

Since 2015 we have increased the number of wastewater tests from 33 to 117 suppliers and 207 test reports, covering approximately 98% of our core wet-processing facilities.

The test results confirm that priority hazardous chemicals have been phased out as planned. Regarding the conventional wastewater parameters that apply only to suppliers which discharge their wastewater directly into natural water bodies. In 2021, test results show over 90% compliance with the ZDHC Wastewater Guidelines (foundational level). Seven parameters hit a 100% compliance level. This means we have achieved our wastewater target for 10FOR25 cycle. PUMA has continued to adopt the ZDHC ClearStream report for wastewater testing. For 2021, 113 out of 117 suppliers have a ZDHC ClearStream report.

In terms of heavy metals and the chemical parameters regulated in the ZDHC MRSL, the suppliers we tested were able to keep their high compliance rates above 90% for each parameter. The only exemption is antimony. As suggested by ZDHC, antimony was tested for reference only, considering the exemption of polyester manufacturing during which antimony is used as a catalyst. PUMA closely follows up the development progress with the ZDHC Task Team and the supply chain for better alternatives.

When a wastewater test fails, we support factories to conduct a wastewater and sludge root cause analysis and create corrective actions, using the industry standard template. In 2021 we received 4 action plans. We will follow up on their implementation through wastewater testing in 2022. In 2021 we conducted good practice sharing during the capacity building training to support factories to improve.

87 out of 117 factories are 100% compliant for all parameters as per ZDHC Wastewater Guidelines. Those that are not compliant are requested to improve.

* Antimony is exempt for mills that produce or dye polyester fabric.

SUPPLIER TRAINING

To help our suppliers better understand the requirements set by PUMA and the industry, we trained suppliers in standards, guidelines and tools, as well as methodology for nonconformance investigation and remediation. Case studies of conventional parameter failures have been used in the training.

Here are 2021 training sessions that have been organized:

In addition, we also encouraged the suppliers’ chemical management teams to attend in-depth training courses under ZDHC Academy as conducted by ZDHC approved service providers. These have been developed by industry experts and can be available in local languages. Examples of the training courses that have been attended by PUMA suppliers were ZDHC Top 10 Issues & best practices and the newly launched Chemical Management System (CMS) and Technical Industry Guide (TIG) training in 2021.

We see water savings of 2,424,800 m³ per year as a result of our core suppliers enrolled in a cleaner production program, which includes water efficiency action. Our Core Tier 1 suppliers have been able to reduce the amount of water per piece of apparel significantly by 44%, due to actions taken by our core factories in water efficiency through the Cleaner Production Program. We will now focus on our core footwear suppliers.

For data on water consumption, please refer to the Environmental Key Performance Indicator Section of this report.

The publication of the ZDHC Air Emission Guidelines was not finalized in 2021, so we decided to internally monitor our core supply chain’s performance regarding air emissions. We designed a set of questionnaires to gather the relevant air emission compliance information on top of our online Enablon data collection campaign for our core factories (T1 and T2). The result shows that 100% of the core factories sampled were compliant with the local regulation for air emission in 2021.

2021 PUMA CDP WATER SCORE: B-

PUMA’s CDP water score improved from C in 2020 to B- in 2021. Besides our consistent improvement on supply chain water efficiency, we clearly set up the water target to 15% water efficiency (water consumption reduction per unit of products manufactured) in 2025 compared to the baseline 2020.

PLASTIC AND THE OCEANS

Target description:

• Support initiative and scientific research on microfibers, work with core suppliers to reduce microfiber release
• Research biodegradable polyester for use in PUMA products
• Eliminate plastic bags from PUMA stores and review the impact of hangers and fixtures

Relates to United Nations Sustainable Development Goals 3, 14 and 15

KPIs:

• Tons of plastic bags used in PUMA stores
• Percentage of PUMA offices that have eliminated single-use plastic
• Percentage of plastic packaging recycled

* We started to collect transit packaging (from factory to warehouse) data since 2021

Plastic pollution of our oceans is one of the most urgent challenges to sustainability of our time. As a company that uses polymers for most of its products, we have a special responsibility to work on this issue. Avoiding plastic pollution is also one of the three pillars of the Fashion Pact, of which PUMA is a founding member. Also, several countries and regions have formed initiatives to ban certain types of single-use plastics or plastic bags.

Therefore we have added Plastics and Oceans to our 10FOR25 sustainability strategy as well as our sustainability bonus targets.

Plastic shopping bags and single-use plastics aggravate the problem of plastic pollution significantly. By eliminating them from our stores and office environment we can set a positive example for our consumers and colleagues and at the same time reduce our use of plastics by several hundred tons per year.

In recent years we switched our shopping bags to FSC-certified paper bags or polyethylene bags with 80% recycled content. During 2020 our Retail division devised a detailed plan to completely phase out plastic bags from our global stores.

Our stores ordered 430 tons of polyethylene bags in 2019 and 400 tons in 2020. In 2021 our stores ordered 189 tons. By 2023 at the latest, we will replace all polyethylene bags for consumers with paper bags or durable multi-use bags for sale.

At the same time, we switched other plastic items in our retail stores, such as hangers and shoe fixtures, to recycled polymers or FSC certified wood. We also started working on more environmentally friendly solutions for our B2B product packaging for Apparel and Accessories, which is also based on polyethylene bags. As a result of these efforts, we switched our transit packaging B2B plastic bags to 100% recycled content. In addition we are also piloting transit bags made from paper in the USA.

During 2021 we also switched most plastic primary packaging B2C to paper (we reported 245 tons of plastic primary packaging used in 2020). At our offices we have challenged our catering partners and employees to avoid single-use plastics such as coffee cups, lids, stirring sticks, cutlery or straws. In 2021, 88% of our offices globally have already eliminated single use plastic cups and cutlery.

MICROFIBERS

PUMA joined TMC (The Microfibre Consortium) to understand and address the environmental concerns for fibre fragments (microfibre) as generated from natural and synthetic clothing during manufacturing and the consumer use phase in the industry.

Microfibers originating from synthetic fibers can have an environmental impact and are a challenge for the industry. With this, PUMA has put more focus on testing synthetic materials, such as polyester. In 2021 we conducted 17 shedding tests (with 12 polyester 100%, 5 blended compositions) per TMC test method. In view of the test results analytics from TMC on 100% polyester, the average on filter mass change from PUMA fabrics was less than compared with that of the overall database average (PUMA = 0.0029g vs Overall = 0.0033g). This means that PUMA tested fabrics released less microfibers in mass compared to those tested fabrics from the TMC Microfibre Data Portal.

As feedback from TMC, we understand that analysis of the shedding data is complex and is to be on-going. At present there is no clear trend with the signatory’s data across the members from TMC in terms of yarn type or structure type. More data entries have been a call-out from TMC. PUMA will continue to participate and support the industry in the shedding study.

PUMA’s representative worked in the TMC task team with other industry representatives to develop a guideline: “Control of fiber fragmentation, within textile manufacturing wastewater”. The final draft is awaiting open consultation by different stakeholders, such as the ZDHC Foundation, prior to public release. PUMA will review the official version of the guideline upon release. PUMA has also participated in the development of a biodegradability report on the available test methods and claims. This could support alignment within the industry.

In September 2021 TMC released the 2030 roadmap. It has laid down its committee with clear accountable outputs - enabling signatories from across the industry to take meaningful, science-based, coordinated action on fiber fragmentation from natural and synthetic textiles. PUMA will continue to support the TMC roadmap and commitment, including building understanding by contributing to research data on fiber fragmentation, reducing fiber fragmentation by adopting mitigation actions once practically available from the industry, drive progress by participating in Task Teams and scaling global uptake.

CIRCULARITY

Target description:

• Set up or join product takeback schemes in major markets
• Reduce production waste to landfills by at least 50% (shared target)
• Develop recycled materials as alternatives to leather, rubber, cotton and polyurethane (shared targets)

Relates to United Nations Sustainable Development Goals 9, 12, 14 and 15

KPIs:

• Percentage of major markets with takeback scheme
• Amount of waste sent to landfills
• Percentage of recycled polyester, cotton, leather, rubber and polyurethane

In 2021 we launched our PUMA Circular Lab and announced as first concrete project the RE:SUEDE, an experiment for a biodegradable shoe, made with chrome-free Zeology leather, hemp, cotton and biodegradable TPE sole, which will launch in 2022 with a first batch of 500 pairs.

PUMA® - No Time for Waste: PUMA pilots testing for biodegradable RE:SUEDE version of its most iconic sneaker

PUMA’s exploration of the issue of circularity dates back to 2011 when we partnered with Cradle-to-Cradle co-founder Michael Braungart. Our rich history as the first company in our industry to develop a Cradle-to-Cradle-certified collection – our InCycle collection launched in 2013 – led us to put circularity back on the agenda with our 10FOR25 sustainability strategy.

We are aware that the linear business model currently applied in our industry is far from the ideal concept of a circular economy. Rethinking the way we produce and moving towards a more circular business model is one of the priorities of our sustainability strategy.

Therefore we have set circularity targets for PUMA, for example, scaling up the use of recycled polyester and cotton and using recycled alternatives to leather, rubber and polyurethane (PU), the materials we use most frequently after cotton and polyester.

We have also started to encourage our suppliers to reuse and recycle the fabric waste they are creating for production, either through applications outside of our industry or ideally, by recycling offcuts into new polyester or cotton yarns.

At the end of 2021 our material toolboxes included recycled options for all the above materials and nylon. For recycling and recycled PU, we have started a research project with chemical company Covestro and shared first insights during our stakeholder dialog in 2021. Our Circularity Strategy was one of the two main topics discussed during our stakeholder dialog.

During 2021, building on our training with Circle Economy, we rolled out an e-learning tool on Circularity for the global PUMA colleagues. Based on the PUMA identity and our material toolboxes we identified circular design approaches around the longevity and cyclability of our products. The e-learning focuses ont our new Circularity Policy, as well as our circular design guidelines.

Regarding Apparel products, we developed a textile-to-textile recycling opportunity with partners in Europe. The initiative enables the recycling of unsellable polyester items (for example due to expired licensing contracts) through an innovative chemical recycling process into new textile items.

To communicate our use of recycled materials, we continued our First Mile collection made from recycled plastic bottles and expanded the concept into all our Business Units. In 2021 we also launched our Re.Gen collection made from recycled cotton, recycled leather straps and recycled polyester.

The use of recycled cotton for our Apparel products increased from 0.6% in 2020 to 2.3% in 2021, and for Footwear it increased from 0.5% to 4%.

The use of recycled polyester increased for all product divisions from 14% in 2020 to 43% in 2021.

More than 60% of pre-consumer waste is either reused or recycled by our Core T1 and T2 suppliers as of 2021, with only 4% of waste ending up in landfills for Apparel suppliers and 14% for Footwear suppliers.

* Includes Core Tier 1 suppliers, apparel, footwear, and accessory (62 factories), not including Cobra

** Includes Core Tier 2 suppliers, leather, synthetic and textile (43 factories)

TAKEBACK SCHEME PILOT

To demonstrate our responsibility as a producer and to secure options for more circular material streams in the future, we also have set the target to offer takeback schemes in all our major markets by 2025.

In our efforts to extend the lifespan of our products and re-integrate used materials into our production, we operate a project group headed by our Retail division.

Since September 2019, PUMA customers in Hong Kong have the possibility to put their used sportswear to good use and support disadvantaged communities across the world, as the sports company teams up with non-profit organization Crossroads Foundation. Hong Kong customers can donate used garments of all brands at PUMA recycling bins, which have been set up in 4 selected stores. For every bag of clothing that is donated, customers receive a 20% discount voucher for their next purchase. 130 kg and 104 kg of garments were donated to the Cross Foundation in 2020 and 2021 respectively.

PUMA SWOP Shops opened from July 9 to 11, 2021 and from July 15 to 17, 2021 in Hong Kong to promote “recycle and reuse”, earth lovers and fashionistas were invited to grant their sport style garment a second life by donating them at PUMA SWOP SHOP, while swapping for the same number of clothes items or accessories. 555 kg of garments were donated to the Cross Foundation.

During 2021 we developed a take back scheme for Ecom, complementing our existing takeback pilot scheme in Hong Kong. Our colleagues at PUMA North America continued to work with Soles for Souls and collected 522kg of used shoes, an initiative where shoes can be donated for reuse in support of a charitable cause.

Soles 4 Souls takeback bin in the USA

WASTE ROADMAP AND RISK ASSESSMENT

In 2021 we developed a waste reduction roadmap and conducted a risk assessment.

The waste data published in our report cover both material waste and factory & office operation waste: cardboard, paper, plastic, light bulbs etc., to ensure a comprehensive scope to cover the waste generated on production sites. We see plastic, chemical, oil lubricant waste and e-waste as high risk. To prioritize these risks, we engaged with other brands and INSEE (a cement company that offers waste treatment services using co-processing technology in Vietnam, Cambodia, Bangladesh & Indonesia). To prioritize our actions we analyzed waste data collected in 2020 and the Higg FEM waste management score of our core factories.

Below are key focus areas for the coming years. Some actions were taken in 2021 and are reported in this report.

• Raise awareness: We will engage our suppliers in FEM waste management training with peer learning sessions.
• Knowledge of impact: We conduct a Life Cycle assessment of our Top 5 products, including end of life. 3 LCA results are reported under the product section of this report.
• Internal action: We translated Higg FEM into a PUMA grading system to include our supplier environmental performance in future in our vendor score card used by our sourcing leaders. We improved waste data collected in 2021 and will increase the data collection frequency. We require our core supplier to set up waste reduction targets. We will maintain our focus on increasing the use of recycled material in our products.
• Collaboration and partnership: We will map further waste governance in our key sourcing countries and conduct local key stakeholder mapping to explore opportunities for a collaborative approach.

PRODUCTS

Target description:

• 90% of PUMA Apparel and Accessories products contain >50% more sustainable materials
• 90% of our Footwear contains at least one more sustainable component
• Increase use of recycled polyester (Apparel and Accessories) to 75% by 2025 (shared target)

Relates to United Nations Sustainable Development Goal 12

KPIs:

• Percentage of Apparel and Accessories with 50% more sustainable material
• Percentage of Footwear with at least one more sustainable component
• Percentage of recycled polyester used in Apparel and Accessories

The PUMA Environmental Profit and Loss Account (EP&L) attributes more than 50% of our environmental impact to material and raw material production. Against this background we have decided to prioritize the large-scale use of more sustainable raw materials. In our 10FOR25 strategy we have set 100% targets for more sustainable raw materials such as cotton, polyester, leather and cardboard.

In addition to measuring the use of more sustainable materials, we now also determine the percentage of more sustainable products, that is, products made with a significant proportion of more sustainable materials. As defined in our PUMA Sustainability Index, or S-Index, more sustainable Apparel or Accessories products contain at least 50% more sustainable materials by weight. For Footwear we currently measure sustainability by including one or more main components made from more sustainable materials.

During 2021 we developed and rolled out an E-Learning toolkit on more sustainable products and our PUMA S-Index for the PUMA family. The training allows designers, developers and product managers to understand which materials qualify as more sustainable, how the PUMA S-Index is calculated, and which certifications need to be in place to externally communicate on product level. The training was completed by over 1,000 PUMA colleagues in 2021.

* In 2021 we implemented a calculation of 50% more sustainable material by weight, which is stricter than the calculation used in 2020.

Our long-term efforts to scale up more sustainable materials in partnership with our material suppliers have helped us to increase the use of more sustainable material. With 99% more sustainable cotton, 80% polyester, 99.9% leather, 100% certified accross all product divisions (Apparel, Footwear and Accessories), we are coming close to achieving our targets of 100% more sustainable materials for all these categories.

In 2021 we used 94% more sustainable cotton and 37% more sustainable polyester for our Footwear, which is a significant increase compared with 2020. This explains why the volume of more sustainable Footwear products has almost doubled since 2020.

To respond to an increased demand of our consumers, in 2021 we also offered 29 vegan certified styles, after 16 styles in 2020.

In 2021 we successfully launched multiple more sustainable collections such the EXHALE yoga collection co-created with Cara Delevingne which uses recycled polyester and natural dyes, and offsets the carbon footprint and the RE.GEN collection made from regenerated materials from our own industry waste. Other highlights include our new BETTER FOAM in Footwear, a material partly made from sugarcane. We also officially announced the launch of the RE:SUEDE, an experimental version of our most iconic sneaker, the SUEDE, to test for a biodegradable product and expanded our PUMA x FIRST MILE collection with products made from recycled polyester to further business units.

PUMA Exhale collection

PRODUCT LIFE CYCLE ASSESSMENT

In light of enhancing the sustainability performance of our products, we have decided to undertake Life Cycle Assessments (LCA) of our top product portfolios. Outcomes of an LCA act as a quantifiable measure of our efforts towards a safer, cleaner and more sustainable value chain. LCAs also encourage innovation.

This year we have completed a screening LCA study for three of our best selling products (Footwear products such as Lifestyle shoes, performance shoes and Apparel products such as Cotton Pants) to map their environmental footprint on greenhouse gases and water consumption across their entire value chains (cradle to grave) as per ISO 14040 and 14044 standards.

Sphera, a leading consulting organization in the LCA domain, has conducted these Life Cycle Assessments, including all elements of these product life cycles, from the overall manufacturing including supply of material and energy carriers to the end of life. The data and methodology was peer-reviewed by an external expert.

The products studied are:

Performance shoes - Velocity Nitro net weight 0.72 kg

Lifestyle shoes - Future Rider Play on net weight 0.78 kg

Apparel pants - Modern Basic Pants (66% BCI cotton/34%polyester) with 30 wash cycles net weight 0.68 kg

Results of the analysis can be summarized as follows:

For performance shoes the global warming potential (GWP) (kg CO₂e) has been influenced by materials which include base material, midsole, outsole, etc. (38.9%) and manufacturing energy (54.4%). While for lifestyle shoes, global warming potential (kg CO₂e) has been influenced by materials by 58% and manufacturing energy by 35.1%. The lifestyle shoes are made of leather, which explains why the global warming potential for material is 58%. Leather in the lifestyle shoes has a higher contribution than other materials. EVA, polyester, hotmelt glue and glue adhesives have high contributions in both Footwear styles.

Energy impact is lower in the case of lifestyle shoes (3.3 kg CO₂), whereas performance shoes have a higher impact (4.14 kg CO₂) mainly because the data is considered for the whole factory that produces the performance shoes (not specifically for the product as such). We see opportunities to improve manufacturing energy efficiency in the factory in question.

Materials, adhesive and water used for production as well as packaging all together have a significant global warming potential for both Footwear styles (38.9% for performance shoes and 58% for lifestyle shoes).

For Apparel pants, global warming potential (kg CO₂e) has been influenced by cotton farming (11%), yarn spinning (34%), dyeing and finishing (44%) and use stage (37%). Primary energy* demand has major contributions from cotton farming (23%), yarn spinning (37%), dyeing and fabric finishing (28%) and use stage (35%). Blue water** consumption has higher contributions from cotton (91%) than other materials such as polyester, chemicals (13%), electricity and fuel (4%).

Footwear products usually don’t require extensive cleaning during their lifetime, and hence the impact of the use phase is negligible. Therefore the GHG emission of use phase from Footwear is not considered¹. However, for Apparel products about ~37% GWP impact lies in the use phase where washing and drying are required and result in respective emissions from energy consumption.

End of life phase includes reuse, recycling, incineration and landfilling based on European scenarios, which contributes to about 2-7% in global warming potential (GWP) impacts.

¹ Source: Quantis “Draft product environmental footprint category rules (PEFCR), Apparel and Footwear”

* Primary energy is the energy that is harvested directly from natural resources: coal, oil, natural gas and uranium.

** Blue water is water that has been sourced from surface or groundwater resources and is either evaporated or incorporated into a product.