ENVIRONMENTAL KEY PERFORMANCE DATA

During 2021 we revisited the methodology of our PUMA Environmental Profit and Loss Account, or EP&L. The methodology, which was developed in 2011 by PWC and Truecost, and later further refined by Kering with the help of PWC, mainly relies on material input and spend data.

During our review, we realized that many savings made by our Tier 1 and Tier 2 suppliers had not been captured by the EP&L methodology, and for some of our major materials used, such as Better Cotton, no specific EP&L emission factors have been developed.

Therefore, we decided to pause the publication of our EP&L for 2021 and rework the methodology to more accurately reflect our environmental performance in the future.

This work has now progressed, so that we are sharing our EP&L results in accordance with the new methodology for 2020, 2021 and 2022.

However, we are still in the process of fully aligning our EP&L methodology for Tiers 3 and 4 with internal and external standards. As a result, the table below differs from our Scope 3 emission calculation in the Climate section and also results in a high water value for Tier 3 due to some wet processing for leather and polyester being attributed to Tier 3.

We will further work on the alignment of methodologies to strengthen the EP&L as a valuable risk assessment and information tool.

As in previous years, we are also reporting the underlying datasets as Environmental Key Performance Indicators in this chapter.

In line with our 10FOR25 target to achieve 25% share renewable energy for core Tier 1 and Tier 2 suppliers, we have set a goal of 10% renewable energy share for 2022. The share of renewable energy consumption by Tier 1 suppliers increased from 5% in 2021 to 11.3% in 2022. This is mainly achieved due to participation of the core suppliers in renewable energy projects, followed by installation of rooftop solar facilities and purchase of energy attribute certificates by the core Tier 1 suppliers. Although the share of renewable energy for Core Tier 2 suppliers has marginally increased in 2022, PUMA has purchased energy attribute certificates on behalf of its Tier 2 suppliers located in Vietnam to achieve the renewable energy target of 10%.

Though we did not have any goals for absolute reduction in waste generation and water consumption from our core suppliers, we continue to track them. We can see that there is a 47% increase in production waste for Tier 1 suppliers and 218% from Tier 2 suppliers from 2020. This is mainly due to the improvement in waste data captured by the suppliers. Certain waste such as residual ash from coal and biomass boilers that were not captured by the Tier 2 suppliers earlier are now included. We also added nine new core factories for textile, which have not yet been engaged in cleaner production programs. At the same time, the production volume has increased by 33% for textiles and 62% for synthetic leather.

Similarly, in 2022 absolute water consumption marginally increased by 9% for Tier 1 suppliers and the same increased by 24% for Tier 2 suppliers as compared to the baseline of 2020. This is mainly due to an increase in production volume. If we compare the KPIs, water per pair of shoes has been reduced by 36% and for apparel it has been reduced by 17% per piece of garment. Therefore, we achieved our goal of a 6% reduction in the water KPI from 2020. Similarly, for leather the water KPI has been reduced by 17% and for textile, it has been reduced by 4.7%. For textile, we are marginally short of achieving our 2022 goal and hence we are going to focus more on water reduction from textile factories in 2023 and in the coming years. Water recycling plants implemented in 2022 by some of the large textile suppliers will have an impact from 2023 onwards.

PRODUCT-RELATED E-KPIS

Since 2017 we have also measured the average environmental key performance indicators (E-KPIs) from textile and leather manufacturing (Tier 2) and apparel and footwear manufacturing (Tier 1).

In 2022 the greenhouse gas emission KPIs have been reduced across the product divisions except for textiles, where they have slightly increased by 1.6% as compared to 2020. CO2 emissions per pair of shoes have been reduced by 5%, by 14% per piece of garment and by 14% per square meter of leather.

This is mainly achieved due to various climate actions initiated as described in this report. The participation of core suppliers in cleaner production and renewable energy programs, the installation of rooftop solar projects and the purchase of IRECs are the main contributors for these reductions achieved in greenhouse gas emissions.