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:

• RSL compliance rate per product division (as a percentage)
• 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 Programme to ensure compliance with global chemical 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 updated our target to RSL compliance rate above 90% considering the potential use of new chemicals in the new material development and innovation. 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 to prevent such failures from occurring in 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. There was no intentional use of the priority chemical groups. Poly- and per-fluorinated chemicals (PFCs) were used until 2017 for water-repellent finishes on apparel and footwear products. In 2021 we started using Gore-Tex bluesign®-certified membranes and finishes again, 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 fabric 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 most 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 98% among the 20 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. Please see our Water and Air section for further details.

A total of 283 ZDHC Gateway accounts are connected with PUMA: 45 are core Tier 1 and 64 core Tier 2 factories and the remaining are non-core factories. These factories are part of different ZDHC programmes, depending on what applies to them: InCheck reports for MRSL conformance, ClearStream reports for wastewater conformance, and the Supplier To Zero programme 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 for our core suppliers and engaged with AFIRM and ZDHC foundation to review our risk assessment. 

We see a high level of risk in upcoming regulatory requirements. We will keep our engagement with AFIRM and FESI as a platform to engage with policymakers in different regions and countries such as EU and the USA, so that standards are achievable by the industry. 

PUMA has a long-lasting programme to ensure compliance with industry standards.

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 compliance with ZDHC Wastewater Guidelines, ZDHC MRSL and AFIRM RSL.

We organised MRSL conformance training for PUMA Tier 1 and Tier 2 suppliers and also invited chemicals suppliers to engage on MRSL conformance engagement. In 2023 we initiated in-check report verification by an authorised third party to ensure the credibility and reliability of MRSL conformance data. 

The details of compliance with ZDHC Wastewater Guidelines, ZDHC MRSL, and Higg FEM chemical management are described in this report.  

2022 PUMA Brands to Zero – PROGRESSIVE Level

We reached the Progressive Level for the Brands to Zero Assessment 2023. Brands to Zero is ZDHC’s leader programme for contributor brands. ZDHC developed the questionnaire and scoring methodology to assess the brands.

All participating contributors in the leader programmes are graded into three performance levels Foundational, Progressive, and Aspirational. Our rating dropped from aspirational level in 2022 to progressive level in 2023, due to changes in the rating criteria. Higher weightage is allocated to business decisions linked to chemical management performance. Though at PUMA, we have a procedure in place to link business decisions with factories’ chemical performance, we have not had such a case. We launched a factory scorecard that includes chemical performance in 2021, so far factories have improved their performance year after year.

In the 2023 Brands to Zero Assessment, we achieved a 100% score for five out of ten performance areas such as Commitment, Internal Enablement, Supply Chain Engagement, ZDHC Gateway Chemical Module, and ZDHC Wastewater Guidelines, as a result of our strong commitment to enhancing sustainable chemical management in our supply chain.

FEM CHEMICAL MODULE

PUMA has moved from individual brand chemical and environmental audits to using 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, other brands, or third-party organisations on the approved list from SAC. The FEM Chemical Management Section measures factory performance from inventory and purchasing through production, storage, and waste. PUMA’s Chemical Performance Rating System is based on the ratings developed from the factories’ verified Higg FEM scores under the chemical management section as verified by SAC-approved verifiers: A, B+, B-, C and D. The minimum passing grade from a Chemicals perspective is 40% (i.e., only A, B+ and B- ratings are a passing score) and C and D are failure ratings. This rating system was presented during meetings of suppliers and sourcing teams in 2021 and was implemented gradually during 2022 and 2023. Our Chemicals handbook has been updated accordingly. The rating system was included in vendor supplier scorecards along with social and environmental ratings.

The table shows the aggregated verified FEM 2022 chemical module scores (median) for PUMA core factories with industry benchmarking. Compared to the industry, the overall verified FEM score for our factories is higher than the industry median score.

*FEM 2022 PUMA and Stichd average: 160 factories; FEM 2021 PUMA average: 142 factories; stichd has 32 core Tier 1 factories of which 30 have completed verification. One core factory is a shared factory between PUMA and stichd and hence counted once under PUMA

**Industry median FEM (6,980 factories): Filters 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 (textile, rubber, foam, insulation, pliable materials); Packaging Production

1Verification in 2023 is for FEM2022; Verification in 2022 is for FEM2021

In 2023, PUMA continued to use the Higg Facility Environmental Module (FEM), an industry tool, to measure chemical management performance through the Higg FEM Chemical Management Module, which tracks purchasing and inventory management, production, storage, and waste locations. This tool is also used to measure Chemical Management performance for stichd core factories. 

In 2022, we communicated our expectation to the PUMA core factories that they improve their verified FEM Chemical Management score to 46% in 2023. We exceeded this goal with a FEM Chemical Management score for PUMA of 51%. The combined average of PUMA and stichd’s chemical module score also exceeded by achieving the target with an average score of 49%. The industry median score is 32%. 

During 2023, we continued to engage with our PUMA core Tier 1 and Tier 2 factories in capacity-building activities and projects in chemical management, for factories with a low Higg FEM Chemical Module score. We worked together with industry expert groups like ZDHC, AFIRM as well and ZDHC-approved laboratories to organise training webinars and develop training videos in local languages. 

PUMA also continued to join the Chemical Management Improvement (CMI) Programme of GIZ to improve the factories’ performance. We collaborated with other brands to nominate participating factories in Vietnam for a tutor-assisted and onsite consultancy programme. For other countries, the factories were invited to join online training on chemical management developed by GIZ.  

The improvement in the MRSL conformance rate also contributed to an increase in Higg FEM Chemical Management score.

In 2024, we will continue to engage with our core Tier 1 and Tier 2 factories in capacity-building activities and projects in chemical management. We will organise customised training sessions by SAC-authorised trainers. The training sessions will focus on Higg FEM 4.0, such as key updates and their relevant impact on their facility for a smooth transition to the new version.

SUPPLIER TRAINING

A series of training sessions were conducted in 2023, covering chemical management in input, process and output phases, in collaboration with ZDHC, accredited third-party laboratories and external consultants.

ZDHC Supplier To Zero Assessment

In 2023, our factories participated in the ZDHC Supplier To Zero programme, a ZDHC Chemical Management System (CMS) Framework that contains a chemical management checklist to help factories identify opportunities to improve their chemical performance. 77 core Tier 1 and core Tier 2 factories completed the ZDHC Supplier To Zero assessment. Almost all of them completed their assessment at the end of 2023 and we will monitor their improvement in 2024. As a result of this programme, the average Higg FEM Chemical Management score of the 58 factories which participated in this programme in 2022, improved from 36% in 2022 to 55% in 2023.

Chemical ManAgement Improvement (CMI)

Chemical Management Improvement (CMI) training course is an initiative by GIZ. The purpose is to develop the knowledge and capacity of the team in charge of chemicals at factories. In 2023, 40 participants from 23 core factories completed and passed the course.

In Vietnam, the training aims to develop a sound knowledge of the responsible management of chemicals, improving capacities for the corporate environment, safety and health, and resource management in relevant industries. Four core factories in Vietnam joined this programme and received onsite consulting from Chemical Management Advisors (CMA) assigned by GIZ, such as Leadership and Sustainability consultancy company. After the consulting, the factories were requested to submit an Action Plan to improve chemical management, CMA will review this and provide recommendations. 24 participants from these four factories joined and completed this programme in 2023. 100% of participating factories worked on improvement plans after these training sessions.  
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*% of factories joined the training, calculated based on the total the factories in the scope for each subject matter training

In 2023, Chemical Management training sessions covered MRSL conformance and factory chemical management. Ten training sessions were conducted in four different languages. More than 200 factories and nearly 450 participants were invited. More than 90% of participants were satisfied with the training.

These training programmes helped our suppliers to improve their understanding of PUMA and industry requirements and to improve the effectiveness of their Chemical Management Systems. After the training, the core factories with low MRSL conformance rates developed an Action Plan to improve MRSL conformance. We received and reviewed Action Plans from 13 factories to facilitate their implementation.

We also encouraged the suppliers’ chemical management teams to attend training courses under ZDHC Academy as conducted by ZDHC-approved service providers. Examples of the training courses that PUMA suppliers attended include ZDHC Chemical Management System (CMS) and Technical Industry Guide (TIG) training.

Restricted Substance list (RSL)

Between January and October 2023, we received 6,130 RSL tests and material certification submissions with an overall RSL compliance rate maintained above 98%. Materials found to be non-compliant with PUMA RSL cannot be used for PUMA products and suppliers need to arrange corrective actions, remediation and retest the materials. This is to ensure that PUMA products are compliant with our RSL requirements.

RANDOM TESTING

PUMA performs due diligence random RSL tests on high-risk materials of finished products. By October 2023, we had tested 130 materials in nine finished products across footwear, apparel and accessories from different suppliers in different sourcing regions, and the pass rate was 99% as of October 2023.

All tested products are compliant with the legal requirements. The supplier took follow-up action to improve the failed component found.

MANUFACTURING RESTRICTED SUBSTANCE LIST (MRSL)

Regarding MRSL conformance, we use ZDHC MRSL, an industry standard adopted by many brands/retailers at the supplier level. Out of 131 core factories, 25 factories do not use chemicals during the manufacturing process and therefore are out of the scope of MRSL.

In 2023, 96 of our core factories used either BHive, CleanChain, or E3 tools to track MRSL compliance. 86% of Tier 1 factories and 94% of Tier 2 factories under the scope of our MRSL programme have an InCheck Report, issued by ZDHC-approved solution providers to track MRSL compliance. These are the chemical management platforms used to manage chemical inventory and generate Performance InCheck Reports, which provide a summary of the MRSL conformance of the factory’s chemical inventory.

*The data is based on the Aug/Sep/Oct InCheck Report and only includes factories with a complete Chemical Inventory List (CIL)

The BHive app uses OCR technology to allow manufacturing facilities to take smartphone photos of chemical product labels, generate a full and accurate chemical inventory, and quickly identify which chemical products meet MRSL requirements used by many brands and retailers. Facilities can then see which chemicals they should keep using and which they should phase out.

Based on a baseline of 45% in 2021, we set a goal of 70% MRSL conformance in 2023 for all factories with an InCheck report. We exceeded the 2023 Goal with an average MRSL conformance rate of 71% for 96 factories with an InCheck report. 59 out of 96 core factories reached a conformance rate higher than 70% MRSL conformance by weight. 37 factories did not reach 70% MRSL conformance rate.

In 2024, we will strive for all core factories to have an InCheck report. We will organise customised training sessions together with ZDHC and ZDHC-approved third-party laboratories, to improve MRSL conformance rate for the factories. 2024’s MRSL conformance goal is 80% for all factories with an InCheck report. 

In 2023, we worked with ZDHC-approved verifiers to conduct a verification of InCheck. The Verified InCheck is an on-site review to establish credibility and trust in the chemical inventory that was used by the supplier to generate their Performance InCheck Reports. The verification is done by a ZDHC-approved third-party or second-party (brand representative) verifier who conduct “spot check” verification of specific parameters. To pass the verification ≥ 80% of the spot check parameters need to be validated, then the factory gets a passed Verified InCheck checkmark on their ZDHC Gateway account. Out of 96 core factories with InCheck report, 79 went through the verification process. 75 obtained a passed verified InCheck report. The four factories with a failed InCheck verification (less than 80% validation rate) were required to conduct a Root Cause Analysis, create a Corrective Action Plan and re-verify after at least three months. We will follow up on the implementation of their action plan and will re-verify in 2024. 

Besides using a chemical inventory to control input chemistry, we also use wastewater tests conducted by accredited independent laboratories to ensure no harmful chemicals are released through the wastewater of our manufacturer’s facilities with wet processing. The results of these tests show a compliance rate of over 90% for each parameter, with most parameters scoring 99 or 100% compliance.

More details on wastewater testing are provided in the Water and Air section of this report.
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VOLATILE ORGANIC COMPOUNDs

With much collaborative effort, we continue to edge closer toward our 2025 target of limiting volatile organic compounds (VOC) emissions to 10 g per pair of footwear produced. Although we faced certain supply chain difficulties in 2023, including the increased bonding requirements for our fast-growing performance categories, we have again managed to reduce our VOC and for 2023 we are reporting 12.5 g per pair. Looking towards 2025, we remain confident of achieving our 2025 target, through the increased use of water-based adhesives, as well as further innovations within our adhesive suppliers. 

1Since 2019 figure-based for core suppliers in alignment with the general reporting scope.