Circularity

TARGET DESCRIPTION:

• Set up or join product take-back 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 take-back scheme
• Amount of waste sent to landfills
• Percentage of recycled polyester, cotton, leather, rubber and polyurethane

We are aware that the linear business model currently applied in our industry is far from the ideal concept of a circular economy. The growing amount of textile waste sent to landfills is an emerging risk. Rethinking the way we produce and moving towards a more circular business model is one of the priorities of our Sustainability Strategy over the coming years.

We begin our journey with product design. Building on our Circular Design training with Circular Economy, we rolled out an e-learning tool on circularity for all PUMA colleagues globally. 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 covers our Circularity Policy, as well as our circular design guidelines.

During 2023, our largest business units held circularity workshops in which the options for transitioning iconic PUMA products into more circular products were discussed.

Circularity innovation

In 2021 we launched PUMA Circular Lab, our platform for speaking and learning about circularity together with our customers. The first project was the RE:SUEDE, an experiment for a biodegradable shoe, made with chrome-free Zeology Leather, hemp, cotton and a biodegradable TPE sole. It launched in 2022 with a first batch of 500 pairs. The shoes were worn for six months by participants and then sent back to PUMA. In December 2022 over 400 pairs of RE:SUEDEs were sent to an industrial composting facility in the Netherlands, where they were prepared for the composting trial that was completed in 2023. The composting results were made public so that anyone interested in compostable footwear can use our lessons learned.

In apparel, we expanded our textile-to-textile recycling programme, which we renamed from RE:JERSEY to RE:FIBRE. The initiative enables the recycling of fabric waste, as well as worn or unsellable polyester items (for example unsellable polyester items due to expired licensing contracts) through an innovative chemical recycling process into new textile items. We continue to partner with several teams for this project: Manchester United, AC Milan, Olympique de Marseille and Borussia Dortmund as well as the Swiss Football Federation. We collect used polyester products at the clubs’ fan shops and our own PUMA store in Herzogenaurach. These products are sorted, and – where possible – enter the recycling stream to make new polyester products.

RE:FIBRE activations with BVB, Manchester City and AC Milan

During the Women’s Football World Cup in Australia, the Switzerland team played in jerseys made from fibre-to-fibre recycled polyester. For 2024 we plan a further and significant extension of the RE:FIBRE programme to cover the jerseys of all major football clubs and federations, scaling up the programme to over 1 million produced items.

Swiss national women’s football RE:FIBRE jerseys

In addition to our existing RE:FIBRE initiative on recycled polyester, we started looking into innovative processes of cotton recycling, such as using 100% (pre-consumer) recycled cotton in selected products and the opportunity to recycle cotton waste into viscose-like materials.

Recycled materials usage

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

We have set circularity targets, for example, scaling up the use of recycled polyester and using recycled alternatives to leather, rubber and polyurethane (PU), the materials we use most frequently after cotton and polyester. Our material toolboxes include recycled material options for all these materials. In 2023, we also started looking at the potential of using secondary raw materials from innovative footwear separation technologies.

In 2023, we delivered a million pieces of our downtown collection, made with at least 20% recycled cotton.

The percentage of recycled polyester increased for all product divisions from 14% in 2020 to almost 62% in 2023. The percentage of recycled cotton for our apparel products increased from 0.6% in 2020 to 8.6% in 2023, and for footwear, it increased from 0.5% to 1.6%.

PRE AND POST-CONSUMER WASTE IN THE SUPPLY CHAIN

Around 77% of pre-consumer waste was either reused or recycled by our core Tier 1 suppliers and around 94% of waste was either reused or recycled by our core Tier 2 suppliers in 2023. Compared to 2022, we observed an increase of 20% in reused/recycled waste for core Tier 1 and an increase of around 4% for core Tier 2. This increase is mainly due to the adoption of better waste disposal practices by our suppliers to divert waste from landfills. For textile and fabric waste, 7.2% of waste was sent to incineration by core Tier 1 factories while core Tier 2 factories sent only 1% of waste to incineration. 

* Core Tier 1 Supplier factories Apparel, Footwear & Accessories (54 factories)

** Core Tier 2 Supplier factories Leather, PU and Textiles (40 factories)

1The values for November and December 2023 were estimated by employing the Exponential Smoothing (ETS) algorithm in Microsoft Excel, utilizing data from January to October of 2023. This approach was chosen after comparing it to alternative methods, considering its performance against actual historical data, specifically in terms of deviation from the actual values in percentage terms. The ETS method displayed both higher accuracy and higher precision compared to other methods, such as averaging the last 10/12 months or multiplying the estimated production by the average KPI (per production unit) from the 12 months of data spanning from November 2021 to October 2022.

*Fabric waste originated from PU coated material with fabric backing (PU on top + fabric at bottom)

1 Data includes extrapolations or estimations where no real data could be provided

2 PUMA Production (Tier 1) includes core Tier 1 supplier factories, Apparel, Footwear & Accessories (54 factories)

3 PUMA Production (core Tier 2) includes core Tier 2 supplier factories, Leather, PU & Textiles (40 factories) 

4The values for November and December 2023 were estimated by employing the Exponential Smoothing (ETS) algorithm in Microsoft Excel, utilizing data from January to October of 2023. This approach was chosen after comparing it to alternative methods, considering its performance against actual historical data, specifically in terms of deviation from the actual values in percentage terms. The ETS method displayed both higher accuracy and higher precision compared to other methods, such as averaging the last 10/12 months or multiplying the estimated production by the average KPI (per production unit) from the 12 months of data spanning from November 2021 to October 2022.

Except for Footwear production that still has fabric waste sent to landfills, 100% fabric waste from Apparel, Accessory, Textile, and Synthetic production was diverted from landfills. Compared to 2022, we observed an increase in reuse and recycle proportion and a decrease in incineration proportion while disposal in landfill percentage remains stable. This change was due to the adoption of better waste disposal practices and reflects a gradual shift towards a circular approach by our suppliers.

In 2023, 95% of fabric waste resulting from PUMA production was diverted from landfill. This is evident as 76% of total fabric waste was either reused or recycled and 19% was sent to incineration. Only 5% of total fabric waste ended up in landfills.

TAKE-BACK SCHEMEs

To demonstrate our responsibility as a producer and to secure options for more circular material flows in the future, we have set a target to join or offer take-back schemes in all our major markets by 2025.

In 2023 we introduced a new take-back scheme in Switzerland, piloted take-back bins in selected stores in Argentina and China and expanded our existing take-back scheme in the USA into the category of apparel. These new expansions complement our existing take-back schemes in Australia, Hong Kong, the USA and the clubs taking part in the RE:FIBRE project. Our colleagues at PUMA North America continued to work with Soles for Souls and collected 4,348 kg of used shoes, an initiative where shoes can be donated for reuse in support of a charitable cause. Our colleagues in Australia were able to collect 3,900 kg of used products.

Since September 2019 PUMA customers in Hong Kong have been able to put their used sportswear to good use and support disadvantaged communities across the world, as we teamed up with the non-profit organisation, Crossroads Foundation. Hong Kong customers can donate used garments of all brands at PUMA recycling bins, which have been set up in four selected stores. During 2023, 1,442 kg of used products were collected. At our German headquarters we collected 385 kg of products through our take-back scheme, which means that in total we collected over 10 tons of products for recycling or donation with our take-back schemes globally for the first time. For 2024, we plan to expand our coverage of take-back schemes further, for example in India and Germany.

SWAP Shops

SWAP shops are a free and local exchange where people can pass on things they no longer want, in exchange for something they need. It helps people refresh their wardrobe without having to shop for something new. Products get a new chance to be worn again and it promotes sustainability in a fun way. In 2023 the fourth PUMA SWAP Shop was held in Hong Kong to promote a “recycle and reuse” culture. It was a public event to swap clothes and accessories. More than 460 guests joined and more than 2,320 items were given away (more than four items per guest). 67 boxes of garments (1,013 kg) were donated to two NGOs: Crossroads and Redress. Another SWAP Shop took place for the second time at our Headquarters in Germany for our own employees. Over 400 items were swapped and the remaining ones were donated to our employees’ charity organisation, Charity Cat. PUMA North America organised its first SWAP shop and had a very positive response from over 130 employees swapping more than 1,000 articles.

SWAP Shop in PUMA North America

PRODUCT CARE GUIDELINES

In 2023 we initiated the publication of care and repair guidelines for consumers to help keep their products in good condition for a longer time. We focus on the most common reasons why people end up throwing away their sportswear and offer easy tips to treat these problems. We promote natural ways to treat stains and odours as well as conscious washing and drying practices to reduce user-phase impact.

Unsellable products

We are aware that due to contractual restrictions, a certain number of unsold products must be occasionally discarded, for example when a license contract with a partner club expires. We have a process in place to ensure that this happens to PUMA products only in exceptional circumstances. Our production forecasts are as accurate as possible to actively prevent high product inventories and their intrinsic management costs. Unsold seasonal products are placed through different channels until they are sold. Returned products that have not been worn are placed on sale again. Returned products with small defects but in good condition are donated and only returned products that are very worn or severely damaged need to be discarded. No new product should be destroyed without the explicit demand of an expiring licensing partner nor a new product shall be destroyed as a solution for inventory management. We have created a reporting structure to identify with accuracy the quantity and reasons for such cases. In 2023, the amount of disposed articles was equivalent to 0.25% of our total material consumption. These products were sent to a recycling facility (where available). In countries where such recycling facilities do not exist, the products were shredded.

WASTE ROADMAP AND RISK ASSESSMENT

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

waste at our own operationS

At our own operations, the most significant fractions of waste are paper and cardboard (notably from outer carton boxes, shoe boxes and office paper usage), poly bags used for transport product packaging and household waste such as organic waste from our canteens. Since we do not operate any industrial manufacturing facilities (with one exception in Argentina), the amount of hazardous waste created in PUMA’s own operations is very low at 36 tons. The 36 tons originate from our factory in Argentina (26 tons) and the exchange of old lighting systems to LED at the PUMA headquarters (9 tons). All hazardous waste is handled strictly in line with hazardous waste regulations.

During 2023, we reminded our PUMA subsidiaries to engage in waste separation and recycling. Consequently, we could increase the rate of recycled waste from 44% in 2019 to 64% in 2023.

waste IN THE Supply chain

For our supply chain, the waste data published in our report includes material waste, along with factory and office operational waste: cardboard, paper, plastic, light bulbs, etc. to ensure a comprehensive scope for the waste generated on production sites. We see plastics, chemicals, oil lubricant waste and e-waste as high risk. To prioritize our actions, we analysed waste data collected in 2020 and the Higg FEM waste management score of our core factories.

Below are the key focus areas for the coming years. Some actions were taken in 2023 and are covered below.

• Raise awareness: As a part of Higg FEM training, we have provided training to 210 suppliers factories on how to improve their score in waste management. As a result of these trainings, the average Higg FEM score for the waste module increased from 45% in 2022 to 53% in 2023, which was higher than the industry median of 40% in 2023. The target for reducing the amount of production waste going to landfills was communicated to the suppliers during the supplier meetings. We also conducted one-to-one meetings with our core suppliers to review their waste KPIs.
• Knowledge of impact: Some of our apparel suppliers have initiated the recycling of pre-consumer cutting waste back into the spinning process. In 2023, we completed a Life Cycle Assessment to compare virgin cotton fabric with 75/25 blend of virgin and recycled cotton from cotton waste. The details of this LCA study are provided in the Product section. In 2023, we mapped a waste governance for our top three sourcing countries, summarised their waste policy landscape and identified key stakeholders. 
• Internal action: In last three years i.e., starting in 2021 we focused on better data collection on waste from supplier’s facilities, and we observed that factories have started reporting comprehensive data on waste. 
• Collaboration and partnership: In 2022, we participated in a project named Closed Loop 2 Balance (CL2B) in Vietnam, for which the final report was published in 2023. The Global Fashion Agenda and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) launched The Circular Fashion Partnership: a cross-sectoral initiative to support the development of effective circular fashion systems in textile, garment and footwear manufacturing regions, by capturing and recycling post-industrial fashion waste. This project is currently active in Bangladesh and Cambodia and is to be launched in Vietnam in 2024. We have had several internal discussions and communication with GFA and GIZ about this project in Vietnam. We will scale up our textile recycling innovation, RE:FIBRE, replacing recycled polyester with RE:FIBRE technology in all PUMA football Club and Federation replica jerseys from 2024 onwards. We also showed that we can successfully turn an experimental version of our classic SUEDE sneaker into compost under certain tailor-made industrial conditions, as we published the results of our two year-long RE:SUEDEexperiment. 

WASTE GOVERNANCE

In 2023, we conducted a waste governance mapping process for our top three sourcing countries, Vietnam, China and Bangladesh. We looked at the waste policy landscape and identified key stakeholders. Challenges and opportunities in waste management were also identified for each region. We found that the waste regulations are evolving with stringent requirements progressively. We also found that interesting projects are being undertaken in these countries on waste tracking, waste recycling/circularity etc.  

Vietnam - Waste regulation in Vietnam has been evolving since 2005, with stringent requirements being added progressively. Vietnam committed to address marine plastic waste, with a goal of eliminating plastic waste from both land and ocean-based sources by 2030. In addition, Vietnam has legal requirements for waste management, which includes the management of domestic solid waste, hazardous waste, and normal industrial solid waste. Specifically, enterprises are obliged to adopt resource- and energy-efficient solutions, use environmentally-friendly raw materials, fuels, and materials, apply cleaner production technologies and programmes, and implement measures to minimize waste generation (Environmental Protection Law, Chapter VI, Section 2, Article 72).

Limited waste segregation at source, inadequate infrastructure for recycling, a lack of adequate data, access to financing, a lack of public awareness, and a lack of market for recyclables were identified as key challenges for waste management in Vietnam. 

The Global Fashion Agenda and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) have launched The Circular Fashion Partnership: a cross-sectoral initiative to support the development of effective circular fashion systems in textile, garment and footwear manufacturing regions, by capturing and recycling post-industrial fashion waste. This project will be launched in Vietnam in 2024. Through this project, we see opportunities to address the current challenges in collaboration with other brands, manufacturers, collectors, sorters and textile recyclers to segregate, digitally trace and recycle textile waste into the highest possible value output, ultimately being new products.  

China introduced a regulation to promote the circular economy back in 2004. The country has a specific regulation to ban the import of waste, which involves penalties for violations such as the illegal dumping of waste. China also has a policy on textile waste recycling, which aims to achieve a 25% recycling rate for textiles waste by 2025 and 30% by 2030. It has also set specific targets to produce recycled fibres derived from 2 million tons of waste textiles by 2025 and 3 million tons by 2030. China provides fiscal incentives for suppliers under the Environmental Protection Tax Law in which tax on hazardous waste is determined based on the generation quantity and hence provides an opportunity for suppliers to save costs by adopting the 3R Principles (Reduce, Reuse Recycle). We see opportunities to engage with key local stakeholders to improve factories waste management.

Bangladesh introduced specific regulation on the circular economy in 2022. The country has a goal to achieve recycling of plastic waste by 80% by 2030, cut single-use of plastic by 90% by 2026, reduce generation of plastic waste by 30% by 2030 and reduce virgin material consumption by 50% by 2030.

PUMA suppliers' have developed cotton pre-consumer textile waste recycling. We increased the use of recycled cotton from 3.6% of total cotton volume in 2022 to 8.6% in 2023.

The Circular Fashion Partnership has been active in Bangladesh since 2021. Key partners in this project are actively engaging with the Bangladeshi government to formalize the informal waste management sector. This includes introducing incentives and tax deductions to incentivize manufacturers to embrace recycling practices and establishing a comprehensive national policy for the sustainable management of post-production fashion waste. Through this policy advocacy work, we see opportunities to further increase the use of recycled cotton in future.

* Waste data for PUMA’s own entities in 2019 and 2020 recalculated due to underreporting in these years

1 Figures include PUMA owned or operated offices, warehouses and stores. Includes our own production sites in Argentina. All other production is outsourced to independent supplier factories, some warehouse operations are outsourced to independent logistics providers. Franchised stores are excluded.

2 Data includes extrapolations or estimations where no real data could be provided

3 Methodological changes over the last three years have influenced results

4 PUMA Production (Tier 1) includes core Tier 1 supplier factories, Apparel, Footwear & Accessories (54 factories)

5 PUMA Production (core Tier 2) includes core Tier 2 supplier factories, Leather, PU & Textiles (40 factories)

6The values for November and December 2023 were estimated by employing the Exponential Smoothing (ETS) algorithm in Microsoft Excel, utilizing data from January to October of 2023. This approach was chosen after comparing it to alternative methods, considering its performance against actual historical data, specifically in terms of deviation from the actual values in percentage terms. The ETS method displayed both higher accuracy and higher precision compared to other methods, such as averaging the last 10/12 months or multiplying the estimated production by the average KPI (per production unit) from the 12 months of data spanning from November 2021 to October 2022.

Similar to water, even though we do not have any goal for absolute reduction in waste generation for our core suppliers, we continue to track them. It is also observed that only 0.5% of waste (material waste but also other factory wastes like boiler ash, sludge from wastewater treatment plants etc.) end up in landfills for apparel suppliers and 6.8% for footwear suppliers. 

We can see that there has been a 7% decrease in production waste for Tier 1 suppliers and 180% increase for Tier 2 suppliers from 2020. The high percentage increase in Tier 2 suppliers is mainly due to the improvement in waste data captured by the suppliers. Certain wastes such as residual ash from coal and biomass boilers that were not captured by the Tier 2 suppliers before are now being included. At the same time, the production volume has increased by 12% for textiles and 171% for synthetic leather. ​76.3% of the production waste are reused or recycled, 18.8% are incinerated and 4.8% are sent to landfill.​

Regarding production waste sent to landfill, both core Tier 1 and Tier 2 suppliers have succeeded in reducing their landfill percentage compared to 2020 baseline. In 2023, Tier 1 and Tier 2 suppliers have achieved a reduction of 51% and 73% reduction respectively from the baseline and thus exceeded the PUMA goal of 50% reduction by 2025. This was achieved due to better waste management practices adopted by the suppliers and more accurate tracking and reporting of waste data.​