Health and Safety

Target description:

• Zero fatal accidents
• Reduce accident rate to 0.5 at PUMA and at suppliers
• Building safety operational in high-risk countries*

Relates to United Nations Sustainable Development Goal 3

Examples of the 10FOR25 action plan:

• Expand building safety projects to include Indonesia
• Ensure professional risk assessments are conducted regularly

KPIs:

• Number of fatal accidents at Tier 1 and core Tier 2 factories
• Average injury rate at PUMA
• Average injury rate at core Tier 1 suppliers
• Number of factories subject to our Building Safety Assessment Programme

Ensuring safe working conditions for our own employees and hundreds of thousands of indirect employees at our manufacturing partners is an ethical imperative. In 2015, we set a target of zero fatal accidents and aimed to reduce the number of work-related accidents. In 2021, we revised our Supplier OHS handbook, requiring our manufacturing partners to conduct an OHS risk assessment. We also published the PUMA OHS Policy for our own employees. Our health and safety targets are linked to the bonuses of our global leadership team.

*High-risk countries are defined by the building safety index which is based on instances of non-compliance associated with building approval, multi-tenant building, structural integrity, ventilation/ heating, and warehouses.

Health AND safety at PUMA’s own entities

At our headquarters, we operate an occupational Health and Safety Committee, that oversees our health and safety management system. The Committee includes a specialised labour physician, a health and safety technician and employee representatives. In 2023, we certified our OHS management system according to ISO 45001 at the headquarters level.

To ensure a global implementation of our health and safety policy, our larger subsidiaries have their own health and safety committees or experts in place. For more than ten years, we have been able to record zero fatal accidents at our own entities globally. We have also kept the lost time injury rate below 0.5 since 2019, meaning that per 100 full-time employees, less than 0.5 accidents were recorded, in line with our targets.

In 2023, this target was supported by continuing our Occupational Health and Safety e-learning. Over 80% of PUMA staff members globally participated in health and safety training to prevent injuries or work-related negative health effects.

In addition, we offer sports facilities, canteens with balanced food and work-life balance courses at our major offices globally. For more information on employee wellbeing please refer to the Our People section of this report.

Health AND safety in THE supply chain

Apart from our ongoing auditing programme that includes occupational health and safety assessments, we implement our Building Safety Assessment Programme in countries where we have identified risks. We also set up professional risk assessments at all our major manufacturing partners. Despite these preventive measures, unfortunately, a work-related accident resulted in the death of an employee in one of our suppliers’ factories in India in 2023. We will keep our focus on Occupational Health Safety accident prevention.

SUPPLIER TRAINING ON OHS RISK ASSESSMENT

In 2021, we updated our OHS Handbook to guide the OHS risk assessment processes and tools for the factory management and OHS person in charge.

PUMA provided training to core Tier 1 and Tier 2 suppliers on how to conduct Occupational Health and Safety (OHS) risk assessments in 2021 and 2022. We followed up on progress with an on-site visit by a third-party auditing company.

In 2023, among the trained factories, we noticed fewer violations related to Chemical Safety Management (-3%), and Electrical and Mechanical Safety Management (-2%) compared to 2022. However, we noticed more violations related to noise pollution. We will explore how to improve together with suppliers in 2024.

In 2023, the PUMA Sustainability Team developed accident prevention and reporting training based on the ITC-ILO material and provided Train-the-Trainer sessions to 266 managerial staff at 102 factories (core Tier 1 suppliers and all factories in India and Sri Lanka). Trained factory managers provided this training to 115,588 workers in 59 factories. Training hours were 117,695 in total. Some of the factory managers received the training in late 2023, we will follow up on their workers’ training in 2024.

4,364 workers from eight factories in Cambodia and Indonesia completed the Better Work e-learning course on Occupational Safety and Health via the WOVO mobile app, covering 51% of the employees in these factories.

BUILDING SAFETY ASSESSMENT AND RISK ASSESSMENT

A safe workplace is a top priority at PUMA and we continuously carry out building safety inspections among high-risk factories in our supply chain. From 2015 to the end of 2023, our Building Safety Assessment Programme covered Bangladesh, India, Indonesia and Pakistan. 

In 2023, we used EIQ to map all sourcing countries where building safety is considered as high risk. As a result, two factories in Indonesia and four factories in India were identified as high-risk. The four factories in India already went through a Building, Electrical and Fire Safety Assessment (BEFS) in 2022, conducted by ELEVATE. A similar assessment was conducted in the two Indonesian factories in 2023. Through active engagement with these four suppliers in India, 69% of the findings had been remediated by the end of 2023. We will keep following up to ensure all findings are taken care of. 

Five factories went through building safety inspections in Indonesia, two in 2023 and three in 2018. We continued following up on remediation at the three factories. Two factories obtained building safety certificates issued by the government, and one will be certified in early 2024. 

ACCORD

As part of its continued commitment to the ACCORD international programme, PUMA signed the Pakistan ACCORD in early March 2023. Seven supplier factories joined the programme, including two of the three factories that were previously assessed by ELEVATE and other third parties. Another factory in scope of this programme was on-boarded in mid-2023, we are now applying for this factory to join the ACCORD. 

Two factories are not under the scope of Pakistan ACCORD programme, as these are not textile product manufacturers. One of these factories was on-boarded in the last quarter of 2022 and will go through an assessment in 2024. The second factory went through a Building, Electrical and Fire Safety Assessment (BEFS) conducted by ELEVATE in 2017 and 2021. Since then, the factory management has hired a professional third party to support the remediation of the open findings. In 2024, this factory will be re-assessed to measure progress.

Our factories in the ACCORD in Bangladesh have a completion rate (initial findings) of 94%, whereas the average rate of all factories in the RSC programme is 91%. Eight (out of 21 ACCORD active) factories achieved 100% remediation of the initial findings. Another seven factories achieved 90%-98% remediation of the initial findings. Six out of 21 factories were at low completion rates (0%-89%): two did not receive a follow up inspection by ACCORD in 2023, two were newly onboarded to ACCORD, and two were delayed in remediation of the findings. We will keep working with those factories on ACCORD remediation plan in 2024.

Accidents

In 2023, we unfortunately reported an employee death resulting from a work-related incident at one of our suppliers’ factories in India. An electrician fell from the factory’s roof, as neither a secured ladder was used nor a harness rope was installed. After 55 days of hospitalisation, the worker’s health deteriorated, leading to his death. The factory paid all medical expenses and the legal compensation, as well as an additional lump sum to the worker's family. An investigation and Hazard Risk Assessment were conducted by an independent expert. Following this assessment, safety equipment including a harness hook was installed on the rooftop, staff training on hazards and risks was provided and enhanced monitoring of potential unsafe conditions was implemented to prevent similar accidents. We deeply regret this tragic accident which caused the loss of this employee’s life. 

INJURIES

The average injury rate was reduced to 0.2%. We followed up on factories' action plan implementation after various OHS trainings, such as Accident Prevention and Reporting training, conducted by PUMA since 2021. Given 2023’s global macroeconomic situation, which led to a change in customers' ordering behavior, we saw a decline in the order book in the first half of the year and stabilisation in the second half. This led to fewer working hours, and fewer temporary workers recruitment, meaning less risks for injury, this could also explain why the injury rate decreased this year.

* Average of the five countries included in this table. Global average injury rate for PUMA’s core suppliers in 2023 was 0.2.

** Including non-core suppliers.

BANGLADESH EMPLOYMENT INJURY SCHEME PILOT

Despite significant progress on the way towards decent and safe working conditions in the ready-made garment industry in Bangladesh, it lacks a comprehensive Employment Injury Scheme (EIS) in accordance with international standards as defined in the ILO Employment Injury Benefits Convention. To mitigate that gap the Bangladesh Government initiated a pilot programme to provide income replacements for the permanently disabled and the dependents of deceased workers. The ILO and GIZ collaborated in the project and agreed on the implementation as well as the transition to a permanent EIS after three to five years.

The EIS provides periodic payments/pensions as top-ups to the lump-sum payments of the Central Fund, rendering the level of benefits compatible with ILO Convention No. 121. These payments are financed by international brands.

PUMA signed the voluntary pledge for the Employment Injury Scheme pilot in Bangladesh to contribute to safeguarding decent living conditions for victims and their families. PUMA joined in early 2023, together with seven other brands. We are actively engaged with the project not only by providing financial support, but also by providing feedback for learning.

According to EIS dataon 31 December 2023, the pilot has responded to 13 death cases. The EIS committee has disbursed a total of 932,766 BDT, equivalent to 5,241 BDT as a monthly compensation, directly to the family members affected by this tragedy. The pilot has responded to eight permanent disability cases, with a total estimated lifelong benefit of 5,837,724 BDT.

As per EIS policy, factory and workers are kept anonymous, so we have no way to know if the families of the two workers who passed away as reported in our 2022 Annual Report, have received such a benefit.