Reporting in accordance with the EU Taxonomy Regulation

Taxonomy objectives

The Taxonomy Regulation (EU) 2020/852 (in the following “the Taxonomy”) entered into force on 22 June 2020. The purpose of this regulation is to provide a definition of what constitutes a sustainable economic activity and to redirect capital flows into companies that are aligning their business models towards such sustainable economic activities. To achieve this goal, companies must report on the proportion of “environmentally sustainable” revenues, investments (capital expenditure) and operating expenses.

The focus of the Taxonomy lies on 6 environmental objectives:

• Climate change mitigation
• Climate change adaptation
• Sustainability and protection of water and marine resources
• Pollution prevention and control
• Protection and restoration of biodiversity and ecosystems
• Transition to a circular economy

The Taxonomy has identified eligible economic activities that substantially contribute to each of these environmental objectives. Linked to these eligible activities are technical screening criteria as well as do no significant harm criteria and minimum safeguards that define whether the activity is considered sustainable or not (aligned).

Delegated Regulation (EU) 2021/2178 as of July 6, 2021 on the climate objectives (climate change mitigation (Annex I) and climate change adaptation (Annex II)) (“the Climate Delegated Act”), was published in the Official Journal on December 9, 2021 and entered into force on January 1, 2022 ((EU) 2021/2139). Further delegated acts for the remaining objectives were published in 2023, namely EU 2022/1214 (Complementary Climate DA), EU 2023/2485 (amending EU 2021/2139), EU 2023/2486 (targets three to six), C(2023)3850 (Amended Climate DA) and C(2023)3851 Environmental DA (targets three to six).

disclosure requirements for non-financial undertakings

According to Article 2 of the Climate Delegated Act and Article 8 of the Taxonomy any undertaking subject to the Non-Financial Reporting Directive (NFRD) must provide information on “environmentally sustainable” revenues, investments (capital expenditure) and operating expenses (OpEx).

According to Article 10 of the Climate Delegated Act undertakings must disclose the proportion of Taxonomy-eligible and Taxonomy non-eligible economic activities in their total turnover, capital expenditure and operational expenditure. The eligibility of an activity implies that an activity is included in the Climate Delegated Act. Whether an activity is Taxonomy-eligible or not says nothing about the sustainability of that activity. Being Taxonomy-eligible is merely an indication that a certain activity makes a substantial contribution to one of the six environmental objectives of the Taxonomy. From January 1, 2023, the disclosure must also include information on taxonomy alignment, meaning only activities that are included in the “environmentally sustainable share” of the three performance indicators. An economic activity is environmentally sustainable if it:

• makes a significant contribution to the achievement of one or more environmental goals (significant contribution, SC)
• does not result in significant harm to one of more of the environmental objectives (do no significant harm, DNSH)
• is carried out in compliance with a defined minimum level of protection (minimum safeguards, MS) and complies with technical screening criteria (TSC) of Annex I and Annex II.

Taxonomy-eligibility of PUMA’s economic activities in respect TO the environmental objectives of the EU taxonomy

The technical screening criteria in Annex I and Annex II of Delegated Regulation (EU) 2021/2139 of June 4, 2021 for the first two environmental objectives, namely climate change mitigation and climate change adaptation, do not list any business activities that are linked to the production and sale of footwear, apparel and accessories. This means that PUMA’s business activities so far do not qualify as contributing substantially to climate change mitigation or climate change adaptation.

Further technical screening criteria were published as Annexes I, III and IV of Delegated Regulation (EU) 2023/2486 (supplementing EU 2020/852) of June 27, 2023, for the remaining environmental objectives, namely sustainable use and protection of water and marine resources, pollution prevention and control as well as restoration of biodiversity and ecosystems. Likewise, these do not list any business activities that are linked to the production and sale of footwear, apparel and accessories.

For the remaining environmental objective published as Annex II, the transition to a circular economy, activities related to apparel are listed, but are limited to sales generated by services such as repair, remanufacturing or refurbishment, preparation for reuse, sale of second-hand goods, or product as a service business models, none of which are not part of PUMA current revenue generating activities.

As mentioned in the Circularity section of this report, PUMA and its partners are piloting fibre to fibre recycling technology and take-back systems. However, those activities have not generated any significant Taxonomy-eligible or aligned sales under the definition of Annex II and had a project status in 2023.

Therefore, PUMA’s business activities in this regard are not considered Taxonomy-eligible (so far). Since PUMA does not have any economic activities related to nuclear power or power generation from gas, PUMA will not report the related standard forms from the Delegated Act (EU 2022/1214).

Eligible capital expenditure

PUMA understands that the Taxonomy and the Climate Delegated Act as well as the Environmental Delegated Act including its Annexes nonetheless requires non-financial undertakings with non-Taxonomy eligible economic activities to report on the part of the capital expenditure related to the purchase of output from Taxonomy-aligned economic activities and individual measures enabling target activities to become low-carbon or to lead to greenhouse gas reductions.

In this regard PUMA reviewed so-called cross-cutting activities that are not directly related to PUMA’s primary business activity and are not revenue-generating for PUMA but still are of relevance to support PUMA’s sustainability efforts. Taxonomy-eligible capital expenditure could be identified with regard to “Transport” and “Real Estate Activities”.

The key figures are determined based on Delegated Regulations (EU) 2020/852, 2021/2139 and 2021/2178 as well as 2023/2385 and 2023/2086 in conjunction with the accounting policies to be applied to the consolidated financial statements. To avoid double counting, expenditure has been allocated to only one economic activity.

In 2023 PUMA made investments in several buildings, including:

• A new solar PV station in Germany (planned completion in 2024)
• New charging stations in Germany
• Office space in Argentina

The technical screening criteria of Annexes I and II define a taxonomy-aligned investment in buildings only for those buildings that are ranked among the top 15% of their regional building stock in terms of Primary Energy Demand (PED).

Since there is no precise definition of this 15%, for example in terms of area covered or primary energy demand per m², and as the rental of buildings is not material to PUMA’s business performance in terms of CO ₂ emissions, we have decided to report the Taxonomy-aligned investment in buildings for 2023 as zero.

This does not mean that PUMA is not investing in lowering CO₂ emissions from its own entities. As described in the Climate section of this report, our Scope 1 and 2 emissions have been reduced by 85% compared to our baseline in 2017, mainly through green electricity tariffs or renewable energy attribute certificates.

In 2023 PUMA also invested in charging stations for electric cars, which do fall under the taxonomy alignment criteria for climate mitigation. The total investment in these charging stations was 241 TEUR (2022: 79 TEUR).

Furthermore, PUMA started to invest in additional solar PV capacity at its headquarters in Germany. The investment in 2023 came to 262 TEUR (no investment in 2022).

As part of PUMA’s 10FOR25 sustainability targets, PUMA is transitioning its car fleet to more sustainable transport vehicles. Therefore, in 2023 PUMA invested in the lease of 92 low or zero emission vehicles (2022: 64 vehicles).

Unlike buildings, the technical screening criteria for CO₂ emissions for taxonomy alignments are clearly defined as below 50 g CO₂/km.

We can confirm that 92 cars added to our car fleet are Taxonomy-aligned with the technical screening criteria based on their CO₂ emission footprint, equalling an investment of over 2,000 TEUR (2022: 1,521 TEUR)

Considering the do-no-significant harm criteria of tires for passenger cars, not all those cars can be considered as fully Taxonomy-aligned, as many of the standard tires used for our new electric cars from Tesla, Volkswagen, Hyundai, Mercedes and BMW do not fulfil the criteria for noise emissions. As a result the reported Taxonomy-aligned investment in vehicles for the year 2023 is 408 TEUR (2022: 372 TEUR).

The total capital expenditure (IAS 16, 38 and IFRS 16) of the PUMA Group amounts to 599,874 TEUR for the year 2023 (2022: 669,382 TEUR). The eligible capital expenditure related to “Transport” amounts to 7,930 TEUR (2022: 5,427 TEUR) and the amount related to“Real Estate Activities /Other” is 336,500 TEUR (2022:376,996 TEUR). The Taxonomy-aligned capital expenditure from investment in solar PV, low or zero emission cars and charging stations for electric cars was 910 TEUR (2022: 372 TEUR).

Eligible operational expenditure

PUMA understands that the Taxonomy and the Disclosure Delegated Regulation (EU 21/2178) nonetheless asks non-financial undertakings with non- Taxonomy eligible activities to report on the part of the operational expenditure related to the purchase of output from Taxonomy-aligned economic activities and individual measures enabling the target activities to become low-carbon or to lead to greenhouse gas reductions.

Due to the nature of our business model, which is the design, development, marketing and sale of footwear, apparel and accessories, the eligible operational expenditure is not material in the context of the environmental objectives of the Taxonomy, therefore the numerator of our taxonomy-eligible operational expenditure is zero.

For the denominator, Article 2, Section 1.1.3.1. of Annex 1 the Climate Delegated Act asks for reporting on the total operational expenditure derived from the categories “research and development, building renovation measures, short-term lease, maintenance and repair and any other direct expenditures related to the day-to-day servicing of assets of property, plant and equipment by the undertaking or third party to whom activities are outsourced that are necessary to ensure the continued and effective functioning of such asset.” The total operational expenditure from these categories amounts to 113.4 TEUR (2022: 103.6 TEUR) for the 2023 financial year.

Outlook

At PUMA, we will continue the transition of our car fleet to low or zero emission vehicles in those countries where the charging infrastructure can support running an electric car fleet. We also plan to continue investing in te renewable energy capacity of the buildings we own. In addition, we will explore the activities listed under “Transition to a circular economy” to assess their technical and financial viability over the next years.

Proportion of turnover from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2023

Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2023

Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2023