ESRS E2 Pollution

ESRS E2 Pollution

Impact, risk and opportunity management

Material pollution-related impacts, risks and opportunities (IRO-1)

PUMA has a long-standing commitment to evaluating and mitigating pollution risks within its global supply chain. In 2011, PUMA supported Greenpeace's Detox campaign, aiming to eliminate the use of particularly hazardous chemicals and ensure the proper treatment of industrial wastewater from the textile industry.

To achieve these goals, PUMA co-founded the Zero Discharge of Hazardous Chemicals (ZDHC) Foundation, a multi-stakeholder organisation working to eliminate hazardous chemicals from the global apparel and footwear supply chain. PUMA supported the development of industry standards such as the ZDHC Manufacturing Restricted Substances List (MRSL) and Wastewater Quality Guideline. These standards have been integrated into PUMA's sustainability strategy and targets, ensuring ongoing adherence and implementation.

Additionally, PUMA ensures product safety by complying with industry standards, which are guidelines set by the Apparel and Footwear International RSL Management (AFIRM) Working Group to eliminate the use and impact of harmful substances in apparel and footwear products.

We assessed PUMA's IROs related to pollution using the same methodology detailed in the General information (IRO-1) section. This assessment included a screening of both actual and potential greenhouse gas (GHG) emissions and other pollutants. While GHG emissions are reported under ESRS E1 Climate change, this section focuses exclusively on other pollutants.

In 2024, PUMA engaged in extensive stakeholder consultations to shape its Vision 2030 sustainability targets. Additionally, a DMA, involving our key stakeholders was conducted in 2023 to identify material topics for our long-term strategy and target setting. Detailed information on stakeholder consultation is provided in the General information (SBM-2) section.

PUMA had no major incidents or pollution deposits in the reporting year. Consequently, there were no operating or capital expenditures related to such incidents, nor were there any provisions for environmental protection or remediation costs. There were no material incidents that negatively impacted the environment or financial performance. Additionally, no related products or services were at risk, and no financial assessments or critical assumptions were necessary.

PUMA’s owned and operated entities are comprised of offices, stores and distribution centres as well as one footwear facility in Argentina. Our offices, stores and distribution centres do not run large-scale boilers, do not use water on an industrial scale, do not use significant quantities of hazardous chemicals and do not produce significant amounts of hazardous waste. Therefore, no material impacts, risks and opportunities have been identified for our owned and operated entities related to pollution.

Processes such as dyeing, finishing, and adhesive application in footwear production may release Volatile Organic Compounds (VOCs) and other pollutants. Leather tanning involves chemicals like chromium, which, if not managed properly, could harm workers. This may impact worker health and safety, identified as a material topic under ESRS S2 Workers in the value chain. However, these processes generally do not significantly pollute the air compared to industries like energy or steel production. The textile and footwear industry's impact is mainly linked to the extraction of natural resources, water pollution, greenhouse gas emissions, post-consumer textile waste, and low recycling rates, rather than air pollution.

Soil pollution from chemical discharges, solid waste, and microplastics, along with pesticides, fertilisers, and dyes in cotton production, may harm soil health and fertility, cause erosion, destroy habitats, and contribute to climate change. Since PUMA facilities with wet process ensure proper wastewater treatment and cotton farming occupies only 0.6 % of global agricultural land, we concluded that soil pollution does not pose significant environmental or financial risks for our operations.

In our industry, the use of certain chemicals is necessary, but some of these can be considered substances of concern due to their potential adverse effects on humans, animals, or the environment. Examples include formaldehyde used in textile finishing, VOCs from adhesives and dyes, certain azo dyes and certain phthalates that may arise as impurities from plasticizers. Many major brands in the fashion industry adhere to the ZDHC MRSL and the AFIRM Restricted Substances List (RSL). These standards include the restricted substances most relevant to apparel, footwear, and accessory production, as listed in the EU REACH and other global regulations. Substances of concern can often be substituted or remediated with sufficient research. Since the journey towards the complete elimination of substances of concern is ongoing and requires continuous efforts, these substances are considered a material topic.

A substance of very high concern (SVHC) is a chemical identified under the European Union’s REACH Regulation due to its serious effects on human health or the environment. Examples include DMFa used in synthetic leather manufacturing, bisphenols, and chromium-based chemicals in leather tanning. These substances can persist in the environment and be toxic. While some SVHCs lack scalable and suitable alternatives that meet our quality and performance standards, PUMA has implemented stringent chemical policies to monitor and control their presence in our manufacturing processes and products. PUMA is committed to addressing these concerns, which is why SVHC is a material topic for us.

Potential pollution of living organisms could occur due to untreated wastewater discharge or the uncontrolled release of chemicals. However, SVHCs that could accumulate in living organisms are already identified as a material topic. Additionally, water pollution from dyeing and finishing processes, which can harm aquatic life, is also a material topic. Therefore, PUMA remains committed to addressing potential pollution of living organisms through stringent monitoring and compliance measures to mitigate water pollution and comply with industry and regulations standards related to SVHC.

Policies related to pollution (E2-1)

The PUMA Management Board is responsible for the approval and implementation of all pollution-related policies and handbooks. Various departments handle implementation and report progress to the Management Board and leadership team.

PUMA’s Environmental Policy includes measures to manage water pollution IROs upstream in its value chain globally. These measures involve regular wastewater assessments at relevant suppliers, implementing effective wastewater treatment systems, and transparently reporting on suppliers’ wastewater quality.

PUMA adopts industry standards such as the ZDHC MRSL, ZDHC Wastewater Guidelines and AFIRM RSL, aiming to meet or exceed environmental legislation requirements. These industry standards cover most substances listed as REACH SVHCs in our industry.

Our policy outlines actions to mitigate, prevent, and address risks to people and the environment, including incidents. It details our monitoring practices, such as guidelines for product testing to ensure compliance with AFIRM RSL, tracking monthly chemical concentration data, and conducting bi-annual wastewater testing to monitor compliance with ZDHC MRSL. The current policy does not include procedures for managing pollution-related emergencies, which will be addressed in the future revision.

Through joint multi-stakeholder industry initiatives and stakeholder dialogue, PUMA includes key stakeholders’ perspectives in the process of developing the policy related to pollution. The policy is publicly available on our website and accessible to all affected and relevant stakeholders. Detailed information on stakeholder consultation is provided in the General information (SBM-2) section.

Actions and resources related to pollution (E2-2)

Since adopting the ZDHC MRSL and AFIRM RSL standards in 2015, PUMA has implemented them across its global supply chain. All wet-processing facilities must upload their test reports to the ZDHC Gateway, and all materials used in PUMA products must pass the RSL test. PUMA's team, including chemical experts, collaborates with suppliers to phase out restricted chemicals. We train suppliers on water and wastewater management and monitor chemical use and wastewater. Our ongoing due diligence process ensures compliance with ZDHC and AFIRM standards to eliminate hazardous chemicals from our supply chain. PUMA also supports The Microfibre Consortium (TMC)’s efforts to mitigate fibre fragmentation impacts. We have no set completion timeline for these actions and will continue to implement industry guidelines, collaborating with associations to support industry progress.At the end of 2016, ZDHC published the first official Wastewater Guidelines, which PUMA adopted and has been implementing globally. Since 2017, PUMA has required wet-processing facilities with industrial wastewater/sludge generation to upload their test reports to the ZDHC Gateway with ClearStream Report.

PUMA maintains RSL to protect consumers, workers, and the environment. Since 1999, PUMA's RSL has listed potentially harmful chemicals and specified safe concentration limits, adhering to stringent global regulations. Upon our adoption of AFIRM RSL, we collaborated with the AFIRM working group and tested thousands of materials annually for compliance. This approach prevents hazardous chemicals from entering our supply chain, avoiding costly end-of-pipe solutions and ensuring product safety.

We employ a team of 10 experts, including two chemical experts, to collaborate with suppliers on environmental pollution protection. This involves phasing out restricted chemicals (SVHC and ZDHC MRSL) and implementing advanced techniques like ventilation systems and effluent treatment plants to control pollution at the source.

During supplier meetings we communicated our targets and reviewed key performance indicators (KPIs) with core suppliers. We monitor chemical use by our suppliers and their compliance with ZDHC MRSL monthly, and we check their wastewater test results bi-annually using the ZDHC Wastewater Guideline. To strengthen our suppliers’ capabilities, we hosted training with ZDHC-approved third-party experts on chemical procurement and conducted root cause analysis on wastewater testing findings according to ZDHC frameworks. We train suppliers on improving water and wastewater management scores through Higg FEM training.

We assess the effectiveness of our supplier programs by tracking key performance indicators (KPIs) focused on outcomes. These include conformance rates with ZDHC MRSL and AFIRM RSL, wastewater test results against ZDHC standards, and microfibre shedding test results, along with the mitigation measures taken. PUMA participates annually since 2014 in the Corporate Information Transparency Index (CITI) by the Institute of Public & Environmental Affairs (IPE) and the Brands to Zero Assessment of ZDHC. Our performance is evaluated and scored, helping us benchmark against other brands and identify areas for improvement.

The expected outcomes of PUMA's actions related to chemicals include ensuring product safety through stringent compliance with RSL, MRSL, and global regulations while reducing hazardous chemical use and environmental pollution. Over the past five years, we have maintained compliance over 90 % for both ZDHC Wastewater Guidelines and RSL. VOC levels have decreased from 14.7 grams per pair of shoes in 2020 to 11.5 grams per pair in 2024. We will continue to implement this strategy to continuously improve chemical management.

All fibres shed to some extent, and understanding their impacts is crucial. The TMC aims to understand fibre fragmentation and its effects on health and ecosystems. PUMA joined TMC to address environmental concerns from fibre fragments in clothing. PUMA conducts microfibre shedding tests on polyester fabrics, showing a lower level of fibre loss than the TMC average. PUMA continues to support TMC's 2030 roadmap, focusing on research, mitigation strategies, and industry collaboration.

Currently, we do not have financial instruments to support our suppliers in implementing advanced pollution control measures beyond compliance with local and industry standards. Our suppliers have been managing chemical use and pollution control for many years, and the prices we pay for our products already reflect the costs necessary to meet these standards.

All financial resources are operational expenses (OpEx) incurred annually in our supply chain for memberships, product/material certifications, risk assessments and consulting fees.

¹ All resources listed here are included in the Other Operating Income and Expenses chapter of PUMA's consolidated financial statement.

Metrics and targets (MDR-M, MDR-T, E2-3)

The targets on pollution align with PUMA’s Environmental Policy objective to reduce our impact through various actions, including controlling pollution and managing the use of substances of concern and very high concern. PUMA has not set contextual targets and therefore has an overall global target to improve wastewater quality and eliminate hazardous chemicals upstream and downstream.

PUMA’s 2025 and 2030 targets are primarily driven by our sustainability strategy and alignment with international standards rather than specific regulatory requirements. These targets are part of PUMA’s broader commitment to sustainability and are aligned with the SDGs. The 2025 targets were set in 2019 after materiality assessment and stakeholder consultation. As explained in the General information section, the 2030 goals were established in 2024, following a double materiality assessment, stakeholder consultations including suppliers and consideration of current technological advancements.

The ZDHC Wastewater Guidelines, which we refer to in our target, aim to minimise the release of hazardous substances into the environment. Developed by industry experts, these guidelines consider national standards and sustainable development in pollution control and chemical management. The target is voluntary and may exceed local standards. The guidelines set limits for various parameters, including hazardous chemicals listed on the ZDHC MRSL. By following these guidelines, facilities ensure that substances of concern and very high concern are not present in treated wastewater.

PUMA set a compliance rate target to track the presence of ZDHC MRSL substances in wastewater but does not quantify pollution load. We have limited visibility of the amounts of chemicals consumed in production, as not all chemicals in our industry provide substance-level information. For our products, we track the presence of these substances through RSL tests of all materials used; available data shows the concentration in the final product, not the total amount.

10FOR25 Targets (Baseline year 2020)

• 90 % compliance with ZDHC Wastewater Guidelines (upstream, global)
• In 2024, we achieved: 98.8 % compliance to ZDHC Wastewater Guidelines
• Maintain RSL compliance rate above 90 % (up- and downstream, global)
• In 2024, we achieved 98.9 % RSL compliance
• Reduce VOC below 10 gr/pair (upstream, global)
• In 2024, we achieved 11.5 gr/pair for VOC
• Support scientific research on microfibers (upstream, global)
• In 2024, we conducted 12 microfiber shedding tests on 100 % polyester fabrics using TMC’s method.

We will uphold our 2025 targets through 2030, while adhering to stricter standards and requirements that will be developed in the coming years.

These targets are absolute targets. Target results are based on actual material testing or wastewater quality tests, conducted by third-party laboratories, with no assumptions applied. The RSL is reported as a compliance rate in percentage within the time interval of January to October from 638 factories of PUMA core and non-core Tier 1 and Tier 2. The MRSL conformance rate in wastewater is reported as percentage based on bi-annual tests from 147 wet-processing factories of PUMA core and non-core Tier 1 and core Tier 2. Wastewater tests are conducted by ZDHC-approved laboratories between May to October and November to April. The VOC percentage is provided by chemical suppliers from 28 PUMA core and non-core Tier 1 footwear factories with random test by PUMA approved third party tests companies annually. These data are collected from 1 January till 31 December 2024. There is no extrapolation. These metrics are not validated by third parties other than the assurance provider.

The 2025 wastewater target is an absolute target applying for the upstream supply chain and PUMA owned footwear facility in Argentina. The target is based on the industry standard ZDHC Wastewater Guideline. The target was established in 2019. In the baseline year of 2020, we have already achieved a baseline value of 90 % compliance. The target period is from 2020 to 2025. However, since then, we have increased the number of facilities covered by wastewater testing from 72 in 2020 to 150 in 2024.

We have the goal of maintaining RSL compliance to be above 90 %. This target was established in 2019. The baseline year was 2020 along with the baseline value of 98.8 % for RSL test. In 2021 we changed our target from less than 1 % RSL failure rate to maintaining the RSL compliance rate above 90 %, to allow for increased new material development and innovation, where each material is tested, and hence more failures can happen. In any case, 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.

VOCs are chemicals that easily evaporate from solid or liquid materials, commonly found in adhesives, and are released during production processes like footwear assembly; therefore, the VOC reduction goal is to reduce the number of substances of concern and very high concern within the footwear production. VOC is a relative goal of grams per pair of shoes produced. The baseline year was 2020 with a value of 14.7 gr/pair.

In 2024, we conducted 12 microfiber shedding tests on 100 % polyester fabrics using TMC’s method. Results showed PUMA’s fabrics had an average microfiber loss of 0.47 g/kg, lower than the TMC database average of 0.66 g/kg. In 2024, PUMA joined the TMC Policy Committee to align research with policy, raise industry awareness, and provide technical expertise. The committee is developing and validating test methods for microfiber loss and addressing environmental impacts. Efforts are ongoing to scale data collection, address knowledge gaps, and develop a comprehensive research strategy through the Microfibre Data Portal.

Pollution of air, water and soil (E2-4)

PUMA’s own offices, stores and warehouses do not use any water or substances of concern for industrial purposes. Therefore, pollution of air, water and soil are considered not material for PUMA’s own operations. Instead, we are reporting our efforts in the supply chain, where the production of PUMA goods is performed by independent manufacturing partners. Our suppliers are independent third-party entities, unaffiliated with the PUMA Group. Therefore, PUMA has no operational control over our suppliers. Further details are in General basis for preparation (BP-1) section.

Pollution of water

We have performed wastewater testing since 2014 and have measured pollution of water in our upstream supply chain at our core facilities with wet processes using industry standards. Regarding other facilities within our value chain, we are ensuring that they meet the applicable local standards on wastewater.

Since 2020, we have more than doubled the coverage of facilities conducting wastewater testing while still maintaining the level of compliance above 90 %. For the wastewater result, we have improved since 2020 and reached full compliance in 2023 for chlorobenzene, chlorotoluene, perfluorinated chemicals (PFCs) and polyaromatic hydrocarbons (PAHs). This improvement is due to advancements in the chemical industry producing sustainable products and our suppliers' adaptability to new regulations. In the coming years, we plan to work with high and extremely high-risk facilities that do not have adequate risk mitigation measures in place. These activities will include providing training and support in terms of improving MRSL conformance, corrective action plans for ZDHC wastewater failures, improving the Higg FEM water module score, enrolment in resource efficiency programs where possible, raising awareness of wastewater recycling and implementing water reduction initiatives. The purpose of wastewater testing is twofold:

• It ensures PUMA’s vendors and material suppliers apply adequate wastewater treatment methods and technology to their processes, avoiding negative environmental impact on the receiving body of water
• It ensures industry-specific priority hazardous chemicals (as defined in the ZDHC’s MRSL) have been eliminated from PUMA’s supply chain. Testing the water and sludge from different steps of production, such as incoming, process, or wastewater, is one approach for discerning whether the production process involves the use of hazardous chemicals.

Since 2015, we have increased the number of wastewater tests from 33 to 150 facilities. In 2024, we received 282 wastewater test reports for 147 facilities with wet processes both Tier 1 and Tier 2. The results show that all these facilities have at least a 90 % compliance rate with the ZDHC Wastewater Guidelines.

The overall compliance rates for each category are:

• Conventional wastewater parameters: 99.0 %
• Heavy metals: 98.7 %
• Restricted chemicals (MRSL): 98.6 %.

Conventional wastewater parameters apply only to 69 facilities which discharge the treated wastewater directly into natural water bodies. Overall, wastewater results in 2024 remained stable as compared to 2023 (98.8 % conventional wastewater parameters, 99.3 % heavy metals and 98.2 % restricted chemicals for 2023 result). Our 2024 results showed over 90 % compliance rate for all parameters (conventional, heavy metals and restricted chemicals) and align with our 10FOR25 targets.

PUMA also monitors suppliers' wastewater quality via the publicly accessible ZDHC DETOX.Live platform, which provides summaries of chemical management and wastewater quality. For 27 facilities with non-compliance in wastewater testing, we support root cause analysis and corrective actions through training by third-party labs on ZDHC Wastewater Guidelines and individual support from our regional teams. We expect compliance in the next testing cycle in 2025 and will continue to follow up, obtain corrective action plans, and monitor implementation through wastewater testing in 2025.

As described in the Metrics and targets section, the wastewater testing is a snapshot result detecting the presence and concentration of ZDHC MRSL substances in the given wastewater sample. Therefore, data on the volume and amounts of pollutants at the aggregate supply chain level are not available. The ZDHC Wastewater Guideline that we implement to measure our metrics and targets is publicly available on the ZDHC website and validated by industry experts from testing laboratories, brands, suppliers and the chemical industry.

Microplastics

Microplastics are small plastic particles less than five millimetres in size. These are intentionally produced and used in products like cosmetics, personal care items, and textiles that contain glitter. s or materials, but focuses on the release of microplastics, i.e. those which are formed from the breakdown of larger plastic items such as polyester fabric during industrial washing or domestic laundry.

TMC Test Method assesses fibre loss from fabrics during simulated home laundering, determining the number of fibre fragments released into water during washing. The method is based on the ISO 105-C06 standard and uses standard laboratory equipment to provide accurate and comparable data.

PUMA plans to support TMC’s development of a shedding rating system to better understand and reduce microfibre release. This will help us choose fabrics that minimise environmental impact and improve wastewater treatment plants' ability to capture and remove microplastics. This may involve advanced filtration systems, specialised enzymes, or other innovative technologies to ensure microplastics are effectively filtered out before water is released into the environment.

Substances of concern and substances of very high concern (E2-5, E2-6)

Using the industry-standard ZDHC MRSL, we monitor the use of substances of concern and very high concern in chemical products used in apparel, footwear, and accessory manufacturing, as well as their presence in wastewater from our facilities. Tests based on AFIRM RSL ensure final product compliance. While ZDHC MRSL and AFIRM RSL are not identical to REACH SVHC, there is significant overlap, capturing relevant substances for our production. Our facilities are prohibited from using substances listed in ZDHC MRSL, but impurities and contamination may result in SVHC findings in wastewater. Some SVHCs may be used in our supply chain for performance or durability but remain within legal limits in final products.

Based on chemical risk assessments, we identified 27 out of 76 facilities using non-compliant chemicals. In 2025, we will work with these suppliers to provide action plans for using better alternatives.

We track chemical products used in our core Tier 1 and Tier 2 facilities monthly, measuring substances of concern (ZDHC MRSL, AFIRM RSL) and very high concern (REACH SVHC). Data is submitted to the ZDHC database by our facilities and verified by ZDHC-approved third parties. However, limitations in chemical industry data hinder accurate reporting. We need the CAS number, concentration, and consumption volume of each substance, which are not consistently available.

Currently, we have data for 57.7 % of our facilities (56 out of 97) from January to October 2024. Due to data limitations, we aim to report chemical usage data for 2025. To increase transparency, we will engage with the chemical industry and third-party data platforms. We will also continue to develop our suppliers’ capacity through ZDHC training on chemical management to ensure good data quality.