Impact, risk and opportunity management AND STRATEGY
Material value chain related impacts, risks and opportunities in relation to strategy and business model (IRO-1, SBM-3)
PUMA manages its material impacts, risks and opportunities related to workers in the value chain. We followed the same process to identify and assess our material topics as outlined in the General information (IRO-1) section.
The value chain workers covered in this report include are farmers, foresters, primary sector producers, employees in supply chain factories and external warehouses, and local communities around raw material extraction and manufacturing sites. At PUMA, we are dedicated to respecting Human Rights and protecting the environment across our Group companies, suppliers, and business partners. Safeguarding Human Rights is integral to all our business functions.
PUMA has a comprehensive management program for material issues related to workers in the value chain. We evaluate these issues by considering Human Rights violations or social non-compliance, including child labour, excessive overtime, forced labour, unsafe work environments, low income, breaches of freedom of association, unsecured employment, lack of workers’ representation, and insufficient training.
T.69Material value chain workers-related impacts and the relation to business model (IRO-1, SBM-3)
Impacts
Value chain location and time horizon
Connection to impact
Impact on people or environment
Effects on business model and strategy and examples of actions
Material positive impacts
Working conditions
Secured employment boosts local economies through increased consumer spending, supporting businesses and creating jobs
Upstream
Downstream
Medium, long term
Contributed
Local economic stability encourages worker participation in community activities and governance, ensuring a stable and prosperous supply chain for PUMA
When parents have secure jobs, they invest more in their children’s education, leading to better job opportunities and a cycle of prosperity
- Ensure all workers are paid fair wages that meet or exceed local living wage standards
- Promote workers’ rights, including freedom of association and collective bargaining
- Provide enough information about the planned business for suppliers to plan the workforce that is needed
Not working excessive working hours improves workers wellbeing
Upstream
Downstream
Short, medium, long term
Contributed
Ensuring no excessive overtime maintains a healthy and productive workforce, leading to higher job satisfaction, lower turnover, improved efficiency, better product quality, and reduced costs, securing PUMA’s business
Employees in the supply chain could benefit from increased mental health by reducing stress and depression
- Promote workers’ rights, including freedom of association and collective bargaining
- Provide enough information about the planned business for suppliers to set a better production plan
Social dialogue and freedom of association for better working conditions, wages and gender equality
Upstream
Downstream
Medium-term
Directly linked
Social dialogue improves working conditions, as issues can be raised and resolved, helping to maintain a healthy and productive workforce, leading to higher job satisfaction, lower turnover, improved efficiency, better product quality, reduced costs, and securing PUMA’s business
Social dialogue improving working conditions, enabling poverty reduction, gender equality and reduced inequalities
- Set up workers-management committee at factory level
- Promote workers’ rights, including freedom of association and collective bargaining
Equal treatment and opportunities for all
Measures against violence and harassment for a safe workplace
Upstream
Downstream
Short, medium, long term
Contributed
Measures against violence and harassment ensure a safe and productive workforce, supporting PUMA’s business model
These measures enhance the overall wellbeing and mental health of employees in the supply chain, foster an inclusive workspace, and provide opportunities for skill development and career growth
- Set up workers-management committee at factory level
- Train factory staff
Material negative impacts
Working conditions
Job insecurity
Upstream
Downstream
Short, medium term
Directly linked
Job insecurity in the supply chain can lead to higher turnover and lower productivity, potentially disrupting the manufacture of textile and footwear products, which is central to PUMA’s business model
On people
Job insecurity causes workers to worry about their future, negatively impacting mental health, increasing turnover, and reducing productivity
- Set up workers grievance channels
- Provide enough information about the planned business for suppliers to have a better production plan
Excessive working hours
Upstream
Downstream
Short, medium, long term
Directly linked
Excessive working hours lead to an unhealthy and less productive workforce, jeopardising PUMA’s business
On people
Excessive overtime increases the risk of heart disease, stroke, mental health issues, workplace accidents and injuries, reducing productivity
- Set up workers grievance channels
- Set up and implement policy and standards
- Provide enough information about the planned business for suppliers to plan the workforce that is needed
Inadequate wages
Upstream
Downstream
Short, medium, long term
Directly linked
Inadequate wages reduce productivity and morale, increase turnover and costs, lower product quality, and can damage PUMA’s reputation
Inadequate wages can lead workers to debt, reliance on high-interest loans, negative health impacts, and vulnerability to exploitation
- Set up workers grievance channels
- Set workers-management committee at factory level
- Promote workers’ rights, including freedom of association and collective bargaining
Lack of social dialogue and ability to organise
Upstream
Downstream
Short, medium term
Directly linked
Unaddressed worker grievances can escalate into protests and strikes, disrupting production, increasing costs, and potentially damaging PUMA’s reputation and business
Lack of social dialogue and ability to organise and collectively bargaining may frustrate workers and increase their vulnerability to exploitative conditions
- Set up workers grievance channels
- Set up workers-management committee at factory level
- Promote workers’ rights, including freedom of association and collective bargaining
Widespread health and safety issues
Upstream
Downstream
Short, medium and long term
Directly linked
Health issues among factory workers lead to higher absenteeism, lower productivity, disrupted production and increased costs, and affect PUMA’s business
Widespread health and safety issues increase the likelihood of workers taking sick leave, resulting in higher absenteeism, lower productivity, and potential income loss
- Set up workers grievance channels
- Set up and implement OHS policy and standards
Equal treatment and opportunities for all
Widespread practices of unequal pay and opportunities
Upstream
Downstream
Short, medium and long term
Contributed
Unequal pay and opportunities increase vulnerability and can lead to gender-based violence, an unsafe work environment, high turnover, low productivity and legal issues, and potentially damage PUMA’s reputation and business
Unequal pay and opportunities reinforce gender power imbalances, leading to more gender-based violence, harm workers’ health and job satisfaction, while lower income limits women’s access to essential resources
- Set up workers grievance channels
- Target setting, regularly review and analyse pay data to identify and address any gender pay gaps
- Establish and implement policies and standards that ensure equal pay for equal work, regardless of gender
Lack of measures against violence
Upstream
Downstream
Short, medium and long term
Directly linked
Lack of measures against violence and harassment creates an unsafe work environment, leading to high turnover, low productivity, absenteeism, reputational damage, legal issues, and loss of consumer trust, ultimately affecting PUMA’s business
Lack of measures against violence can cause workers to suffer from physical and mental health issues, and women may face reproductive health complications
- Set up workers grievance channels
- Set up workers-management committee at factory level
- Train factory staff
Other work-related rights
Child labour
Upstream
Downstream
Long term
Directly linked
Potential child labour in PUMA’s supply chain can severely damage its reputation, leading to a loss of consumer trust, boycotts, legal consequences, and financial penalties
Hiring child labour in the supply chain restricts their education opportunities, earning potential, and perpetuates poverty. This delays economic development and increases social inequality
- Establish and implement clear policies and standards
- Zero tolerance approach
- Set up workers grievance channels
- Engage in industry initiatives to mitigate the risk of child labour upstream in the supply chain
Forced labour
Upstream
Downstream
Short, medium, long term
Directly linked
Forced labour in the supply chain can lead to legal issues and reputational damage and can severely impact PUMA’s business
Forced labour can lead workers to mental and physical health issues like chronic anxiety and sleep disorders
- Implement policies and standards
- Zero tolerance approach
- Set up workers grievance channels
T.70Material value chain workers-related risks and opportunities and the relation to business model (IRO-1, SBM-3)
Risks and opportunities
Value chain location and time horizon
Origins, dependencies and relation to business
Mitigation actions and measures
Risks
Working conditions
Unsecured employment can lead to reputational and regulatory risks
Upstream
Downstream
Short, medium, long term
Rising wage costs, fluctuating material prices, and evolving regulations impact sourcing markets, leading to unstable employment, labour shortages, production delays and higher costs, potentially affecting PUMA’s sales due to late deliveries and quality issues
- Promote workers’ rights, including freedom of association and collective bargaining
- Provide enough information about the planned business for suppliers to plan the workforce that is needed
Reputational risks related to excessive working hours
Upstream
Downstream
Short, medium, long term
Inaccurate sales forecasts and local minimum wage can lead to excessive working hours. Low productivity, inefficient suppliers, and reports of excessive working hours increase costs, cause delays, damage PUMA’s brand image and erode its competitive advantage
- Promote workers’ rights, including freedom of association and collective bargaining
- Provide enough information about the planned business for suppliers to set a better production plan
Reputational risks due to inadequate wage
Upstream
Downstream
Short, medium, long term
Low legal minimum wages result in inadequate pay, potentially harming PUMA’s brand image through negative publicity, loss of consumer trust, and decreased sales
- Set up workers grievance channels
- Set up workers-management committee at factory level
- Promote workers’ rights, including freedom of association and collective bargaining
Reputational and regulatory risks due to freedom of association breach
Upstream
Downstream
Short, medium, long term
In countries that have not ratified the ILO Convention on freedom of association or which do not comply with international standards, workers face union restrictions, while breaches at PUMA suppliers can harm its brand image, decrease trust and sales, and deter investors. PUMA could also face financial legal penalties
- Set up workers grievance channels
- Set up workers-management committee at factory level
- Promote workers’ rights, including freedom of association and collective bargaining
Reputational and regulatory risks due to health and safety issues
Upstream
Downstream
Medium term
Non-compliance with health and safety regulations can lead to fines, legal actions, and harm PUMA’s reputation. PUMA could also face financial legal penalties
- Set up climate adaptation plan including reskilling and upskilling for new technologies or green jobs
Equal treatment and opportunities for all
Reputational risks arise from inadequate training and development programs for adopting new climate adaptation technologies
Upstream
Downstream
Medium term
Climate adaptation plan implementation depends on the level of education. Without upskilling for new green jobs, suppliers lacking climate adaptation skills could face extreme weather vulnerabilities, causing supply chain disruptions, higher costs, inefficiencies, and harming PUMA's sustainability targets and reputation
- Set up climate adaptation plan including reskilling and upskilling for new technologies or green jobs
Other work-related rights
Regulatory and reputation risks related to child labour
Upstream
Medium term
One of the root causes of child labour is poverty. Despite strict policies and audits by PUMA, without supply chain traceability, child labour could persist in deeper supply chain tiers, leading to potential legal penalties and reputational damage that can decrease customers and investors’ trust, sales and revenue
- Establish and implement clear policies and standards
- Zero tolerance approach
- Set up workers grievance channels
- Engage in industry initiatives to mitigate the risk of child labour upstream in the supply chain
Regulatory and reputation risks related to forced labour
Upstream
Medium term
Lack of supplier traceability, low local wages, and poverty can lead to forced labour, resulting in fines, reputational damage, loss of customer trust, and reduced investment opportunities
- Zero tolerance approach in sourcing
- Supply chain traceability
- Implementation of Code of Conduct and Social Standards setting measures
Opportunities
Equal treatment and opportunities for all
Competitiveness in the market due to job security
Upstream
Downstream
Short, medium, long term
Lower employee turnover reduces costs, fosters innovation, minimises supply chain disruptions and enhances PUMA’s competitiveness. Success hinges on the local government’s strategy for maintaining stable employment
- Set up workers grievance channels
- Provide enough information about the planned business for suppliers to have a better production plan
Diverse teams unlocking innovation and new revenue streams
Upstream
Downstream
Long term
Companies with above-average diversity generate more revenue from innovation due to diverse teams bringing unique perspectives and ideas and enhances PUMA’s competitiveness. Local cultural barriers might hinder efforts to achieve diversity
- Set up workers grievance channels
- Target setting, regularly review and analyse pay data to identify and address any gender pay gaps
- Establish and implement clear policies and standards that ensure equal pay for equal work, regardless of gender
Driving innovation via training and skills development
Upstream
Downstream
Medium term
Skilled workers are essential for driving innovation and climate adaptation, which in turn creates new markets and ensures supply chain stability. However, this relies on local education systems to provide the necessary upskilling for green jobs
- Set up climate adaptation plan, including reskilling and upskilling for new technologies or green jobs
Safeguarding Human Rights is integral to our operations, with zero tolerance for violations as outlined in our Code of Ethics, Code of Conduct, and Human Rights Policy.
As a responsible business partner, we recognise that our business practices and trading terms can impact our suppliers' factories. To ensure the interests, views, and rights of workers in our value chain are protected, factories producing for PUMA are regularly monitored for compliance with the PUMA Code of Conduct. Workers can raise their concerns through the various channels PUMA provides. We consider workers vulnerable if they face poor working conditions and job insecurity, including self-employed, unpaid family workers, informal, low-skilled, migrant workers, and women and minorities facing discrimination and limited opportunities.
In 2024, PUMA engaged in extensive stakeholder consultations to shape its 2030 sustainability targets. Additionally, a double materiality assessment was conducted to prioritise key sustainability issues for our long-term strategy and identify material topics for target setting. Stakeholder consultation details are explained in the General information (SBM-2) section.
PUMA’s 2030 sustainability strategy aligns with our business model by prioritising people and sustainability. By embedding these principles into our operations, we aim to meet the growing demand for responsible and ethical products. We are committed to integrating worker rights into our business strategy, mitigating negative impacts, and adapting our business model to address key issues.
PUMA adopted the ELEVATE intelligence (EiQ) tool to assess supply chain risks and manage material risks for suppliers, factories and sites. The scope of the current risk assessment is only PUMA. We plan to include stichd in 2025 for our risk assessment and develop appropriate countermeasures. We also evaluated the social risks of key materials like cotton, polyester, leather, and rubberat the commodity level. We found risks of child and forced labour in cotton, leather, and rubber.
Policies related to value chain workers (S2-1)
The Management Board is responsible for the approval and implementation of Human Rights Policy. Various departments manage implementation of the policy and report progress regularly to the Management Board and leadership team.
PUMA’s policies address material topics identified in its double materiality assessment, focusing on financial, societal, and environmental impacts. Our Human Rights Policy commits to respecting Human Rights and protecting the environment across our operations, suppliers, and business partners. This includes upholding the Universal Declaration of Human Rights and ensuring rights such as adequate living standards, freedom of association, access to clean water, and a safe working environment free from discrimination, forced labour, or child labour. We have zero tolerance for Human Rights violations, as outlined in our Codes of Conduct and Ethics.
The policy applies to our entire value chain, including sourcing, production, procurement, logistics, sales, and other business activities. It also covers ethical advertising and consumer rights in all business locations.
Our policy aligns with international standards such as the UN Guiding Principles on Business and Human Rights, the International Bill of Human Rights, which consists of the Universal Declaration of Human Rights and the two Covenants that implement it, the ILO’s Declaration on Fundamental Rights and Principles at Work, the Ten Principles of the UN Global Compact, and OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector.
We conduct due diligence to identify and mitigate Human Rights risks, including regular audits and assessments. Training is provided to employees and suppliers on Human Rights principles, and we have grievance mechanisms for confidential reporting of human rights violations, ensuring prompt and effective resolution.
PUMA engages with value chain workers and stakeholders to gather feedback and incorporate their interests into the policy. This includes exploring impact measurements, strengthening industry collaborations, and developing communication strategies to make our Human Rights efforts meaningful to consumers. The policy is available to all stakeholders through our website and other communication channels, ensuring transparency and accessibility.
Our Code of Conduct includes provisions addressing worker safety, precarious work, human trafficking, and the use of forced labour or child labour, in line with applicable ILO standards. Key commitments specifically relevant to value chain workers include:
Fair wages and reasonable working hours, in compliance with local laws and international standards
Safe and healthy working environments, free from hazards and risks
Support for the right of workers to form and join trade unions and engage in collective bargaining
Strict prohibition of forced labour, human trafficking, and child labour
Equal opportunities and prohibition of discrimination based on race, gender, age, religion, or any other status
Access to effective grievance mechanisms to report and resolve Human Rights violations.
All suppliers must display our Code of Conduct, which includes contact details for our Sustainability team as a whistleblower hotline. Grievances received and resolved are reported. In 2024, we updated our Code of Conduct to clarify definitions of child labour, slavery, supply chain traceability, use of security forces, chemical and waste management, and land rights. The update also emphasises our commitment to remediation and provides guidance on using the PUMA hotline for grievances.
We disclose cases of non-adherence to the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, or OECD Guidelines for Multinational Enterprises involving value chain workers. Issues identified during our auditing and hotline activities are classified as zero tolerance, critical, or other issues in our Sustainability Handbooks. Zero tolerance issues result in immediate audit failure. New factories with these issues cannot produce PUMA goods, and established suppliers must address them immediately. If a factory fails to cooperate, the business relationship may be terminated. Other issues related to PUMA Code of Ethic are monitored by our Compliance team.
Engagement with value chain workers about impacts (S2-2)
PUMA integrates the perspectives of value chain workers into its decision-making processes to manage actual and potential impacts effectively. This is achieved through several key practices:
Feedback from value chain workers is collected through annual surveys, grievance mechanism interviews, and dialogue sessions. This feedback is crucial for assessing the effectiveness of PUMA’s sustainability initiatives and targets and making necessary adjustments
PUMA’s due diligence processes include evaluating the working conditions and rights of value chain workers every 6 – 24 months, based on the level of risk. Insights gained from these evaluations are used to mitigate risks and enhance worker welfare.
PUMA collaborates with industry peers and expert organisations to benchmark best practices and incorporate value chain workers’ perspectives into broader industry standards.By systematically incorporating the views of value chain workers, PUMA ensures that its decisions and activities are aligned with the needs and expectations of those directly affected by its operations.
Stakeholder dialogue was conducted to review PUMA’s Vision 2030 strategy and targets. Representatives from the trade union IndustriAll, the multi-stakeholder organisation Fair Labor Association (FLA), the Non-Governmental Organisation (NGO) Better Cotton, which works with cotton farmers, and various Human Rights experts representing affected stakeholders provided their perspectives.
In 2023, PUMA developed a CSOs engagement policy, which was approved by the FLA. This policy formalises PUMA’s commitment to engage with CSOs for information sharing and consultation purposes. This can lead to collaboration on specific challenges or remediation. Criteria for engagement are based on high-risk and high-production volume countries, severity and likelihood of violations or risks, knowledge gaps regarding new or upcoming risks, persistent issues identified through factory monitoring or risk assessment, and concerns raised through PUMA grievance mechanisms and third-party reports. This policy ensures that PUMA remains transparent and responsive to the concerns of CSOs and other stakeholders and will be implemented in the coming years.
Since February of 2024, PUMA engaged in a project called Access to Remedy for (Refugee) Workers under The Partnership for Sustainable Textiles (PST). The main goal is to improve working conditions for refugees in the Turkish textile industry. This is to be achieved by strengthening access to the grievance mechanism and remedies for (refugee) workers in the Turkish textile supply chain of PST member companies and enabling them to be aware of their workplace-related rights and know how to assert those rights.
Remediation of negative impacts and channels for value chain workers to raise concerns (S2-3)
PUMA is working towards providing access to functioning grievance channels throughout its supply chain. Where we do not have direct operations, we seek partners who can run such complaints mechanisms, in accordance with the UN Guiding Principles. At the cotton farm level, the Better Cotton Grievance procedure provides a system for anyone engaged with its activities, people, or programmes to raise a complaint relating to any aspect of Better Cotton and its activities, including third parties.
PUMA and its suppliers offer different grievance channels to any worker as well as third parties, including CSOs, to raise their concerns regarding Human Rights, environmental protection, and violations of PUMA’s policies. Such concerns can be raised through workers’ voice platforms, the PUMA hotline, and FLA third-party complaints. We operate multiple worker voice channels to reach more than half a million workers at our Tier 1 and core Tier 2 factories. Third-party engagement platforms cover 97 factories, representing over 79.7%% of our production volume. In 2024, PUMA’s subsidiary stichd, which produces bodywear and socks, piloted MicroBenefits CIQ in Vietnam and plans to expand it to more factories in 2025.
PUMA has published its Rules for the Complaints Procedure, explaining how PUMA’s employees and the employees of PUMA’s business partners, as well as external stakeholders, can submit complaints related to Human Rights, environmental risks and violations, or breaches of PUMA’s policies. It explains the complaint submission process, confidentiality, non-retaliation, remedial actions, and how we assess the procedure's effectiveness.
PUMA aims for a safe environment free from harassment, intimidation, discrimination, and retaliation for those who submit complaints. PUMA works with business partners to protect the complainants’ identity and ensure they do not face violence, threats, or harassment. In 2023, we reviewed our grievance system, surveying 14,823 workers across 45 factories in eight countries. The PUMA hotline was deemed legitimate by 94% of workers, accessible by 80%, and available in their language by 92%.
Out of 12 allegation cases related to freedom of association breaches received in 2024. 11 were resolved through active engagement with factories, unions, and stakeholders. In Cambodia, union representatives were reinstated, and the factory joined the Better Factory Cambodia Industrial Relations programme. Another case involved union concerns about factory management monitoring their activities, which was resolved by providing a private space for union meetings. One case in Türkiye regarding a union's request for a Collective Bargaining Agreement is still under the FLA Third Party Complaint process.
As we observed several allegations related to freedom of association breach in Cambodia, in 2024, we partnered with Better Factories Cambodia to host training for 204 participants from 32 factories, covering topics like Freedom of Association and labour dispute resolution. All factories submitted CAPs, which we will verify in 2025. CENTRAL, a local NGO, released a report on Freedom of Association in Cambodia, leading to government-aligned unions calling for an investigation into CENTRAL. PUMA and other brands urged the Cambodian government to cancel the audit and respect civil society.
Actions on material impacts on value chain workers, and managing material risks and opportunities related to value chain workers (S2-4, MDR-A)
PUMA has several internal functions dedicated to managing impacts, ensuring negative impacts are mitigated and positive impacts are advanced. Key functions and their actions include:
Sustainability department develops and implements PUMA’s sustainability strategy, conducts sustainability audits, and collaborates with external stakeholders to improve sustainability practices
Human Rights Officer and Compliance team monitor PUMA’s risk management system, conducts risk analysis relating to Human Rights, and ensures compliance with Human Rights due diligence regulations
Risk management function conducts formal interviews with selected risk owners on a semi-annual basis to identify, evaluate, and report risks
Internal audit provides independent assurance on the effectiveness of PUMA’s risk management and internal controls, conducts audits of various departments, reviews compliance with policies, and recommends improvements.
Mitigation measures include factory monitoring, grievance mechanisms, supplier scorecards, business integration, goal setting, and reporting. The effectiveness of these measures is evaluated based on compliance and progress. PUMA’s social monitoring programme, accredited by the FLA, ensures fair labour standards and the remediation of violations. Frequent audit findings are publicly reported, and social KPIs on working hours, wages, and injury rates are published.
PUMA will take all appropriate measures to prevent, end, or minimise such violations or potential risks immediately, in accordance with the severity and the principle of proportionality. Appropriate measures include risk analysis, audits and/or on-site inspections, preventive measures such as training, and/or implementation of a Corrective Action Plan (CAP). PUMA expects full collaboration from its business partners throughout the remediation process. In the case of unresolved violations due to a lack of collaboration, PUMA reserves the right to terminate the business relationship with the business partner involved.
PUMA has established a comprehensive process to identify actual or potential negative impacts on value chain workers:
PUMA conducts regular audits and assessments of its suppliers to identify risks related to labour practices, working conditions, and Human Rights
When issues are identified, PUMA performs a root cause analysis to understand the underlying factors contributing to the problem
PUMA engages with stakeholders, including workers, suppliers, and NGOs, to gather insights and feedback on potential impacts and appropriate actions
Based on the findings, PUMA collaborates with suppliers to develop and implement action plans aimed at mitigating the identified risks and improving conditions.
PUMA ensures effective remedy processes for material negative impacts on value chain workers through the following approach:
PUMA provides accessible grievance mechanisms for workers to report issues. These mechanisms are designed to be confidential and protect workers from retaliation
PUMA continuously monitors the implementation of corrective actions through regular audits and follow-up assessments to ensure that issues are resolved effectively
PUMA engages with various stakeholders, including workers, NGOs, and local communities, to gather feedback and ensure that the remedies are effective and meet the needs of those affected
PUMA provides training for suppliers and workers to build capacity and ensure they understand their rights and the available grievance mechanisms.
PUMA is actively pursuing several initiatives to enhance opportunities for value chain workers:
Fair wage initiatives: PUMA is working towards fair wages across its core factories by collaborating with suppliers to meet or exceed local wage standards
Training and development: PUMA provides training programmes to improve workers’ skills and productivity, which can lead to better job security and career advancement
Health and safety improvements: PUMA is working to implement better health and safety standards in factories to create safer working environments
Responsible sourcing practices: PUMA is focusing on responsible sourcing practices that not only protect the environment but also improve working conditions and job stability for workers
Stakeholder engagement: PUMA engages with various stakeholders, including workers, suppliers, and NGOs, to gather feedback and continuously improve their practices.
The expected outcomes of PUMA's actions on Human Rights include improved working conditions, fair wages, and enhanced safety for workers throughout their supply chain. PUMA aims to resolve worker complaints effectively, increase transparency, and ensure compliance with international Human Rights standards. These efforts contribute to a more ethical and sustainable business model, fostering trust and collaboration with stakeholders.
Social monitoring program
At PUMA, we manage our material impacts on supply chain workers from all Tier 1 and core Tier 2 suppliers through regular audits. We track the effectiveness of our actions to improve working conditions using tools such as audits, training, surveys, and metrics. Our actions support the Sustainable Development Goals. PUMA actively involves value chain workers and their legitimate representatives in the design and implementation of its programmes and processes through several key approaches.
Since 1999, all direct PUMA Tier 1 factories have been frequently audited for compliance with ILO Core Conventions and environmental standards. Each year, 500–600 audits or assessment reports are collected. The audit programme also includes key Tier 2 suppliers and priority warehouses. PUMA’s social compliance programme, accredited by the FLA, plays a crucial role in addressing Human Rights issues in several ways: the programme ensures that all factories producing PUMA goods adhere to the most stringent standards of fair labour practices. This includes compliance with local labour laws, fair wages, reasonable working hours, and safe working conditions.
In 2022, over 200 non-core Tier 2 suppliers were mapped, with only 13 having social audits. These reports were converted into PUMA’s grading system. In 2024, we used a risk-based approach to set up a roll out audit plan to 82 non-core Tier 2 factories. We used EiQ to map social risks evaluating risks based on geography, product, and audit results. We will expand our social monitoring programme to these factories, starting audits in 2025 for 12 extremely risky factories, in 2026 for 48 high-risk, and in 2027 for 22 medium-risk. The main risks include freedom of association, forced labour, working hours, and occupational safety.
We have a team of compliance experts in all our major sourcing regions who regularly visit our core manufacturing partners. We work with external compliance auditors and with the ILO’s Better Work Programme. Each PUMA supplier factory must undergo a regular compliance audit every six to 24 months based on their audit rating. All issues identified need to be remedied as part of a CAP.
We believe in using industry collaborations to introduce sustainable processes and find impactful solutions. PUMA has been a long-term member of various industry groups addressing environmental and social issues collectively. PUMA collaborates with organisations like Better Work, the FLA, and the Fair Wage Network (FWN). These partnerships help PUMA understand and address the needs and concerns of value chain workers.
To avoid duplication and audit fatigue, we increased shared assessments to 70.9% in 2024 (up from 67% in 2023). We plan to use assessments based on the Social & Labor Convergence Program (SLCP), a universal social assessment tool aimed at reducing the burden of redundant and resource-intensive social audits, for 370 factories in 2025. SLCP is ideal for building long-term supplier relationships and supporting them in managing their social and labour data. PUMA uses Better Work assessment reports and FLA-accredited brands' reports in lieu of our compliance programme. We aim to use external reports for up to 80% of our factories by the end of 2025.
Our Sustainability Handbook for Social Standards details our supplier compliance programme, including grievance mechanisms and case studies. In 2023, 1,035 participants from 557 factories completed e-learning training based on our social handbook, and in 2024, 601 participants from 587 factories passed the refresher course, covering 78.2% of PUMA’s active factories.
In 2023, we developed supplier scorecards to better visualise our strategic performance towards 2025 targets, and in 2024, we included our 2030 targets. The scorecards cover Social KPIs such as audit ratings, worker training, injury rates, and fair wage performance. In 2024, PUMA held individual meetings with 38 suppliers to review the performance of 57 core Tier 1 factories using a scorecard.
In 2023 and 2024, suppliers were reminded that using undeclared subcontractors is a Zero Tolerance issue. They were asked to self-declare their Tier 1 subcontractors. In 2024, audits were conducted for Tier 1 and Tier 2 suppliers and warehouses, safeguarding the rights of over 671,000 workers.
PUMA used EiQ Sentinel tool to monitor near-real-time alerts on labour, health, safety, environment, ethics, and management systems in our supply chain. In 2024, four potential new factories had alert cases; three were onboarded after resolving issues, while one was not due to unresolved fire safety concerns. For existing factories, four alert cases were found, including a factory closure in Indonesia, a workers’ protest in Argentina, and two payment issues in Bangladesh, all resolved with PUMA’s intervention.
In April 2024, we uploaded 698 audit results to the EiQ platform, identifying 14 high-risk factories due to issues like working hours management and missing safety or environmental permits. We followed up, with 71.4% obtaining safety certificates and improving practices. One factory is under review, and three were deactivated due to non-compliance.
We also evaluated the social risks of key materials like cotton, polyester, leather, and rubber using the EiQ platform. The assessment covered risks such as child labour, forced labour, chemical exposure, unfair treatment, wages, and working hours. Results showed cotton has the highest social risks, followed by natural rubber and leather, with polyester having the lowest.
We do not make estimations or assumptions regarding audit-related KPIs, including any limitations. The audit findings are identified by an external third-party auditor other than the assurance provider. Each audit finding is labelled and defined with clear and precise names and descriptions.
PUMA’s commitment to transparency includes public reporting on its sustainability efforts and Human Rights initiatives. This transparency allows value chain workers and their representatives to hold PUMA accountable and provide feedback on its programmes. Frequent audit findings at 258 active factories (tier 1 and Tier 2 excluding new factories) are publicly reported in the table below.
Excessive overtime is a common audit finding, despite PUMA’s Code of Conduct limiting workweeks to 48 hours with one day off every seven days. Total weekly hours, including overtime, should not exceed 60 hours or local labour laws.
PUMA provided working hours management training for all Tier 1 factories and held root cause analysis workshops with core suppliers in 2022 and 2023. Factory management improved policies and monitoring systems, and action plans were developed to address overtime causes. PUMA also tracks the weekly average overtime of core Tier 1 suppliers annually.
T.71Number of most frequent audit findings1
Findings
2024
2023
Working hours management
72
77
Social security benefit
60
62
Legal obligation
41
46
Systematic excessive overtime
31
40
Fire safety equipment
25
18
Insufficient overtime wage
14
9
Chemical safety management
11
5
Dismissing and downsizing
10
9
OHS risk management
8
9
No pay slip
7
3
1 Only active factories audited in both 2023 and 2024 are included for a year-to-year comparison
Working conditions
Job security
Workers may face job insecurity due to weak labour protections and informal employment. PUMA’s Purchasing Practice Policy, developed in 2019, aims to minimise negative impacts on workers, promote fair labour practices, and secure jobs by avoiding drastic order reductions or irresponsible business relationship terminations.
In 2023, we added a clause to PUMA’s Purchasing Practice Policy requiring a minimum six-month notice for ending partnerships or downscaling orders, published in January 2024. In 2024, 333 staff members participated in refresher training on responsible sourcing practices, emphasising the link between purchasing practices, working conditions, and Human Rights.
We track permanent employee percentages and turnover rates of core Tier 1 factories to develop improvement plans.
Freedom of association and social dialogue
PUMA is committed to effective social dialogue and industrial relations. We encourage suppliers to join the ILO Better Work Programme, which supports factories setting up participating committee to facilitate communication and building trust between workers and management. PUMA ask suppliers to join Better Work program in Bangladesh, Cambodia, Indonesia, Pakistan, Egypt and Vietnam. We have partnered with Timeline Consultancy to train our Sustainability Team in promoting Worker Representative Committees in factories not enrolled in the Better Work Programme.
Since 2022, all 19 core Tier 1 factories in China have established Worker Representative Committees, with 52.8% of representatives being female. Surveys showed increased trust, awareness, and productivity. The programme expanded in 2023 to include factories in Vietnam, Indonesia, the Philippines, and Pakistan. By the end of 2024, 91.4% of our core Tier 1 factories had freely elected worker representation, up from 66% in 2023.
To ensure workers’ voices are heard, we signed the Indonesia Freedom of Association (FoA) Protocol, aiming to eliminate union busting, foster healthy industrial relationships, and set fair rules for FoA. By the end of 2024, 10 Tier 1 factories had agreed to apply the protocol with 21 unions, resolving FoA cases internally without escalation.
The Americas Group is a multi-stakeholder forum promoting socially responsible apparel and footwear industries in the Americas. The Mexico Committee focuses on FoA and collective bargaining, hosting webinars and developing guidance for compliance with labour laws. Representatives from one Tier 1 and one Tier 2 PUMA factory attended both webinars. In June 2024, the Mexico Committee approved the Employer Guidance on FoA and Collective Bargaining. The next step is to follow up on its implementation at Mexico factories producing for PUMA in 2025.
Fair wages
To ensure fair wages, PUMA has a zero tolerance policy for failing to pay at least the minimum wage. Suppliers must fully comply with local wage regulations to become or remain active PUMA partners. Since 2018, we have collaborated with the FWN to assess and improve wage practices at our factories.
The FWN assessment evaluates wage practices, identifying strengths and areas for improvement. FWN collaborates with factories to set up remediation plans to address issues like wage structures and communication strategies to enhance working conditions. Positive outcomes include strong factory performance in on-time wage payment, compliance with wage laws, and non-discriminatory practices. However, some factories need to adjust wages for inflation and involve worker representatives in wage discussions. Overall, worker satisfaction with wages and conditions has been high, with over 80% of surveyed workers being satisfied.
In 2024, we conducted Fair Wage Assessments with 10 factories in Bangladesh, Indonesia, Vietnam, the Philippines, and China. Eight factories started Fair Wage Remediation due to gaps in meeting the living wage benchmark.
Since 2018, we have collected annual wage data from our core Tier 1 factories. In 2024, we used the FLA’s Fair Compensation Dashboard to analyse 2023 wage data for 57 strategic Tier 1 factories, covering 136,097 workers:32 factories paid a living wage on average to 70,602 workers in Cambodia, China, Indonesia, Pakistan, Türkiye, and Vietnam, covering 45.9% of PUMA’s global production volume. These 70,602 workers represent 11.6% of our total supply chain workforce.
Health and Safety
PUMA conducts regular occupational health and safety (OHS) assessments and building safety inspections in high-risk countries.
PUMA signed the ACCORD agreement for Bangladesh and Pakistan, a legally binding agreement designed to improve safety in the garment industry in these countries. It respects human rights by ensuring safe working conditions for garment workers, thereby protecting their right to a safe and healthy work environment. It also empowers workers by involving them in safety initiatives and providing mechanisms to report safety concerns without fear of retaliation.Through the mechanism, we received a few cases of delayed payments and managerial abuse, all of which have been addressed.
In 2021, we updated our OHS Handbook and provided training to core Tier 1 and Tier 2 suppliers on OHS risk assessments. In 2024, accident reporting violations in trained factories decreased from four in 2023 to two in 2024. We will continue to emphasise accident reporting in 2025 training sessions. In 2024, we developed Fire Safety training for 72 factories and machinery safety training for 38 footwear factories. We will follow up on improvements during on-site visits in 2025.
In 2024, we used the EiQ risk assessment tool to assess building safety risks in sourcing countries. Four factories in India and one in Indonesia underwent Fire Safety Assessments, identifying several issues, with 45.8% resolved by August. The remaining issues are expected to be addressed by mid-2025. In Türkiye, we reviewed 26 factories for earthquake compliance, with 10 submitting valid permits and 15 requiring inspections. Five factories completed inspections, with two needing building reinforcements. New factories must provide valid occupancy permits or inspection reports.
Equal treatment and opportunities for all
Gender equity and measures against violence and harassment at the workplace
Training women about their rights and empowering them is crucial for gender equality. At PUMA partner factories, 59.7% of workers are women, 48.5% of managerial positions at core Tier 1 suppliers are held by women, and 7.9% of core Tier 1 suppliers are owned by women.
Since 2021, 290,226 participants have completed Sexual Harassment Prevention training.
In 2023, we partnered with the China National Textile and Apparel Council to launch the Family-Friendly Factories project at three core factories in China, benefiting 5,747 workers in 2024. The project developed and implemented policies on maternity protection, caregiving support, and flexible work arrangements. By 2024, the factories achieved significant milestones, including forming Family-Friendly Committees and establishing Mother and Baby Care Rooms. These efforts reduced employee turnover by 18.9% on average. We expanded the programme to three more factories in September 2024 and will continue to monitor progress.
The Ready-Made Garment sector has driven Bangladesh’s economic growth, with women making up 60% of the workforce but only 5% of line supervisors. The Gender Equality and Returns programme, a collaboration between the IFC and ILO, aims to improve this by promoting women’s career progression in the garment industry through comprehensive training in soft and technical skills. In June 2024, PUMA launched the Gender Equality and Returns programme in a Bangladesh factory, selecting 10 female workers for training. The factory completed all sessions in 2024, and PUMA plans to expand the programme to three more factories in 2025.
Other work-related rights
Forced labour
Since signing the Fair Labor Association/American Apparel and Footwear Association Commitment to Responsible Recruitment in 2018, PUMA has actively collaborated with suppliers, industry peers, and the UN’s International Organisation for Migration (IOM) to protect the rights of foreign and migrant workers in our supply chain. We annually assess if our factories employ foreign migrant workers whether they have paid recruitment fees, since it can lead to debt bondage or risk of forced labour. We then work with our sourcing leaders, supplier top management, and sometimes other brands to agree on a repayment timeline for migrant workers. Repayments are sometimes made in instalments to avoid misunderstandings among workers, as not all are eligible for this payment.
From 2020 to 2024, 284 workers across 14 factories were reimbursed approximately USD 178,000. In 2024, we identified and addressed recruitment fee issues in Taiwan, Japan, and Mauritius, and conducted training on responsible recruitment. We also signed a three-year partnership with IOM to eliminate recruitment fees and sustain progress.
T.72Financial resources allocated to value chain workers related actions (in million €) (S2-4)1
All financial resources are operational expenses (OpEx) incurred annually in our supply chain for memberships, factories programs, and consulting fees. As part of our commitment to respecting human rights, we ensure that social projects are fully or partly funded from our own budget. We do not currently use external sustainable finance instruments, such as social bonds. Our action plan depends on local policies, when countries have gaps in labor laws, we apply international standards defined under ILO core conventions.
Metrics and targets (MDR-M, MDR-T, S2-5)
PUMA's sustainability targets apply upstream in the value chain and align closely with its Human Rights Policy objectives. Both aim to ensure ethical practices throughout the company's operations and supply chain.
As part of our Vision 2030, we have set specific targets for upstream value chain workers. These targets align with and support our business strategy and policy objectives. During the target-setting process, we considered our impact areas, international trends in human resources, PUMA’s data trends over the years, and benchmarks from peers. These targets were established after consultations with internal stakeholders, presentation at the Stakeholder Dialogue meeting, and approval from both the Management Board and Supervisory Board, including employee representatives.
PUMA organises regular meetings with expert stakeholders, including NGOs, labour unions, and industry experts. These meetings help identify lessons learned, refine sustainability targets, making them more measurable and ensuring that no key themes are missing. Stakeholder dialogues were held to review PUMA’s 2030 strategy and targets, with trade union representatives (IndustriAll), a multi-stakeholder organisation (FLA), an NGO working with cotton farmers (Better Cotton), and human rights experts providing their perspectives. PUMA’s commitment to transparency includes publishing detailed reports on its sustainability targets and progress. These reports are shared with stakeholders, who can then provide feedback and hold PUMA accountable.
All defined specific, measurable, achievable, relevant, and time-bound (SMART) targets were developed by PUMA and are global and are set for five years. Progress towards targets is as initially planned.
Vision 2030 Targets (Baseline year 2025)
400,000 workers trained on Human Rights (forced labour, freedom of association, OHS) (upstream, global)
Progressive salary increase towards living wage at core factories (upstream, global)
No recruitment fees for foreign migrant workers (upstream, global)
Zero gender pay gap at core factories (upstream, global)
100% core Tier 1 CEOs sign the UN Women Empowerment Principles (entity specific, upstream, global)
Through these targets, we aim to improve working conditions in supplier factories, ensure fair compensation by setting a living wage target, protect foreign migrant workers from recruitment fees to mitigate forced labour risks, and enhance gender equity in our strategic Tier 1 factories. Progress towards the targets is measured annually, with data collected through social audits and the social reporting campaign, with contributions from upstream value chain factories. Additionally, we consider relevant and internationally recognised benchmarks, such as the Global Living Wage Coalition, for the living wage target. All set targets contribute to our progress in SDGs.
10FOR25 Targets (Baseline year 2020)
Train 100,000 direct and indirect staff members on women’s empowerment (baseline value: 0) (upstream, global)
In 2024, the accumulated number of participants in sexual harassment prevention training came to 290,226
Zero fatal accidents in suppliers (baseline value: Zero fatal accidents since 2018) (upstream, global,including stichd)
In 2024, we unfortunately had one fatality at one of our factories in China. An employee suffered a heart stroke in the workshop during working hours. By law, this is considered a work-related fatality
Reduce accident rate to 0.5 in suppliers (baseline value: injury rate reduced from 0.5 to 0.4) (upstream, global)
In 2024, the average injury rate in our core Tier 1 factories 0.2%
Ensure effective and freely elected worker representation at all core Tier 1 suppliers (baseline value: 33% core Tier 1 factories have elected workers' representative) (upstream, global)
In 2024, 91.4% of our core Tier 1 factories have freely elected worker representation, from 66.1% in 2023
No zero tolerance issue remains open (upstream, global)
No zero tolerance issue open.
Social data on sexual harassment prevention training is primary data from 152 core and non-core PUMA Tier 1 factories, accumulated from January 2021 to December 2024 with no extrapolation. Fatalities and injury rate are primary data for 57 PUMA core Tier 1 factories, covering 12 months, January to December 2024 with no extrapolation. Effective and freely elected worker representation is primary data from 57 PUMA core Tier 1 factories, accumulated from January 2022 to December 2024 with no extrapolation. Zero tolerance issue is primary data from 446 of core and non-core PUMA Tier 1, 89 core and non-core Tier 2 factories, 3 warehouses and 14 non-commercial goods factories, covering 12 months, January to December 2024 with no extrapolation. These metrics are not validated by third parties other than the assurance provider.
Zero tolerance issues are severe breaches of PUMA’s Code of Conduct that result in the immediate failure of an audit. Established suppliers must remedy all zero tolerance issues immediately by conducting a root cause analysis and implementing preventive measures to prevent recurrence. As a last resort, a business relationship can be terminated if the factory fails to cooperate. New suppliers identified with these issues cannot produce any PUMA goods. These issues include child labour, forced labour and all modern forms of slavery, non-compliance with basic government licensing regulations, payment below the legal minimum wage, falsified records, unauthorised subcontracting, imminent danger to life, and the illegal discharge of wastewater and hazardous waste.
At PUMA, we link performance criteria in the remuneration of all leaders globally with clear and defined sustainability targets. The resolution of zero tolerance issues prevailing at year-end is a bonus target for all sourcing leaders.
In 2024, we identified 25 zero tolerance issues and remedied 13 related to workers’ compensation, transparency, unauthorised subcontracting, and illegal wastewater discharge. 12 factories were not onboarded or deactivated. The increase in issues is due to more Tier 1 subcontractors being audited, often unaware of the need to declare their subcontractors. We will continue to remind Tier 1 factories during 2025 training sessions.
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