Impact, risk, and opportunity management

Impact, risk, and opportunity management

Process to identify material impacts, risks, and opportunities (IRO-1)

PUMA’s DMA is used to inform our sustainability strategy and reporting. The assessment incorporates input from stakeholders, legal requirements, media reports, industry benchmarks, and ongoing due diligence. It covers PUMA Group’s operations and value chain, with a focus on direct upstream value chain partners (Tier 1 suppliers) and strategic material and component suppliers (Tier 2 suppliers). The DMA is conducted using the methodology highlighted in the ESRS and is updated periodically. In 2025, we reviewed the DMA by engaging local upstream value chain stakeholders and using publicly available information on industry-specific IROs.

Topic mapping

A comprehensive list of potentially material topics is compiled, informed by media analysis, review of peer reports, industry-specific reports, and the complete topic and sub-topic universe defined in the ESRS. Key assumptions include the relevance of identified trends to PUMA’s business, the reliability and comparability of peer disclosures, and the applicability of ESRS topics across PUMA’s value chain.

Consultations and assessment

Methodology

PUMA used a gross impact scenario, assessing potential and actual impacts before implementing mitigation measures, within our own operations or throughout the value chain (upstream and/or downstream). We examined both actual and potential positive or negative impacts on people and the environment across short-term (within the reporting period), medium-term (1 to 5 years), and long-term (over 5 years) time frames. We considered how this impact relates to our business model and strategy. PUMA used a scale of 0 (no impact) to 15 (maximum possible impact) to rate impacts down to the ESRS provided sub-sub-topics-level, considering the scale, scope, and irremediability of each impact, multiplied by the likelihood (0-1, unlikely to almost certain). Impacts scoring 8 and above were deemed material.

PUMA’s assessment of its upstream value chain, from farming to finished product, included a focus on key sourcing countries in Asia such as Bangladesh, Cambodia, China, Indonesia, and Vietnam. The evaluation considered environmental impacts, particularly in wet processing facilities (like fabric mills and tanneries) and agricultural activities such as cotton farming. Data from core suppliers, representing approximately 60-80% of PUMA’s business volume, was used in a materiality assessment that incorporated established industry practices and recent media insights. Upstream value chain impacts were reviewed through a structured due diligence process to support an informed evaluation.

We used financial materiality to evaluate topics that create risks and opportunities for PUMA, potentially impacting financial performance, access to finance, or the cost of capital over the short, medium, and long term. While the risk assessment of the probability of occurrence is measured as a percentage rate, the extent of damage is based on the planned operating result for the upcoming financial year. For example, a risk may be classified as critical, in the case that its assessment reflects a combination of highest bandwidth for extent of damage and probability. This assessment considers risks and opportunities from current or future events, and those arising from business relationships. The business dependencies on natural, human, and social resources were evaluated. The potential magnitude of financial effects, the time horizon, and the likelihood were also assessed.

PUMA’s sustainability teams, in collaboration with risk management and other internal stakeholders, defined financial materiality based on the magnitude of financial effects from 0 (no effect) to 5 (very severe effect) and a likelihood of occurrence factor from 0.65 (low likelihood) to 1 (almost-certain likelihood). A gross risk perspective was applied, like the assessment of impact. The connections between impacts and dependencies, along with the associated risks and opportunities, were also considered. During this process, the following input parameters were used:

• Regulation on certain aspects and potential financial penalties in the event of non-compliance
• Results of PUMA’s due diligence process, including social compliance audits and environmental assessments of suppliers
• ESG benchmark and NGO reports on the fashion and sporting goods industry
• Engagement with industry peers and experts
• Review of literature and guidance documents on CSRD.

Only risks or opportunities scoring 3 or higher were deemed material and integrated into PUMA’s risk management. This list was approved by the relevant topic owners within the company (e.g., P&O for human resources topics) and integrated into PUMA’s risk management system.

Process

Double materiality assessment

Expert consultation: PUMA collaborated with a third-party consultancy to conduct a DMA involving both internal and external stakeholders. This process included analysing media and peer ESG topics, developing a long list of potentially material topics based on ESRS and narrowing it down to a short list through stakeholder consultations, interviews, and surveys. The results identified material topics based on their impact on people and the environment (inside-out perspective) and the material risks and opportunities for PUMA’s financial performance (outside-in perspective). An example of stakeholder consultation and inclusion in the DMA process is the re-evaluation of the microplastics topic as material, following new reports from the Microfiber Consortium and media articles.

Stakeholder dialogue: In early 2024, we held a stakeholder dialogue meeting to identify and understand actual and potential impacts and underlying opportunities. Participants were selected based on their dependency, responsibility, influence, outreach, and ability to provide diverse perspectives. Internal stakeholders included departments such as Sustainability, Product Compliance, Finance, Sourcing, Internal Audit, People and Organisation (P&O), Investor Relations, and Legal/Compliance. External stakeholders included suppliers, topic experts, non-governmental organisations (NGOs), intergovernmental organisations, business partners, financial institutions, investors, and ranking agencies.

IROs list review

Using the input at hand, in the second half of 2024, PUMA’s sustainability teams assessed all IROs.

In 2025, as part of our due diligence process and in line with our Civil Society Organisations (CSOs) Engagement Policy, we organised stakeholder dialogues in our top five sourcing countries Bangladesh, Cambodia, China, Indonesia, and Vietnam to review the upstream material IROs as published in our Annual Report 2024. As these countries represented 86% of total sourcing volume in 2025 the local stakeholders engaged are deemed representative of the rightsholders in our upstream value chain thereby providing input on our upstream IROs.

In each country, PUMA’s sustainability team invited preselected organisations to in-person discussions on environmental and human rights topics. These sessions gathered local perspectives on the materiality of issues from stakeholders such as NGOs, trade unions, business associations, and development agencies. Participants also assessed the effectiveness of example mitigation measures, providing input that will inform PUMA’s 2026 country plans, particularly preventive actions, in line with stakeholder expectations.

For three of the engagements on human rights, PUMA leveraged stakeholder engagement pilot programmes. In Bangladesh and Cambodia, PUMA joined GIZ’s Our Rights, Our Voice (OROV) pilot, an initiative for enabling CSOs to participate in due diligence processes. GIZ invited CSOs to discuss the IROs shared by PUMA and facilitated the sessions. In Indonesia, PUMA joined two other brands in the Fair Wear Foundation’s (FWF) Meaningful Stakeholder Engagement pilot. The FWF had identified salient human rights risks based on the stakeholders’ input. All topics chosen for discussion featured in the IRO list discussed at the other engagements. CSOs, trade unions, business associations, and suppliers were invited by the FWF and CNV International to prioritise the identified salient human rights risks and suggest preventive and migration actions for brands.

Overall, PUMA collected input from 40 local organisations or local offices of international organisations on the human rights IROs and from 20 such organisations for environmental IROs.

The stakeholder feedback on each IRO topic was analysed to conclude on whether the IROs were considered material for these top five sourcing countries. Any new, material IROs suggested by stakeholders were also recorded. Both these inputs were used in the review of the IROs for this report, alongside other input. The 2025 consultation and assessment resulted in the addition of material IROs to existing material topics.

In every IRO section of the topical standards, we also further describe the relevant processes. This includes additional information on climate‑scenario analysis, physical climate risks, transition risks and opportunities, as well as methodological assumptions in E1; location‑specific assessments regarding pollution, water resources and circular economy, including dependencies and impacts, in E2, E3 and E5; and site‑level information on biodiversity‑sensitive areas in E4. Business conduct matters are explained in G1, with contextualisation by business model and location.

Final list of IROs (IRO-2)

The final list of IROs is formally approved by PUMA’s Management Board and Supervisory Board, to confirm consistency with corporate governance principles and strategic objectives.

These IROs are fully integrated into PUMA’s ERM, which connects environmental and social impacts with business risks and opportunities. While not all topics identified as material under the CSRD are automatically considered material within ERM, PUMA has a process in place to evaluate and align them where relevant. This system enables the company to identify and assess potential developments that could affect its strategic targets. It treats sustainability-related risks with the same priority and tools as other enterprise risks, promoting continuous improvement and resilience. Opportunity management is embedded throughout PUMA, from strategic planning to operational execution, with identified opportunities included in annual and medium-term planning and decision-making. PUMA continuously monitors both internal operations and the external environment to evaluate dependencies on natural and human resources, assess stakeholder impacts, and refine its strategy accordingly. Stakeholder engagement plays a key role in this process, helping to validate material topics and enhance risk responsiveness.

Each IRO including its relation with the business is reported within the respective topical standards’ sections. The material IROs identified by PUMA include:

• Climate change adaptation, mitigation and energy for own entities and in the value chain (ESRS E1)
• Pollution in the value chain, including substances of concern or high concern (ESRS E2)
• Water use in the upstream value chain including water scarcity (ESRS E3)
• Biodiversity, land use, and deforestation impacts in the upstream value chain, including pressures on ecosystems and land-use change (ESRS E4)
• Circularity including the use of certified and recycled materials, environmental impact of inflow materials, extended product life (ESRS E5)
• Working conditions and equal treatment and opportunities for all for own workforce including topics of occupational health and safety, adequate wage, diversity, equity, and inclusion, and also employee engagement and development of own workforce (ESRS S1)
• Labour conditions and equal treatment and opportunities for upstream value chain workers including worker health and safety, adequate wages, forced labour, child labour (ESRS S2)
• Ethical marketing practices, product safety, and data safety for consumers (ESRS S4)
• Corporate culture, bribery and corruption, whistleblower system, responsible purchasing practices (ESRS G1)

Interests and views of stakeholders (SBM-2)

At PUMA, we organise stakeholder dialogues by inviting representatives from various stakeholders to discuss our DMA, decision-making process, and sustainability strategy. Stakeholder views are considered in strategic decisions, risk management, and sustainability-related policies and targets as described in the interests and views of stakeholders (SBM-2) table. These consultations aim to support alignment between our priorities and broader societal objectives while fostering constructive relationships with stakeholders. External stakeholders include CSOs, NGOs, suppliers, topic experts, intergovernmental organisations, business partners, financial institutions, investors, and ranking agencies and other relevant groups. Internal stakeholders include departments such as Sustainability, Product Compliance, Finance, Sourcing, Internal Audit, P&O, Investor Relations, and Legal/Compliance. Feedback and recommendations from stakeholder engagements are summarised and communicated to PUMA’s Management Board and Supervisory Board, through the Sustainability Committee meetings.

Engagement across the value chain takes place all year round through supplier meetings, industry benchmarks or conferences. PUMA emphasises industry collaboration to align tools and processes, making sustainability efforts more efficient and impactful across the sector. PUMA also engages with organisations focusing on materials (e.g., Better Cotton, Leather Working Group), product and material manufacturing partners, workers’ rights groups, trade unions, environmental and human rights experts, customers, marketing assets, and product sorting and recycling organisations. PUMA does not engage in direct lobbying or public policy advocacy, but relevant teams contribute to policy discussions through memberships and industry groups like FESI to provide PUMA’s perspective in public policy discussions such as around climate change.

Voluntary disclosure is provided in this report to enhance transparency and support stakeholder understanding beyond mandatory CSRD requirements. It also responds to information requests from ESG benchmarks which rely on publicly available data, PUMA’s commitments under industry initiatives and/or progress towards its sustainability targets. We use the following icon (») next to the sub-title or paragraph where PUMA makes a voluntary disclosure.

Material impacts, risks, and opportunities and their interaction with business (SBM-3)

A detailed description of specific IROs per topic, including their time horizon and location in the value chain as well as potential changes to PUMA’s strategy, is provided at the beginning of each topical chapter. PUMA evaluated how material negative and positive impacts affect (or are likely to affect) people or the environment, and whether and how material impacts originate from or are connected to the strategy and business model, considering geographical areas, facilities, types of assets, input, output, and distribution channels.

PUMA’s material IROs included in the company’s Enterprise Risk Management (ERM) are:

• E1: climate change adaptation, climate change mitigation and energy
• E2: pollution of water, substances of very high concern and microplastics
• E3: water
• E4: direct impact drivers of biodiversity loss and impacts on the extent and condition of ecosystems
• E5: resource inflows and outflows, including resource use and waste
• S1: working conditions and equal treatment and opportunities for all
• S2: working conditions, equal treatment and opportunities for all and other work-related rights
• S4: information-related impacts for consumers and/or end-users and personal safety of consumers and/or end-users
• G1: corporate culture, protection of whistleblowers, management of relationships with suppliers including payment practices and corruption and bribery.

Potential material adjustments are related to remediation, compliance efforts, factory policy changes, and training initiatives. PUMA’s resilience in addressing IROs is rooted in its sustainability strategy which integrates sustainability into all core business functions and is supported by several key elements:

• PUMA has set targets across different areas, including human rights, climate and circularity. These targets refer to the SDGs and are designed to drive continuous improvement
• Stakeholder dialogue meetings provide opportunities for PUMA to gather a range of perspectives. This engagement helps keep PUMA’s strategies informed and responsive
• PUMA has committed to science-based targets for reducing GHG emissions, considering the Paris Agreement, to mitigate climate risks
• Sustainability targets are part of the bonus arrangements for all of PUMA’s global leadership team, ensuring accountability and alignment with corporate goals
• PUMA focuses on product innovation, design, and supply chain management with the aim of reducing environmental impact and improving resource efficiency
• Policies and standards on ethical marketing, chemical safety and data privacy for consumers are in place and are updated as necessary to align with regulations and stakeholder expectations
• PUMA operates a compliance management system to address conflicts of interest and has set up a Responsible Purchasing Policy.

By embedding sustainability into our strategy and operations, we aim to address material impacts and risks while capitalising on opportunities for long-term growth and resilience. A resilience analysis for climate and biodiversity is included in the relevant topical standards. For the reporting year 2025, we do not see any significant impacts of our material IROs on our financial performance and cash flow.

Entity-specific disclosures

Our 10FOR25 targets were established in 2019 before the CSRD came into force. To decide if a target or KPI is an entity-specific disclosure, we applied a unified methodology to see how far the metric is connected to a topic covered by the CSRD and assess the materiality of the disclosure. If both target and metric are covered in the CSRD and are material, they are included as part of the reporting process. By that, if the target is connected to a topic covered by the CSRD which does not include the specific KPI, those are disclosed as entity-specific metrics in the relevant topical standards.