Puma EP&L: Experts Weigh In
While Puma’s first-ever environmental profit and loss report accurately estimated the social cost of carbon, according to a panel of experts, the company could improve some other areas of its environmental impacts calculations, such as air pollution and water use.
In November 2011, Puma’s parent company, PPR, published the EP&L, which calculated the 2010 environmental impacts of Puma’s operations and supply chain, and valued the impacts at €145 million ($190 million). The company describes the report as a “best practices” tool that can potentially change the way businesses measure, value and report their environmental impact.
After reporting on its own environmental profits and loss, Puma said the next step in its goal to develop a natural capital accounting framework was to bring in expert opinion. The company convened a group of independent experts, and has now published a report titled An Expert Review of the Environmental Profit & Loss Account.
Overall, the panel said the EP&L was “an excellent first step” toward promoting the sustainable use of natural capital, according to the new report.
It does offer recommendations for future EP&Ls. The experts said that for air pollution, location-specific conditions and figures would be more useful, and would better estimate the health and environmental impacts of air pollution.
Additionally, some experts raised concerns about the approach used for valuing water. Puma estimated scarcity based on 18 studies in the US, and applied this to the rest of the world, the report says.
Some experts suggested splitting this category into different types of water use: ground and surface water. (Ground water is not considered in the original analysis.) They also said Puma should increase the sample size to include more studies across a bigger geographical range, and include water pollution calculations.
The experts agreed Puma overestimated the ecosystem services losses by counting all converted natural areas as losses. They suggested estimating the level of sustainable land management to provide more accurate results.
Experts also said Puma likely underestimated the profits and losses associated with waste because of its limited ability to differentiate between high- and low-quality treatment practices.
In October, Puma followed its EP&L process down to the product level, and said it is planning an industry coalition to broaden adoption of the sustainability accounting method.
In April, PPR – whose other brands include Gucci, Yves Saint Laurent and Alexander McQueen – announced a raft of sustainability goals, including a pledge to reduce its carbon emissions, waste and water usage resulting from the production of products and services by 25 percent by 2016, when normalized against production levels.
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