The parent company of some of the world’s biggest luxury and sporting brands, including Gucci, Yves Saint Laurent, and PUMA, is to embark on one of the world’s most ambitious green accounting programmes, after announcing it will create a group-wide environmental profit and loss statement (EP&L).
PPR chief sustainability officer Jochen Zeitz yesterday unveiled the results of PUMA’s inaugural E P&L statement for 2010, and confirmed the initiative would be rolled out to cover the group’s remaining brands by 2015.
By placing an economic value on its environmental impact, the company hopes to improve its reporting of a wide range of green metrics, including greenhouse gas emissions, water use, pollution, and land use change.
Speaking to reporters in London, Zeitz, who is also PUMA chief executive, argued E P&Ls offered a superior alternative conventional sustainability reports as they make it easier for companies to prioritise those areas that need tackling.
He added that PUMA will repeat the E P&L exercise annually and will use the results to refresh its current 2015 sustainability targets.
“As the manager of a business, all you need to look at now is one page and you know what you need to do because it tells you exactly where you need to attack in order to get rid of your footprint,” he said.
“Before… you would have a 200-page sustainability report at the end of the year, but what does it really tell you? Should I now look to save a cubic metre of water? Or a tonne of greenhouse gases?”
“But once you visualise and measure, you can actually manage the impact. Whereas before the visualisation was so hypothetical that it didn’t lead to concrete day-to-day decisions.”
Significantly, PUMA’s E P&L revealed that 94 per cent of its environmental impact was created in the supply chain, more than half of which was linked to the production of raw materials, such as leather, cotton, and rubber.
Zeitz said the company is now trying to find alternative materials to reduce that impact, especially for leather which was the single greatest factor contributing to environmentally damaging land-use change.
Responding to questions from BusinessGreen, Zeitz refused to rule out abolishing virgin leather from PUMA’s product line.
However, he noted that PPR brand Stella McCartney has a leather ban and that PUMA would now seek to restrict leather from countries where land use change would be a major concern, such as Brazil.
He added that the company would also investigate the option of requiring firms to measure and report their environmental impact when PUMA is selecting suppliers in future.
While Zeitz admitted that the methodology of the E P&L still needs to be perfected, the initiative was hailed as a step forward for green accounting.
Alan McGill, sustainability partner at PwC, which worked on the accounts said the move would create greater transparency in the supply chain.
“Reports like this lift the lid for consumers and business on the chain reaction of decision we make day to day and give business the information to prioritise and act,” he said.
“The report represents just one company’s share of a much wider business issue -our demand for natural resources in the consumer supply chain - which slips below the radar of financial reporting currently.”
