Intelligent Energy

Puma runs ahead in energy and water reporting

Puma runs ahead in energy and water reporting

Posting in Energy

German sports company reveals that water for cotton contributed heavily to $133 million in 2010 water/energy costs. The environmental P&L statement could set a trend in corporate reporting.

With the pressure on corporations to transparently report their environmental impact, German sports and footwear company Puma took a big step in that direction yesterday.

It revealed that it racked up combined costs of €94.4 million ($134 million) from emitting carbon and using water in 2010. The figures included its own usage plus those of its suppliers, and were evenly split, with €47 ($66.7) million in carbon emissions and €47.4 from water use.

According to the “environmental profit and loss account” (E P&L), Puma’s direct environmental costs were €7.2 ($10.2) million, while the supply chain accounted for €87.2 (123.8) million. Puma compiled the numbers in partnership with consultancy PricewaterhouseCoopers (PwC) and environmental research firm Trucost. It valued CO2 at €66 ($93.7) per ton and an average water value of €0.81 ($1.15) per cubic meter.

According to the “environmental profit and loss account” (E P&L), Puma’s direct environmental costs were €7.2 ($10.2) million, while the supply chain accounted for €87.2 (123.8) million. Puma compiled the numbers in partnership with consultancy PricewaterhouseCoopers (PwC) and environmental research firm Trucost. It valued CO2 at €66 ($93.7) per ton and an average water value of €0.81 ($1.15) per cubic meter.

“The E P&L statement…is an essential tool and a shift in how companies can and should account for and, ultimately, integrate into business models the true costs of their reliance on ecosystem services,” Puma chairman and CEO Jocehn Zeitz said in a press release. “Gaining a better understanding of the source of the natural goods and services PUMA relies on and the declining availability of the basic resources required for our business growth, will help PUMA build a more resilient and sustainable business model and ultimately better manage its impacts on the environment.”

The company also noted in the statement that it is “preparing for potential future legislation such as disclosure requirements.”

Puma evaluated 4 tiers of the supply chain, including raw material production such as cotton farming, raw material processing such as leather tanneries, outsourced processes such as embroiders and printers, and manufacturing. Its core operations included logistics, warehousing, retail, and other operations.

Puma said that production of raw material from natural resources accounted for 36% of its greenhouse gas costs and 52% of its water consumption. The most water-intensive link in its chain was the cultivation of cotton for t—shirts.

The company aims to cut carbon emissions, waste, energy and water usage by 25% by 2015. The current report does not include waste and land use costs, but Puma hopes to bundle those into its next environmental report in the fall.

“Fundamentally, this analysis is about risk management for the environment, and for business, because you cannot separate the two,” said Alan McGill, partner, PwC Sustainability and Climate Change.

We wonder how accurate this is – Puma provides some convoluted details of its methodology on its website But it’s an exemplary move that others should follow, even if Puma is a sponsor of the CO2-spewing professional waste car circuit. Other corporations should issue similar reports. To borrow a phrase from a Puma competitor, when it comes to environmental reporting, they should just do it.

Photo: Photobucket

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Mark Halper

Contributing Editor

Mark Halper has written for TIME, Fortune, Financial Times, the UK's Independent on Sunday, Forbes, New York Times, Wired, Variety and The Guardian. He is based in Bristol, U.K. Follow him on Twitter. Disclosure