July 21, 2011

Puma running for Green

There is more to Puma than meets the eye. Puma is the first company in the world to have an E P&L. That is an Environmental P & L. The first time I read about it, I dismissed it for green wash. But, almost all the so-called green news portals are going gung ho about the E P& L and I cannot but notice the depth and details.

To attach a price to its environmental footprint in quantifiable terms is no easy task. The botton-line result is a precise €94.4m (£82.6m) per year. Wow! That too, after taking into account its end-to-end supply chain! Right from the end retailer to the Cotton fields! There may be shortcomings and assumptions made, but at the end of the day, I think this is indeed a commendable feat.

Puma worked closely with PwC and Trucost to come with up the epoch-making P&L. Now, what does it entail? And what does it say about the writing on the wall? Is green marketing here to stay? And isn't the message to the Corporate fraternity loud and clear? I have been following green marketing trends for sometime now and must say there is room for hope.

Puma analyses its GHG emissions and water consumption throughout its core business and supply chain and tags a price to it in its P&L. It also plans to take into account the social impacts of its supply chain going forward. Which will lead to an Environmental & Social P & L. Way to go, Puma.

As one would rightly aassume, raw material production accounts for the highest relative impacts of Greenhouse Gas Emissions (GHG) and Water Consumption within PUMA’s operations and supply chain. It doesn't stop there. Puma in its action plan, plans to find solutions to reduce its environmental impact.

Guess what is the most water intensive activity in the production of a t-shirt? It occurs right at the initial step – the cultivation of cotton. Environmental impact being highest at the Tier 4 Supplier level, for Puma this means greening from the grass roots itself! Easier said that done because its challenges galore at that level.

Puma in consultation with Pwc and Trucost estimates that, in 2010, the environmental cost of its supply chain was €94.4m.Well, that may very well motivate govt.s (if there are any motivated ones) to make environmental impact disclosures mandatory. That day may not be far.

Thats a whole lot of numbers and details. To end this note on something more visual and promising, watch this video where a Puma bag disappears in water in just a few minutes! And don't miss the numbers at the end of the video! 192 tonnes of plastic and 293 tonnes of paper every year!!



Simply Techie said...

Hmm.. Interesting. So, where'd that 94M euro go. Puma must have shown it as a loss for helping sustain environment. Nice way to report a significant liability (on paper), save a good amount in tax and in the process, gain eco-goodwill. Really Nice. :)


Nishad said...

BTW, I do appreciate PUMA doing all this for the environment. It is just that I also like the idea of using green initiatives to hide some profit. :)

anna's musings said...

Interesting observation! As you look deeper into the Puma story, they say that these costs will serve as a metric for the company when aiming to mitigate the footprint of PUMA’s operations and all supply chain levels and will not affect PUMA’s net earnings.
Guess that makes you happy! So, how many shares of Puma do you own :)

Tharuni Vincent said...

Minu..I am going to buy a PUMA women bag:)

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