Environmental impacts in business practice - PUMA Environmental Profit and Loss Account

The growing importance of True Cost Accounting

Approaches such as True Cost Accounting, which help businesses gain a better understanding of their own environmental impact, are becoming increasingly relevant in business practice. This is due to current regulations, the real-world economic consequences for the business itself, or the needs and requirements of its customers.

There are now a number of real-world examples: the retailers PENNY and Albert Heijn have carried out scientifically monitored True Cost experiments, the Lammsbräu brewery is attempting to pay farmers for their sustainability efforts, and the Value Balancing Alliance brings together a wide range of economic and scientific stakeholders to advance the issue.

Environmental indicators at Puma

The sports and fashion brand Puma is demonstrating, through its own approach, how environmental impacts can be quantified in monetary terms. Using an assessment methodology developed by PWC and Truecost, among others, Puma produces its own environmental profit and loss account – the PUMA Environmental Profit and Loss Account (EP&L). This accounts for environmental impacts across six categories (air pollution, greenhouse gas emissions, land use, waste, water use, water pollution) from raw material extraction right through to its own production.

Leather is one of the key raw materials in Puma’s supply chain, and following the 2019 EP&L results, efforts were made to source it more sustainably.

This methodology enables Puma to compare its own environmental impact across products, production sites and the nature of that impact. By conducting repeated assessments, it is also possible to track trends over time. This allows the company to adapt its sustainability strategy more effectively to address emerging issues.

Pumas results and experiences

PUMA’s 2019 EP&L report showed that 63% of the company’s total ecological footprint was attributable to raw material processing and production. On this basis, the company was able to prioritise the large-scale use of more sustainable raw materials as a key component of its sustainability strategy.

Advantages of conducting your own assessment

It is therefore evident in practice that there are many benefits to quantifying one’s own environmental impact in monetary terms. True Cost Accounting, which is based on a life cycle assessment of a company’s own value chains, offers a scientifically proven methodology for doing so.

Please feel free to contact us if you would like to work with PATOS to gain an overview of your monetarised environmental impact!