PUMA Commits 20 Key Suppliers to Sustainability Reporting
For years, multinational companies have committed themselves to publishing environmental, social, and governance (ESG) reports. Over time, these reports have demonstrated increased and proactive disclosures about a firm's global, social and environmental impacts. But in a world where so much of a company's supply chain is now outsourced or contracted out, a supplier's business practices can attract criticism from labor and environmental groups. At a press conference that helped kick off the GRI's third biennial Global Conference on Sustainability and Transparency, a leading sporting goods and apparel manufacturer revealed that it is actively working with its vendors to enhance their transparency.
This afternoon, PUMA announced that it has assigned 20 of its leading strategic suppliers to environmental, social, and governance (ESG) disclosure. Handing over to Nelmara Arbex, GRI's Learning Services Director, a stack of 20 vendor ESG reports, Stefan Seidel, PUMA's Chief Environmental and Social Affairs Manager, explained that PUMA has changed its corporate mission from the most 'desirable' sporting brand to one that is 'desirable AND sustainable'.
Working with the GRI and Gessellschaft fü r Technische Zusammenarbeit (GTZ), PUMA participated in the pilot project "Transparency in the Supply Chain," in which three PUMA suppliers received training and consultation on the steps involved in creating ESG reports. One of these suppliers is Impahla Clothing, which counts PUMA as its only customer. Impahla's managers learned how to measure sustainability concepts such as waste diversion, energy efficiency, and key performance indicators.
The detailed 51-pages of Impalah's 2009 Sustainability Reports reveals successes such as a 40% increase in production, a doubling of its permanent staff, a 10% drop in absenteeism, and an increase in energy reduction by almost one-fifth. But what is impressive is how Impahla discloses its shortcomings: a five-fold increase in the purchase of imported fabric (as opposed to a 19% increase in local sourcing), and a 75% increase in minor injuries--while articulating how the company is addressing such issues. William Hughes, Impahla's Managing Director, noted that the four year project helped the concept of sustainability ingrain itself among employees, who in the meantime developed a closer relationship with management. Furthermore, the company's bottom line improved through the cost savings gained.
Similar projects are underway in China, South Asia, Turkey, and Portugal. By engaging with its vendors and offering them further resources, PUMA has empowered these companies to proactively address the weak points in their operations, while also giving them the tools to find those improvements independently. The end result: an exciting time in the sporting goods and apparel industry, and not just because of the 2010 World Cup. And PUMA may very well be setting an example for its competitors.