Measuring Social Impact with PUMA
While as many as 93% of CEOs believe that building sustainability into their core business strategy is the way of the future*, few have figured out how to get there. The good news is that corporate leaders already well down the sustainability path are beginning to emerge and share their achievements. One such example is PUMA, the sports and lifestyle mega brand, with the disclosure of the company’s social impact performance through the release of their integrated Annual Report [PDF] earlier this year.
For any leader or manager seeking guidance on how to integrate sustainability into their business strategy, PUMA’s report is a helpful case study, illuminating three key pillars that have contributed to their sustainability story:
- Define the destination and plan the journey.
- Measure, monitor, evaluate. And improve.
- Communicate to all stakeholders.
Define the destination and plan the journey.
PUMA didn’t get to their current level of sustainability integration overnight, and they’re not yet where they want to be. They are significantly closer than they were 10 years ago, though. Following a decade of commitment to impact data collection across their operations and supply chain, the environmental impact detail and goals set out in their 2010 integrated report are an important tactical step and mobilizing tool.
PUMA’s first Environmental Profit and Loss (E P&L) statement, arguably the 2010 report’s crowning achievement, details the company’s CO2, energy, water and waste footprint in dollar terms, equating to over $15 Million CDN. The articulation of data at this level legitimizes the business case for PUMA’s sustainability direction and defines steps that the entire organization, including strategic suppliers, needs to take to meet the 2015 targets.
Measure, monitor, evaluate. And improve.
The complexity of data collection and validation is often cited by organizations seeking to achieve positive change, as the most challenging aspect of impact measurement implementation. But the investment is increasingly seen as worthwhile, evidenced by a trend that recognizes data as a powerful problem solving tool that can reveal new opportunities.
Hannah Jones of Nike, another corporate giant tackling sustainability, notes “to be able to deliver this transparency has required data, which in turn has the potential to trigger innovation. We're discovering how combining different data sets can be a tool for empowerment; social change; new insights; new solutions”. Emphasizing these benefits, Dr. Richard Mattison, CEO of Trucost, asserts that by monitoring their use of natural resources along their value chain, PUMA is now positioned to “identify new opportunities to optimise the sustainability of its products.”**
Communicate to all stakeholders.
Clearly, a core strategy for PUMA is translating complex, interdependent data into meaningful communication, thus galvanising stakeholders around short, medium and long-term sustainability goals. The report delivers actionable messages that are accessible to media, the public, investors, suppliers, managers and store level employees in 80 countries.
Highlighting the mobilizing effect of communication on employees, PUMA CEO Jochen Zeitz stated “a 10% reduction in a company's carbon footprint means nothing to most managers. But if we say we're going to save £20 million from our P&L, that's much more tangible”.
Where does integrated reporting go from here?
Leadership and governance driving PUMA’s sustainability vision comes foremost from within the parent company, PPR. The increasing share of corporate resources being allocated to Social Impact Measurements and Integrated Reporting reflects the growing scope of CSR initiatives.
The number of integrated financial, environmental and social impact reports issued by corporations grew from 26 in 1992 to over 5,000 in 2010*. This growth indicates that corporations and stakeholders alike find value in combining social and environmental impact with fiscal transparency. Blending sustainability into business practice extends corporate responsibility beyond marketing departments to the whole organization, encouraging employee engagement and investment support.
It is also noteworthy that PUMA’s report is in large part a proactive response to the globe’s changing regulatory landscape, affecting the production and disposal of energy, materials, resources and waste.
We are seeing growing impetus across corporate and stakeholder networks to design a marketplace that builds a sustainable society through the development of sustainable business models. Integrated reporting is a powerful design tool that can help move us closer to that destination.
The following posts on Socialfinance.ca provide additional insights into reporting, performance and impact investing:
Socially Responsible Investment and Impact Investment by Olaf Weber
Insights from the Front Line of Impact Investing by Ricardo Granja Vazquez
Sources
UN Study Press Release; Full Report *
PUMA 2010 Annual Report **
