The fashion system rewards growth.
Selling more jeans, handbags and sneakers equates to more prestige, more influence, more capacity to innovate and more money. Within the current fashion system, it also leads to more pollution, waste and exploitation.
But what if it didn’t? What if the industry’s high-profile sustainability commitments amounted to more than corporate grandstanding and actually delivered results? What if companies could decouple their revenue growth from ever more negative environmental impact?
These are not fanciful daydreams or the preserve of niche, specialised businesses. It is possible for even fashion’s biggest companies to bend the curve on planet-warming carbon emissions because Puma, for one, is doing it.
Since 2017, the German sportswear giant’s revenue has doubled to €8.6 billion ($9.3 billion) as its carbon footprint has shrunk by nearly a third. Strip out the company’s growth and the results are even more substantive: relative to sales emissions are down two thirds.
These results were not achieved by adopting trendy silver-bullet “solutions.” Instead, Puma’s impressive sustainability progress is the result of more than a decade of concerted management focus, partnership and investment.
The Roadmap
To achieve hard-earned emissions reductions, Puma has deployed a comprehensive array of initiatives. Nearly all of the company’s cotton and leather now fall under some form of sustainability certification and almost two thirds of its polyester is recycled. As a result, raw material emissions have halved since 2017. Fast, but polluting air freight is now used for fewer than one percent of shipments – a move that’s helped offset the impact of increased e-commerce deliveries. And the company is working in close collaboration with suppliers to support their decarbonisation targets. Last year, for example, suppliers were able to access Puma’s superior credit rating to fund nearly $500 million in working capital thereby creating more ability for suppliers to advance initiatives like replacing polluting coal-fired boilers, improving eco-efficiency of production processes and installing solar arrays.
These initiatives are underpinned by strong governance that directs and incentivises action.
More specifically, Puma has established targets that are measurable, discrete, transparent and time bound. They’re rooted in science and established in consultation with a range of stakeholders. The company has robust sourcing policies in place that reflect current best practice, including commitments to pay suppliers on time and in full. Unlike most competitors, Puma publishes updates on how well it lives up to those standards. Last year, for example, it cancelled less than one percent of its orders and paid for all associated liabilities. Close to half the company’s suppliers have been with the brand for more than a decade.
Though sustainability is directed by Puma’s supervisory board, accountability for the company’s performance rests with a single leader, Puma’s chief sourcing officer Anne Laure Descours. This makes sense given that most of Puma’s social and environmental impact resides within the company’s supply chain. All Puma executives receive sustainability-linked bonuses based on clear, measurable goals.
Puma’s commitment to sustainability also extends well beyond carbon emissions reductions. The company has programmes in place to reduce water and chemical usage and protect human rights. Results of these efforts are validated by consulting partners, arm’s-length verifiers and third-party apps and are reported transparently.
If some of these approaches sound familiar, that’s because much of Puma’s playbook is echoed by countless corporate sustainability proclamations. What is different, however, is Puma’s long-term commitment, detailed follow-through and progress.
To be sure, Puma is not flawless. The certifications and monitoring systems it relies on to deliver on many of its goals have come in for their share of criticism from advocates who want to push the industry further and point to loopholes in existing standards. The quality and credibility of industry emissions factors and assessment methodologies remain a point of heated debate across sectors. And a supply chain that is as distributed and extensive as the sportswear giant’s is bound to have challenges. More broadly, the industry as a whole must still grapple with the scale of investment required to drive down emissions across the value chain and the hurdles facing new technologies that many hope will offer alternative solutions.
Nonetheless, the company offers a proof point that fashion brands can advance authentic sustainability and also grow. While investment and commitment are required to deliver these outcomes, it is also important to recognise that Puma’s work has not come at the cost of profitability. In fact, Puma’s gross margins are higher than those of Nike.
Regrettably, Puma and a small cohort of committed sustainability paragons remain lonely exceptions.
To assure social and environmental fashion industry progress, new rules are needed. Perhaps, instead of lamenting the various emerging regulatory regimes, it would make sense for industry leaders and trade associations to propose a progressive path to assure that all fashion brands emulate Puma when it comes to sustainability.
