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JoinMeasuring Eco and Social Impacts to Redefine Business Value: PwC & Puma
Sustainability mega-trends such as resource constraints, population growth and demographic changes are beginning to have significant financial impacts in the ‘here and now’, causing many prominent business leaders to rethink the impact on their businesses. Compound growth in consumption in the face of finite resources suggests competition for access, price increases of resources, and regulatory pressure. The companies who have measured their reliance on natural resources, such as clean air, water, and forestry, will be well positioned to proactively manage their resource usage as it becomes more of an issue and impact on the bottom line.
The question is, why would a company be transparent about their environmental impact? Metrics exist to measure the dollar value of corporate environmental impact - but logic would seem to dictate that in lieu of regulation, companies would not voluntarily go through the valuation process and especially not want any negative impact to be publicized. Yet some companies are doing both -- and for economically rational reasons.
The valuation process gives management insights as to where they may have the largest impact and potentially highest risk or opportunity. Beyond more efficient use of resources, other solutions may evolve such as mitigation technology and substitutes for existing resources. First-adopters have the opportunity to differentiate their firms and capture market share. Leaders may use this information to minimize the environmental and business risks involved in specific operations and to protect near term profits and long term continuity.
PUMA’s Environmental Profit and Loss Account (E P&L) is a long-term, three-stage process to consider PUMA’s and its supply chain’s environmental, social and economic impacts, ultimately leading to the development of an all encompassing Environmental, Social and Economic Profit and Loss Account.
First Results revealed the economic values for the environmental impacts of
- GHG emissions
- Water consumption
- Acid Rain Precursors (Sulphur Dioxide, Nitrogen Oxide and Ammonia)
- Smog Precursors (Nitrogen Oxide, Carbon Monoxide, Particulates)
- Waste
- Impacts on land-use
- Decent/ Fair Wages Health & Safety
- Working Conditions
- Standard of Living
- Security and Stability
- Empowerment
- Community Cohesion
- Human Capital
- Diversity and Gender Equality
- Health & Well-Being
- Cultural Heritage
- The creation of jobs
- Wages
- Total tax contributions
- Indirect tax payments
- Indirect and Induced employment
- Indirect and Induced output
- Productivity and efficiency gains
- Business creation and growth
More information on Puma's Environmental KPI Methodology can be found at:
http://www.ukmediacentre.pwc.com/imagelibrary/downloadMedia.ashx?MediaDetailsID=1925
For More Information on Puma's Greenhouse Gas Emissions Valuation Method can be found at:
http://www.ukmediacentre.pwc.com/imagelibrary/downloadMedia.ashx?MediaDetailsID=1927
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Comments
Commendable, potentially transformational
If institutional investors (more likely) and/or consumers (less likely I am afraid) recognize this as what it is and support it with their purchasing power, we may be seeing a transformational effort.
Sustainability professionals would do well to help guide the discussion around this so that more zealous advocates do not use these powerful new efforts to heap scorn and disdain on the brave. That would be short-sighted and ultimately would not serve their interests if they are truly trying to drive improvements.
These two leading edge companies are allowing themselves to be vulnerable to critism by opening themselves up in this manner. They should be commended and rewarded.