The PUMA E P&L, valuing PUMA’s environmental impacts for key areas identified at €145m in 2010, is released ahead of wider EU and global moves to develop environmental accounting at a country-level, which will drive companies to integrate financial and environmental data in annual reports.
Dr Richard Mattison, chief executive officer, Trucost, said: “Environmental issues are changing business models. The current era of volatile resource prices, growing consumer and investor interest and greater regulatory standards mean that environmental issues are increasingly core to the business strategy. By representing its environmental impacts in financial terms, a metric that business managers commonly use and understand, PUMA is providing its management teams with a robust framework to embed sustainability at the heart of business decision making. PUMA has demonstrated that accounting for the environment across the value chain is no longer a ‘holy grail’ objective, but simply makes good business sense.”
Alan McGill, partner, sustainability and climate change, PwC said: “Business and society are recognising that past financial performance is unlikely to be the only measure used to assess the long term prospects of a business. The PUMA environmental profit and loss account is a great example of the sort of information that will help to present truly integrated reporting. PUMA haven’t waited for regulations to drive this, instead they’ve developed the first – ever E P&L to take this step by examining business risk and efficiencies, future resources and markets, and material environmental impacts. Reports like this lift the lid for consumers and business, on the chain reaction of decisions we make day to day, and give businesses the information to prioritise and act. The report represents just one company’s share of a much wider business issue – our demand for natural resources in the consumer supply chain – which slips below the radar of financial reporting currently. Such developments show that recent calls for a serious reassessment of the reporting system are possible, hard – wiring environmental, social and governance factors into a reframed reporting model.”
Conversion of natural ecosystems to make way for agriculture for example, is the main driver of the loss of biodiversity and ecosystem services globally.
“For meaningful business reporting to occur, resource usage and the risks and opportunities associated with business have to be considered, across a business’s entire value chain and cannot be limited to the accounting definition of control. This has significant implications for how companies report, but the PUMA E P&L is showing how companies can break the traditional reporting mould for competitive advantage.”
The recently released International Integrated Reporting Council’s blueprint emphasised that more focus needed to be given to the resources consumed and impacts that arise from business activity, including those which have no monetary value in the way our economic system has evolved to date (for example carbon, water).
Accounting for resource consumption and environmental impact in financial terms provides such focus by enabling businesses to understand and manage these impacts alongside traditional financial metrics.
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