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EP&L analysis gives Kering critical new business insights

June 2015

A pioneering environmental impact report is being shared worldwide by Kering, the French holding company for global fashion and sportswear brands, including Gucci, Balenciaga and Puma.

Kering’s Environmental Profit and Loss Account (EP&L) measures the effects within its own operations and across its supply chains – and calculates them financially.

The company hopes that sharing the report will encourage corporations to understand their impact on natural resources and encourage take-up of the Natural Capital Protocol, being published next year as a guide to evaluate that impact.

Kering, which had €10bn ($11.1bn, £7.1bn) revenues last year, envisages its report enabling better decision-making so that companies can reduce their environmental impact and react to supply chain changes, such as fluctuations in raw material quality and availability.

This could produce better strategies underpinning more resilient business in an atmosphere of environmental challenges triggered by climate change, says the company.

The Kering report measures greenhouse gas emissions, water use, air and water pollution, land use changes and waste created by its offices, transport and retail activities within the group and in its supply chain.

The company is already concentrating on improving its manufacturing processes and the efficiency of its stores and other bases and transport.

It says that without the measures outlined in the report the effects would have been 40% greater.

The report records that 93% of total environmental impact is within the supply chain and more than half of it involves raw material production. It says 35% is produced by greenhouse gas and 27% from land use.

Among the materials used, 35% of the impact is from leather and 17% from cotton.

Marie-Claire Daveu, Kering’s chief sustainability officer and head of international institutional affairs, said: “The EP&L analysis provides us with critical new insights into our business, highlighting where we can design and implement innovative solutions to mitigate our environmental impact, while creating new business opportunities.

“At Kering we believe that it is important to be transparent with our peers and stakeholders as it is only through collaboration that we will be able to scale sustainability solutions and make a difference beyond our own business and supply chains, for society and nature more broadly.”

Richard Branson, the Virgin Group founder, commented: “Businesses that measure and value their true impacts have a better chance of mitigating increasing environmental risks and unleashing the innovation urgently needed to hasten the transition to a net zero emissions economy by 2050.”

Peter Bakker, president of the World Business Council for Sustainable Development, said Kering was “paving the way forward”.
 




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