Environmental Profit & Loss Account
What is an EP&L?
An Environmental Profit & Loss Account is an innovative tool to measure the environmental footprint across our entire supply chain and then calculate the monetary value of the footprint as a common basis of comparison.
We take a deeper look than conventional sustainability reporting by measuring water use and water pollution, waste, greenhouse gas, other air emissions and land use beyond our own operations into our productions processes and even back to the source where we get our raw materials.
Why we use the EP&L for our group?
An EP&L analysis provides us with information we would otherwise not have to incorporate into our planning. By looking at our entire footprint, it helps us understand and identify opportunities to measure and better manage our environmental impacts. By stating these impacts in monetary terms, it enables us to have a common metric to compare performance across different product categories and business units.
It serves as a tool for deeper understanding and better decision-making in 3 ways:
- Strategic tool
The findings of the EP&L make transparent where we need to direct our sustainability initiatives in order to be effective and make real improvements in reducing our impacts. To find new solutions where it matters most. As a result we are looking into solutions to lessen the impact of our existing materials and production processes and to innovate new materials, technologies and sources that not only help us run more sustainably, but contribute to the overall success of our business.
- Risk management tool
Understanding the value and nature of our environmental impacts in the supply chain provides an early view of emerging risks, enabling us to incorporate these risks into our business planning and thus respond strategically to protect and enhance shareholder value. This is particularly relevant in an industry already facing increasing input costs as a result of a changing climate and availability of water and costs of energy.
- Transparency tool
By reporting the results of the EP&L we are being transparent about the extent of our environmental impacts and acknowledging our responsibility for the cost of doing business on Nature.
We believe this will provide a basis for more meaningful and concrete ways to engage with our stakeholders including investors and NGOs and enable us to clearly demonstrate the positive results of our activities to reduce our impacts.
In the process of developing and deploying the EP&L in our brands, we are discovering new ways to analyse our performance and look for opportunities to improve.
Ultimately, the EP&L will help us make better, more informed business decisions that take into account the natural resources our business depends on to operate, and the subsequent environmental impacts, which will enable us to develop a more sustainable and resilient business model for the Group overall. By monetizing these impacts, we can provide a more integrated approach to sustainability reporting and analysis of our financial performance.
How are we deploying the EP&L across the Group?
Pioneered by PUMA, Kering is now rolling out EP&L analyses across the entire Group to be published in 2016. We are supporting this effort at a Group level and will leverage our synergies while simultaneously working with each of our brands independently and collaboratively. The goal is not just to deliver a new reporting approach, but to find new ways to enhance the sustainability of our products, improve our performance and deepen our understanding of our impacts. We call this synergistic approach the ‘Kering effect’.
This is the first time that a global Group of companies has undertaken such an analysis. The EP&L will lead us to new ways of doing business that take nature into account.