German sports giant Puma has generated quite a hype with its recent publication of the world’s first environmental profit and loss statement. Commentators have argued that this is a big step for accounting practices, accountants being sometimes described as someone who knows the cost of everything and the value of nothing. As the Guardian put it, “Puma’s bold step adds a previously unquantified cost into the bean-counting equation – namely, that of a company’s footprint on the planet. The bottom-line result comes in at a very precise €94.4m £82.6m per year.” However, “groundbreaking though it may be, the final figure is not without its assumptions or shortcomings.
First, it presumes an accurate record of the company’s environmental impacts. As far as its direct operations go, the retailer is pretty confident. As with most large companies these days, it keeps track of major environmental data from its offices, stores and other direct operations.”
Surely, measuring the environmental impact of your supply chain will be a difficult task to do. But it is also an essential one, as those companies will feel the pressure to update their practices and to adapt them to the resource realities of the 21st century. It is also the chance for those doing good by excelling in corporate sustainability to increase their market share and see some financial rewards. In the end, environmental profit and loss statements should be as normal (and obligatory) as its economic equivalent is today. Puma is to be applauded for leading the environmental accounting movement into the right direction and should take any critical feedback as an opportunity for continuous improvement. May the era of integrated reporting follow soon…
For more on this topic, check out these books on environmental accounting on Amazon.
Picture credit: norio nakayama