2019 Sustainability Achievements





In 2019, Puig achieved to reduce its carbon footprint by 8%* as a result of the reduction in gross emissions and participation in offset programs. * Greenhouse gas emissions in t CO2 eq./net income in € million. Icons


GHG EMISSIONS

GHG Emissions


Our reductions come as a result of the following:

GHG Reductions
Image 01
In order to minimize our impact, we complemented our emission reduction with an alliance with the Fortaleza Ituxi REDD Offsetting Program in Brazil, thus continuing our collaboration policy from previous years. This project is certified by the VCS Program4 and by the CCBA5 and its main objective is to prevent massive deforestation in the indigenous forests of the Amazon. These programs also allow us to generate economic development beyond the vicinity of our premises and to support both sustainable forest management and the economic development of the community. Thanks to our participation in the Fortaleza Ituxi REDD Offsetting Program, in 2019 we contributed to the offsetting of 7,000 tons of CO2.

4 Verified Carbon Standard. https://verra.org/project/vcsprogram

5 The Climate, Community & Biodiversity Alliance. http://www.climate-standards.org/ccb-standards/



PILLAR 1

Product Stewardship

Pillar 1 - Product Stewardship Pillar 1 - Product Stewardship
A few years ago, we demonstrated our alignment with the circular economy model, which prioritizes efficiency in the use of resources and, therefore, of raw materials, while advocating the minimization of waste. The concepts associated with the circular economy have a direct relationship with everything associated with the product. For this reason, our products are designed more and more to take into account the practices within our scope and in 2019 we made progress in different lines of work.

On the one hand, promoting eco-innovation through the training and development of our teams in sustainability criteria in all phases of the product life cycle. The training sessions were aimed at designing innovative packaging solutions by reducing weight and/or volume without compromising on the design and quality of the products. We carried out different actions, including:

  • Annual R&D meeting, inviting industry leaders to share experiences of their projects and create synergies with our company.
  • Packaging School event in which leading experts in this field participated and various sustainability and circular economy initiatives, both internal and external, were presented with the aim of inspiring the technical teams.
  • Workshops with the brand teams in which they were encouraged to think about how to design products applying the principles of the circular economy.

On the other hand, searching more intensely for solutions to reduce the use of plastic in the coffret trays, leading us to act on different lines.

  • We continued our collaboration with ITENE7 to adopt new measures for reducing the amount of plastic by introducing an additive in the thermoformed trays without losing their physical and aesthetic characteristics. With this collaboration we have managed to reduce a total of 38.6 tons of plastic since 2016 (-13% of the plastic in the trays). In addition, we carried out a study on replacing the plastic trays of some brands with recyclable and biodegradable cardboard trays (100% virgin paper pulp). In 2020 we will carry out a pilot test so that we can subsequently plan their implementation in the coming years.
  • In parallel, we worked on the integration of recycled PET in these trays, an innovation that was applied in 85 products and meant an increase in the proportion of recycling of 30%. We hope to reach 90% in 2020.

During 2019 an in-depth investigation was carried out on new ingredients, materials and suppliers. We incorporated new raw materials of plant and/or natural origin, which allowed us to design formulas and products that adapt to current standards and the demands of our consumers. In tertiary packaging, we replaced some materials with more sustainable alternatives: in GWP8 we substituted polyethylene bags (81%) and silica gel bags (76%) for more sustainable options, and in the point-of-sale material we replaced the foam corners with cardboard wedges.

In addition, we carried out a study on the use of biodegradable or bio-based plastic, as well as an analysis of recyclable and recycled materials in different product categories: foam, polyester and metals. In our search for more environmentally friendly materials and raw materials, we approved new suppliers, to ensure that our value chain promotes sustainability in all its phases.

We continued working on the implementation of the White Book of Materials and Their Processes and updating the Watch List in accordance with new trends and demands, both legislative and those of the market and consumer.

Our effort and commitment was channeled through two additional projects:

  • Analysis of the environmental impact of some projects in the initial design phase, in the definition of components and in the selection of materials, in terms both of the formulation and of the packaging, with the aim of detecting eventual improvements in our environmental performance. The quantitative analysis allowed us to assess the different alternatives continuously and choose the most sustainable option.
  • During the launch of the Pacollection (Paco Rabanne) we set up an initiative to promote the return of packaging by the consumer. This action was complemented with a study on more sustainable packaging alternatives right from design stage.

Aware that consumers are the ultimate decision makers during the purchase and in order to determine loyalty in their consumption habits and their sensitivity towards sustainability, in 2019 we held, with the help of an external consultant, a discussion seminar on the trends and the future of the sector.

7 Technological Institute of Packaging, Transport and Logistics (ITENE, according to its acronym in Spanish).

8 Gift with purchase.

PILLAR 2

Sustainable Sourcing

Our responsibility and commitment to sustainable sourcing is reflected in the decisions we make and the actions we implement in our supply chain.

Aware that it is a never-ending task, we continued with the campaign to ensure adherence of our suppliers to our Sustainable Sourcing Policy and our Ethical Code, in order to ensure responsible behavior on their part and alignment with our values.

This task was complemented by the third supplier evaluation campaign to increase our sustainability performance. Until 2019, a total of 176 suppliers had been evaluated, representing 94% of the volume of purchases. Our suppliers obtained an average score of 55.4 points (+2.4%), which places them above the EcoVadis average (42.4).

In parallel, we started new ways of collaborating with suppliers in order to increase knowledge about the origin and traceability of some key perfumery ingredients.

Our commitment to the protection of forest ecosystems and biodiversity ensured we achieved, before the set date, the principal objectives of the Sustainability Program on the sustainable sourcing of the main raw materials such as paper, cardboard and alcohol.

In 2019, one year ahead of schedule, we ensured that 100% our folding cardboard came from sustainably managed forests. This involved a total 1,781 tons of various types of paper. Our main suppliers are from Nordic countries and therefore follow very stringent sustainability policies.

We took the decision to work internally on the traceability of the key raw materials for our activity. This decision was brought about due to the dissolution of the NRSC9 after five years of collaboration, during which we acquired key knowledge about the origin of raw materials and the field work of relevant supply chains. The direct management of purchasing decisions based on this knowledge will allow us to reinforce internal know-how and improve supply following sustainability criteria.

9 Natural Resources Stewardship Circle for the Cosmetics and Fragrance Industry.

PILLAR 3

Responsible Logistics

Pillar 3 - Responsible Logistics Pillar 3 - Responsible Logistics
Aware that the way we deliver our products to the consumer has a very high impact on our carbon footprint (84.1% of the total), we continued to take measures to optimize our distribution.

As a result of the projects defined and launched in previous years, in 2019 we reduced emissions associated with transport and distribution by 5%.
Pillar 3 - Responsible Logistics

In the area of logistics, we continued to work on initiatives such as increasing efficiency in freight, using more sustainable modes of transport, and increasing the number of local suppliers of raw materials. In 2019 our performance in reducing our logistics emission was good, achieving a reduction of 9%.

We launched initiatives in both inbound and outbound logistics, in the following areas:

Inbound logistics: -4% of GHG emissions10.

  • Positive result of the initiatives launched in previous years such as the implementation of Dual Evarm11 technology, after its pilot test in 2018, moving to dual-fuel hybrid systems based on gas in the Fransitrans fleet.

Outbound logistics: -10% of GHG emissions.

  • Agreement with five customers to replace air transport with sea transport (which has a lower environmental impact), something which requires us to adapt our processes, times and methodologies, without neglecting the quality and satisfaction of our customers. We hope to extend this initiative in the coming years.
  • Opening of a logistics platform in Venlo (Netherlands), which helped optimize transport to customers in central Europe, reducing the kilometers traveled and therefore waiting time and emissions (-11% tons of CO2).

As part of our supply chain environmental performance control program and in line with our desire that all our logistics operators comply with the environmental standards necessary to achieve our objectives in this pillar, at the end of 2019 – also in collaboration with EcoVadis – we carried out an evaluation on 87% of our logistics suppliers, which provided confirmation of the positive results of previous years.

10 Greenhouse gases.

11 Approved technology for the implementation of gas-based dual-fuel control units in trucks and other vehicles.

PILLAR 4

Responsible Manufacturing

Despite the fact that our impact in manufacturing is low in relation to other sectors, we continued to work every day to optimize any variable that allows us to be more efficient. On our way to being carbon neutral in the production phase, we managed to reduce emissions in this pillar by 6%12 in 2019.12 KPI t CO2 eq./1,000 units produced.
GHG Emissions per plant

Given that energy and water consumption, in addition to minimizing waste, is one of the key areas to improve for reducing environmental impact in production processes, we have obtained international certifications that periodically monitor our performance.

Annual Consuption

The greatest impact in 2019 was in gas consumption, which moreover is the main source of emissions from our production processes.

GHG Emissions by source

One of our priorities at Puig is energy efficiency, so in 2019 we carried out periodic audits in our manufacturing plants to optimize energy management, guarantee the required environmental compliance, detect areas for improvement and implement measures. These measures focused on two aspects:

1. Promoting a move towards less polluting energy sources:

In 2019, we continued our renewable energy implementation plan. Since 2015 we have been buying 100% of our electricity for our production plants and headquarters from renewable sources.

Undoubtedly, the greatest milestone in 2019 in the production area was the introduction of biomass energy systems in the Chartres and Vacarisses plants, which enabled a reduction of GHG emissions by 57% and 14% respectively. Since gas is the main source of emissions in our factories, this change was a key step forward in the goal of becoming carbon neutral by 2020.

GAS Consumption per hours of operation and plant

We also carried out a feasibility study on installing solar panels in the Alcalá plant, with the aim of generating electricity for self-consumption.

2. Intensifying measures to reduce consumption:

We continued to work on measures that impact the day-to-day activity, such as the implementation of automation and mechanisms that allow us to sectorize and therefore reduce consumption or the change to LED lighting.

In addition, we developed a new 2020-2023 Energy Minimization Plan for each of the manufacturing plants and designed the roadmap for incorporating all the supplies of the four plants into the corporate Energy Management System (EMS) software. In parallel, we redefined energy KPIs and incorporated baselines in order to improve management, monitor consumption more efficiently and improve reporting.

Intensifying measures to reduce consumption

Aware that water is a scarce commodity and to ensure that we act efficiently and responsibly, we introduced improvements in reuse and decreased consumption. In 2019, we improved the osmosis and nanofiltration membrane facilities at the Vacarisses water treatment plant and decreased the amount of irrigation water used at the Alcalá plant.

A large part of our commitment to the circular economy has to do with the way we manage the waste generated by our production. In this regard, we work towards increasing waste valorization through our own actions and through agreements with suppliers. Since 2015 we have consistently met the “zero waste to landfill” target, but in addition in 2019 we maintained our recycling and recovery rate at 95%.

Tertiary packaging is among the most significant waste generated by our activity and therefore we tried to reduce it through various initiatives, achieving very positive results in 2019:

  • Circular economy project at the Barcelona plant to manage thermoformed plastic trays as a by-product instead of treating them as waste. This action allowed us to reduce the impact of tertiary packaging. Up to year-end, a total of 86 tons of plastic was managed as a by-product.
  • Feasibility studies to replace the plastic in the thermoformed trays with paper pulp.
  • Return of box-pallets to suppliers for reuse.
  • Improvement in the light packaging waste segregation at the Chartres manufacturing plant through the use of new containers, as well as internal communication and awareness campaigns.

Regarding noise and light pollution, no significant impacts were identified in our factories and facilities, in which we comply with the technical characteristics required by applicable legislation and regulations. Also, in order to carry out the required verifications, each center has operating instructions which establish the frequency with which peripheral sound level tests should be carried out.

None of our centers has any direct impact on protected areas. However, the Vacarisses plant is located near a protected water channel and, therefore, since 2006 we have implemented a plan to reduce consumption and discharge.

PILLAR 5

Employees and Facilities

Pillar 5 - Employees and Facilities Pillar 5 - Employees and Facilities
Our commitment in this pillar is to reduce the impact of our offices and the environmental footprint of the people who work at Puig in relation to their professional activity. Overall, in 2019 we reduced GHG emissions related to the activity of our employees by 16% and those of our headquarters by 4%.
GHG Emissions associated with employees in Spain and France
GHG Emissions associated with central headquarters


One of the main initiatives launched in previous years was the reduction of paper consumption, with a reduction of 4% in 2019 and of 17% in its associated emissions. These figures contributed to surpass the 50% reduction target planned for the 2014-2020 period, reaching 71% in 2019.

GHG Emissions associated with paper consumption

This reduction in paper consumption and in associated emissions was the result of different actions:

  • Global implementation of a single print provider in all business units, which allowed us to standardize processes and improve reporting data.
  • Analysis of the global implementation of common software to improve the management and reporting of consumption and associated emissions, which is scheduled for 2020.
  • Drafting of the Global Printing Standard, a guide that outlines the criteria for the purchase and use of paper printing at a global level, with the aim of reducing the amount of printing and its environmental impact.
  • Centralization of printers and, therefore, reduction in the number of units.
  • Awareness campaigns for employees.
  • Use of recycled paper instead of bleached virgin paper.

Our global presence means that our employees take a significant number of business trips, which in 2019 we managed to reduce by 23%. Air travel decreased by 6%, replaced by rail travel, which reduced travel emissions.

In addition, we signed an agreement in France with Joinup for the use of taxis, leading to improved data on journeys, kilometers traveled and associated emissions.






OTHER INITIATIVES
We want to involve our employees in the environmental challenges we face today. In this regard, we promoted the Plastic Free initiative to get our employees to reduce their consumption of single-use plastic and the associated generation of waste at the headquarters in Spain and France and at the four factories.

We promoted actions such as the elimination of plastic bottles, the installation of reverse osmosis drinking fountains, and the use of biodegradable cups or reusable personal coffee cups and bottles. This campaign will be extended in 2020 during which other actions will be launched.

In 2019 we also continued with other actions aimed at involving our employees and improving their sustainability activity, including:

  • Improvements in waste management: installation of waste segregation bins for events at the Barcelona headquarters and adaptation of containers to allow waste sorting.
  • Initiatives to combat food waste in the canteen of the Barcelona headquarters, encouraging workers to “take away” left-over food. Thanks to this initiative, since the year this headquarters was opened, food waste has been zero.
  • Internal campaigns through Workplace.
  • Benchmark corporate events on sustainability, such as the Sustainable Week.
We are committed to improving the environmental performance of all our facilities, and, consequently, we ensure that our certifications that guarantee the high standards of our actions are kept up to date.

At the Barcelona headquarters, we completed the implementation of the same software as in the plants, the Energy Management System (EMS), for real-time monitoring of consumption and measurement of impacts. To do this, we redefined the indicators and included baselines in order to measure the behavior of the building in terms of energy performance.

We started to deploy the Energy Consumption Minimization Plan defined in 2018 for the 2019-2021 period, achieving improvements in the three indicators:

Annual Consumption



Cross cutting initiatives

As well as the actions structured around the pillars of our Sustainability Program, we are committed to extending our philosophy and objectives to key moments in the year in which we can reach a large number of employees, in order to launch awareness campaigns. In 2019, two moments are worth mentioning:
SIM2019, CARBON NEUTRAL EVENT

The Strategic International Meeting is the largest annual internal event used to present the company’s upcoming projects in an innovative and appealing way. In 2019 we had more than 1,000 attendees, including Puig employees, shareholders and important customers (+10%).

Following the strategy of organizing a specific activity every year to increase the awareness and commitment of the attendees to sustainability, in 2019 we organized the exhibition “Sustainability and Luxury: a strategic opportunity”, in which we showed how other industries are evolving towards a more sustainable business model without neglecting the luxury aspect. We also took the opportunity to advantage to highlight our achievements since the start of the Sustainability Program in 2014.

In 2019, the carbon footprint13 of the event in absolute values was 1,100 tons of CO2. In order to make the event carbon neutral, in addition to minimizing GHG emissions in all parameters, all unavoidable emissions were offset through our participation in the Madre de Dios Amazon REDD+ Project (Peru), a sustainable forest management project carried out in the Peruvian Amazon. This enabled us to make the SIM a CO2 neutral event.

This collaboration also has a direct impact on the development of local communities, providing temporary work to more than 100 people, allocating economic resources in the form of basic medicines and supporting campaigns against dengue, among other benefits.

13 The KPI is 1.04 tons of CO2/participant.

Sustainable Week 2019

We held the third edition of the Sustainable Week, an internal communication campaign to raise awareness about sustainability within the company, with a fully global reach in all our premises for the first time.

This year, under the slogan “Join the REgeneration”, we focused on explaining what the circular economy is and how Puig is incorporating it into its processes. The objective was to raise awareness in a practical and experiential way about how it is possible to change habits and actions in our day-to-day life to have a lesser impact on the environment.

The initiative was held between October and December at both headquarters, all factories and the vast majority of affiliates, with a record global participation of 78%.

In this way, not only do we ensure that we act in a more responsible and sustainable way as a company, but we ensure that our employees are also equally committed in their day-to-day life.

Our contribution to the SDGs
  • 1. No Poverty
  • 2. Zero Hunger
  • 3. Good Health and well being
  • 6. Clean Water and Sanitation
  • 7. Affordable and clean energy
  • 9. Industry, Innovation and infrastructure
  • 10. Reduced Inequalities
  • 11. Sustainable Cities
  • 12. Responsible Consumption and production
  • 13. Climate Action
  • 15. Life on Land
  • 17. Partnerships for the goals

ACHIEVEMENTS BY PILLAR
SUMMARY

New initiatives in circular economy and ecodesign.
- Measurement of the environmental impact of projects.
- Pacollection: consumer packaging collection program and search for more sustainable materials.
Training for internal teams.
- R&D Annual Meeting, Packaging Academy, Paco Rabanne workshop.
Secondary packaging.
- Reduction/replacement of plastic with paper in secondary packaging (especially in coffrets).
In-depth investigation into new materials and suppliers.
- Biodegradable plastic, recyclable and recycled materials, raw materials of natural or plant origin.

Ensure supplier compliance with our Sustainable Sourcing Policy (SSP).
New Ecovadis campaign:
- 176 providers monitored.
- 94% of purchasing volume.
- High average rating: 55.4 (EcoVadis average: 42.4).
100% of our folding cardboard comes from sustainably managed forests.
100% of our alcohol is of natural origin.

Reduction of transport and distribution emissions: –5%.
- Reduction of logistics emissions: –9%.
Reduction of inbound emissions: –4%.
- Use of liquefied natural gas trucks.
- Implementation of Evarm technology (gas-based dual-fuel hybrid system).
Reduction of outbound emissions: –10%.
- Substitution of air transport with sea transport for some customers.
- Positive impact of the new warehouse in Venlo, the Netherlands (direct service to Europe).

Biomass energy installation in Vacarisses and Chartres.
- Vacarisses: –14% in GHG emissions.
- Chartres: –57% in GHG emissions.
Reduction/replacement of plastic in tertiary packaging.
- 86 tons of plastic per year managed as a circular economy.
Study on the implementation of solar energy in Alcalá.

Internal PLASTIC FREE campaign.
- Reduction of single-use plastic (bottles and glasses) in headquarters and production plants.
Improvement of waste segregation areas.
4% reduction in paper consumption per employee.
Sustainable Week 2019: “Join the REgeneration”.
- Raising awareness of the circular economy.
- World-wide participation 78%.

* Greenhouse gas emissions in t CO2 eq./net income in € million.



Report Methodology

Report Methodology

This sixth Sustainability Report published by Puig presents the main milestones and indicators of the company’s sustainability performance during the 2019 financial year.

This year, we have taken another step in improving the accountability model of the results of the 2020 Sustainability Program, by including these results and milestones, as well as the environmental requirements of Law 11/2018 on non-financial information and diversity, in a single verified report.

Moreover, the report uses the recommendations of the Global Reporting Initiative (GRI14) as reference and reflects the alignment of the company’s sustainability strategy with the United Nations Sustainable Development Goals.15

The report details the most important milestones achieved in 2019 through our Sustainability Program and the level of compliance with the company’s targets for 2020. For the purposes of comparison and analysis, the quantitative data for previous years has been included, ensuring transparency and clarity in the communication of results to stakeholders.

14 GRI: The Global Reporting Initiative is an international standard for companies interested in communicating a new approach to their governance, their economic, social and environmental results, and the impacts of their organizations.

15 In 2015, the United Nations General Assembly approved the 2030 Agenda, made up of 17 Sustainable Development Goals (SDGs) to eradicate poverty, protect the planet and ensure peace and prosperity. Each of these sets out specific goals that must be achieved by 2030, which can only become a reality through the collaboration of governments, the private sector, civil society and citizens.

For more information, download Puig 2019 Sustainability Report
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