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Howzit?
One of the public sports companies I’m keeping a close eye on is Puma.
The reason?
They’re one of the few publicly traded sports companies that have a perfect triple-A ESG rating.
What does that even mean, Ronen?
Glad you asked – let me explain.
ESG – The “ethical investing” rating
Many investors and investment funds are beginning to integrate environmental, social, and governance ratings (also known as ESG).
An ESG Rating measures a company’s resilience to ESG risks, exposure, opportunities, and management relative to its peers.
The criteria used in the rating go from things like climate change and workplace diversity to residual waste and responsible supply chain sourcing.
ESG Ratings go from ‘leader’ (AAA, AA), ‘average’ (A, BBB, BB) to ‘laggard’ (B, CCC).
Puma’s ESG Score
Puma – the famous German footwear and sports apparel company – is one of the few public sports companies with a perfect AAA ESG rating.
Relative to their competition, where Adidas is also a AAA and Nike is an A; Puma is doing an extraordinary job.
How exactly?
They recently launched several campaigns to positively impact society and the environment by continuously raising the bar in gender equality and sustainability.
In 2020, they launched the 10FOR25 sustainability targets, which include goals related to the following:
Some of their projects include:
The Forever Better collection of products made with sustainable, eco-friendly materials
A new shoebox design made of recycled cardboard
The “no more plastic bags in its stores” policy
Sustainable footwear made of sugarcane:
Why is all this important?
It may be hard to think people make investment decisions based solely on ESG ratings. However, interest in sustainable investing is a fast-growing trend that may eventually take over in the decision-making process of all types of investors.
This research from Morgan Stanley found that:
71% of individual investors believe companies with sustainability practices may be better long-term investments.
More people want to invest in companies that share their values and ethics— especially Millennials.
The Bottom Line
It’s cool to see companies like Puma make many efforts to create a positive impact in diverse areas of society and the environment.
Nevertheless, there’s a big difference between saying and doing – that’s why the ESG rating is so important.
Puma is an example of a company in sports that is delivering its promises related to environmental, social, and governance goals.
Yet, not all companies say or do anything related to their ESG efforts.
If the trend continues to grow – markets will likely require all public companies to disclose data and information about their sustainabilities practices along with their annual earnings. More funds and investors will use it as their “ethical investing” rating, and companies will work harder to get (or improve) it – creating a virtuous circle.
🎙 Halftime Snack of the Week
The Future of Networking in Sports
In my latest podcast episode, I discussed with Michael Katos the future of networking in sports.
Mike is the founder & CEO of Playing The Field — a social network for sports fans that allows them to connect to create anything from friendships to teammates, or maybe even finding your MVP!
We discussed meeting sports-minded people, the value of sports in our culture, the future of networking and dating, the strategy to grow a platform to different verticals, and so much more!
Listen on Apple | Spotify | Google
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Until next week,
Ronen Ainbinder
Twitter: @Ronenain
Website: ronenainbinder.com
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Halftime Snacks Podcast