Kering
Using environmental profit and loss data to guide sourcing decisions
Climate-related procurement risk: Limited visibility of environmental impacts across raw materials, water use, land use, pollution, biodiversity pressure and climate-exposed sourcing regionsÂ
Solution pathway: Environmental Profit and Loss accounting, natural capital measurement, supply-chain impact data and material decision supportÂ
Business type: Large corporate / luxury fashion groupÂ
Sector: Luxury fashion, apparel, leather goods, jewellery and global materials procurementÂ
Geography: France / global supply chainsÂ
In practice
Fashion and luxury supply chains depend on high-quality raw materials such as cotton, wool, cashmere, leather, precious metals and other natural fibres. These materials are exposed to climate and nature risks, including drought, water stress, biodiversity loss, land degradation and changing production conditions. Yet many procurement decisions are made with incomplete information about environmental impacts and dependencies.Â
Kering developed its Environmental Profit and Loss account, or EP&L, to make these impacts more visible. The EP&L quantifies environmental impacts across the value chain and translates them into monetary terms. It covers areas such as greenhouse gas emissions, water consumption, water pollution, air pollution, waste and land use.Â
This allows the business to compare environmental impacts across materials, sourcing regions and stages of production. Instead of treating sustainability information as separate from business decision-making, the EP&L turns environmental data into a format that can be used by procurement, design, finance and management teams.Â
For procurement, this is valuable because environmental risks are often hidden in upstream production. A material may appear commercially attractive but carry high exposure to water stress, land-use impacts, pollution or climate-related disruption. By improving the information available on these impacts, Kering can better prioritise lower-impact materials, engage suppliers and identify where sourcing models need to change.Â
The case is useful for this section because it shows how businesses can improve the sustainability information behind procurement decisions. It is not a traceability map or a supplier audit alone; it is a system for turning environmental data into comparable business intelligence.Â
Why this example was selected
This case study was curated because Kering’s EP&L is widely recognised as a pioneering corporate natural-capital accounting tool. Kering published its first EP&L accounts in 2015 and has described the tool as a cornerstone of its environmental strategy. Its methodology is linked to the Natural Capital Protocol and has been profiled by external organisations as a case study in long-term value creation and environmental measurement.Â
The example is useful for the Business Knowledge Hub because it shows how procurement information can move beyond basic compliance. For businesses buying climate- and nature-exposed materials, information on cost, volume and supplier location is not enough. Procurement teams increasingly need comparable information on environmental impact, water use, land use and natural capital dependencies.Â
The case is especially relevant for businesses that depend on high-quality natural materials. It shows how better information can support sourcing decisions before environmental risk becomes a quality, availability or reputational problem.Â
