“Luxury Brands Can No Longer Ignore Sustainability”
The Luxury Institute and Positive Luxury produced a report – 2016 Predictions for the Luxury Industry: Sustainability and Innovation. In this study, it claims that sustainability and social responsibility are now requirements to the luxury brands. There were four key pressures that supported this claim:
- Direct Pressure: The laws are changing and they require specific reports such as the Modern Slavery Act to prevent slavery in the large companies’ supply chains.
- Indirect but Powerful Pressure: Social norms are influenced through high-profile individuals such as celebrities. These figures’ voices are having impact on fashion and luxury worlds. Furthermore, “88% of UK and US millennials and Generation Xers believe brands need to do more good, not just ‘less bad.’”
- Investment Community: Numerous large companies, such as Nike, are being analyzed based on their sustainability performance.
- Finite Resources: Luxury products are dependent on the products of nature to maintain their businesses. With limited resources and the climate change effect, the companies are now well aware of the issue on hand.
For me, the fact that the luxury brands now see sustainability as a requirement, is a sign that sustainability is almost at the maturing stage in terms of realization. There are exceptions, but the luxury makers are known for producing the best highest quality goods at whatever cost. Now that they are looking at the non-financial and non-quality related aspects of their businesses, I am very optimistic that the effort into sustainability in all industries will increase exponentially.
Now that these luxury business are well aware of the sustainability issue, it will be very curious to see how they will integrate this new component into their operations. An industry where they emphasize quality and prestige, where does “green” fit in and how will they articulate it? Will they be aiming for the quadrant of Leaders or will the Bashfuls be enough in this segment?
This will be a difficult journey for these entities because of the nature of their businesses. Even if they use certifications, such as the Kimberley Process mentioned in the article, using the most premium natural resources will be contradictory.
Article: https://hbr.org/2016/02/luxury-brands-can-no-longer-ignore-sustainability?utm_campaign=HBR&utm_source=facebook&utm_medium=social
Daniel Im
April 8, 2016 — 3:48 pm
Great post Joseph! It’s really refreshing to see that even luxury brands need to focus on becoming more sustainability-centred. An individual wouldn’t think that a brand that sells extremely expensive goods to affluent consumers would need to worry about the environment or social issues, rather focusing only on quality and service. The second pressure point is one that I am really interested in – celebrities and prolific individuals applying pressure on these kinds of brands. Today, where society is so enveloped in a pop culture, celebrities have the ability to significantly affect trends. Specifically, they have a huge impact on fashion and luxury brands! I think it’s great that celebrities such as Leo are advocating increased sustainability for our future!
ChaoranZhang
April 11, 2016 — 12:07 am
I really enjoy your topic.
For years, traditional investors only focused on corporates’ financial performance to make the decision whether investing and purchasing the stock or not; however, the current tendency is that more and more sustainable and green investors are growing, which they take social and environmental aspect into consideration. Therefore, luxury fashion brands cannot ignore sustainability, in other words, the gap between sustainability and luxury fashion is closing fast. In addition, sustainability and corporate social responsibility are no longer an add on or bonus for luxury fashion brands, however, they are now requirements.