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Reconciling luxury with Clean

While on the face of it, luxury and sustainable development seem completely incompatible, the reality of it is far more complex. Standing for quality and sustainable items, the luxury sector must set an example, under pressure from its future customers and market observers.

Whereas luxury is associated with a universe of excess and prestige, accessible to a privileged minority, sustainable development brings with it an idea of collective responsibility and more reasonable consumption. On the face of it, these two things seem to conflict with each other. And more than 56.7% of French buyers of luxury goods do think the two are at odds*. However, there are growing CSR demands being made of the sector, as pointed out back in 2018 by a Boston Consulting Group (BCG) report. Luxury goods customers, associations standing up for environmental or social causes, CSR ratings agencies, ethically-sound investment funds: they are all keeping tabs on the luxury sector’s every move.

Luxury – ostentatious and pointless or beautiful and sustainable?

There has to be a new definition of a luxury item.

What is a luxury item?

And that’s the first stumbling block. According to the same study by Jean-Noël Kapferer and Anne Michaut*, the conflict between luxury and sustainable development is significant for 70.2% of those for whom luxury refers to expensive items and 68.4% of people who define it as referring to something scarce. However, only 48.2% of those for whom luxury denotes exceptional quality see the two as being at odds.

Because, fundamentally, the following attributes define a luxury item :

  • Scarcity: made in small quantities, it does not deplete reserves of natural raw materials, the preservation of which shores up the future of the trade
  • Artisan craftsmanship: crafted partly by hand, it safeguards quality expertise
  • Sustainability: unlike fast fashion for fashion’s sake, it is built to last

From artisan craftsmanship to the luxury industry

The trouble is that while a few houses hold onto artisan activity with family businesses with whom rare knowhow rests, most have become part of the luxury industry, led by large listed corporations which condense an array of brands into their portfolios ranging from fashion to beauty products to spirits.

From value to values

In the 90s, the “bling-bling” years, owning a luxury branded item was about attaining status and gaining recognition in society. The most important thing about it was not aesthetics but a hefty price tag, and the brand being recognisable at first glance. And so it was that the price of luxury goods became disconnected from the cost price – a measure of the value of the brand, and by extension of the person wearing it.

While this is still the case for many luxury goods consumers, back in 2017 a study by Boston Consulting Group (BCG) identified a new profile dubbed “social wearer“ among big consumers of luxury goods. These consumers display strong attachment to ethical and environmental considerations in their relationship with brands, and their market share has doubled in the space of five years.

Lastly, according to a 2020 Ipsos survey, 68% of those in Europe aged 18-34 took the view that a luxury brand must make ethical and ecological commitments. Given that, again according to the BCG, “80% of the luxury sector’s growth comes from those aged 23-38”, it’s clear that the crucial issue for luxury groups is the development of new practices – and going public about them.

From the obligation to the epiphany in the minds of luxury groups

This approach is dictated by the authorities and also by companies themselves, internally.

Guided by an obligation

The CSR obligation has caught up with luxury groups as it has with all other companies. Here in France, the CSR reporting obligation was established by Article 116 of the New Economic Regulations Act (NRE) of 2001 for listed companies, then extended in 2011 by the Grenelle 2 Act to those with more than 500 employees or generating turnover of more than 100 million euros. Since the PACTE Act of 2019, annual “extrafinancial reporting” is required of almost all companies and organisations. It concerns the publication of information pertaining to 42 items falling into 3 categories: social concerns, the environment and sustainable development commitments.

Luxury sector firms had no choice but to look at their track record, more as a risk management exercise than out of any deeply-held conviction. All the more since investment funds and financial analysts have also been piling on the pressure: when you set prices like those, you’re at increased risk of harm to your reputation. The last thing you want is to be singled out by an NGO or a whistleblower and see your share price plummet.

A paradigm shift

To save their reputations, French luxury groups audited their value chains and identified sensitive areas and priorities back in the late 1990s, from sourcing of materials to manufacturing, and from logistics to stores.

And so it was, for example, that luxury leather goods brands were the first to question tanning processes that are polluting and a health hazard for artisans.

In the jewellery segment, in 2003 luxury brands were the first to join the Kimberley Process Certification Scheme, which originated in South Africa and prohibits the sale of uncertified diamonds and those that come from war zones.

To ward off any crisis, some even took it further by opting to no longer sell fur or goods made from exotic skins, since they could not provide guarantees as to the source.

Robust commitments made by all luxury groups

Each luxury-sector group has established its own approach

Kering, the group headed up by François-Henri Pinault

The owner of Gucci, Yves Saint Laurent and Balenciaga… The group headed up by François-Henri Pinault was the first to appoint a “Sustainable Development Director”, in 2010. It was also the first to publish an “environmental profit and loss statement” to measure the impact of its business on the environment, from product manufacturing through to sale. With its “CARE” programme, the group pledges to cut its CO2 emissions by 50% by 2025, and is aiming for 100% of its suppliers to meet the standards set by it in terms of environmental footprint reduction, traceability, animal welfare, the use of chemicals and working conditions. Gucci already announced that it was carbon neutral in 2019. Among Kering’s developments is investment in biotechnologies to develop eco-friendly, ethically-sound leather made in a lab from living animal cells.

LVMH, the group headed up by Bernard Arnault

In 2012, the group with more than 70 brands to its name (Sephora, La Samaritaine, Le Bon Marché, Louis Vuitton, Guerlain, Dior, Céline, Fendi, Chaumet…) presented its Life 2020 environmental programme, extended in 2019 by the Future Life programme, which makes priority issues of preserving biodiversity, combatting climate chaos, the circular economy and traceability. The Group headed up by Bernard Arnault pledges that within 5 years, 100% of its strategic raw materials will be certified as safeguarding ecosystems and water resources. LVMH group is also launching regenerative farming programmes, such as reforestation of vineyards. The group has pledged to cut its energy usage-related carbon emissions by 50% by 2026, and to power its shops and sites with renewable energy only. Lastly, the company has stated that its brands will no longer use virgin plastic in their packaging by 2026.

To this end, British designer Stella McCartney, a pioneer in standing up for the environment and animal rights – and newly cut loose from Kering group’s stake in her brand – has been appointed special adviser on sustainable development to Bernard Arnault.

The creation of the Fashion Pact

At the 2019 G7 Summit in Biarritz, the Fashion Pact was created upon the initiative of François-Henri Pinault. It brings together 56 companies and 250 brands including Kering, Hermès and Chanel. The aim: to halt global warming, restore biodiversity and protect the sea.

Real-world examples within luxury brands

Luxury brands became well aware that they had to act fast with high-exposure initiatives

Prada, Burberry, Chanel and Giorgio Armani dropped fur some years ago.

 Within Kering group, Saint Laurent and Brioni were the two remaining brands still using animal fur – Gucci, Balenciaga, Bottega Veneta and Alexander McQueen had already dropped it. In September 2021 the group announced that fur will be gone as from the autumn 2022 collections onwards. At the same time, singer Billie Eilish agreed to wear an Oscar de la Renta gown to the prestigious Met Gala only on condition that the fashion house stops selling real fur.

At Cartier and Boucheron, no less, all the gold is traceable.

Swiss luxury group Richemont launched its Baume brand in 2018, producing watches without any material that comes from animals, or precious stones, made entirely from recycled products. It reins in logistics as much as possible to reduce the carbon footprint and avoid stock having to be destroyed.

Ilaria Fendi has launched Carmina Campus, which makes luxury bags out of recycled materials, while Stella McCartney goes for synthetic or plant-based leather.

In the beauty product sector, luxury brands (Dior and Guerlain at LVMH, Lancôme and Armani at L’Oréal, and Chanel) have switched to clean extraction processes and green chemistry. They have also audited their suppliers of raw materials and their factories, while putting ethically-sound supply chains in place. Luxury beauty product brands are relying on NGOs’ support programs and starting to clean up their formulations. The fact remains that it’s very difficult to both hit the target of clean formulations and meet luxury product consumers’ criteria when it comes to sensory appeal and product enjoyment!

Can luxury still exist without fancy packaging ?

Packaging is an integral part of the essence of a luxury brand. It must reflect its image and status. All the more since e-commerce is developing and taking the place of the in-store experience, and since unboxing pretty much live on social media has become the norm. But amid this shift towards CSR, can we really keep using so many packaging items, which are bound up with status but also costly and superfluous?

What about jewellery boxes, complete with an abundance of ribbons, card inserts and pouches? Tons of perfume bottle glass, which calls for multiple separators in cardboard boxes? Beauty products that need heavy plastic to give them that luxury feel?

The revolution of the eco-designed packaging item

Eco-packaging is developing in the luxury segment, too. Recyclable is becoming the norm, boxed sets are breaking free of plastic, glass is recycled and recyclable, inks are plant-based and metal incorporates recycled aluminium. The weight of packaging is being reduced for a more virtuous approach, as is overpackaging.

By way of example, the new moulded shell of Ruinart champagne took two years of research and development work to produce. It is eco-designed, contains no plastic, is 100% recyclable and is nine times lighter than the presentation boxes used previously.

Beauty products – a tall order

In the beauty product industry, whereby the packaging is part of the product, luxury brands are also switching to eco-packaging.

On secondary packaging (the cardboard outer) the following are being phased out: leaflets and cellophane, separators and, little by little, make-up product pouches.

In the beauty product industry, whereby the packaging is part of the product, luxury brands are also switching to eco-packaging.

On secondary packaging (the cardboard outer) the following are being phased out: leaflets and cellophane, separators and, little by little, make-up product pouches.

Perfume is replenishable: Mugler, with Angel (under licence from Clarins group at the time) revolutionised the perfume world back in the 1990s with the creation of Source, whereby you could refill your empty bottle. Now, at Guerlain, you can fill Abeille bottles at the shops’ perfume fountains. It’s also the case of Louis Vuitton fragrances, and has been since they were launched in 2016. At Dior, Sauvage perfume is available in a refillable version that comes in an aluminium can. As does H24, the latest perfume from Hermès. In addition, the Chanel No. 5 perfume bottle will be the first to incorporate recycled glass whilst keeping its purity and transparency intact thanks to the work of glazier Pochet Du Courval. In 2022, all of the brand’s other perfumes will go down the same route.

Luxury cream pots and lipsticks are becoming refillable, too. La Bouche Rouge went with noble materials (metal, leather) and personaliseable refillable packaging for its lipsticks, and then its powders. Rouge Hermès lipsticks were designed this way upon launching, and Rouge Dior will be converted this year. Lastly, Guerlain, Sephora and more and more make-up shops are offering empty product collection for recycling.

The luxury world is by definition one that eats up a lot of scarce, costly resources. In the glare of the spotlight and needing to prove its good intentions to both its customers and its investors, this industry is working to reduce its carbon footprint, increase its transparency and make its environmental footprint as virtuous as possible. To do so, it is going as far as to reintroduce and protect plant species.

The fact remains that even these days, those who buy luxury branded products still expect to be sold a dream, creativity and exuberance, which often seem at odds with the clean approach in the broader sense.

*Jean-Noël Kapferer and Anne Michaut, “Luxury and sustainability: a common future? The match depends on how consumers define luxury”, Luxury Research Journal

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