Sustainable Luxury, Beauty & Sport

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More than 50 percent of executives consider sustainability—the management of environmental, social, and governance issues—“very” or “extremely” important in a wide range of areas, including new-product development, reputation building, and overall corporate strategy, according to the latest McKinsey survey.¹ Yet companies are not taking a proactive approach to managing sustainability: only around 30 percent of executives say their companies actively seek opportunities to invest in sustainability or embed it in their business practices, for example.

This survey explored how companies define sustainability, how they manage it, why they engage in activities related to sustainability, and how they assess as well as communicate this engagement. Companies are defined as being most engaged with sustainability if their executives say that sustainability is a top-three priority in their CEOs’ agendas, that it is formally embedded in business practices, and that their companies are “extremely” or “very effective” at managing it.² These companies are much likelier than others to reap value in the form of reputation building, cost savings, and growth opportunities. Energy companies, not surprisingly, also take a more active approach.

Discover, how the diamond industry (at least one of their actor) is heading towards more Corporate Responsibility. Get the presentation that Mrs Iris van der Veken, Manager Corporate Affairs Global of Rosy Blue - one of the most renowned diamond and jewelry companies - www.rosyblue.com - gave during the 2009 Antwerp Diamond Symposium. Get the 2008 Rosy Blue CSR Report.

Which luxury watch brand (from Jaeger-Le-Coultre, Audemars Piguet (ex-America’s Cup), Hublot (new America’s Cup), Girard Perregaux, IWC or …) will be the first (and unique) to join this eco-responsible-sailing competition … ?

The MultiOneDesign, an international programme combining an eco responsible initiative and a sailing competition, including ocean races, a World Tour, a European Tour and “city races », attracting the best skippers in the world. One-design 70’ multihulls – all equal on the ocean! – will carry the message of the eco responsible initiative called the “Multi One Attitude” defending a vital cause: the preservation of Water. A rich and exciting program…

Sustainable development, CSR or sustainability (whatever the terms and definition) represents certainly one of the 21^st century’s greatest opportunity; even more for luxury brands. So, it is no surprise to notice that most luxury companies, despite their slowness, head towards a strategic integration of corporate social responsibility (CSR). To evolve in that direction, they will have to systematically consider environmental and social impacts more seriously, in addition to ensuring their financial sustainability. It will induce a deep mind shift and change in the way they think, behave and  manage luxury brands; and especially among today’s “oldish” and conservative board room.

Present situation. Nowadays, CSR consideration is growing and is regarded as a crucial dimension to judge companies’ quality. Luxury brands have to improve in two dimensions – People, Planet – hence in making a Profit, as new ethical luxury clients are growing in share of voice and power. Even if CSR is more widely adopted around the world, a gap is growing between people expectations and the real implications for companies, giving birth to new business opportunities. In the luxury industry, traditional well-known brands or groups have already implemented CSR initiatives, mainly driven by cost savings and reputation management. Some new luxury brands, launched in the last few years, have built their strategy around CSR.

Rising trend.Numerous researches show that sustainable development is a rising trend within the luxury industry. An even increasing number of brands communicate their implications and most managers are persuaded that companies will increase their sustainable investments. Although CSR in the luxury industry is an emerging trend, stakeholders and market pressure, economic cycle and globalization will push companies to act and evolve toward CSR 2.0.

Perceived obstacles The vast majority of luxury brands have not been very active, mainly because of:

• Lack of understanding and expertise about CSR and/or sustainability.
• Perceived incompatibility of CSR with luxury values.
• Somehow conservative attitude.
• A generational gap of current decision maker
• Greed
• Weak market or government pressure.
• Fear of greenwashing
• The perception of high financial investments without guaranteed ROI.
• Supply chain complexity.
• The size and ownership of the business

Despite these obstacles, luxury companies have an opportunity to evolve to stay competitive and leverage the benefits of sustainability.

Real benefits – not a cost. By integrating a CSR program, luxury companies are expected to reduce their impact on the environment and increase their social considerations without jeopardizing their economic performance.  Companies will benefit from an improved brand reputation, a deeper relationship with and understanding of all stakeholders, higher productivity, and innovation which leads to increased profits and shareholder value.

How responsible are you ?

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