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magazine. If these brands trade in aspiration, how will they relate to our aspirations at a time when global challenges such as security and climate change have become daily concerns? What is the future of luxury, of quality and style, when the world seems to matter more than ever before? New aspirations An important part of the role of luxury products is to confer on their owners an air of success. In this report, we argue that the definition of success – and the way it is perceived by others – is changing. A sense of shared responsibility is pervading the more affluent sections of society, with corresponding changes in the tastes and aspirations of affluent consumers. Increasingly, successful people want to show that they care about environmental and social issues. Some luxury brands, such as those featured in Chapter 7, have responded to the challenge of sustainability in appropriate and commercially successful ways. Others have tried to engage but failed, for reasons discussed in Chapter 4. Many have failed to engage in any significant way. Watch company TAG Heuer’s question to consumers – “What are you made of?” – will increasingly be turned back on TAG and its fellow luxury brands by consumers who expect convincing answers to questions of environmental and social responsibility. This report To our knowledge, this report is the first systematic analysis of luxury brands’ social and environmental responsibilities, performance and opportunities. In Chapter 1, we describe the global necessity of sustainable consumption. We explore specific aspects of this sustainable consumption agenda that involve luxury brands, from mining and farming to design, manufacture, marketing, retail, use, re-use and eventual fate (Chapter 5). We present the world’s first ranking of the social and environmental performance of the 10 largest luxury conglomerates (Chapter 6), responsible for a diverse range of brands, including Bulgari, Garnier, Tods, Kenzo, Hermès and TAG Heuer. 7
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Although some large luxury firms have begun to work on this agenda, they are lagging behind many other makers of consumer products. This is due to a range of myths that pervade the industry, such as assumptions about a lack of consumer demand for sustainable brands within emerging markets (Chapter 4). We explain the commercial reasons why luxury firms should do more, based on general market trends (Chapter 2) and on the current dynamics of the luxury sector (Chapter 3). By showing how the key commercial challenges facing the luxury sector today necessitate social and environmental excellence, we remove any doubt about the commercial drivers for sustainability. Towards Deeper Luxury We observe shifts in the luxury paradigm, emerging from major changes in social dynamics. In future, the highest quality product or service will be the one that generates the most benefit to all involved in its production and trade. Consumers’ knowledge of that benefit will be essential to their elite experience, and to the prestige ascribed to them by their peers. In future, luxury brands could represent the greatest positive contribution any product or service could make to people and planet: they would identify the luxury consumer as a person who has both the means and the motivation to ensure that others do not suffer. This deeper, more authentic approach to luxury would require truly excellent social and environmental performance; consumers expect excellence in this, because they expect it in all aspects of a luxury brand. The direct environmental impacts of luxury brands are significant (Chapter 5) although light compared with other sectors such as oil and gas; lighter, even, than those of many fast moving consumer goods, which have a shorter average lifespan and are disposed of more quickly. However, luxury brands are more sensitive to reputational damage, because a greater proportion of their brand value is derived from empathy and trust. Furthermore, in the case of lower-priced luxury items, it is relatively easy for consumers to switch to a “greener” alternative. (It is hard to switch to a sustainable airline, since there are none; in contrast, it is relatively easy to find “sustainable” clothes and accessories.) In this way,