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quality and style when
the world matters
Jem Bendell &
Anthony Kleanthous
Dee per
Luxury
WWF-UK
Panda House,
Wayside Park,
Godalming,
Surrey,
CU7 1XR
t +44 (0) 1483 426 444
f +44 (0) 1483 428 409
WWF-UK registered charity number 1081247 A company limited by guarantee
number 4016725 © 1986 Panda symbol and ® “WWF” Registered Trademark
of WWF-World Wide Fund For Nature (Formerly World Wildlife Fund)”
Project number GB063501
The mission of WWF is to stop the degredation of the planetʼs natural environment
and to build a future in which humans live in harmony with nature, by:
• conserving the worldʼs biological diversity
• ensuring that the use of renewable natural resources is sustainable
• reducing pollution and wasteful consumption
wwf.org.uk
Printed on Revive Matt – made from 50% de-inked
post-consumer waste, 25% pre-consumer waste and
25% virgin fibre from Sweden and Spain.
Strict environmental controls are adhered to during
production and no chlorine bleaching is used. Printed
on a waterless press using vegetable-based inks.
“Luxury is well-rounded excellence. Corporate excellence today includes being
globally responsible. This WWF report makes explicit how luxury companies can,
should, and hopefully will, develop and leverage their globally responsible behaviour
to enhance their brand image. Tomorrow, they will have no choice.
Henri-Claude de Bettignies, Emeritus Professor, INSEAD, and Distinguished Professor of Leadership and Responsibility,
CEIBS (Shanghai)
“WWF’s report, Deeper Luxury, demonstrates that a quality product must involve a
quality value chain, where everyone in that chain benefits and their environment is
sustained. Bendell and Kleanthous’s analysis should be welcomed as an important
contribution to the strategic planning of all high-end brands and their suppliers.
Pierre Simoncelli, Managing Director of Sustainable Development, L'Oreal
“There is nothing luxury about sweatshops. ‘Deeper Luxury’ highlights how luxury
brands need to excel in how they treat their workers and local communities, just as
they excel in design, quality and marketing. Only when they can demonstrate this
will they be seen as a potential ally for social development, rather than merely a
symptom – or even symbol – of inequalities worldwide.
Barry Coates, Oxfam, New Zealand
“Affluent consumers in some Asian cities are increasingly aware of environmental
problems and many now show an interest in the responsibility of brands. In highlighting
this, Bendell and Kleanthous outline a global context for the future of luxury.
Carmen Ho, Luxury Footwear Designer
5429 Cover artwork:Layout 1 21/11/07 12:41 Page 1
94
The Sunday Times 12 August 2007
Revealed: Topshop clothes made with
‘slave labour’, Claire Newell in Port Louis,
Mauritius and Robert Winnett. http://women.
timesonline.co.uk/tol/life_and_style/women/
fashion/article2241665.ece
95
Dana Thomas, 2007, Deluxe: How Luxury
Lost its Lustre, Penguin.
96
FTSE4Good March 2007 Review: 25
Companies Added, 17 Companies
Removed Article Category: News-Press
Releases, Release Date: 9 March 2007.
97
www.iccwbo.org/policy/society/
id1188/index.html
98
For Richemont, see its 2007 CSR report
at www.richemont.com, and for LVMH see:
Novethic (2005) Only Six French Companies
in the CAC 40 Stock Market Index are up
to Standard on their Non-Discrimination
Disclosures, 15 December 2005
www.csrwire.com/bsr/article.cgi/4821.html
99
You’re worth it - if white. L’Oréal guilty of
racism, Angelique Chrisafis, 7 July 2007,
The Guardian. www.guardian.co.uk/
france/story/0,,2120789,00.html
100
www.cites.org/
101
www.panda.org/about _wwf/what_we_do/
species/news/index.cfm?uNewsID=17351
102
International Herald Tribune, 2007,
Big spenders to face new scrutiny in Britain,
By Eric Pfanner, 7 May 2007,
www.iht.com/articles/2003/05/07/
launders.php
103
http://en.wikipedia.org/wiki/Luisel_Ramos
104
The Observer, 2007. Everyone knew she
was ill. The other girls, the model agencies
... don’t believe it when they say they didn’t,
Magazine, http://observer.guardian.co.uk/
magazine/story/0,,1987928,00.html
105
In Sync With the West /Tuning In to
Baywatch : Globalization Brings New
Cultural Traits to India, By Thomas Fuller
Published: September 14 2000,
www.iht.com/articles/ 2000/09/14/
delhi.2.t_0.php
106
Sustainable by design: explorations in
theory and practice, Earthscan, 2006,
Stuart Walker.
107
The Independent (2007) A bit rich: Luxury
brands are flaunting their green credentials
but can conspicuous consumption come
with a clear conscience?, by Simon Brooke,
9 August, http://environment.independent.
co.uk/lifestyle/article2849283.ece
108
Kyojiro Hata, 2004, Louis Vuitton Japan:
The Building of Luxury, assouline.
pp.76-78.
109
Carbon Trust, 2005, Brand value at risk
from climate change, p12.
www.carbontrust.co.uk/ Publications/
publicationdetail.htm?productid=
CT-2004-10
110
IWC gives meaning to marketing, 19 March
2007. 3rd Issue,
http://journal.hautehorlogerie.
org/en/points-of-view/interview/iwc-gives-
meaning-to-marketing/661.html
111
The Independent (2007) A bit rich: Luxury
brands are flaunting their green credentials
but can conspicuous consumption come
with a clear conscience?, by Simon Brooke,
9 August, http://environment.independent.
co.uk/lifestyle/article2849283.ece
112
www.solarimpulse.com/news-1-en31.html
113
IHT. On Advertising: Luxury gets less flashy,
By Eric Pfanner Published: 29 July 2007,
www.iht.com/articles/2007/07/29/
business/ad30.php
114
Marie Le Berre, 2007, The social
responsibility of watchmaking companies,
Haute Horlogerie Journal, 15 April 2007.
4th Issue, http://journal.hautehorlogerie.
org/en/notes/notes/the-social-
responsibility-of-watchmaking-
companies-3690.html
115
These summaries were prepared from
company websites and cross-checked
with other online sources.
116
Self-reported data on a mixture of
performance and management process
is the type of data used by responsible
investment institutions, which account
for trillions of dollars under management.
However, some have criticised such data
for not accurately describing either impacts
or public reputation (see Waddock, S.
(2003) “Myths and Realities of Social
Investing.” Organization & Environment 16.3,
369). Impact data are currently not available,
and WWF is promoting obligatory reporting
of environmental and social impacts.
117
www.eiris.org
118
The United Nations’ expert advice on ESG
reporting to accountancy professions does
not currently recommend weighting of criteria.
See: UNCTAD (2003) Disclosure of the
Impact of Corporations on Society:
Current Trends and Issues, UNCTAD/ITE/
TEB/2003/7, United Nations Conference
on Trade and Development, Geneva.
119
www.covalence.ch
120
www.unpri.org
121
www.globalreporting.org
122
www.osklen.com.br
123
All quotations from personal communication
with Jem Bendell, August 2007.
124
All quotations in this section from: Time, 2005,
Bali Guy, 29 November 2005 By Aryn Baker.
www.time.com/time/magazine/article/0,917
1,1135643-1,00.html
125
www.johnhardy.com
126
All information from www.madara-
cosmetics.lv
127
www.madara-cosmetics.lv
128
www.lindaloudermilk.com
129
San Francisco Chronicle, 2007, Hyatt
puts Tesla roadster recharging stations in
3 hotels, David R. Baker, 30 August.
130
www.teslamotors.com
131
www.oneplanetliving.org.uk
132
Okonkwo (2007) p.157.
133
Ibid, p.242.
134
Ibid, p. 256.
135
www.ew.com/ew/article/0,,20037
658,00.html
136
Cited on http://londonstarmap.com/
September 2007.
137
Are Celebrities Being Used as Pawns by the
Fragrance Industry? Las Vegas, NV 89126,
28 August 2007. http://www.expertclick.com/
NewsReleaseWire/default.cfm?Action=
ReleaseDetail&ID=17731
138
This plan is adapted from WWF’s report on
responsible brands, ‘Let Them Eat Cake’,
available at www.wwf.org.uk/letthemeatcake.
For WWF’s latest advice on luxury brands
visit www.deeperluxury.com
139
Walker, 2006, Sustainable by design:
explorations in theory and practice,
Eearthscan, 2006, p.59.
140
Keesing, Roger. 1984. Rethinking mana.
Journal of Anthropological Research 40:
pp.137-156.
Design by bwa-design.co.uk
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“A fascinating, ground breaking, must read wake-up call for all professionals and
aficionados of the luxury goods industries, the consumers of their products and the
celebrities that endorse them. The report says ‘Consumers’ increasing concerns with
environmental and social problems are the greatest cultural shift of the 21st century’
and points the way to how these industries must behave if they are to keep their
cachet which they need to survive.
Katharine Hamnett, Ethical Fashion Designer
5429 Cover artwork:Layout 1 21/11/07 12:41 Page 2
Executive summary 2
Introduction 5
Chapter 1: Context 8
Chapter 2: How markets are
driving sustainable luxury 12
Chapter 3: Industry Challenges 17
Chapter 4 Exploding the myths of shallow luxury 23
Chapter 5: Issues of public concern 25
Chapter 6: Performance ranking of luxury groups 32
Chapter 7: The future makers 37
Chapter 8: The role of celebrities 42
Chapter 9: The ten point plan 44
Conclusion 46
Endnotes 47
Website
Electronic downloads freely available at
www
.wwf.org.uk/deeperluxury include:
Executive summary
This report in full
Non-graphics 14 font “accessibility” version of this full
r
eport, in pdf for audio reading
Press release and press pack
Deeper Luxury
1
Contents
Acknowledgements
This report is the result of a team effort. First, we thank Elizabeth
Goodwin for her efficient, insightful and enthusiastic support
throughout, Fiona Harkin, who offered invaluable advice, and
bwa design, whose flexibility was as valuable as their talent in
designing this report and accompanying website. We are also
grateful to the following, who have provided input or contacts
that helped either the conception, research, writing, design or
promotion of this report: Mark Bendall, Bianca Cheng, Indre
Kleinaite, Vanessa Friedman, Antoine Mach, Tanya Mailangkay,
John Manoochehri, Cristiana Schiavolin, Ariane Thomas, Diana
Whittington, and staff at Covalence, Ethical Investment Research
Service (EIRIS), Future Lab and Trend Buero. We are grateful to
our pro bono media partners for this report, Hannah Lane and
Diana Verde Nieto of Clownfish. In WWF-UK, we thank Greg
Armfield, Georgina Bridge, Jane Caie, Pippa Carte, Adrian
Cockle, Sarah Coombs, David Cowdrey, Glyn Davies, Peter
Denton, Susan Gent, Oliver Greenfield, James Leaton, Dax
Lovegrove, Jacqueline Morgan, Jen Morgan, Christina Palmer,
Tanya Reed, Edwina Silvester, Oliver Smith and Heather Sohl.
The authors
© Greg Armfield / WWF-UK
5429 Inside pages Artwork for web:Layout 1 21/11/07 12:33 Page 1
Executive summary
What are you made of?
bwa-design.co.uk
5429 Inside pages Artwork for web:Layout 1 21/11/07 12:33 Page 2
This report provides a clear vision and rationale for
a more sustainable luxury industry. A compelling
business case is presented for a new type of luxury
whose deeper values are fully embodied in the
sourcing, manufacture, marketing and distribution of
products and services. Authentic luxury brands are
those that provide the greatest positive contributions
to all affected by their creation and that identify their
consumers as having the means and motivation to
respect both people and the planet.
Luxury brands have the power to influence consumer
aspiration and behaviour by editing consumer choices
through product design, distribution and marketing;
and by influencing how, when and for how long
consumers use their products. They have both the
opportunity and the responsibility to promote
sustainable consumption.
The New Luxury Consumer
Many luxury consumers are part of an affluent,
global élite that is incr
easingly well educated and
concerned about social and environmental issues.
These consumers use luxury products as a symbol
of success. The definition of success – and the way it
is perceived by others – is changing. Many successful
people now want the brands they use to reflect their
concerns and aspirations for a better world. This is true
not only in Western luxury markets, but, increasingly,
amongst the affluent middle classes of Asia, Latin
America and Eastern Europe.
The New Luxury Marketplace
Sustainable business practice is a necessary response
to the main strategic challenges facing luxury brand
owners. Seven challenges ar
e outlined in this
report, including:
The democratisation of luxury:
Luxury brands have become more accessible, making
it harder to appeal to consumers on the grounds of
exclusivity. Instead, their added value for consumers
could be derived from superior environmental and
social performance, expressed through “deeper” brand
values and more sustainable business practices.
Splendour amid squalor:
Luxury brands are experiencing rapid expansion in
societies that contain both very rich and very poor
people. Such societies can view displays of conspicuous
consumption as a threat to social cohesion. This is true,
for example, in China, where the authorities in Beijing
have banned the use of billboards to advertise luxury
products and services.
In this context, the credibility of luxury products and
services will be derived from their ability to generate
wellbeing, not only for consumers, but also for those
involved in (or affected by) their production, use, reuse
and disposal.
Environmental and Social Performance
Given a lack of public information about corporate
performance on this agenda, WWF-UK analysed and
ranked the ten largest, publicly-traded luxury brand-
owning companies on their envir
onmental, social and
governance (ESG) performance. These brands include
Gucci, Yves Saint Laurent, IWC, Garnier and Louis
Vuitton. The ranking is derived from a combination of
two types of information: what the companies themselves
report to the ethical investment community; and what
media and non-governmental organisations have been
saying about them. This information was scored,
weighted and combined to create a score out of
100, expressed as a grade from A (best) to F (worst).
No company was awarded higher than a grade C+.
The French luxury group, L'Oreal, topped the ranking
and the Italian group Tod's came tenth. As reported
by themselves and others, the ESG policies and
performance of luxury brands is inferior to that of
other types of leading brands.
WWF-UK urges luxury companies to put sustainability
issues at the heart of their business strategy and to
benchmark their progress. To do so, they should
measure and report their performance in accordance
with international guidelines, as set out in the Global
Reporting Initiative (GRI).
Deeper Luxury
2/3
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Coherent Celebrity Endorsement
Celebrity endorsement is an important driver of value
for most luxury brands. Furthermor
e, the brands that
these celebrities choose to endorse are seen as a
reflection of their personal values. Endorsing brands
with poor social and environmental performance can
damage the reputation of these celebrities as well as
undermining the good causes that they support.
WWF-UK calls on celebrities to seek more coherence
between the causes that celebrities support personally,
and the brands that they endorse on a commercial
basis. To help them to make the right endorsement
choices, we have prepared a “Star Charter”, comprising
the following six principles:
1. To recognise their potential to influence
consumer behaviour
.
2. To encourage both consumers and companies to
be awar
e of the social and environmental aspects
of their activities.
3. To consider the social and environmental
performance of companies befor
e endorsing them.
4. To obtain independent expert advice on that
performance before endorsing companies.
5. To address any public concerns over the social and
envir
onmental performance of the brands that they
currently endorse.
6. To tell professional colleagues about their
commitment to the Star Charter
.
Conclusion
Luxury companies must do mor
e to justify their value
in an increasingly resource-constrained and unequal
world. Despite strong commercial drivers for greater
sustainability, luxury brands have been slow to
recognise their responsibilities and opportunities.
We call upon the luxury industry to bring to life a new
definition of luxury, with deeper values expressed
through social and environmental excellence. Their
performance and progress on environmental, social
and governance issues should be comprehensively
measured and reported.
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Deeper Luxury
4/5
Introduction
Luxury brands trade in aspiration. They are usually the
highest-priced and highest-quality items in any product
or service category and provide the consumer with an
elite experience or sense of prestige. Watches, jewellery,
high-specification interiors, high fashion, exclusive
resorts and top restaurants are considered luxury items.
Rare and enjoyable experiences also qualify as luxury
purchases, and are becoming increasingly popular.
1
The luxury industry is worth approximately £77 billion,
and is now truly global. Iconic brands such as Chanel,
Dior, Prada and Cartier influence the beliefs and
behaviour of billions of people.
2
Global celebrities,
advertising agencies and media owners collectively
earn billions of dollars in advertising revenues and
fees from these brands.
The market for luxury goods is expanding fastest in
economies with rapidly expanding middle classes, with
Asian countries setting the most furious pace.
3
China’s
luxury market is set to become the world’s largest within
just six years. In Tokyo, 94% of women in their twenties
own Louis Vuitton bags. Hong Kong hosts more Gucci
and Hermès stores than New York or Paris.
4
Despite this boom, there are warning signs of a coming
impasse. Titles and headlines such as “How Luxury
Lost Its Luster”; “The Devil Sells Prada”; and “Has luxury’s
lap gotten too big?” indicate how fashion journalists are
questioning whether the corporate globalisation of luxury
brands has emptied them of their meaning.
5
Meanwhile,
questions are increasingly raised about the ethics of
luxury goods. For example, the 2007 film Blood Diamond
fuelled (and responded to) so much concern over the
trade in conflict diamonds that few diamonds of any
sort were worn at the subsequent Academy Awards.
There were great stories on society in the 2007 green
issue of Vanity Fair, but not a word about the environmental
impact of the luxury brands advertised throughout the
© Ana Gremard
Where’s the bling? Stars arrive at the 2007 Academy Awards minus the showy diamonds
© Ana Gremard
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magazine.
6
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 r
eport, 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 compa ny 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 envir
onmental
responsibilities, performance and opportunities.
7
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.
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
fr
om 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,
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the values of luxury brands will be forced to shift in
response to consumer demand.
8
A key impact of luxury brands on sustainable
consumption is through its influence on people around
the world. The brands promote concepts of quality,
style and, ultimately, success. The scale and urgency
of the sustainable consumption challenge requires all
those who communicate widely, including iconic brands,
to promote a more authentic understanding of quality,
style and success, which includes respect for each
other and the planet upon which we depend. In reality,
the most successful and iconic brands, especially in
the worlds of fashion and technology, do not so much
respond to consumer demand as create and influence
it. They do this in two ways: by “editing” consumer
choices through product design, distribution and other
attributes over which consumers have no control; and
by influencing the choices that consumers can make,
such as how and when to use their products. The way
in which products are bought, used and disposed of by
consumers is key to a host of environmental challenges,
including reducing the effects of climate change and
protecting habitats for endangered species. This is
one reason why WWF-UK engages with government,
businesses and the media to bring about more
sustainable patterns of consumption.
We believe that businesses (with which this report is
primarily concerned) should be able to thrive within the
ecological carrying capacity of the planet. Currently,
human beings are consuming more natural resources
and emitting more pollution than the Earth can stand
(Chapter 1).
Creating futures
Luxury companies influence consumer behaviour through
pr
oduct design and example-setting. Product design can
reduce the direct impacts of production and improve
performance efficiency; example-setting influences
consumer behaviour by such means as advertising,
the sponsorship of role models and the provision of
user instructions. We therefore call on businesses to
make greater investments in the sustainable design
of their products and services, and to champion
sustainable lifestyles to their consumers. This must
begin with a process of internal change, fostering
sustainable business practices in all parts of the
organisation and its supply chain. Subsequently,
even greater environmental, social and economic
gains will come as a result of better products and
external communications.
With a combination of more sustainable products and
effective communications, luxury brands can do well by
doing good. To illustrate this point, we profile seven
companies that represent the height of luxury fashion
while building social and environmental excellence into
their brand personality. They are the future makers
(Chapter 7).
In Chapter 9, we offer a Ten Point Plan for Sustainable
Luxury Brands. This is guided, in part, by the plan
proposed by our previous report on sustainable brands,
Let Them Eat Cake: Satisfying the new consumer
demand for responsible brands.
9
We invite companies
to contact us to share ideas for how to develop
deeper luxury.
Given their influence in the luxury sector and beyond,
we call on celebrities worldwide to endorse only brands
that are committing to social and environmental
responsibility. To help them set an example in this
regard, we propose a “Star Charter” which sets out
the key elements of such a commitment (Chapter 8).
Ultimately all products and services need to generate
wellbeing for everyone involved, within environmental
limits. Professionals in the luxury industry have an
extraordinary opportunity to lead the way. With booming
sales and high margins, and an emphasis on consumer
emotions, they have the resources and mandate to
develop a deeper, more au thentic and sustainable luxury.
In so doing, they could encourage us all to consider the
social history of things – how they come to be and who
is affected. They should remind us of the deep connection
between our things, ourselves, our communities and
our planet.
Deeper Luxury
6/7
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Chapter one
Context
Is this where we’re heading?
© Mike Innes
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Deeper Luxury
8/9
1960 1970 1980 1990 2000 03
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0
WWF works towards a future in which humans live in
harmony with nature. This is one of the most important
and urgent challenges facing humanity, yet we are
failing to meet it. The Living Planet Index, published
every two years by WWF, uses average trends in
populations of terrestrial, freshwater and marine
species worldwide as indicators of the health of our
planet. This index declined by around 30% between
1970 and 2003 (Figure 1). It is so well supported by
scientific evidence that, in 2004, it moved Nature
magazine to warn that we could lose a quarter of
all living species by 2050.
10
The ultimate cause of this decline is over-consumption
of irreplaceable natural resources by humans. Global
consumption levels are five times what they were just
50 years ago, and the natural world is buckling under
the weight of demand. Symptoms include pressure
on ecosystems (already leading to complete collapse
in some instances), soil loss and degradation, ground
water depletion, loss of productive land and the
accumulation of toxins.
11
We must reduce overall levels
of consumption.
The Ecological Footprint is WWF’s measure of how
we are depleting stocks of renewable natural resources.
In Figure 2, it is expressed in the number of planets,
where one planet equals the total biologically productive
capacity of the Earth in any one year. In 2001, humanity’s
footprint exceeded the Earth’s biological capacity by
approximately 20%. This overshoot depletes the Earth’s
natural capital and is therefore possible only for a
limited time.
12
If everyone were to live like the average European,
three planets would be needed to provide adequate
quantities of natural resources – for the average North
American, five planets would be required.
13
It would be
physically impossible for all the world’s poor to achieve
greater wellbeing in the same ways that Europeans and
North Americans have managed so far. Such wasteful
development is possible only for a minority, and for a
limited time. This is neither morally nor environmentally
sustainable. Our challenge is to find ways to improve
human wellbeing within natural limits; to stop living as
though we had another planet to go to.
Figure 1: Living Planet Index 1970-2003
1960 1970 1980 1990 2000 03
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0
Figure 2: Humanity’s ecological footprint 1961-2003
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To achieve this One Planet Future, we need to find
more resource-efficient ways of meeting our needs
and aspirations. We must also reduce our demands on
sensitive ecosystems and vulnerable people. Reducing
consumption of resources does not have to mean
reducing wellbeing. Instead, it implies a reduction in the
resource through-flow of economies. This is sometimes
described as the dematerialisation of the system of
production-consumption. The goal is a sustainable
economy, with production-consumption systems that:
enhance wellbeing for the greatest majority;
respect the resource and livelihood rights
of local communities;
reduce material use for the same amount
of utility/wellbeing;
cycle resources, cradle to grave;
are non-toxic;
are ecologically restorative; and
are accountable to those most affected by them.
Shifting to a sustainable economy r
equires leadership
from businesses, since they are both the biggest
consumers of resources and the most able to influence
consumers. Consequently, WWF has been engaging
with business for many years to help them face the
sustainability challenge (Box 1).
The challenge of climate change, like the challenge of
resource depletion and sustainable development more
broadly, will only be met if billions of people worldwide
begin to aspire to lifestyles that feed the solutions,
not add to the problems. As iconic brands promote
themselves and the concept of luxury in new markets
around the world, there is an opportunity to promote
aspirations for sustainable living.
WWF-UK and Business
Achieving market transformation is beyond the
capacity of
any individual business, or even group
of businesses. It will require a network of far-sighted
businesses, NGOs, investors, governments and
consumers, working together towards system change.
WWF-UK’s role comes from being a trusted custodian
of environmental science and a respected convenor
with global reach. We are experienced in working
through partnership with other organisations, while
retaining the flexibility to campaign directly against
behaviour that creates the worst ecological damage.
Over the years WWF-UK has helped to create and
promote credible certification schemes for sustainable
business including the Forest Stewardship Council
and the Marine Stewardship Council. At the same
time, we also support networks that increase
information on corporate performance, such as
Banktrack, or that campaign for regulatory reform,
such as the CORE Coalition. We have also supported
leading corporations by constructively challenging
their operations and policies. For example, we have
worked with Marks & Spencer, plc on water
footprinting and with HSBC on its lending policies.
Box 1:
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Deeper Luxury
10/11
From our experience with these initiatives,
WWF-UK’s Sustainable Business and Markets
team has identified five key challenges:
how to create and promote a developed lifestyle
that is personally aspirational, globally fair and
ecologically sustainable;
how to ensure that economic systems work to
deliver this lifestyle and govern markets so that
they operate within ecological limits;
how to transform key markets (starting with
housing and energy, food and transport) so that
they operate within their fair share of ecological
limits and enable business to provide for a
sustainable lifestyle;
how to enable business and industry to transform
business models, operations, products and
services in order to create value within ecological
limits; and
how to minimise the worst ecological impacts of
business while this transformation is under way.
WWF-UK’s work on sustainable branding focuses
on making sustainability the dominant aspirational
corporate marketing message. This complements
One Planet Business, our engagement with
businesses to help them drive systemic change
to create markets where they can thrive within
environmental limits, and One Planet Finance,
which engages financial institutions in reshaping
financial markets to favour sustainable business.
It also complements our ongoing work to pressure
the oil and gas industry to reduce its impacts on
sensitive environments. All of this work highlights
WWF-UK’s continued commitment to diverse tactics
that meet the urgent need for a sustainable economy.
WWF: Working toward a One Planet Future
© Brent Stirton / Getty Images / WWF-UK
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Chapter two
How markets are driving
sustainable luxury
Luxury shopping in London
© Greg Armfield / WWF-UK
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How markets are driving sustainable luxury
Luxury brand executives should care about their
company’
s social and environmental performance
for two reasons: first, because the challenge of
global sustainability is clear and urgent; second,
because it makes good business sense for them
to improve this performance.
There are strategic commercial reasons for luxury brands
to improve their social and environmental performance
as part of deepening their luxury offering. In this report,
we explore two dimensions to this business case for
action. In this chapter, we chronicle some dynamics of
societies and markets worldwide that point to the need
and opportunity for greater responsibility on the part of
all companies, particularly those with consumer-facing
brands. We report a growing global wave of environmental
awareness among urban middle-class consumers,
and the consequent changing attitudes towards brands.
In the next chapter, we focus on dynamics specific to
the luxury industry that imply the need for deeper and
faster changes.
In the past ten years, voluntary corporate action to
improve social and environmental performance has
gathered pace. Thousands of companies now publish
annual reports detailing their social and environmental
impacts, and tens of thousands of firms have been
certified as compliant with a range of independent
voluntary standards. Terms such as “sustainable
business”, “corporate social responsibility” and
“corporate citizenship” are now widely understood
as describing the integration of social, environmental,
and economic considerations into the decision-making
structures and processes of business. This approach
involves not only diligent compliance with national law,
but also aspiring to meet international standards and
the expectations of society. It involves engaging
stakeholders to understand and manage potential
corporate risks more effectively, build trust within
society, stimulate innovation, enable new business
models and reach new markets. Ultimately, it involves
innovating products and business processes that
effectively meet social and environmental challenges.
Here are seven commercial reasons why luxury
brand-owners should become more sustainable
14
:
1. Operational efficiency gains.
2. Enhanced employee relations, making for easier
r
ecruitment, more motivated and loyal staff,
better customer service, enhanced learning
and innovation, and higher productivity.
3. More welcoming and accommodating
local communities.
4. Enhanced brand reputation and trust.
5. Connections with voluntary associations and
networks that generate new market intelligence
and enable access to new markets.
6. A more secure and sustained supply of raw
materials, pr
ovided by more motivated suppliers.
7. Improved relations with the financial sector,
including r
esponsible investors and lenders.
Several of the above commercial drivers would not
have been seen as such a few years ago. However,
today’s businesses operate under an evolving set of
global market conditions, including
15
:
1. Globalisation – selling to, sourcing from, and being
owned by people in a multi-cultural global economy
with diverse and rapidly evolving values, norms
and beliefs.
2. The rise of brand culture – consumers worldwide
ar
e attracted increasingly by the emotional aspects
of brands.
3. Greater access to information – thanks to faster,
cheaper inter
national communications, widespread
access to the internet, higher levels of education
and greater competence in internationally-
used languages.
4. Greater public participation in non-governmental
and not-for
-profit organisations due to retreat (or
capture) of the state, growth in global philanthropy,
and rising interest in values-related self-expression
and social participation.
Deeper Luxury
12/13
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5. The growing scarcity and cost of natural resources
and sinks – as industrialisation and consumerism
spread throughout the southern hemisphere,
businesses will be forced to respond.
6. Growth in brand value relative to corporate value –
this, combined with the gr
owing proportion of brand
value associated with environmental and social
performance, will lead investors to call for greater
corporate sustainability.
All the business reasons outlined here also apply to other
sectors, but most are of greater relevance to the luxury
sector. Of particular note are the rise in the emotional
and financial value of brands, and the consequent rise
in their sensitivity to cultural shifts. The greatest cultural
shift of the 21
st
century has been the rise in concern
over environmental and social problems, and the greatest
rise in such concern is among middle-class consumers.
The Global Wave of Awareness
In our 2005 report, Let Them Eat Cake: Satisfying the
new consumer appetite for responsible brands
16
, we
showed that, in Western markets, environmental and
social issues are no longer the sole concern of a
minority of socially-conscious people, but of a sizeable
proportion of mainstream, brand-conscious consumers
who want to purchase the quality they expect at a
reasonable price, but with social and environmental
performance built in.
Since then, and particularly in 2007, we have witnessed
a rapid rise in the awareness of environmental issues
among US consumers. Nearly one in four American
adults now subscribes to a new set of values that
typically includes “environmentalism, feminism, global
issues and spiritual searching”. Most of these so-called
“cultural creatives” are well-educated and relatively
affluent.
17
No wonder, then, that sales of top-end hybrid
cars, such as Toyota’s Lexus 450h, are booming.
18
Although sometimes dubbed an “old market” for luxury,
the Financial Times reminds us that “the world’s largest
consumer market still presents far more immediate
opportunities for growth than the much discussed
emerging promises of Russia, India and China”.
19
The latest consumer research on the luxury market in
Europe tells the same story: “The wealthy are increasingly
concerned about environmental issues”, says Ledbury
Research.
20
This not only means shopping differently,
but sometimes not at all; industry specialist Luxe etc
reports that some wealthy consumers “regard luxury
products, such as fine jewellery, well crafted time
pieces and fast cars, as conspicuous wastes”.
21
Analysts at the UK’s Future Laboratory believe that
“overconsumption is no longer a signal of success” and
that it is being replaced by “conspicuous abstention”.
22
Walpole, the UK’s industry association for luxury brands,
attributes this to a broader emphasis by consumers on
ethics; in 2007, it emphasised social values as one area
to which its members should pay more attention.
In the US, this is not a passing fad but an enduring
trend, according to professors Ronald Michman and
Edward Mazze.
23
Looking at Europe, the editor of the
Financial Times, Lionel Barber, agrees that the trend
is here to stay.
24
But what of the rest of the world? There is a widespread
belief that consumers in Asia, Africa, Latin America and
eastern Europe are not aware or don’t care about the
social and environmental performance of the companies
from which they buy products and services. Given other,
more urgent and immediate preoccupations (such as the
need to escape from poverty and ill health) this has been
true to a certain degree. However, there is evidence of
a wave of eco-awareness sweeping the urban middle
classes across these continents, with significant
implications for business.
Across Asia – the focus of so much strategic planning
in the luxury sector – something surprising happened in
2007: green issues suddenly became cool. In April 2007,
Cosmopolitan Hong Kong magazine featured a 25-page
eco-awareness supplement that aimed to educate
readers on the importance of green living. Many other
fashion and lifestyle publications also discussed the
implications of environmental issues for shopping and
living. In Thailand, Singh Intrachooto, founder director
of OSISU luxury recycled furniture, confirmed that “green
consumerism is growing in Asia. A year ago OSISU
5429 Inside pages Artwork for web:Layout 1 21/11/07 12:33 Page 14
customers were 10% Asian and 90% Western; now, it’s
50:50. The Asian market for green products is definitely
on the rise”.
25
Dozens of Asian lifestyle magazines featured
his company during 2007, many of them splashing green
lifestyle themes across their cover. In Singapore, Issy
Richardson, co-founder of organic t-shirt company
Belle and Dean, says that “with increasing press
coverage and celebrity endorsements of green living
and eco-fashion brands, attitudes are changing and an
interest in green fashion seems to be surfacing”.
26
Simon Chau, founder of Produce Green Foundation
in Hong Kong, says, “Asia has a long tradition of
ecological awareness from its religious beliefs such
as Taoism and Buddhism. Health scares triggered
Asian society to challenge food safety issues,
acceptable work environments and questions of
personal health.” Opinion surveys in China reveal
high levels of concern (reaching 80%) over certain
environmental issues, although less awareness of
possible solutions.
27
Despite this lack of awareness,
China’s richest man, Zhengrong Shi, accumulated
his estimated $2.2 billion fortune thanks to the success
of his solar power company, Suntech Power Holdings.
28
Awareness is also growing in Latin America and in the
European Union’s newest member states. Although most
luxury fashion brands derive less than 5% of their revenues
from sales in the new Europe, consumers in these markets
are following the global trend of rising environmental
and social consciousness. Lithuania’s leading fashion
magazine, IEVA, ran a green issue in 2007; one article
was entitled “Ecological snobs in Hollywood, in fashion
and in life”, and an editorial headlined “I want to be a
snob” suggested that environmental responsibility
confers social status on individuals.
29
In neighbouring Latvia, Lotte Tisenkopfa, co-owner of
the Latvian natural cosmetics company Mádara, says
that her western colleagues “are fascinated by how
close to nature we still are...One of our partners was
truly moved to hear that…we still celebrate Midsummer’s
Eve the way he did as a child, 50 years ago. Feeling
this atmosphere of celebration surrounding the cycle
of nature made him happy once again.”
30
In Latin America, Brazil’s middle classes are also tuning
in to social and environmental issues concerning
business. The São Paulo fashion week has featured
environmental themes in recent years. Brightly coloured
fish leather bags, soft natural rubber straps and iridescent
floor tiles made from compacted PET plastic bottles
have all been featured as sustainable fabrics.
Deeper Luxury
14/15
In Asia, green lifestyles are becoming aspirational
Fish leather: a more sustainable alternative
© Osklen
© SCMP / Cosmopolitan
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It should come as little surprise, then, that the latest
global study on luxury consumer tastes finds that they
are remarkably similar in many ways, especially in the
emphasis consumers place on experiences, rather than
something that one has or owns. Consumers in China,
France, Germany, Italy, Japan, the UK and the US were
found to “have remarkably similar perspectives on how
to define luxury”, said Lynn Franco, director of the
Conference Board Consumer Research Center.
31
The role of showbusiness in this global upturn of
awareness is important. Celebrities from around the
world have increasingly become involved in high-profile
awareness campaigns on issues from poor country
debt relief to climate change. Hollywood celebrities
may have pioneered the trend, but, in 2007, Bollywood
caught up; the International Indian Film Awards –
complete with green carpet instead of red – were
organised in a more environmentally friendly way in
order to promote environmental awareness among
Bollywood fans.
32
As celebrity endorsement is
increasingly important to the luxury industry, so this
trend is commercially relevant, and we discuss the
implications further in Chapter 8.
Despite this global wave of awareness, there is still a
long way to go in changing behaviour. Business has a
key role in enabling this. More employees and business
owners are keen to play such a role. A WWF survey
found that communications professionals want to lead
on this agenda, but were not being encouraged by
their employers or clients to do so.
33
The luxury industry
depends on such people, and will benefit from answering
their calls for better training, better information and
adequate recompense for improving their environmental
and social performance.
Investors are also encouraging companies to become
part of the solution to social and environmental
challenges, as an element of a smarter and longer-term
approach to portfolio management. The UN Principles
for Responsible Investment are now backed by
institutional investors with more than $10 trillion of
assets under management.
34
These institutions invest
in many luxury brands, either directly or indirectly.
Their calls for more strategic and systematic approaches
to corporate responsibility will need to be addressed.
35
Eco-Bollywood: Actress and luxury brand ambassador Pretty Zinta on the
Green Carpet at the 2007 Bollywood Awards
© Monir Ali Photography
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Chapter three
Industry challenges
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Must-haves amidst have-nots in Shanghai
© Ullstein / Ecopix / Still Pictures
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In this chapter, we summarise seven strategic
challenges faced by the luxury industry, which all
necessitate a new depth to luxury through improved
social and environmental performance.
Challenge 1: Splendour amid squalor
The geographical broadening of the luxury industry
means that companies ar
e increasingly selling in
markets that are highly unequal and with significant
poverty. During 2007, this raised concerns among
government officials, celebrities and the wider public,
including luxury consumers. Discussing luxury in India,
the Financial Times pointed out that “the price tags of
luxury goods could equal the annual income of a small
Indian village”.
36
The Prime Minister of India has called
on the rich to “eschew conspicuous consumption” and
on businesses to “promote socially relevant messages
and causes” in their advertising. The tax on luxury goods
charged by the Indian government is now 114%.
37
In China, the mayor of Beijing has said that
advertisements for luxury products “are not conducive
to harmony”.
38
The local market regulator added that
“there is a problem with certain advertising not
conforming to the demands of a socialist spiritual
civilisation”.
39
Consequently, the mayor of Beijing ordered
all luxury billboards to be removed.
40
In Egypt, Al-Ahram
newspaper warned against the new “immersion in
luxury consumption” that “can only worsen the situation
where political extremism and political oppression
combine to destroy the social fabric of our country”.
41
How can luxury be more socially acceptable in societies
of high inequality? By generating more value for everyone
involved in (or affected by) its manufacture and supply;
by preventing irreparable damage to the beauty and
biodiversity of the global commons; and by developing
processes, techniques and materials that are consistent
with the demands of sustainable development. Such an
approach requires a level of investment that lower
priced brands may not be able to match.
By meeting this challenge, luxury brands could encourage
affluent consumers in China and India, who are known
to save a relatively high proportion of their income, to
spend more on luxury goods and services.
42
In China, the
concept of luxury relates to the Confucian concept of
“face”, or personal reputation. There are two aspects
to face: mien-tzu and lien. The former usually refers to
material prestige and displays of wealth, while the latter
refers to moral standing, the loss of which makes it hard
to function in Chinese society.
43
The Mandarin term for
luxury may be translated as “show-off goods”, indicating
that luxury consumption is currently driven by mien-tzu.
In future, it may be driven to a greater extent by lien.
Challenge 2: Democratised luxury
“Our products have become more accessible and by
definition less exclusive... it is this, our very success,
that imperils us,” says Guy Salter
, the forward-thinking
deputy chairman of Walpole.
44
The socio-economic
broadening of luxury brands across different product
sectors, social classes and time zones has undermined
their exclusivity. According to some experts, the concept
of democratisation has devalued that of luxury. According
to Dana Thomas, the culture and fashion writer for
Brands, beggar, belief, in New Delhi
© Mayank Austen Soofi
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Newsweek, the appearance of Armani t-shirts, Prada
bikinis and phones, and Versace sofas and hotels, have
caused luxury to “lose its cachet”. As family-owned
luxury companies have given way to large conglomerates,
so the industry has “sacrificed its integrity, undermined
its products, tarnished its history and hoodwinked its
consumers,” says Thomas.
45
A fashion expert in the
New York Times agreed that, whereas luxury brands
were “once guarantors of value and integrity”, they are
now “markers that point toward nothing, guiding the
consumer on a road to nowhere”.
46
There is also a
concern that private equity firms may compound the
problem by treating their newly-acquired luxury
subsidiaries as cash cows.
47
Brands may restore lost cachet by imbuing their products
and services – and, indeed, the brands themselves –
with deeper meanings and values, embodied in the
concept of sustainability.
Furthermore, the emergence of the internet has weakened
the ability of companies to control the identities of their
own brands, and enabled consumers to start setting
their own trends. Since the 19th century, luxury fashion
houses have led fashion, but now trendsetters are drawn
from many social groups.
48
“There is now a two-way
dialogue and an unfettered exchange of opinions,
reviews and information”, says Brand Channel, and
“this apparent rise of people power is making the luxury
brands baulk; they are scared that they may lose control
of their brand”.
49
Joe Chung, chief executive of innovative
e-commerce software provider Allurent, agrees: “Like
it or not, all brands are losing control... everyone is
influenced by blogs.” Looking at fashion trends among
those most using digital social networking gives us
insight to the future: “Young people are more comfortable
with a peer-to-peer viewpoint, so they are more likely
to see a few Japanese designers as equally [sic] good
as Western ones,” explains Japanese consumer expert
Michael Causton.
50
The world’s wealthiest consumers
are now using the web’s interactive capabilities, and
expect to purchase luxury goods online.
51
The internet also prevents brand owners from presenting
inconsistent images across geographical markets, since
national governments are unable to effectively restrict
the surfing habits of consumers.
52
Therefore, a new
paradigm for both brand communications and design
innovation is required. This will invite consumers to
participate in the creative process within a framework
of global core brand concepts. In this way, real
communities will grow around the brands. A brand
will no longer grow because of how well it is controlled,
but because of how well it is shared. Of paramount
importance will be the way in which a brand’s traditions
and practices relate to contemporary concerns such
as wellbeing, work-life balance, community security and
environmental protection. Therefore, a brand’s social
and environmental depth will become an important
determinant of its financial value.
Challenge 3: The casual consumer
The demographic of the luxury consumer is broadening:
younger people in the W
est have begun consuming
luxury brands; brands have expanded into new markets,
where the population is generally younger; and, at the
other end of the age scale, “baby boomers” are spending
their considerable wealth in retirement on luxury goods
and services. All of these factors have led to a more
casual trend in luxury fashions. Diesel’s Renzo Rosso
says that the young luxury is casual, not stiff. This poses
a challenge to luxury brands, since luxury t-shirts cannot
justify margins of the type available to purveyors of
Savile Row suits.
53
Superior social and environmental
quality could be a justification for their higher prices
and will afford the opportunity for higher margins.
Challenge 4: Western existentialism
As brands lengthen their presence in the market,
so the inter
ests of luxury consumers mature. Industry
specialists are agreed that in the West, this maturing
process involves a form of post-materialism and an
emphasis on experience. (This is illustrated by the
growth in health spas, holidays and the like.)
54
Luxury
lifestyles are increasingly understood to avoid favouring
such experiences over mere “stuff”, which is perceived
as “clutter”.
55
There is some uncertainty about what
kind of experiences people are seeking. Some stress
individualistic needs for personal attention and
excitement.
56
Others suggest that people seek what they
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The luxury market is maturing fast in China
© 2 dogs / Flickr
have lost, such as the ability to take their time, to enjoy
nature, to connect with people, and to “do something
worthwhile”. “In a world that seems to worship speed,
going a little faster is not a luxury,” says futurist Charles
Leadbeater. “Being able to go a lot slower is the luxury.”
57
In this context, exclusivity is less attractive to luxury
consumers than special and authentic experiences of
connection. Walpole’s Guy Salter explains that modern
luxury brands can provide a valuable feeling of belonging
to consumers.
58
“The true sign of discernment is to rise
above the need for a brand logo... to look for experiences
that are surprising, exotic and, above all, authentic,” says
Leadbeater. “Consumers will expect to have wholesome
experiences with every interaction with luxury brands”,
adds industry consultant Uche Okonkwo.
59
Increasingly,
therefore, consumers “will reject brands that seem...
profit-driven and lacking in substance. This means that
only the brands that show deeper meanings and foster
simplicity in creativity will thrive.” Consequently,
“consumers will need a concrete and morally right
‘background story’ to endorse a brand”, which means
that they “will be expected to show more socially
responsible practices”.
60
The designer Philippe Starck
calls for the whole symbolism of luxury to change in
light of environmental and social problems.
61
Challenge 5: Maturing new markets
Western luxury brands have been successful in Japan
for mor
e than 30 years. Their luxury market is maturing
fast, as are other markets around Asia, matching the
luxury industry’s high sales and growth expectations of
the region. To understand how markets are maturing,
one needs to know what values shape current
behaviour; how these values will be expressed, given
new information; and how these values might evolve,
given new circumstances. It is also helpful to look at
how markets with similarities have matured so far, and
to take account of their respective paces of change.
We look at each dimension in turn and conclude that
luxury brands from the West, Asia and elsewhere must
embrace sustainability if they hope to continue to thrive
in maturing new markets.
Asian luxury gurus Radha Chadha and Paul Husband
describe a pattern for how luxury has been developing
in Asia. They explain that, although the conspicuous
display of logos has been key to Japan’s luxury boom,
tastes are maturing towards interest in luxury lifestyles.
62
This is reflected by recent research showing that a
majority of affluent consumers polled in Japan did not
agree that luxury is defined by the brand.
63
Changes there
may foretell changes elsewhere, as the Japanese “serve
as style leaders for the rest of Asia”.
64
Neither will it take
long for others to catch up. It took South Korea just a
decade to develop its market size and tastes in the same
way as Japan and Hong Kong took two decades,
conclude Chadha and Husband.
65
China and India are
likely to move faster still. “One thing that has surprised
us in the last 10 years is the speed at which [China’s
luxury market] has developed,”
66
says Serge Brunschwig,
former managing director of Louis Vuitton Worldwide.
The agency of Chinese style pioneer Huang Hung reports
that the luxury market is already undergoing a values
shift, segmenting into “nouveau riche, understaters,
connoisseurs and spirituals”. Even 76% of the more
ostentatious nouveau riche segment said they “would
pay more to buy natural healthy foods”. Co-produced
by TrendBuero, their report concludes that in China
“the experiential, authentic and enjoyable side of luxury
products and brands will determine if consumers
consider them luxury or not”.
67
The editor of Vogue
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China, Angelica Cheung, reports growing sales of luxury
goods that do not flaunt their logos, demonstrating
that “a new class of Chinese consumers is ready to
spend money on quality and style without showing it
on their sleeves”.
68
Meanwhile, in South Korea, there are
“inconspicuous gourmands” who conform to Confucian
cultural norms against ostentation.
69
In Asia, recent years have seen a greater focus on the
logo; but it would be wrong to assume that this implies
a more superficial approach to luxury on the part of
consumers. Chadha and Husband say that “luxury
brands are a modern set of symbols that Asians are
wearing to redefine their identity and social position”.
70
Asian psychologists report that famous Western brands
have been attractive to many Asians because they have
an international profile, bestowing on the consumer an
image of modernity and success.
71
They explain that
brands are less about distinguishing oneself than
demonstrating membership of a particular social group,
as social harmony through conformity is still a common
value. Increasingly, wealthy Asian consumers share the
concerns of the well-educated and well-off in the West,
for whom sustainability has become an important issue.
In Asia, this new type of luxury can prove very popular,
as illustrated by the rush, in 2007, to buy the designer
shopping bag by Anya Hindmarch, branded with the
phrase “I’m NOT a plastic bag”. In Taiwan, Hong Kong
and Beijing, “public sales were abandoned... amid
scenes of chaos,” reported the South China Morning
Post.
72
“Ironically,” the paper went on, “each of the
bags… was wrapped in the kind of plastic bags they
are supposed to replace.” This also illustrates how
companies need to be coherent in how they meet
growing demand for eco-luxury.
Existing values not only manifest themselves in novel
ways given new information, but they also evolve given
new circumstances. As Asia grows technologically,
economically and politically, so being international and
successful no longer implies following western style.
Don Hedley, consumer trends analyst with Euromonitor,
says that, across Asia, “there is now evidence of
national and regional pride shifting the axis away from
Hollywood glamour, New York glitz and European
sophistication, and towards a new belief... in Asian style
and creativity”.
73
The Chinese art market is booming.
However, the indigenous Asian luxury market is still
relatively weak. “Brand-savvy consumers in India and
China are not happy to pay for a premium label
assembled in their own backyard,” reports the fashion
chronicler Monocle.
74
The only way forward for Asian
luxury brands, in both domestic and international
markets, will be to embody innovative social and
environmental excellence. Asian brands John Hendry
and OSISU believe that this includes the provision of
luxurious working conditions to the craftspeople they
employ (see Chapter 7).
Commenting on the future of the Asian market, Michael
Burke, chief executive of Fendi, believes that “as markets
mature, they will become more discriminating” and people
will want more “true luxury” rather than “pseudo luxury”.
75
To continue to thrive in maturing new markets, luxury
brands will need to offer deeper luxury, with social and
environmental excellence built in.
Anya Hindmarch’s bag
Chris Lee / Hong Kong Digital Vision
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Challenge 6: Fast fashion
Luxury is quickening because of technological
innovations in communications and pr
oduction.
Catwalk designs can be emulated by mass retailers
such as Top Shop, H&M and Zara within a couple
of months.
76
These retailers have also begun to work
directly with designers such as Stella McCartney and
Kate Moss (who is better known for her modelling).
While these mass retailers and brands can often
emulate product attributes, they may be less able to
match deeper elements of value such as high ethical
standards in sourcing, efficient use of materials, low-
impact manufacture, assembly and distribution, and
the provision of repair and upgrade services. All of
these represent an opportunity for luxury brands to
justify their share of the wallets of wealthier consumers.
Challenge 7: Counterfeiting
The technologies making fast fashion possible are also
enabling an explosion in the amount of counterfeit luxury
pr
oducts. Modern fakes are often indistinguishable from
genuine products, and thereby rob those genuine
products of much of their value.
77
According to a study
by law firm Davenport Lyons, fakes and replicas are
becoming more socially acceptable among consumers.
In the UK, they report, “two-thirds of consumers, up 20%
on 2006, are happy to own fake clothing, footwear,
watches and other items”. This suggests that demand
is set to increase here, fuelled by internet shopping and
cheaper long distance travel.
78
In response, the luxury
industry lobbies governments for stricter rules and
inspections on producers and traders, and takes direct
legal action against those who participate in the
counterfeit market, including against some market stall
owners in China.
79
(In contrast, it is recognised that efforts
to criminalise consumers can be counterproductive.)
In the face of this threat to the value of luxury brands,
brand owners will seek to provide prestige in new ways
that do not rely so heavily on the use of logos.
Conclusion
The seven industry challenges (counterfeiting, fast
fashion, maturing new markets, wester
n existentialism,
the casual consumer, democratised luxury, and
splendour amid squalor) all point to the same future
for luxury brands: to become part of a social movement,
connecting with and helping people to express their
deepest values. As the luxury market broadens,
lengthens and quickens, luxury brands must deepen
their offering if they are to continue to thrive amid
changing global values and realities. They must deepen
in terms of the meaning and experience given to
the consumers of luxury brands, and in terms of the
luxurious nature of the production and retail process
involved. Thus, the social and environmental quality
of the product or service becomes paramount,
alongside its ability to champion new, more
connected aspirations.
Contrary to popular myth, this applies in Asia, as well
as in more developed Western markets. The business
case for more sustainable and responsible luxury is
clear. In this chapter and the last, we have outlined
seven reasons, six accelerators and seven industry
situations for deeper, more sustainable luxury to be
pursued by luxury brands as part of their core
commercial strategy.
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Chapter four
Exploding the myths
of shallow luxury
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© Mike Innes
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As we have shown in Chapter 3, there are powerful
commercial reasons for luxury brands to improve their
social and environmental performance. In this chapter,
we identify seven myths that may explain why the
luxury industry performs relatively poorly against
environmental and social indicators (see Chapter 6).
Myth 1: “Luxury is about conspicuous personal
indulgence
, so it can never be moral”
Wrong! Luxury is about being and having the very best.
Pr
oducts that cause misery or environmental damage,
now or in the future, are no longer considered by affluent
consumers to be best in class. Such products do not
feel luxurious to the more ethically and environmentally
concerned consumers of today.
Myth 2: “Luxury consumers in new markets do
not car
e about ethics or the environment”
Wrong! As new markets mature, their more affluent
citizens incr
easingly follow international trends, including
awareness and concern over social and environmental
issues, and a desire for their purchases to provide
meaningful experiences. In certain regions, this arises
not only from international influences, but also from
local sets of values, such as lien in China. (See
“Challenge 1”, Chapter 3).
Myth 3: “Brands cannot tell consumers what
to car
e about”
Wrong! Brands tell consumers what to care about
all the time, both dir
ectly and by implication or
demonstration. Examples include: models selected
for their body shape; fashion and personal care tips
in the media; and advertising.
Myth 4: “Luxury brands can only build in value
thr
ough materials, design and marketing”
Wrong! Value can be provided via benefits to the people,
communities and envir
onment affected by production,
marketing and distribution. These benefits help to build
the intangible value of the brand. This implies and requires
a high level of collaboration between marketing, design
and other business functions.
Myth 5: “Heritage will maintain luxury brand value”
Wrong! 50 years hence, what a luxury firm does today
will be part of its heritage, and another company that
is cr
eated today will also have a heritage. A company’s
heritage from the 19th or 20th centuries will not stay
the same, but will be interpreted on the basis of
contemporary values and the company's activities
during the 21st century. Luxury brands need to see
heritage as an evolving phenomenon, and work at
contemporary heritage creation, by shaping the
future proactively.
Myth 6: “Legal action is the only way to
addr
ess counterfeiting”
Wrong! Changes in technology and communications,
combined with the pr
omotion of labels by luxury brands,
mean that counterfeiting will continue, even in the face
of legal challenges. Therefore, luxury brands must
reconsider their emphasis on logos, and seek to
connect with deeper values.
Myth 7: “Luxury brands have less impact on
society than other companies, so need offer
nothing mor
e than philanthropy and compliance”
Wrong! Luxury goods involve diverse supply chains that
have impacts on communities and natur
e throughout
the world. Various stakeholders, including investors,
increasingly expect verifiable and comparable information
on social and environmental performance, resulting from
a systematic approach. In many cases, non-luxury
consumer goods companies outperform luxury brands
in aspects of corporate sustainability (see Chapter 5).
Counterfeit goods seized in London
© London Borough of Hackney
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Chapter five
Issues of public
concern
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Disturbed Earth: mining in Papua New Guinea
© Friedrich Stark/Das Fotoarchiv. / Still Pictures
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Edward Zwick’s film, Blood Diamond, has raised
public awareness of the role of precious stones in
fuelling conflict. However, the impacts and influence
of luxury goods and services – both positive and
negative – are many and varied. They arise through
the processes of production (including design,
sourcing and manufacture), distribution, retail,
marketing, use, re-use, recycling and eventual
disposal. They are affected by the quality of corporate
governance and regulation throughout all of these
processes. Some relate to broader, unresolved issues,
such as systemic racism and carbon pollution. In this
chapter, we examine some of the issues most affecting
(and affected by) today’s luxury industry.
There is growing awareness of the impacts and influences
of luxury brands among opinion formers, employees and
consumers. Furthermore, the advertising of luxury brands
is beginning to show signs of a shift towards a deeper
concept of luxury, which is the focus of this report.
However, luxury brands fail to match the environmental
and social efforts of companies in most other consumer
sectors, both in the quality of their policies and in their
operations. The deeper values that some of these brands
have begun to espouse in their advertising need to be
applied in depth within their own organisations and
throughout their own supply chains. The depth of the
shifts in societal values is beginning to expose the
shallowness of the industry’s collective response.
In order to formulate a meaningful response, it is first
necessary to understand some of the key negative
impacts of the luxury goods sector. These include:
the role of precious stones in financing conflicts;
the impacts of mining operations; worker rights in
companies and their supply chains; responsible
marketing; and the trade in wildlife-derived products.
Although some of the issues we present below are
beyond the traditional focus of WWF's programmes,
they are useful to illustrate the range of challenges
that collectively require a more coherent approach
to corporate responsibility from the luxury industry.
Diamonds
The mining of diamonds has often created conflict,
due to the financial r
ewards involved. On many
occasions, diamonds have provided new impetus and
finance for conflicts in Africa, resulting in the deaths and
displacement of millions of people. Angola, the
Democratic Republic of Congo (DRC), Liberia and
Sierra Leone are still recovering from such conflicts.
According to Global Witness, diamonds being smuggled
out of the rebel-held north of Côte d’Ivoire and out of
eastern DRC continue to be used for money laundering,
tax evasion and organised crime.
81
Global Witness’s campaign against conflict diamonds
led to the creation of the Kimberley Process, designed
to stem the flow of rough diamonds to rebel movements
who use them to fund violent activities. It is a voluntary
system that imposes extensive requirements on
participants to certify that shipments of rough diamonds
do not include those from conflict areas.
82
This has been
a major step forward, and many luxury brands are publicly
committed to purchasing only diamonds certified through
the Kimberley Process.
However, Global Witness has criticised the industry for
misleading the public in 2007 by falsely suggesting that
there remained no conflict diamonds in luxury items.
“Although the Kimberley Process makes it more difficult
for diamonds from rebel-held areas to reach international
markets,” Global Witness noted, “there are significant
weaknesses that undermine its effectiveness and allow
the trade in blood diamonds to continue. Poor
government controls and enforcement are allowing
smuggled diamonds and blood diamonds to be
certified as conflict-free. Unscrupulous diamond traders
are knowingly violating the Kimberley Process and
national laws.”
83
Global Witness calls for more controls to be introduced
by companies at the top of the supply chain, as the
“diamond industry has failed to create an auditable
tracking system to ensure that diamonds are conflict
free.”
84
Some brands, such as Tiffany and Co, are
recognised for pursuing best practice, by introducing
an additional audit system of the chain of custody of
Kimberly-certified diamonds.
85
However, many companies
“When we buy things in one place, it has repercussions some
place else... When we put our credit card down we endorse a
corporation and their practices and what it takes, and how it
affects thousands, if not millions, of lives,”
declares Edward Zwick, director of the Hollywood movie, Blood Diamond.
80
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are not meeting the challenge. A survey in the UK with
Amnesty International found that more than three-
quarters of retailers who responded reported having
no auditing procedures in place to combat the trade
in conflict diamonds. Almost a third of those surveyed,
including leading luxury house Cartier, failed to respond
to repeated requests from Amnesty and Global Witness
to provide information about their policies.
86
Gold
Mining for gold and other precious metals used in
luxury goods poses significant social and envir
onmental
challenges. For example, gold mining can displace
communities, contaminate drinking water, hurt workers
and destroy pristine environments. In the past, the mining
industry has threatened natural areas, including those
that are officially protected. Nearly three-quarters of
active mines and exploration sites encroach on regions
that have been defined as having high conservation
value.
87
Mining is a major threat to biodiversity and to
frontier forests (large tracts of relatively undisturbed
forest). One example comes from the Indonesian
province of West Papua, home to the largest protected
area in South-east Asia, containing five WWF-classified
ecoregions in its 2.5 million-hectare expanse.
88
Next to
this Lorentz National Park, now a World Heritage Site,
is a large, open-pit mine operated by PT Freeport
Indonesia. This mine has caused devastating harm to
its immediate environment by dumping 110,000 tons
of toxic mine tailings each day into the Ajikwa river. By
the time it closes, it will have excavated a hole covering
an estimated 230 km
2
in the forest that will be visible
from space.
89
In Mongolia, rapid expansion of the gold mining industry
has led to the deviation of rivers, loss of water flow and
degradation of water quality, creating erosion and
undermining traditional herding communities. Much of
the mining activity is illegal and conducted without prior
impact assessments. While WWF is working at the local
level with communities, decision-makers and investors
to promote more responsible mining in Mongolia
90
, we
believe that more should be done by luxury brands to
introduce better standards throughout their supply chains.
Earthworks and Oxfam have helped in this regard by
developing a set of “Golden Rules” of social, environmental
and human rights criteria for more responsible gold
production (Box 2). Their No Dirty Gold campaign
encourages brands and retailers to endorse these
criteria and to persuade their suppliers to meet them.
The campaign is supported by a handful of luxury
brands, including Cartier, Piaget, Tiffany & Co and
Van Cleef & Arpels.
91
In addition, there are now over 70
member companies across the gold and diamond supply
chain that have joined the Council for Responsible
Jewellery Practices, to promote action from mining to
retailing: (see: www.responsiblejewellery.com)
Despite these advances, much remains to be done in
order to clean up the production and trading of gold and
other precious metals. The luxury watch and jewellery
Deeper Luxury
26/27
Golden Rules for Mining
Respect for basic human rights outlined
in international conventions and law.
Free, prior and informed consent of
affected communities.
Safe working conditions.
Respect for workers’ rights and labour
standards (including the eight core
ILO conventions).
Ensure that operations are not located in
areas of armed or militarised conflict.
Ensure that projects do not force
communities off their land.
No dumping of mine wastes into oceans,
rivers, lakes or streams.
Ensure that projects are not located in
protected areas, fragile ecosystems or other
areas of high conservation or ecological value.
Ensure that projects do not generate
sulphuric acid in perpetuity.
Cover all costs of closing down and cleaning
up mine sites.
Fully disclose information about the social
and environmental effects of projects.
Allow independent verification of the above
Box 2:
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industry can and should apply pressure on both suppliers
and governments to improve and broaden standards.
92
Luxury brands should position ethically sourced gold as
a more attractive alternative for the discerning customer.
Employees
Many people depend upon the luxury industry for
their livelihoods. Some ar
e very well paid and treated,
but many suffer great hardship. Among the most
disadvantaged are those involved in the extraction
and processing of raw materials, and the manufacture
or assembly of luxury footwear and accessories.
To contribute to a One Planet Future, where everyone
can thrive within environmental limits, luxury brands
must help their own employees to thrive, as well as the
people working within their supply chains worldwide.
Guy Salter of Walpole, the UK’s luxury industry
association, comments that “what happened in the
late 1990s to sports apparel manufacturers – with
the exposure of sweatshops – is a warning to us.
The luxury industry has so far avoided the spotlight,
but this may not always be the case.”
93
The spotlight
has begun to swing towards luxury, to the extent that
model and luxury-brand endorser Kate Moss was
criticised in an investigation by the UK’s Sunday Times
newspaper about labour practices involved in the
manufacture of her own collection. Under the headline
“Slave labour”,
94
the Sunday Times reported that as
many as fifty workers are crammed into 20ft-30ft
dormitories and forced to work for 70 hours per week
for as little as $25.
Separately, a Newsweek journalist cited the gap between
the glamour of the catwalk and the squalor of the
sweatshop as one reason why luxury brands are losing
their appeal.
95
Large luxury conglomerates, including
Richemont and LVMH, do not fully accept responsibility
for practices throughout their supply chain. In 2007, LVMH
was de-listed from the FTSE4Good index as a result of
poor compliance with supply chain requirements.
96
For more than ten years, the International Chamber of
Commerce (ICC) has recommended that “companies
should encourage their suppliers to abide by and apply
the same business principles that they themselves
uphold, thereby promoting good practice throughout
the supply chain”.
97
Many luxury firms have not adopted
a management system for basic labour rights within
their own wholly-owned operations. LVMH and
Richemont failed to report on their non-discrimination
policies and performance on workforce diversity.
98
In the
summer of 2007, the luxury cosmetics firm Garnier,
a subsidiary of L’Oréal, was found guilty of racial
discrimination after it sought to exclude non-white
women from promoting its shampoo in stores.
99
Recent
court cases on discrimination in the luxury sector may
force companies to be more transparent, but force should
not be necessary; all that is required is a recognition
that today’s luxury consumers do not feel comfortable
wearing the products of other people’s misery.
Wildlife Trade
One of the longest running criticisms of the luxury
industry concer
ns the use of animal products, including
furs and hides. The issues include protecting endangered
species, welfare in the process of rearing and killing
animals, and pollution.
The Convention on International Trade in Endangered
Species (CITES) is the treaty that controls and monitors
Snakeskin belts
© WWF / Rob WEBSTER
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the international trade in species that are, or could be,
critically endangered as a result of over-exploitation
100
.
For some species, CITES certificates are needed to
prove that products are derived from captive-bred
populations, rather than wild ones. Nevertheless, illegal
activity persists; for instance, seizures show that some
crocodile skin and snake skin products without CITES
certificates continue to be traded, further endangering
wild populations
101
.
Shahtoosh shawls are made from the fine wool of the
endangered Tibetan antelope, or ‘Chiru’. Because they
must be killed before the wool can be taken, and three
to four animals are needed to make just one shawl,
the demand for these fashion items has driven their
numbers to less than 100,000 in the wild.
Even high-profile species, such as endangered big cats,
are still illegally traded for fashion. In July 2007, the
owner of a London fur shop was convicted for keeping
coats made from the skins of tiger, leopard and ocelot
with intent to sell them. Luxury brands will continue to
be criticised until they provide independent guarantees
of the sustainability and ethical credentials of their
animal-derived products.
Corruption
The International Herald T
ribune reports that “jewellery,
Swiss watches and other compact but costly goods
are often used as a parallel currency by criminals
because they can easily be resold and are difficult to
trace”.
102
For this reason, the European Commission
included sellers of high value goods – items valued at
€15,000 (£10,400) or more – among the businesses
that will now be required to take steps to avoid helping
money launderers move their illicit funds. Unfortunately,
this does not apply to companies based outside the
EU, including the many luxury brands (particularly of
watches) based in Geneva, Switzerland. There is no
evidence in the corporate responsibility reports or
annual reports of the top ten luxury conglomerates (see
Chapter 6), that they have examined this issue and are
promoting responsible retail practices to avoid enabling
and benefiting from money laundering and corruption.
Marketing and advertising
On 2 August 2006, 22-year-old model Luisel Ramos
died of heart failur
e as a result of anorexia nervosa while
participating in a Fashion Week show in Montevideo,
Uruguay. Her father told police that she had gone
“several days” without eating before the event. At the
time of her death, Ramos had a body mass index (BMI)
approximately 14.5 and weighed little more than 7
stone (98 lb, 44 kg) despite being 5ft 8in (1.73m) tall.
The World Health Organisation considers people with
a BMI of 16 or less to be suffering from starvation.
103
In subsequent months, other models, including Ana
Carolina Reston died of complications from anorexia –
which, claimed the UK Sunday newspaper,
The Observer, “shone a spotlight on the way the
business treats its models, and more significantly,
on how destructive our current perception of female
beauty can be”.
104
The notion that “thin is beautiful” is
a recent and Western one, fuelled by the global fashion
industry. It is now reshaping notions of beauty from
India to Indonesia.
105
This not only threatens the health
of models, but also of those consumers who feel
compelled to emulate them.
The late Ana Carolina Reston
© AP/PA Photos
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A month after Luisel Ramos’ death, Madrid Fashion
Week set a minimum BMI of 18 for all models. In
December of that year, Italian fashion designers
banned size zero models from their catwalks. Others
in the industry (including the organisers of London
Fashion Week) failed to follow suit, and most fashion
publications continue to use ultra-thin models in their
fashion shoots.
Consumption
As discussed in the Introduction, the fashion industry
(as distinct fr
om the luxury industry) relies on things
becoming aesthetically obsolete; it encourages the
view that items are no longer worth wearing if they
go out of fashion, even if they are still able to fulfil their
practical function. Some luxury brands are accused
of compounding this unnecessary and unsustainable
waste of natural resources by fuelling unfulfilled desire.
As explained in Chapter 3, these criticisms have even
led some governments to ban the advertising of
luxury products.
Luxury fashion does not have to be the enemy of
sustainable consumption. Outmoded technologies and
approaches are often more environmentally damaging
than their replacements, which can bring environmental
and social benefits if designed with sustainability in mind.
“Fashion in design fosters creativity and the exploration
of new, previously untried solutions,” notes design
Professor Stuart Walker. He explains that sustainable
design is neither a destination nor a fad, but a new
paradigm within which fashion will move.
106
Luxury brands could be at the forefront of this positive
role for fashion, thanks to their heritage, quality, client
focus and high margins. Heritage means that luxury
brands do not merely sway with the latest fashion fads,
but focus on adapting traditions to create products that
will last, maintaining the brand’s heritage into the future.
“Ninety per cent of [the] clothing [that] people buy these
days ends up as landfill within two years; but that’s not
the case with what you buy in Savile Row,” says Mark
Henderson, managing director of luxury suit outfitter,
Gieves & Hawkes.
107
Many luxury brands offer return and
repair facilities to their clients, viewing it as an essential
part of their customer retention strategy. “We cannot
offer unbreakable products,” explains Kyojiro Hata, chief
executive of Louis Vuitton Japan, “but our repair services
can ensure continued use. Improved repair services are
crucial to customer satisfaction.” Louis Vuitton has five
dedicated repair centres in Japan.
108
Luxury brands enjoy high margins that may in turn
be used to finance the development and marketing of
more environmentally and socially responsible products
and services. This has been evident in the automotive
sector, which has recently seen launches of several
top-end models powered by renewable energy, including
the Lexus 450h, the new BMW 7 Series Hydrogen, and
the Tesla electric sports car (Chapter 7).
109
While this helps
reduce the impacts of luxury vehicles that have traditionally
been powered by thirsty petrol engines, there is an
associated danger that consumers will simply trade up
from smaller conventional engines, many of which are
less polluting than the new, renewable, luxury alternatives.
Such a scenario would produce a zero net reduction in
carbon emissions.
Recent work by WWF and others has demonstrated that
consumption – the way that products are bought, used
and retired – must be changed if we are to stand a chance
of combating climate change. For businesses, this does
not mean reducing revenues from consumers, but offering
them new types of value in less carbon-intensive ways.
This can be achieved through a combination of intelligent
design, appropriate messaging and practical support
for consumers. Public statements on environmental
issues can even represent value in their own right, as
has been recognised by watchmaker IWC, which has
announced its ambition to become carbon-neutral.
110
Beauty as once held by Rubens
The Judgment of Paris, Peter Paul RUBENS,
© The National Gallery, London
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Prior to this, in 2004, Louis Vuitton began to measure
the amount of carbon emitted by its retail business
and subsequently stopped using plastic wrapping
for customer deliveries; this measure alone reduced
the company’s consumption of plastic by 20 tons
per year.
111
Signs of change
Notwithstanding the efforts described above, and despite
the practical and economic potential of the luxury industry
to pioneer a mor
e sustainable model (see Chapters 2
and 3) luxury companies are failing to embrace social
and environmental challenges as part of their core
business strategies. Instead, we are seeing piecemeal
approaches to corporate social responsibility. Despite
recognition among some executives of the need for
greater depth in their offering, there remains a reluctance
to face the challenge of sustainable consumption in a
broader, systemic way.
Some in the industry have recognised the need to
offer reassurance on social and environmental issues.
However, this is usually limited to “glam philanthropy” –
giving to high-profile projects that involve events with
celebrities. Omega, of the Swatch Group, is sponsoring
a project that aims to fly a solar plane around the world.
112
TAG Heuer is raising funds for the United Nations
Development Fund for Women (UNIFEM) through a
series of photographic exhibitions in which the world’s
top female photographers present portraits of exceptional
women, as well as events featuring TAG representatives
such as actress Uma Thurman. However, the company
offers no information on its website about its workplace
and supply chain diversity policies and performance –
and this in a year when its parent company was excluded
from the FTSE4Good index on the basis of a lack of such
policies for its own supply chains.
Some brands have begun to bring their philanthropic
work into their advertising – for example, Baume and
Mercier, the Richemont-owned Swiss watch company,
featured celebrities mentioning donations to charitable
causes. The International Herald Tribune reported that
Louis Vuitton’s 2007 advertising campaign featuring
Mikhail Gorbachev “reflects a move by some luxury
companies to connect with consumers on a more human
level. In the past, many fashion houses and other luxury
brands relied primarily on the so-called product-as-hero
approach, featuring their products, perhaps accompanied
by a model, in a stylised, static way.” The adverts mention
donations to environmental organisations.
113
Often without a connection to charity, luxury brands are
seeking to relate to contemporary human concerns such
as scarcities of time, personal energy and connectedness.
But even these attempts can be misguided if the
consequences are not thoroughly thought through. In
its 2007 marketing campaign, luxury car maker Bentley
states: “The greatest luxury in life is time. Savour every
second.” This invitation to savour time by speeding up
global warming epitomises the shallow attempts at depth
that currently pervade the luxury sector.
As evidenced in this chapter, consumer needs and
concerns too often fail to inform the policies, processes
and cultures of brand-owning companies. The diverse
issues described here all relate to the business challenge
of creating a sustainable economy, for a one planet
future, as described in Chapter 1. The lack of explicit
policies, systematic programmes, stakeholder dialogues
and comprehensive sustainability reporting by most
luxury brands indicates that they lack a full understanding
of the strategic corporate imperative of sustainable
development. Watch industry expert Marie Le Berre
writes that “while a number of watchmaking brands
have invested in actions in favour of solidarity, they
have been slow... to produce detailed reports on...
the social responsibility of companies”.
114
WWF believes that companies can partner with NGOs
to move forward more effectively. For instance, WWF
US has partnered with Tiffany & Co to build support for
a marine protected area in the Indo-Pacific Coral Triangle,
one of the most important source regions for pearls on
the planet, as well as exchanging information on how
to define and encourage more responsible mining.
Given that there is both a business and social case for
luxury brands to excel in this area, we promote
transparency by introducing a ranking of performance in
the next chapter.
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Chapter six
Performance ranking
of luxury groups
All companies are used to being ranked on business
performance. Such a benchmarking exercise can
help individual business people better understand
their relative performance, and identify areas for
improvement. In recent years, more companies have
begun to be ranked on their environmental, social
and governance (ESG) performance, especially by
investment analysts who provide information to
asset managers and asset owners that consider
these issues material to financial performance,
or to the wider interests of their investors.
This report ranks the ESG performance of the ten
largest publicly-traded luxury companies or groups.
These were selected for WWF by financial analysts,
based on the companies’ market capitalizations in
2006 and on the fact that they derive a significant
portion of their revenue from the manufacture or retail
of personal luxury items. The Industry Classification
Benchmark (ICB), jointly-owned by FTSE and Dow
Jones Indexes, does not have a specific subsector
classification for luxury companies. Therefore, companies
featured in this ranking are drawn from the following
ICB subsectors: Clothing & Accessories, Personal
Products, Apparel Retailers, Broadline Retailers and
Specialty Retailers.
The companies are:
Bulgari: The fast-gr
owing Italian jeweller and luxury
goods retailer, founded in Rome in 1884. Bulgari’s
heritage is in jewellery, but it now also produces and
licenses watches, handbags, fragrances,
accessories and hotels.
Coach, Inc: The US-based leather goods company
that started life in a loft in Manhattan in 1941. Coach
Figure 3: Ranking of environmental, social and governance performance and reputation of luxury corporate groups
5429 Inside pages Artwork for web:Layout 1 21/11/07 12:33 Page 32
is famous for handbags, luggage, briefcases,
wallets and other accessories.
Hermès: A leather goods, fashion and perfume
company based in Paris. It pr
oduces ready-to-wear
fashion, home décor, jewellery, luggage, fragrances
and saddles.
L’Oréal: The world’
s largest cosmetics and beauty
company is a French multinational comprising four
operating groups, one of which is its luxury products
division with brands such as Lancôme, Helena
Rubenstein and Kiehl’s.
LVMH: The world’
s largest luxury goods
conglomerate, created after mergers brought
together Moët et Chandon, Hennessy and Louis
Vuitton. LVMH now owns more than fifty iconic
brands, including TAG Heuer, Fendi, Marc Jacobs,
Guerlain, Kenzo and Givenchy.
PPR: A Fr
ench multinational holding company
specialising in luxury brands and r etail. It owns
the Gucci group, which also controls Yves Saint
Laurent, Sergio Rossi, Bottega Veneta, Alexander
McQueen, Stella McCartney and Balenciaga.
Compagnie Financière Richemont SA: This Swiss
luxury goods conglomerate was founded in 1988 by
the South African entr
epreneur, Anton Rupert. It has
four main business areas: jewellery, watches, pens
and clothing. Among its brands are Cartier, Mont
Blanc, Chloé and International Watch Co (IWC).
The Swatch Group Ltd: Since its cr
eation in 1982,
the Swatch Group – the world’s largest watch
company, based in Switzerland – has accelerated
its acquisition of Swiss luxury brands, including
Breguet, Blancpain, Omega, Rado, Longines,
Tissot, Certina and Pierre Balmain.
Tiffany & Co: As well as diamonds and jewellery
,
US company, Tiffany & Co, sells watches, silverware,
china, crystal, stationery, fragrances and accessories.
Tods SpA: The shoe an d leather goods manufactur
er,
created in Italy in 1978 by Dieg o della Valle, was
listed on the Milan Stock Exchange in 2000 and
owns Tods, Hogan, Fay and Roger Vivier.
115
These companies, despite being leaders in the luxury
sector, feature little in ethical rankings because of the
limited nature of their ESG reporting. Not a single luxury
conglomerate appears in investment analyst Innovest’s
list of the 100 most responsible corporations of 2007,
despite the fact that 23 make discretionary consumer
items – more than any other type of product or service.
LVMH, Hermès, L’Oréal and Swatch were the only luxury
conglomerates listed in the FTSE4Good index in 2006,
but LVMH was expelled for supply chain issues in March
2007. Appearance on these indices indicates that a
company has a conscious strategic approach to the
responsibilities associated with its core activities, and is
communicating its efforts to external audiences. With
trillions of dollars now invested according to ethical
guidelines, the lack of luxury conglomerate performance
on these indices will become more financially relevant.
It is in this context of limited ESG disclosure that we have
prepared the ranking for this report. In the absence of
data from all the companies using standardised protocols
and systems of verification and audit, our ranking relies
on two categories of information: first, what companies
themselves report to the ethical investment community
about their ESG performance; and second, what the
media and non-governmental organisations have been
saying about them. The data for each was compiled in
2007 for performance during 2006.
116
For the first category, data was sourced from Ethical
Investment Research Service EIRIS.
117
A non-profit,
independent research organisation, EIRIS has been
conducting social, environmental and ethical research
on publicly listed companies since 1983. It gathers
information directly from companies through
questionnaires, and augments this by analysing
company public documents including annual reports,
websites and specific environmental, social and
sustainability reports. The data is collected for 50
criteria, grouped in four areas:
environment;
human rights;
corporate governance; and
stakeholder relations.
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Grade Score Grade Score
A
+
90 - 100 C
+
67 - 69
A 85 - 89 C 63 - 66
A- 80 - 84 C- 60 - 62
B
+
77 - 79 D
+
55 - 59
B 73 - 76 D 50 - 54
B- 70 - 72 F 0 – 49
Criteria include topics such as equal opportunity and
environmental policies, against which companies are
graded from poor to exceptional. WWF turned these
into numerical scores, with each criterion given equal
weight in making up the total score. (In the absence
of a stakeholder process to determine the relative
importance of different issues, any weighting of the
criteria would be arbitrary and not credible.
118
However,
we did correct bias introduced by the unequal numbers
of sub-criteria within each of the four principal areas.
This ensures that each area accounted for 25% of
the 50 points available for this half of the index –
a maximum for each, then, of 12.5 points.)
For the second category, data was sourced from
Covalence, a Geneva-based research house. Covalence
documents thousands of positive and negative news
stories about companies in English, French, Spanish,
Italian and German, then codes and synthesises them
into rankings.
119
Its 45 criteria cover working conditions
and the impacts of production, products and institutions.
Covalence’s search generated 512 news stories which
were analysed and coded as either positive or negative.
WWF weighted the result so that each company obtained
a comparable score out of 50.
The scores for EIRIS and Covalence were then added,
to create a total maximum possible score of 100.
This creates a ranking of the self-reported performance
and public reputation on corporate performance on
environmental, social and governance issues. Each
company’s score out of 100 is expressed in our ranking
as a grade between A+ (best) and F (worst) according
to the scale in Table 1. The results are shown in Table
2, and presented graphically in Figure 3.
Table 2: Scores
Group Covalence EIRIS Total Rank Grade
L’Oréal 38.5 30.0 68.5 1 C
+
Hermès 50.0 17.9 67.9 2 C
+
LVM H 37.2 29.9 67.1 3 C
+
Coach 50.0 16.2 66.2 4 C
Tiffany 47.8 11.9 59.7 5 D
+
Swatch 38.9 13.8 52.7 6 D
PPR 21.3 30.3 51.5 7 D
Richemont 35.5 15.2 50.6 8 D
Bulgari 20.0 17.6 37.6 9 F
Tods 25.0 9.9 34.9 10 F
The highest grade reached by any luxury conglomerate
is C
+
, which is achieved by three of the four companies
based in France: L’Oréal, Hermès and LVMH. Companies
based in Italy come bottom, with F grades; of the top 10
luxury conglomerates, they have the worst self-reported
performances and overall media reputation for good
governance, and social and environmental responsibility.
The combined scores mask some of the differences in
self-reported performance, as companies such as Hermès
and Coach appear better at having avoided negative
criticism from civil society and the media. Figure 4
illustrates the level of media attention given to brands
between 2001 and the end of 2006, as well as the
general nature of that attention.
Table 1: Score card – grades and corresponding scores
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Deeper Luxury
34/35
Self-reported performance is shown in Figure 5. The two
highest-scoring companies have activities outside the
luxury sector: L’Oréal markets products aimed at the
mass market, and PPR obtains more than 50% of its
operating income from retail outlets. These additional
activities may be responsible for improving the scores,
adding weight to the argument that luxury companies
are lagging behind other consumer product sectors.
The larger conglomerates divide their operations into
distinct business units, each of which manages its own
consumer brand(s). Given these management layers
and the presence or absence of particular environmental,
social and governance (ESG) issues in the various
product categories, a combined score can hide
important differences within corporations. In addition,
the 10 luxury conglomerates give the sector’s ESG
challenges varying levels of attention. Figure 6 draws
out some of these differences.
PPR and L’Oréal score well for stakeholder relations,
due to policies on equal opportunities, health and
safety in the workplace, and attention to the rights of
customers and suppliers. LVMH obtains a high
environmental score due to comprehensive reporting
of improvements in environmental management of its
own operations. While Hermès and Swatch score low
on board practice due to the lack of a code of ethics,
Bulgari has an advanced code of ethics. Both US
groups – Coach and Tiffany – score badly on
environmental factors, due a lack of reported
environmental monitoring or performance. Richemont
does not score well on human rights due to lack of
reporting and lack of supply chain policies where the
major human rights concerns would be located.
Tods comes bottom overall, due to an unwillingness
to respond properly to EIRIS questionnaires; there is,
therefore, little evidence of active consideration of its
ESG responsibilities.
These luxury groups differ widely in their approach to
corporate responsibility. This not only calls into question
their commitment to sustainable business practices,
but also deprives responsible investors of information
on which to base their ratings. These investors, who
account for more than $10 trillion of global assets,
consider performance on ESG issues to be material to
financial performance.
120
Our analysis shows that this is
particularly the case for luxury brand-owners, some of
whom are nevertheless failing to report adequately on
Figure 4: Positive and negative coverage of luxury
brands, multiple markets
Figure 5: Self-reported performance
© Covalence 2007
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these aspects of their performance; of the companies
that do report annually on ESG issues, only L’Oréal,
PPR and Richemont use Global Reporting Initiative
(GRI) guidelines. Richemont began doing so in the
middle of 2007.
The GRI is a coalition of companies, consultants and
non-governmental organisations. It has established an
internationally recognised framework for reporting on
ESG issues, which is now being used by hundreds of
major companies worldwide.
121
Our review of these companies indicates some progress
by some luxury brand-owners; for example, IWC has
committed to becoming carbon-neutral. However, as
discussed in Chapter 5, these companies still approach
corporate social responsibility with a combination of
piecemeal philanthropy, glamorous sponsorship projects
and the management of reputational risks. Their direct
impacts may not be as large as other industry sectors,
but unless they become more engaged in this agenda,
they will miss out on the growing level of responsible
investments, as well as the commercial opportunities
described throughout this report.
The quality and reliability of our ranking of the luxury
industry on ESG issues depends on the availability of
reliable and comprehensive data. All companies were
contacted for information by EIRIS and WWF-UK. It is
our aim that the introduction of this ranking will encourage
companies to provide more of such data in future years.
Our recommendations to these luxury groupsare:
1. Report annually according to GRI guidelines.
2. Do not ignore any of the GRI criteria unless
logically irr
elevant.
3. Collaborate with stakeholders to create a GRI
sector supplement on luxury goods.
This thir
d recommendation implies the inclusion of
issues that are specific to the luxury sector, such as
corruption and product responsibility. For example,
the high value, small size and limited traceability of
watches and jewellery make them ideal for use in illegal
bribes or money laundering activities. Additional GRI
indicators of innovation, such as progressive marketing
campaigns, should be developed to respond to the
potential for luxury to lead innovation on social and
environmental performance.
Figure 6: Self-reported performance by issue category
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Chapter seven
The future makers
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FROM LEFT TO RIGHT
Tesla/Osklen/John Hardy
© Osklen © John Hardy
© Tesla © Tesla
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Exploring challenges, problems, commercial imperatives
and myths could give the impression that deeper
luxury is a complicated ambition. It is not, and to
some entrepreneurs it comes naturally; innovative
examples of authentic luxury products and services
can be found around the globe. To illustrate, we have
selected seven companies that embody aspects of
the future of luxury by excelling in key aspects of
their social and environmental performance.
Examples covered here include: clothing from Osklen
in Brazil; furniture from OSISU in Thailand; jewellery
from John Hardy in Bali; cosmetics from Mádara in
Latvia; fashion from US designer Linda Loudermilk;
sports cars from Tesla, also based in the US; and
sustainable housing in Mata de Sesimbra, Portugal.
These brands demonstrate that sustainable luxury
cannot be approached in a superficial way, but involves
meeting challenges in sourcing, design, production,
marketing, use, repair and disposal. WWF has not
audited these companies’ sustainability and cannot
vouch for their broader performance, but presents
them here to illustrate the possibilities.
Osklen
Osklen is a leading fashion brand in Brazil and is
expanding inter
nationally, with three new stores in Tokyo
and one in New York opening in 2007. Owner and
creative director Oskar Metsavaht is keen to promote
the Brazilian heritage behind his brand, as well as
supporting efforts to protect the local environment.
Osklen’s winter 2007 collection, “Amazon Guardians”,
makes full use of organic wool, natural latex and
fish leather which was used for a range of brightly-
coloured accessories.
These fabrics were developed in partnership with
Instituto-e, a not-for-profit organisation promoting
sustainable human development in Brazil. WWF-Brazil
has supported Instituto-e in promoting access to
sustainable fabrics. Through Insituto-e’s partnership
with Osklen, a royalty is derived from sales of products
using these fabrics.
“We need to fire up the consumer again,” says Metsavaht,
who adds that conspicuous eco-consumption (as
opposed to a quieter focus on sustainability) is the way
to shape consumer attitudes in Brazil. The environment
was heavily featured in Osklen’s 2007 show in São Paulo.
122
Osklen’s Amazon Guardians collection winter 2007
Osklen makes innovative use of organic wool
© Osklen
© Osklen
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OSISU
Despite the presence of strong local design traditions,
Asia has not been at the for
efront of modern luxury.
OSISU is an exception – a Thai company that
manufactures recycled furniture, creatively re-using
materials that would otherwise go to landfill or be
incinerated. Though not setting out to be a luxury
brand, OSISU is being retailed and perceived as such;
its Chairwalker product retails in the US at $1,600.
As well as recycled materials, OSISU uses water-based
glue and Livos oil for finishes. Not only do the products
come from waste, but “we do not foresee OSISU
products being disposed of”, says founder-director
Singh Intrachooto. “We want people to keep them as
art. That is why we put so much effort into putting the
design together so laboriously.” OSISU’s is a “grave to
eternal cradle” approach to business.
“We attempt to balance three dimensions of sustainability:
environment, economics and social issues,” says Singh
Intrachooto. A small company employing just 15
craftspeople, OSISU is not seeking a rapid expansion.
Indeed it is cautious, perhaps because the business
was created against advice: “We didn’t conduct market
research on green consumers,” explains Intrachooto.
“If we did, we may not have decided to salvage waste
for furniture-making. People told us at the beginning
that we were crazy... [but] we wanted to create demand
for green design, even if there was none.”
It was never intended that OSISU would be a luxury
brand, but it is now perceived that way. Like some
iconic luxury brands such as Dom Pérignon, OSISU
is an “accidental” luxury brand.
123
John Hardy
John Hardy is a jewellery company based in Bali. Its
r
etail turnover is $150 million per year and it employs
more than 1400 staff worldwide. In 2007, it was privately
bought for an undisclosed sum. According to Time
magazine, the company embodies a new vision of
luxury in which “beauty and luxury could be a solution,
not just a commodity”.
124
John Hardy’s philosophy finds a variety of unusual
expressions. For example, the factory walls, made of
bamboo and mud brick, are topped with thorny
bougainvillea rather than razor wire. John Hardy
calls them a “sustainable solution to the international
problem of security”. Workshop roofs are covered with
creeping passion-fruit vines to provide protection from
the equatorial sun. At lunchtime, workers dine on fresh
organic food raised in the factory grounds.
John Hardy combines a millennia-old tradition of
jewellery-making and design with 21
st
century technology
The result is an artisanal approach to design, says
Hardy: “The worker who carved your bracelet is proud
of it, and the hand-hewn imperfections turn a thing of
beauty into a work of art”. The back of a John Hardy
brooch is as beautiful as the front: “It’s like a little secret
for the wearer alone,” says creative director Guy
Bedarida. “That’s our trademark.”
125
Deeper Luxury
38/39
© OSISU
Bud stands are made from scrap steel and discarded tree roots
© John Hardy
5429 Inside pages Artwork for web:Layout 1 21/11/07 12:33 Page 39
Mádara
The new Latvian company, Mádara, makes completely
natural flower and herb cosmetics for body and facial
car
e. These products are made only from plant extracts,
natural oils, butters and waxes, without petroleum
ingredients, chemical preservatives, parabens, artificial
colorants and other potentially harmful substances.
For all print and packaging, Mádara uses paper from
forests certified under the Forest Stewardship Council
(FSC), a system of sustainable wood supply that WWF
helped to create in the early 1990s. The paper is
manufactured in accordance with a strict environmental
policy that calls for minimal carbon emissions and the
recycling of water. According to co-founder Zane
Rugina, the brand “tells a story about a healthy and
natural lifestyle, about dignity and respect towards
secrets of natural beauty”.
126
Mádara is not alone in the high-end natural cosmetics
market. Designer Stella McCartney recently launched
Care, a range of organic skin care products, some of
which are sourced from eastern Europe.
127
Linda Loudermilk
Los Angeles-based Linda Loudermilk epitomises the
brash confidence of a gr
owing group of ecologically
concerned designers. She counts among her clients
Jane Fonda, Debra Messing and Jennifer Beals.
Loudermilk merges high fashion and environmental
awareness with the originality of fabrics made from
bamboo, seaweed, soya and recycled beverage
bottles. Vogue, Elle and Rolling Stone have featured
the Loudermilk brand, which was dubbed the “rock star
of nature” at New York’s autumn 2007 Fashion Week.
Linda Loudermilk’s policy is to source materials produced
in a socially and environmentally responsible manner.
Applying this policy has enabled Loudermilk to become
an expert capable of teaching others how to do the same;
it does so by means of an institute and associated
labelling scheme.
128
Natural beauty from Mádara
© Mádara
© Mádara
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Tesla
Tesla Motors Inc is a new kind of car company. Its sleek
$98,000 electric sports car
, launched in 2007, can rocket
from 0 to 60 mph in just four seconds. Although electric
vehicles are not new, none has attempted to compete
in this market segment. Actor George Clooney and
California Governor Arnold Schwarzenegger were
among the first to place orders.
All Tesla owners have two options to recharge – via a
standard wall socket (which takes at least six hours for
a full charge); or by means of a Tesla-designed recharging
station, which the company is installing in high-end hotels
such as the Hyatt.
129
Tesla’s chairman and chief source of investment is the
PayPal founder Elon Musk. Like many silicon valley start-
ups, Tesla is offering stock options to all its employees,
so that they reap the rewards of the success to which
they contribute. Given that transport is a key sector for
the consumption of energy and natural resources, it is
important that companies like Tesla blaze an aspirational
trail for others to follow.
130
Mata de Sesimbra: One Planet Living
TM
Market trends suggest that more people are becoming
interested in luxury lifestyles, as distinct from luxury goods.
Offerings include holidays, spas and elite experiences.
Luxury housing is no longer defined only by the property
itself, but by its situation within a thriving local community.
The high-end villas available at the Mata de Sesimbra
eco-tourism development in Portugal respond to this
demand. They are part of the world’s first major integrated
sustainable building, tourism, nature conservation and
reforestation programme. The 5,300-hectare site
comprises a 4,800-hectare nature reserve, a project
to restore a native pine and oak forest, and a 500-
hectare eco-tourism development of up to 8,000 units.
BioRegional and WWF are working with developers
Pelicano on the €1 billion project to ensure that it
incorporates One Planet Living
131
principles and to
manage the conservation activities. The development
includes the largest privately-financed forest restoration
project in Europe, creating closed-off protected areas
for the critically endangered Iberian lynx and the
vulnerable Bonelli’s eagle, and recovering wetland
and other important freshwater and coastal habitats.
Mata de Sesimbra is designed to use sustainable
building materials, renewable energy, rainwater and
water recycled from within the development, and local
food (to reduce carbon emissions from transport). It is
intended to revive local agriculture, create a sustainable
transport network, and virtually eliminate the need for
private vehicles on site. Mata de Sesimbra’s golf course
will be fed only by treated wastewater (grey water).
© Tesla Motors Inc
A fast pace of innovation from Tesla
© Pelicano
Luxury eco-living in Portugal
Deeper Luxury
40/41
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Chapter eight
The role of celebrities
FROM TOP TO BOTTOM
Chinese actress Ziyi Zhang endorses Tag Heuer/Sienna Miller for Global Cool/UNHCR Goodwill Ambassador Angelina Jolie
© Marc Roussel / Gamma, Camera Press London
© AP Photo / Rajesh Nirgude
© Abaca / PA Photos
5429 Inside pages Artwork for web:Layout 1 21/11/07 12:33 Page 42
Celebrities are key to the success of most luxury
brands. According to marketing services company
WPP, the number of advertisements featuring
celebrities has doubled in the past 10 years. Today,
“celebrities are highly important and valuable to
brands, especially in the luxury fashion sector”,
explains industry consultant Uche Okonkwo.
132
For example, LVMH-owned Christian Dior cosmetics
are endorsed by actresses Monica Bellucci (Italy),
Charlize Theron (South Africa), Choi Ji Woo (South
Korea), and Ziyi Zhang (China). Zhang promotes another
of LVMH’s brands, TAG Heuer watches, as do Hollywood
stars Brad Pitt and Uma Thurman. Although the use of
celebrity endorsement is ubiquitous, industry experts
Radha Chadha and Paul Husband say that “in India,
thanks to a manic obsession with Bollywood, it takes
on magical proportions”. When Indian fashion magazine
Verve ran a feature for Louis Vuitton’s 150th anniversary,
eight Bollywood divas were photographed with their
favourite Vuitton bags. Giorgio Armani dressed
Aishwarya Rai for her London premiere of the film
Bride and Prejudice, and she endorses both the
jewellery brand Chopard and De Beers’ diamond
brand in India, Nakshatra.
133
The power of these celebrities to build brand value
is enormous. A former editor of Elle Thailand, Siri
Udomritthiruj, explains, “the trend usually starts with a
celebrity. You have a celebrity walking around, wearing
it all the time, so it gets publicity.”
134
Given this increased
importance of celebrity endorsement, luxury brand
companies would do well to recognise another recent
trend in the celebrity world: overt support for public
causes. Examples have been set by Angelina Jolie,
Leonardo DiCaprio, Bono, George Clooney, Emma
Thompson, Madonna, Gwyneth Paltrow and many
more. Actress Natalie Portman works with FINCA, a
group that supports women entrepreneurs with loans
in poor countries.
135
Brad Pitt, a face of TAG Heuer, and
involved in African peace and development initiatives,
spoke in 2007 of the need for people to buy products
that would help African development.
136
By aligning themselves (albeit unwittingly) with
unsustainable or unethical brands, celebrities can risk
damage to their own reputation. For instance, the
National Toxic Encephalopathy Foundation (NTEF)
has criticised celebrities for promoting fragrances
without any knowledge of their toxicity. “Some
fragrance ingredients have suspected carcinogenetic
activity, and dermatological and respiratory reactions,
while others interact with estrogen receptors,” reports
the NTEF.
137
Tods’ first celebrity ambassador, actress Sienna Miller,
campaigns against climate change through her association
with Global Cool. She also endorses Tods, which came
bottom of our index of ESG perfomance. Tods may
represent a liability to Sienna Miller’s reputation.
WWF recognises that celebrities influence consumers,
and can therefore influence companies. The challenge is
to discourage corporate behaviour that contributes to the
problems celebrities are campaigning on, and encourage
corporate contributions to the solutions not simply
through donations, but through sustainable business
practices. In deciding which brands to work with, we
call upon celebrities and their agents to follow our “Star
Charter”, which comprises the following six principles:
1. To recognise their potential to influence
consumer behaviour
.
2. To encourage both consumers and companies to
be awar
e of the social and environmental aspects
of their activities.
3. To consider the social and environmental
performance of companies befor
e endorsing them.
4. To obtain independent expert advice on that
performance befor
e endorsing companies.
5. To address any public concerns over the social
and envir
onmental performance of the brands that
they currently endorse.
6. To tell professional colleagues about their
commitment to the Star Charter
.
For more information about the Star Charter, visit
wwf.org.uk/deeperluxury.
Deeper Luxury
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Chapter nine
The ten point plan
Brand and marketing professionals on both client and
agency sides can unlock the latent commercial potential
of sustainable luxury brands, provided that they do
so in an authentic and systematic way. This can be a
complex task, but the following guidelines can make
it easier.
138
1. Understand your brand. Conduct a “brand
perception audit” to understand and define your
brand’s true personality as it exists in the minds of
both employees and consumers/customers. Include
environmental and social elements in this and
subsequent tracking studies. Identify the values in
your brand’s traditions, and creatively explore what
they can mean in current global contexts. Consider
the inherent qualities of your product or service to
see how it might affect the environment or society.
2. Understand your consumers and how their
r
elationship with sustainability and ethics affects
their esteem for your brand. Understand how your
company meets your customers’ needs. Observe
and understand the values, beliefs and lifestyles
of your present and potential customers. Avoid
assumptions about consumers, particularly in
Asia and other emerging markets. Explore locally
appropriate ways to generate consumer insights
into the depth and authenticity of your luxury offering.
3. Get your house in order. Audit and impr
ove your
internal processes, from office management to
production, supply chain, distribution, marketing
and advertising. Minimise power consumption,
water use and waste. Use environmentally-friendly
cleaning products and office supplies. Accept
responsibility for the practices throughout your
supply chain by screening, training and monitoring
the sustainability performance of its constituent
parts. Take guidance on other important issues
from the guidelines of the Global Reporting Initiative.
4. C(S)R: Handle with care! Lear
n from the leading
companies and their latest understanding of
corporate responsibility and sustainability as
drivers for innovation and value creation. Neither
treat philanthropy nor reputation management as
the main concerns of the corporate responsibility
function. Rather than restricting its focus on
measuring and reducing risks and direct impacts,
CSR should draw attention to opportunities. CSR
units should work with the heads of the core business
functions (including product development, sales
and marketing) to develop key performance
indicators (KPIs) of sustainable business practices.
These KPIs should then be used for setting objectives
and targets, reviewing performance and determining
remuneration and career progression. They should
focus on embedding social responsibility and
innovation into corporate and brand DNA.
© iStock / Bora Ucak
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Deeper Luxury
44/45
5. Innovate. Identify new and efficient ways in which
your brand can help consumers do what they wish
to do or feel how they wish to feel. Re-tune the
corporate values and brand to resonate with
attributes and attitudes that you see emerging in
consumers on sustainability issues. Recognise
sustainability as a new paradigm for design rather
than just a passing fashion, and corporate social
contributions as a new paradigm for core business
operations, not an afterthought. As your product or
service progresses from inception through design
and manufacturing, constantly query its sustainability
at the most important levels and at all stages of its
lifecycle. Think of new ways for your existing products
or services to do useful jobs w hile enhancing people’s
perceptions of themselves as environmentally or
socially responsible. Think how changes to these
products and services might make them even more
useful and responsible.
6. Motivate. Rewar
d and congratulate staff for
meeting environmental and social objectives and
targets, and for aligning with corporate and brand
values. Do so, where appropriate, as part of their
regular performance reviews.
7. Collaborate. Explor
e possibilities to team up, both
internally and externally. Encourage staff participation
in multi-functional, multi-skilled teams that include
personnel from all relevant functions, including
marketing, communications, investor relations,
product design/development, brand strategy,
financial planning and analysis, and corporate
responsibility. Include staff from both brand and
corporate level, if they are distinct. Collaborate with
third parties (such as strategic partners and celebrity
representatives) to improve environmental and
social performance. Engage non-governmental
organisations to advise on strategic business
issues and ensure rigour. Partner with competitors
and industry associations to lobby or plan for the
better regulation of markets.
8. Communicate. Once you have done all of the
above, communicate exter
nally. If you are open,
honest and heartfelt, then a bit of sniping here and
there from your critics will just be grist to your mill.
Avoid contestable claims about issues such as
carbon neutrality, and be open about needing
continual improvement. Think about how
consumers interact with the new media landscape.
Integrate your messages through the most
appropriate channels, even if you have to invent
those channels yourself.
9. Sign up your consumers to the sustainability
jour
ney that your company is taking – use them to
create and ride the sustainability wave. Ensure that
consumers come away from every interaction with
your brands, products and services with as positive
a self image as possible, and a new understanding of
the meaning of luxury. If your brand makes them
feel like better people at the same time as fulfilling
its principal function, then it will thrive.
10. Measure, monitor and report continuously.
Develop ways of identifying, measuring, evaluating
and r
eporting the various elements of brand value,
including those that relate to sustainability, so that
they can be used by managers as indi cators of
performance. Specific targets may then be set to
sit alongside shorter-term ones and be taken into
account at staff performance reviews. Consider
participating in creating a sector supplement to GRI
on sustainability reporting by luxury goods companies.
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As our consumption habits chew up both people
and the planet, so our desires for human creations
are making luxuries out of nature’s creation.
Clean water, safe food, breathable air, a peaceful
community, and a walk in nature are already scarce
luxuries for many people – unfulfilled desires for
basic needs. New consumption habits within a
sustainable economy are urgently needed, to
create a one planet future. Given its global brand
power, the luxury industry should demonstrate
greater leadership on this agenda.
Despite strong commercial drivers for greater
sustainability, luxury brands have been slow
to respond. The largest luxury conglomerates
have been ranked on their social and environmental
performance for the first time, and none
scored highly.
Luxury brands face criticism that they fuel
unnecessary consumption and provoke discontent
among poorer members of society. This has been
true of some (shallow) forms of luxury that waste
resources or exploit vulnerable people. Increasingly,
however, consumers require deeper, more complex
experiences, emotions and connections. Selfishness
is frowned upon; altruism is respected.
Stuart Walker, a professor of design, explains
that “an object can become the culmination,
physical manifestation and symbol of good works –
in its intention, design making, use and disposal...
Beauty can be captured in the object through
what it represents, and not simply through
its appearance”.
139
Today’s social, environmental and cultural challenges
are reminding us that true wealth is the ability to
provide not only for one’s own needs, but for those
of others.
This is an ancient idea that exists today in many
cultures. For instance, mana is a concept used
across the Pacific Islands to describe a force
or quality that resides in people, animals and
inanimate objects, that instills in the appreciative
observer a sense of respect or wonder.
140
If someone
has a lot of mana, they have the power, energy and
ability to make a difference. This is because in a
tribe “wealth” is, by definition, of benefit to the
tribe. As global awareness increases and we come
to understand ourselves as a one planetary tribe,
perhaps we will rediscover how prestige and status
should come from having unusual access to the
energies that help others. Luxury brands can be
part of that process. If not, they may come to be
regarded as shallow, perhaps almost as fake as
the counterfeits.
In Chapter 9, we offered some guidance to luxury
executives wishing to embrace the sustainability
agenda. We believe that adopting this approach will
produce deeper, more rewarding experiences to
consumers, staff, investors and local communities.
The pioneering brands and people we have profiled
in this report suggest we are seeing the birth of a
movement for authentic luxury that could remind us
all that sustainability is truly our highest aspiration
and greatest success. We challenge more celebrities
to join this movement, by bringing their commercial
endorsements into alignment with the values and
causes they champion, and by committing to the
Star Charter. More than anything, that will answer
the question: “what are you made of”?
Conclusion
5429 Inside pages Artwork for web:Layout 1 21/11/07 12:33 Page 46
Endnotes
1
This excludes many routine purchase
categories, meaning that a brand for the
highest priced and best quality toilet roll,
for instance, is not a luxury brand, although
it might use the term ‘luxury’. However,
some fairly routine purchases, such as
restaurant meals, do have luxury offerings
with associated luxury brands. Thus, no
definition of luxury brands is completely
accurate, as it is a constantly shifting
concept constructed by social dynamics
that influence personal tastes.
2
Circa 11-12% of sales revenue is spent on
advertising: Radha Chadha and Paul
Husband (2006) The Cult of the Luxury
Brand: Inside Asia’s Love Affair with Luxury,
Nicholas Brealey International, London, UK.
p.254.
3
The Independent (2007) A bit rich: Luxury
brands are flaunting their green credentials
but can conspicuous consumption come
with a clear conscience? by Simon Brooke,
9 August http://environment.independent.
co.uk/lifestyle/article2849283.ece
4
Radha Chadha and Paul Husband (2006)
The Cult of the Luxury Brand: Inside Asia’s
Love Affair with Luxury, Nicholas Brealey
International, London, UK.
5
See the following:
• Dana Thomas (2007) Deluxe: How Luxury
Lost Its Luster by Dana Thomas;
Penguin Press.
• Review: Has luxury’s lap gotten too big?,
by Lyn Millner, Special for USA TODAY,
www.usatoday.com/money/books/2007-
08-26-deluxe_N.htm
• The Devil Sells Prada, by Caroline Weber,
26 August 2007, New York Times.
www.nytimes.com/2007/08/26/books/
review/Weber-t.html
6
Vanity Fair, Green Issue, May 2007.
7
The latest publications, news items and
trend reports on the worldwide luxury
market were collected via the web,
bookshops, online libraries and journal
databases by an interdisciplinary four-
person team of experts. Data on corporate
performance was sourced from analyst firms
Covalence and EIRIS. This information was
related to corporate respo nsibility and
sustainability issues by the authors Bendell
and Kleanthous, who have a combined 20
years of experience in that field.
8
See, for example, Brand Value at Risk from
Climate Change, The Carbon Trust, 2004.
9
Kleanthous, A and Peck, J (2005) Let Them
Eat Cake, WWF-UK. www.wwf.org.uk/
letthemeatcake
10
Living Planet Report, WWF, 2006.
11
Collapse, Jared Diamond, Penguin, 2005.
12
Living Planet Report, WWF, 2006.
13
Living Planet Report, WWF, 2006.
14
More information on these drivers is provided
in: Holliday, C. O. and S. Schmidheiny,
and P. Watts, (2002) Walking the Talk:
The Business Case for Sustainable
Development, WBCSD and Greenleaf,
Geneva and Sheffield.
15
More information on these accelerators is
provided in: Schaltegger, S. and Wagner, M.
(2006) Managing the Business Case for
Sustainability: The Integration of Social,
Environmental and Economic Performance,
Greenleaf Publishing, Sheffield, UK.
16
Kleanthous and Peck, WWF-UK. View the
summary of this report at www.wwf.org.uk/
filelibrary/pdf/let_them_eat_cake_abridged.
pdf, or the full version at www.wwf.org.uk/
filelibrary/pdf/let_them_eat_cake_full.pdf.
17
Ronald D Michman and Edward Mazze,
2006, The Affluent Consumer, Marketing
and Selling the Luxury Lifestyle, Praeger,
Westport USA. p.139.
18
FT 2007, Automobiles: Life is sweet –
and becoming sweeter, by John Reed in
London, Published: June 4 2007, p.3.
19
The US: A vast market opens its doors to
the clever retailer, by Jonathan Birchall in
New York, Published: 4 June 2007. p.2.
http://www.ft.com/cms/s/9d9f5702-1021-
11dc-96d3-000b5df10621,dwp_uuid=c2f3
36f6-093a-11dc-a349 000b5df10621.html
20
The Independent (2007) A bit rich: Luxury
brands are flaunting their green credentials
but can conspicuous consumption come
with a clear conscience? by Simon Brooke,
9 August, http://environment.independent
.co.uk/lifestyle/article2849283.ece
21
Uche Okonkwo (2007) Luxury Fashion
Branding: Trends, Tactics and Techniques.
Palgrave Macmillan p239.
22
The Future Laboratory, Conscience
Consumers and the New Austerity,
Alex Steffen, August 31, 2006 11:48 AM,
www.worldchanging.com/archives/
004876.html
23
Ronald D Michman and Edward Mazze,
2006, The Affluent Consumer, Marketing
and Selling the Luxury Lifestyle, Praeger,
Westport USA.
24
Lionel Barber in Brand Strategy, 2007.
25
Personal communication with J Bendell,
August 2007.
26
Reported to authors by fashion journalist,
Fiona Harkin, July 2007.
27
www.chinadaily.com.cn/china/2006-
06/01/content_605512.htm
28
www.forbes.com/free_forbes/2006/
0327/062.html
29
IEVA (2007), Ekologiskas Snobizmas
holivude, madoje, irgyvenime, p.1, and
Noriu Buti Snobe by Eva Tombak p.6,
Rugpjutis/August.
30
Closer to Nature, Baltic Outlook August/
September 2007, pp 52-55.
31
Conference Board (2007) The Global Luxury
Market: Exploring the Mindset of Luxury
Consumers in Seven Countries, Consumer
Research Center Special Report, June 2007,
The Conference Board.
32
http://news.bbc.co.uk/2/hi/entertainment
/6737805.stm
33
Kleanthous and Peck (2006) Let Them
Eat Cake, WWF.
34
www.unpri.org
35
Most of these investors do not argue
that ESG performance is a determinant
variable in corporate financial performance,
but that similarly to excellence in other
areas of business, such as human resources,
accounting, innovation, and so on,
excellence in ESG helps contribute to
business success both directly and
through reducing reputational risk and
encouraging investor confidence.
36
India: Custom for cruises and cars,
by Amy Yee, Published: June 4 2007, p.4
www.ft.com/cms/s/981bd954-1021-11dc-
96d3-000b5df10621,dwp_uuid=c2f336f6-0
93a-11dc-a349-000b5df10621.html
37
India: Custom for cruises and cars,
by Amy Yee, Published: June 4 2007, p.4
www.ft.com/cms/s/981bd954-1021-11dc-
96d3-000b5df10621,dwp_uuid=c2f336f6-0
93a-11dc-a349-000b5df10621.html
38
Manmohan Singh, The Financial Express,
25 May 2007, www.aifoundation.org/
newsroom/tenpointcharter.htm
39
The Economist (2007) “If you’ve got it, don’t
flaunt it: The sale of luxury goods in China
runs into political trouble”, p 64, 2 June.
40
Beijing Mystery: What’s Happening To the
Billboards? Airport Road Ads Vanish Or Are
Being Covered Up; Pitching Luxuries
Offends. By Jason Leow, Wall Street
Journal, 25 June 2007; Page A1.
41
Al-Ahram, Gated communities, By Salama
A Salama, 9-15 August 2007, Issue No.
857, http://weekly.ahr am.org.eg/2007/
857/op4.htm
42
Chada and Husband 2007, p.229.
43
The Chinese Concepts of ‘Face’, Hsien
Chin Hu, American Anthropologist, New
Series, Vol. 46, No. 1, Part 1 (Jan-Mar
1944), pp. 45-64. Note other spellings -
Lian and Mianzu.
44
Salter, 2007, The luxury challenge, Walpole,
pp.8-9.
45
Dana Thomas (2007) Deluxe: How Luxury
Lost Its Luster; Penguin Press.
46
New York Times (2007) The Devil Sells
Prada, By Caroline Weber, 26 August 2007,
New York Times.
www.nytimes.com/2007/08/26/books/
review/Weber-t.html
5429 Inside pages Artwork for web:Layout 1 21/11/07 12:33 Page 47
47
Uche Okonkwo (2007) Luxury Fashion
Branding: Trends, Tactics and Techniques.
Palgrave Macmillan, p226.
48
Fashion and its Social Agenda, Diana Crane.
Chicago: University of Chicago Press.
49
Edwin Colyer, 2007, Luxury Brands Confront
Web 2.0. Brand Channel, 27 August 2007.
www.brand
channel.com/start1.asp?fa_id=383
50
Radha Chadha and Paul Husband (2006)
The Cult of the Luxury Brand: Inside Asia’s
Love Affair with Luxury, Nicholas Brealey
International, London, UK. p.98.
51
CEO of The Luxury Institute, Milton Pedraza
(19 June 2007, luxuryint.com)
52
FT (2007) Brands: Between luxury and anti-
luxury, brands learn to surf back and forth,
By Yannis Kavounis, Published: 4 June
2007, p.7. www.ft.com/cms/s/ 977139f4-
1021-11dc-96d3-000b5df10621,dwp_uuid
=c2f336f6-093a-11dc-a349-000b5df
10621.html
53
Speech at the 2007 FT Business of Luxury
Conference, Venice, June.
54
Danziger, P 2005 Let Them Eat Cake:
Marketing Luxury to the Masses,
Dearborn Trade Publishing.
55
The Future Laboratory, Conscience
Consumers and the New Austerity,
Alex Steffen, 31 August 2006,
www.worldchanging.com/archives/
004876.html
56
The Luxury Institute, 2006, website:
www.luxuryint.com
57
Does luxury have a future? Charles
Leadbeater, 29 September 2006,
www.charlesleadbeater.net/cms/site/
news/what-is-luxury.aspx
58
Cited in: Brand Strategy 2007, Is luxury
lost? A detailed report from the Walpole
Seminar 2007 Luxury Experience: Magical
or Mundane? Reasserting the Human
Dimension, 16 May 2007. Report at
http://brandstrategy.wordpress.com/2007/
05/16/is-luxury-lost-a-detailed-report-from-
the-walpole-seminar-2007/#more-315
59
Uche Okonkwo (2007) Luxury Fashion
Branding: Trends, Tactics and Techniques.
Palgrave Macmillan. p.38
60
Ibid p.243.
61
Speech at the 2007 FT Business of Luxury
Conference, Venice, June.
62
Chadha R and Husband P (2006) The Cult
of the Luxury Brand: Inside Asia’s Love
Affair with Luxury, Nicholas Brearley
International, London, UK. p.46.
63
Conference Board (2007) The Global Luxury
Market: Exploring the Mindset of Luxury
Consumers in Seven Countries: Consumer
Research Center Special Report, June
2007, The Conference Board.
64
p.251 Chadha and Husband, 2006.
65
p.178 Chadha and Husband, 2006.
66
p.141 Chadha and Husband, 2006.
67
CIMG and Trendbuero, 2007, To Get Rich
is Glorious: Being Rich is a State of Mind,
March, Beijing.
68
China: Retailers tap into hierarchy of the
nouveau super-riche, By Angelica
Wiederhecker, Published: 4 June 2007
02:30. p.4 www.ft.com/cms/s/95718032-
1021-11dc-96d3-000b5df10621,dwp_uuid
=c2f336f6-093a-11dc-a349-
000b5df10621.html
69
Chadha and Husband p. 192.
70
Radha Chadha and Paul Husband (2006) p.3
71
Science cited on pp 3, 68 and 118 in
Chadha and Husband 2006.
72
South China Morning Post (2007) I’m not
a plastic bag - but I’m wrapped in one,
by Zoe Mak and Kristine Kwok in Beijing,
12 Jul 2007. www.scmp.com/portal/
site/SCMP/
73
Don Hedley (2007) East is East and West
is West - regional consumer attitude
comparisons – Introduction, 11 May.
www.euromonitor.com/Articles.aspx?folder
=East_is_East_and_West_is_West_regional
_consumer_attitude_comparisons_Introduc
tion&print=true
74
Monocle (2007), issue 4, p 121.
75
Chadha and Husband, 2006, p. 285.
76
Ronald D Michman and Edward Mazze, 2006.
77
BBC (2007) UK consumers happy to own
fakes, 23 July 2007, http://news.bbc.co.uk/
2/hi/business/6910710.stm
78
BBC (2007) UK consumers happy to own
fakes, 23 July 2007, http://news.bbc.co.uk/
2/hi/business/6910710.stm
79
Decision News Wire, 2006, Luxury goods
makers declare war on China counterfeits,
By Simon Pitman, 07/03/2006.
www.packwire.com/news/ng.asp?
n=66252-lvmh-counterfeit-china
80
In the director’s commentary on the
film’s DVD, 2006.
81
www.globalwitness.org/
82
www.kimberleyprocess.com
83
Global Witness 2007, Conflict Diamonds:
US jewelry retailers still not doing enough.
Summary of US results of Global Witness
and Amnesty International Survey.
84
www.globalwitness.org/pages/en/
the_kimberley_process.html
85
Global Witness 2007, Conflict Diamonds:
US jewelry retailers still not doing enough.
Summary of US results of Global Witness
and Amnesty International Survey
www.globalwitness.org/media_library_detail
.php/519/en/global_witness_amnesty_inter
national_us_diamond_re page.10.
86
Global Witness and Amnesty International
(2007) New Survey: UK Retailers not doing
enough to combat conflict diamonds,29
May 2007. www.globalwitness.org/media
_library_get.php/397/uk_survey_pr_final.doc
87
No Dirty Gold Coalition (2004) Dirty Metals:
Mining, Communities, and the Environment.
www.nodirtygold.org/pubs/DirtyMetals_Mini
ngParks.pdf
88
www.panda.org/about_wwf/where_we_
work/asia_pacific/our_solutions/new_guine
a_forests/conservation_new_guinea_forests
/sites_new_guinea_forests/lorentz_national_
park_indonesia/index.cfm
89
No Dirty Gold Coalition (2004) Dirty Metals:
Mining, Communities, and the Environment.
www.nodirtygold.org/pubs/DirtyMetals_Mini
ngParks.pdf
90
www.panda.org/about_wwf/ where_we_
work/asia_pacific/where/mongolia/our_solu
tions/responsible_mining/index.cfm
91
www.nodirtygold.org/supporting_
retailers.cfm WWF also supports the IUCN
(World Conservation Union) Amman
Resolution calling for the exclusion of
extractive industries from IUCN Protected
Areas. Categories I-IV (see:http://www.wwf.
org.uk/filelibrary/pdf/to_dig_or_not_to_dig1.
pdf). This is part of the framework on
responsible mining - a joint effort between
Earthworks and WWF (see http://www.
frameworkfor responsiblemining.org/).
92
For instance, the rules do not explicitly
mention communicable diseases such as
HIV/AIDS. Mining operations have been a
key accelerator of HIV transmission due to
the nature of the working arrangements,
and thus responsible mining should involve
active HIV/AIDS prevention and mitigation
programmes (Bendell, 2003, Waking Up to
Risk, UNRISD, Geneva).
93
Salter, G (2007) The Luxury Challenge, In
Walpole Yearbook: A Showcase for British
Luxury 2007, Walpole: London UK. p.9.
5429 Inside pages Artwork for web:Layout 1 21/11/07 12:33 Page 48
94
The Sunday Times 12 August 2007
Revealed: Topshop clothes made with
‘slave labour’, Claire Newell in Port Louis,
Mauritius and Robert Winnett. http://women.
timesonline.co.uk/tol/life_and_style/women/
fashion/article2241665.ece
95
Dana Thomas, 2007, Deluxe: How Luxury
Lost its Lustre, Penguin.
96
FTSE4Good March 2007 Review: 25
Companies Added, 17 Companies
Removed Article Category: News-Press
Releases, Release Date: 9 March 2007.
97
www.iccwbo.org/policy/society/
id1188/index.html
98
For Richemont, see its 2007 CSR report
at www.richemont.com, and for LVMH see:
Novethic (2005) Only Six French Companies
in the CAC 40 Stock Market Index are up
to Standard on their Non-Discrimination
Disclosures, 15 December 2005
www.csrwire.com/bsr/article.cgi/4821.html
99
You’re worth it - if white. L’Oréal guilty of
racism, Angelique Chrisafis, 7 July 2007,
The Guardian. www.guardian.co.uk/
france/story/0,,2120789,00.html
100
www.cites.org/
101
www.panda.org/about _wwf/what_we_do/
species/news/index.cfm?uNewsID=17351
102
International Herald Tribune, 2007,
Big spenders to face new scrutiny in Britain,
By Eric Pfanner, 7 May 2007,
www.iht.com/articles/2003/05/07/
launders.php
103
http://en.wikipedia.org/wiki/Luisel_Ramos
104
The Observer, 2007. Everyone knew she
was ill. The other girls, the model agencies
... don’t believe it when they say they didn’t,
Magazine, http://observer.guardian.co.uk/
magazine/story/0,,1987928,00.html
105
In Sync With the West /Tuning In to
Baywatch : Globalization Brings New
Cultural Traits to India, By Thomas Fuller
Published: September 14 2000,
www.iht.com/articles/ 2000/09/14/
delhi.2.t_0.php
106
Sustainable by design: explorations in
theory and practice, Earthscan, 2006,
Stuart Walker.
107
The Independent (2007) A bit rich: Luxury
brands are flaunting their green credentials
but can conspicuous consumption come
with a clear conscience?, by Simon Brooke,
9 August, http://environment.independent.
co.uk/lifestyle/article2849283.ece
108
Kyojiro Hata, 2004, Louis Vuitton Japan:
The Building of Luxury, assouline.
pp.76-78.
109
Carbon Trust, 2005, Brand value at risk
from climate change, p12.
www.carbontrust.co.uk/ Publications/
publicationdetail.htm?productid=
CT-2004-10
110
IWC gives meaning to marketing, 19 March
2007. 3rd Issue,
http://journal.hautehorlogerie.
org/en/points-of-view/interview/iwc-gives-
meaning-to-marketing/661.html
111
The Independent (2007) A bit rich: Luxury
brands are flaunting their green credentials
but can conspicuous consumption come
with a clear conscience?, by Simon Brooke,
9 August, http://environment.independent.
co.uk/lifestyle/article2849283.ece
112
www.solarimpulse.com/news-1-en31.html
113
IHT. On Advertising: Luxury gets less flashy,
By Eric Pfanner Published: 29 July 2007,
www.iht.com/articles/2007/07/29/
business/ad30.php
114
Marie Le Berre, 2007, The social
responsibility of watchmaking companies,
Haute Horlogerie Journal, 15 April 2007.
4th Issue, http://journal.hautehorlogerie.
org/en/notes/notes/the-social-
responsibility-of-watchmaking-
companies-3690.html
115
These summaries were prepared from
company websites and cross-checked
with other online sources.
116
Self-reported data on a mixture of
performance and management process
is the type of data used by responsible
investment institutions, which account
for trillions of dollars under management.
However, some have criticised such data
for not accurately describing either impacts
or public reputation (see Waddock, S.
(2003) “Myths and Realities of Social
Investing.” Organization & Environment 16.3,
369). Impact data are currently not available,
and WWF is promoting obligatory reporting
of environmental and social impacts.
117
www.eiris.org
118
The United Nations’ expert advice on ESG
reporting to accountancy professions does
not currently recommend weighting of criteria.
See: UNCTAD (2003) Disclosure of the
Impact of Corporations on Society:
Current Trends and Issues, UNCTAD/ITE/
TEB/2003/7, United Nations Conference
on Trade and Development, Geneva.
119
www.covalence.ch
120
www.unpri.org
121
www.globalreporting.org
122
www.osklen.com.br
123
All quotations from personal communication
with Jem Bendell, August 2007.
124
All quotations in this section from: Time, 2005,
Bali Guy, 29 November 2005 By Aryn Baker.
www.time.com/time/magazine/article/0,917
1,1135643-1,00.html
125
www.johnhardy.com
126
All information from www.madara-
cosmetics.lv
127
www.madara-cosmetics.lv
128
www.lindaloudermilk.com
129
San Francisco Chronicle, 2007, Hyatt
puts Tesla roadster recharging stations in
3 hotels, David R. Baker, 30 August.
130
www.teslamotors.com
131
www.oneplanetliving.org.uk
132
Okonkwo (2007) p.157.
133
Ibid, p.242.
134
Ibid, p. 256.
135
www.ew.com/ew/article/0,,20037
658,00.html
136
Cited on http://londonstarmap.com/
September 2007.
137
Are Celebrities Being Used as Pawns by the
Fragrance Industry? Las Vegas, NV 89126,
28 August 2007. http://www.expertclick.com/
NewsReleaseWire/default.cfm?Action=
ReleaseDetail&ID=17731
138
This plan is adapted from WWF’s report on
responsible brands, ‘Let Them Eat Cake’,
available at www.wwf.org.uk/letthemeatcake.
For WWF’s latest advice on luxury brands
visit www.deeperluxury.com
139
Walker, 2006, Sustainable by design:
explorations in theory and practice,
Eearthscan, 2006, p.59.
140
Keesing, Roger. 1984. Rethinking mana.
Journal of Anthropological Research 40:
pp.137-156.
Design by bwa-design.co.uk
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“A fascinating, ground breaking, must read wake-up call for all professionals and
aficionados of the luxury goods industries, the consumers of their products and the
celebrities that endorse them. The report says ‘Consumers’ increasing concerns with
environmental and social problems are the greatest cultural shift of the 21st century’
and points the way to how these industries must behave if they are to keep their
cachet which they need to survive.
Katharine Hamnett, Ethical Fashion Designer
5429 Cover artwork:Layout 1 21/11/07 12:41 Page 2
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quality and style when
the world matters
Jem Bendell &
Anthony Kleanthous
Dee per
Luxury
WWF-UK
Panda House,
Wayside Park,
Godalming,
Surrey,
CU7 1XR
t +44 (0) 1483 426 444
f +44 (0) 1483 428 409
WWF-UK registered charity number 1081247 A company limited by guarantee
number 4016725 © 1986 Panda symbol and ® “WWF” Registered Trademark
of WWF-World Wide Fund For Nature (Formerly World Wildlife Fund)”
Project number GB063501
The mission of WWF is to stop the degredation of the planetʼs natural environment
and to build a future in which humans live in harmony with nature, by:
• conserving the worldʼs biological diversity
• ensuring that the use of renewable natural resources is sustainable
• reducing pollution and wasteful consumption
wwf.org.uk
Printed on Revive Matt – made from 50% de-inked
post-consumer waste, 25% pre-consumer waste and
25% virgin fibre from Sweden and Spain.
Strict environmental controls are adhered to during
production and no chlorine bleaching is used. Printed
on a waterless press using vegetable-based inks.
“Luxury is well-rounded excellence. Corporate excellence today includes being
globally responsible. This WWF report makes explicit how luxury companies can,
should, and hopefully will, develop and leverage their globally responsible behaviour
to enhance their brand image. Tomorrow, they will have no choice.
Henri-Claude de Bettignies, Emeritus Professor, INSEAD, and Distinguished Professor of Leadership and Responsibility,
CEIBS (Shanghai)
“WWF’s report, Deeper Luxury, demonstrates that a quality product must involve a
quality value chain, where everyone in that chain benefits and their environment is
sustained. Bendell and Kleanthous’s analysis should be welcomed as an important
contribution to the strategic planning of all high-end brands and their suppliers.
Pierre Simoncelli, Managing Director of Sustainable Development, L'Oreal
“There is nothing luxury about sweatshops. ‘Deeper Luxury’ highlights how luxury
brands need to excel in how they treat their workers and local communities, just as
they excel in design, quality and marketing. Only when they can demonstrate this
will they be seen as a potential ally for social development, rather than merely a
symptom – or even symbol – of inequalities worldwide.
Barry Coates, Oxfam, New Zealand
“Affluent consumers in some Asian cities are increasingly aware of environmental
problems and many now show an interest in the responsibility of brands. In highlighting
this, Bendell and Kleanthous outline a global context for the future of luxury.
Carmen Ho, Luxury Footwear Designer
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