Kering: Sustainability is a ‘Business Imperative’ for Global Luxury Industry

Kering Chief Sustainability Officer and Head of International Institutional Affairs Marie-Claire Daveu. (Courtesy Photo)

Kering Chief Sustainability Officer and Head of International Institutional Affairs Marie-Claire Daveu. (Courtesy Photo)

As educated consumers around the world become increasingly concerned about corporations’ impacts on social issues including worker conditions, income inequality, and environmental sustainability, the global luxury industry has been grappling with ways to shed an ostentatious image and catch up with the times. Kering, one of the world’s biggest luxury conglomerates and the owner of some of the world’s top high-end brands including Gucci, Balenciaga, and Alexander McQueen, has been undertaking some of the biggest corporate social responsibility (CSR) and sustainability initiatives in the industry in a move that aims to redefine what future generations associate with the word “luxury.”

Kering is working to weave the ideas of sustainability and social responsibility into its business model and brands’ DNA with a comprehensive plan to meet benchmarks in areas such as supplier practices, carbon emissions, PVC-free products, hazardous chemicals, sustainably sourced raw materials such as gold and diamonds, and more. It also publishes a report on its “environmental profit and loss,” and sponsors programs to prevent violence against women worldwide.

As China remains one of the brand’s most important consumer markets while facing significant struggles with issues such as worker conditions, product safety, and pollution, the country is a key area of focus for Kering (especially as China’s younger generation becomes increasingly socially conscious). On June 3, the Kering Corporate Foundation held a social entrepreneur awards ceremony in Beijing, which provided a grant to charitable jeweler the Starfish Project. One day earlier, it held an event in Hong Kong where it recognized the sustainability efforts of its brands.

To learn more details about Kering’s CSR and sustainability initiatives—and why they’re so important in China—we interviewed Kering Chief Sustainability Officer and Head of International Institutional Affairs Marie-Claire Daveu.

How does China factor into Kering’s global corporate social responsibility strategy? 

At Kering, we go beyond the conventional concept of CSR, which is often more focused on philanthropy, with the aim of becoming a truly sustainable business.

We are integrating sustainable practices across all of our operations, and implementing new business models that take into account the conservation of our planet’s natural resources. Via the innovations we are developing, our aim is to reduce our environmental impact in every single one of our operating regions, so as to create a better future for everyone. This certainly applies to China, as the region is a key source of raw materials for the Kering Group, be it silk, cotton, or gold, and it is also one of our Group’s major retail hubs.

We are also committed to sharing our know-how with our stakeholders in China, as collaboration is a key element of sustainability. By open-sourcing and sharing our new solutions, like we did recently with our EP&L (Environmental Profit & Loss), we want to contribute to a smarter planet whilst encouraging others to do so also.

Take, for example the partnership we launched with the Tsinghua Foundation last year, to educate and empower China’s next generation. With five creative talents and 10 female students selected each year, the “Tsinghua and Kering Personnel Training and Artistic Innovation Fund” empowers participants via training and education programs.

Turning to the social aspects of sustainability, Kering is focusing its actions on an urgent global concern: violence against women. Established in 2009, The Kering Foundation—whose slogan is “Stop violence. Improve women’s lives”—supports local NGO projects all over the world. In 2014, the Foundation appointed its first Chinese board director: Yuan Feng. A journalist by practice, Yuan has been an advocate for women’s rights and gender equality in China since the mid-1980s. On June 3 this year, the Kering Foundation held its biennial Awards in Beijing, naming Starfish Project its 2015 Social Entrepreneur Award winner in China. Starfish Project is a social business, owned and operated by women, which designs and manufactures jewelry. As a recipient of the Kering Foundation’s Award, Starfish Project will now receive support in the form of a €30,000 grant from the Kering Foundation and two years mentoring from Shirley Jiang, China Head of Communication & Marketing at Qeelin.

How important is CSR to consumers in China right now compared to the rest of the world? 

We’re facing many challenges in the 21st century: we are moving towards a population of nearly 9 billion people on this planet, with diminishing resources, loss of biodiversity, and climate change. In light of this, we have no other choice but to act responsibly. We need to change the paradigm; we need to change our consumption habits and change our business models, so as to become less impactful and more efficient.

I believe that behind each customer, there is a citizen, and as citizens we all have a responsibility to our planet. This is as true in China as it is anywhere else in the world.

A recent trend we are seeing is that consumers around the world are saying loud and clear that a brand’s social purpose is among the factors that influence their purchasing decisions. According to a Nielsen Global Survey on Corporate Social Responsibility, the propensity to buy socially responsible brands is strongest in Asia-Pacific (64 percent), Latin America (63 percent), and Middle East/Africa (63 percent), whereas the figures for North America and Europe are 42 percent and 40 percent respectively.

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Kering’s sustainability event in Hong Kong on June 2, 2015. (Courtesy Photo)

Do you think demand for CSR in China will increase in the future?

In China—like in the rest of the world—I believe that behind every customer there is a citizen. People are becoming more and more aware of environmental issues.

Focusing on China, I have noticed during my time spent here on business that people are increasingly concerned about pollution issues, evidently due to the direct impact of this issue on their health and daily lives.

We’ve been reading a lot about the growth of “slow fashion” or “eco-fashion.” Kering recently held a sustainability awards ceremony in Hong Kong, where it recognized the efforts of brands like Gucci, Balenciaga, and Bottega Veneta. Would you say that any Kering brands could be considered a part of the slow fashion movement?

The link between luxury and sustainability is obvious: the luxury sector sets the trends in fashion.  Hence, we believe we have a responsibility as a luxury group to change the paradigm and build a more sustainable industry, in which brands continue to offer top-quality products that meet consumer demands, without adding to our planet’s resource scarcity and environmental issues.

To achieve this, we are taking a supply-chain approach, developing new solutions for smarter sourcing that better address animal welfare and environmental impact, and empower communities in our operating regions. For example, Kering brands such as Gucci and Bottega Veneta  have developed more environmentally-friendly, metal-free leathers; Gucci’s Fairmined gold; and Kering’s python and crocodile conservation programmes.

We believe there is a growing interest in sustainable fashion, and hope to inspire other companies to join us in driving this trend.

Consumers often feel that companies’ CSR initiatives may be just about generating good PR for the company rather than making an impact. Is Kering doing anything to address this attitude?

Let me be clear: at Kering, our interest in sustainability is not driven by a desire to sell more handbags to our customers. We are in this because we believe it’s the only way to run our businesses, now and in the future.

As a global group, it is our responsibility to take the lead and to embrace better practices. We put the products on the shelf; we control what is available to our customers and our stakeholders. In ensuring our products are as sustainable as possible, we are ensuring they are of the highest quality, because sustainability to us also means quality. After all, the role of the fashion industry is to offer both beautiful and sustainable products.

Our brands, however, are free to communicate, or not, on their sustainability actions. It’s not our style to talk too much about what we do, instead our style is to take action, to “walk the talk.”

Kering is focusing significantly on sustainability. Do you believe that China’s pollution levels have impacted Chinese consumers’ interest in sustainability? Do you think younger Chinese consumers are more concerned with CSR than the older generation?

As I said previously, sustainability is the answer to many of the major issues of the 21st century, not just in China but worldwide. And yes, this will particularly impact younger generations!

Looking to our future consumers, the next generation, the “millennials,” they are the most environmentally conscious generation to ever grace our planet. They are not only our future consumers but also our future talent and future leaders. Eighty-three percent of millennials believe that businesses must take responsibility for their environmental impact.

Is sustainability a necessity for global luxury brands to succeed in the future?

Our chairman and CEO, François-Henri Pinault, strongly believes that becoming a more sustainable business is not only a responsibility, but also a business imperative.

As a business, we know that the pursuit of sustainability is a non-negotiable. In our rapidly changing world, sustainability is the only way to ensure a business will thrive now, and in the future.

The fashion industry has a critical role to play. We are in a unique position, where we influence and set the trends and aspirations in fashion. This can ultimately drive and inspire sustainable change. Like any business, fashion brands rely on natural resources—they are essential to the running and the very success of a business.

Taking Kering for example, you just need to look at our raw materials to understand our reliance on nature; cotton, silk, leather, cashmere, wool, and so on. As for our manufacturing processes, they depend on water and energy, amongst other resources. At Kering, like the entire fashion industry itself, our supply chains are complex and often stretch across multiple countries around the world. What we must also take into account is that the livelihoods of people and communities living in these regions rely on our supply chains. Running your supply chain in a resilient manner, which protects the environment, supports people, economic development and business growth, is no longer a luxury—it is a necessity. In our rapidly evolving and volatile world, a robust sustainability strategy can provide your business with the focus, knowledge, and solutions necessary to address and adapt to the said resource constraints, to the changing needs of consumers, and to other unprecedented events.

This interview was edited and condensed.

 

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