Retailers are facing an increasing population of ethically minded consumers. A Nielsen 2015 global survey found that 66% of respondents were “willing to pay more for products and services that come from companies that are committed to positive social and environmental impact,” up from 55% in 2014. The report also found that 73% of global millennials are willing to pay extra for sustainable products, an increase from 50% in 2014. Another 2014 study found that 81 percent of millennials expect companies to commit publicly to good corporate citizenship. Generation Z—the generation born between the mid-1990s and early 2000s—are even more environmentally and socially aware than millennials, and we have witnessed the strength of their convictions over the past two weeks.
The retail manufacturing industry, the second most polluting industry behind the oil industry, will be expected to meet the preferences of these consumers by developing long-term, industry-wide sustainable and ethical practices. This growing young generation of consumers will call out companies on social media that are not fully transparent or “merely pay lip service” to corporate social responsibility.
Some luxury brands have resisted this call for transparency. As the fashion industry has faced increasing scrutiny over its social and environment impact, these brands have hidden “behind sepia-tinted marketing images of craftsmanship,” suggesting they do not contribute to the pollution associated with mass production. Luxury brands also play up the “the necessity of confidentiality—for example, many won’t reveal the exact location of their factories.” Luxury brands typically do not collaborate to develop sustainable materials; “for Haute couturiers, the exclusivity of the materials is as crucial as the exclusivity of the designs.” Some fashion houses will “go as far as acquiring heritage ateliers and fabric mills to ensure the uniqueness of their creations.”
One exception is Kering, a global luxury group composed of luxury fashion houses including Gucci, Balenciaga, Alexander McQueen, and Stella McCartney. Kering is committed to bringing transparency and collaboration to the luxury sphere. Marie Claire Deveu, Kering’s chief sustainability officer, highlights that Kering has taken on the “responsibility not only to educate its own designers but also to let its competitors benefit from that research too, in the hope that peer pressure will force change.”
Kering’s commitment to transparency will benefit its competitors as well as non-luxury brands. For example, Kering developed a new approach to producing leather—which traditionally causes horrific damage to the environment and nearby communities—and shared each step of this approach, “herd to handbag,” with its rivals. Additionally, Kering created and made available to the public an app for designers called “My EP&L.” My EP&L calculates the environmental cost of a design—comparing carbon emissions, pollution, and waste—depending on the raw materials and manufacturing locations proposed for each design.
While its approach may be less competitive than its peers, Kering hopes to profit from its transparency with its investors. Kering makes all of its sustainable targets public in detailed reports alongside it financial results. Investment analysts and shareholders are taking notice of the fact that ethical considerations are part of a brands profitability, and “are taking a closer interest in, say, how ethically sound a luxury brand’s snake farm or cotton field is.”