A climate-change report raises the alarm for luxury. K magazine investigates….
As heads of state gathered in Paris to tackle global warming at the COP21 conference, a new report pointed out the luxury industry is particularly sensitive to climate change at the beginning of its supply chains – and that’s in addition to transport and delivery disruption, resource scarcity and social challenges.
The apparel industry is a significant contributor to climate change through green-house gas emissions, from energy use and waste production, and also in the impact of agriculture in raw-material production, according to MIT.
Luxury fashion is arguably more sustainable, though it’s a business where high-quality raw materials are geographically limited and especially vulnerable to climate variations – and much more can be done to reduce emissions. There are many ways, however, to mitigate the risks, especially if brands collaborate. These are some of the findings in the report Climate Change: Implications and Strategies for the Luxury Fashion Sector published by Kering and consultancy, Business for Social Responsibility (BSR).
Kering’s Environmental Profit & Loss account, published in November 2015, highlighted that most of the environmental impact of the business is in the supply chain – beyond immediate operations and in fact, around 50% of the impact originates where raw materials are produced and extracted.
Helen Crowley, Head of Sustainable Sourcing Innovation at Kering, explains: “The EP&L looks at our environmental footprint beyond our carbon emissions. It’s important because this not only helps us see where we can reduce our emissions, but also how to improve our resilience in the face of climate change, particularly in evolving where and how we source our raw materials.” The new study with BSR goes deeper than the EP&L and shines a light on specific risks associated with, for example, where Chinese silk-producing mulberry trees are grown or where South American vicuña (a camelid that produces fine, warm wool) are reared.
It is at the raw material production, extraction and initial processing stages that enterprises such as Kering interface with agricultural and natural systems. “Here, there are significant risks – and opportunities – that need to be addressed”, says Crowley. “After all, quality is paramount in luxury apparel, and we are particularly vulnerable to climate change as it affects both availability and quality of the materials we need.”
As a result, the report analyses the current and future climate risks for the Group’s vital raw materials: cotton; cashmere; vicuña; silk; beef and calf leather; and sheep and lamb leather.
An earlier, detailed scientific study commissioned by Kering, from Verisk Maplecroft, came up with three important findings relating to climate change: it’s already causing reduced availability of luxury fashion’s raw materials and will continue to do so; its impact will probably escalate over time and will lead to reduction in raw material quality, resulting in greater business risk; and it will have a negative effect on small-scale producers, often rural and poor, who rely on raw-material production for their livelihood.
Although each material is vulnerable in its own way – pests and diseases caused by drought affect beef, sheep and lamb leather, for example – particularly at risk are extra-fine cotton; vicuña and cashmere. This is because of the limited geographic scope of their producing regions and their dependence on natural systems: terrain and climate.
Less water being available due to drought and glacial melt, for example, coupled with temperature variations and restricted geographical range, in the Andes, is beginning to restrict availability of vicuña. These conditions also diminish the quality of the animal’s fibres produced.
Similarly, cashmere goats’ principal habitat is the central Asian steppes, which are deteriorating: 90% of Mongolia is fragile, dry land, under growing threat of desertification; it’s also subject to frequent dzud (extremely severe winters). This complexity of climate-change effects and overgrazing is resulting in declining cashmere production. Quality is also being affected as the situation leads to undernourished animals with coarser hair. Rising temperatures can also constrain the growth of their winter coat, which is the source of high-quality fibres.
The BSR-Kering report asserts that so-called ‘‘input’’ risks associated with availability and quality are becoming heightened. Now that we know the risks, however, it declares: ‘‘It is imperative that companies develop a strategic approach to tackling the challenges posed by climate change to their business and across their supply chains.’’
The Report’s authors, which include Crowley, stress the need for innovative action to build resilient supply chains, which is built on a greater understanding the changing environment.
For Kering and those of its brands which source cashmere, for example, this means working to develop sustainable herding practices and holistic management of pasture lands, or implementing early weather warning and disaster-management systems for the herding communities. Collaborative platforms include the Sustainable Fibre Alliance. Ensuring livelihoods is also critical as the goats are not only sources of wool but also meat and milk for the herding population. Also critical is to focus on women in rural communities, who are particularly vulnerable to climate change because social, economic and political barriers limit their coping capacity.
In a separate, more general initiative, the need to reduce emissions has prompted 39 major French companies (including Kering) to sign a Business Climate Pledge. The firms plan to invest €45 billion in industrial projects and research & development devoted to renewable energy, energy efficiency and other low-carbon technologies between 2016 and 2020. The announcement was made during COP21, whose principal goal was to limit the warming of the earth to a few degrees celsius above pre-industrial levels. This, along with other commitments from the private sector, is showing how business is now seeing itself as being part of the solution to mitigating and adapting to climate change.
Real progress on climate change, therefore, will involve a suite of actions from policy-makers, civil society and business. For luxury companies like Kering, “Rethinking the way we source and produce our raw materials, and the impact this has on people and the environment, will be key to our contribution to a climate-smart world and to resilient business,” says Crowley.
Finally, the Kering-BSR report says that luxury companies can harness their leadership position as influencers, to build awareness and excitement around a more environmentally-friendly world, making it as irresistible as their products are desirable.
With their high profile, luxury brands can galvanise action on climate change through their customers, who are often society’s elite and therefore influencers in their own right, as well as more broadly with the general public. By communicating on their position on sustainability and showcasing strong environmental and social credentials, brands can meet consumers’ desire for solutions and effect change.
The business community has a particular responsibility to act, according to Marie-Claire Daveu, Kering’s Chief Sustainability Officer and Head of International Institutional Affairs. “Beyond doubt, business can and has to drive change. We can replace the outdated ‘compete and consume’ business model with ones that are ‘collaborative and regenerative’ and that build resilience across our supply chains.”
For further information about Kering, go to www.kering.com.