The star session at the recent Condé Nast International Luxury Conference held in Seoul, South Korea, was “Ripples of Responsibility.” It addressed the impact of wasteful sourcing and processes in the fashion industry and emphasised the need to “institute sustainability,” as K magazine reports….
Under the shadow of the South Korean capital’s geographical landmark, Mount Namsan, the Condé Nast International Future Luxury conference at the Samsung-run Shilla Hotel was in full swing. Between sessions, delegates from around the world networked at a Swarovski multi-media exhibition, in front of a giant stand displaying the organiser’s gamut of up-to-the-minute magazines (Vogue, GQ, Glamour, Self, Wired, Vanity Fair et al), and at a splendid lawn reception area.
Though the conference boasted some of the biggest names from some of the world’s biggest brands, the only session described in the programme as “essential” was a round-table discussion entitled Ripples of Responsibility. Chaired by conference hostess Suzy Menkes, international editor of Vogue, and by Sophie Hackford, director at Wired Consulting, it featured two panellists: Swarovski heiress and board member Nadja Swarovski and Kering’s Marie-Claire Daveu, chief sustainability officer and head of international institutional affairs.
“Sustainability is not an option,” Daveu said. “When you look at the state of the planet, you can see already the effects of climate change and loss of biodiversity, resource scarcity and population growth.”
Daveu – who, being an engineer by training, cut an unusual figure among delegates who predominantly boasted media and design backgrounds – explained that Kering pledged itself to a sustainability action programme four years ago. The firm created a tool, the Environmental Profit and Loss (EP&L) account to “measure environmental footprint and to give monetary value” in the firm’s own operations and across its supply chain.
From MIL to mall
There are two principal elements in the EP&L: sourcing and processes. Discussing downstream supply, Daveu noted that Gucci has now started to use Fairmined gold for rings; Brioni will include sustainable wool in its autumn/winter 2016 collection; and Kering has developed programmes to source sustainable crocodile and python skins.
The second element in the sustainability offensive is processes. The firm has established a Materials Innovation Lab (MIL), “a hub where our brands’ design teams and people with technical backgrounds can identify new, sustainable fabrics and also work with classic traditional raw materials and suppliers to improve their own practices,” Daveu said. “We remove all traditional processes, step-by-step, that are not sustainable,” and she gave the example of certain tanning processes, which have now been made heavy metal-free.
In her efforts to instil sustainable practices across the group’s various brands, Daveu is backed by significant muscle. “What is great is I don’t go to see companies alone,” she said; she is joined by Kering chairman and CEO François-Henri Pinault on “roadshows” to the brands. “We have a meeting with every designer and his or her team, and we talk about sustainability in a very operational manner,” she continued. “We ask them for their suggestions, to share with them why it’s key to implement sustainability. We also go and see the executive committee together to ensure that they know they have to implement sustainability.” She and Pinault “support the brands with their implementation,” offering tools and contact points with experts and NGOs.
Swarovski detailed her group’s environmental efforts which date back to 1895, when the firm tapped a green power source – hydroelectricity in the Austrian Tyrol. She also presented a short film on the company’s worldwide Water Schools, which teach students about the importance of water and water hygiene.
Following up on Swarovski’s comments, Daveu noted that it is “concrete and possible” for the textiles sector to reduce water use. “We have invested in a start-up called Worn Again to separate and extract polyester and cotton from old clothes and old fabrics,” she said. “When you separate polyester from cotton, it is good for biodiversity, for waste, for water and for energy.”
Kering is reducing water consumption by pushing for use of organic rather than traditional cotton, which makes “the footprint 80% less.” Likewise, Gucci’s heavy metal-free tanning process reduces water consumption by 30%. “It is not perfect, but it is operational and concrete,” she said.
Menkes praised Kering’s efforts to be “…the strongest luxury house that cares” but questioned how companies squared the issue of sustainability with their need to sell manufactured products.
Hackford riposted, “I am surprised that we are having this conversation in 2016: we need to future-proof our businesses; and from a business perspective, it is astonishing that most companies have not been able to integrate these issues.” Risk management is a significant push factor in adopting sustainable practices. The increasing use and ongoing commercialisation of spy-in-the-sky satellites equipped with high-definition cameras means companies are increasingly going to come under scrutiny by authorities, NGOs and even competitors, Hackford said; so it is essential to institute sustainability.
“For me the future of luxury without sustainability does not exist,” Daveu summed up. “We have to take care of our raw materials.”
A Korea in fashion
While the sustainability session was arguably the highlight for incoming delegates, locals were fascinated to see a presentation by Samsung heiress Lee Seo-hyun, president and CEO of Samsung C&T. The Lee dynasty is famously reclusive, and it is believed to be the first time a member of the family’s third generation had addressed a conference. A graduate of Parsons The New School, with a background in fashion, Lee discussed Samsung’s programmes to incubate and fund young Korean designers, while frankly admitting the difficulties she has faced in efforts to establish a home-grown luxury brand.
Several sessions probed the Asian market, with particular emphasis on Chinese as consumers, and on Korea as a hub for popular culture exports (click here). Assuming Chinese authorities do not institute a customs-inspection crackdown in the future, the wave of globe-trotting Chinese luxury shoppers will continue to flow. Aimee Kim, lead partner for retail at McKinsey & Co, noted that only 6% of Chinese currently hold passports. Asians, and particularly Chinese, are leading the “travelling shopper” trend and 60% of luxury spend in cities like Paris is from tourists. Duty free shops are emerging as a “sixth continent” with a 30% annual growth rate.
South Korea – which along with Hong Kong, Macau, Singapore and Japan make up the five top destinations for Chinese tourists – is catering for this demand by opening giant, inner-city duty free shops which sell luxury brands in what is almost a marketplace atmosphere. Noting that the trend is driven by mid-end rather than high-end tourists, Menkes raised a plaintive question: “If it is for everyone, is it luxury?”
Discussing Korea’s legendary dynamism, Bae Sang-min, professor at the Korea Institute of Science and Technology, explained that Korean manufacturers and designers used to be “fast followers” but are now becoming “fast movers,” given both their increasing sophistication and their need to stay ahead of up-and-coming Chinese competitors.
Proof, if needed, was provided by the venue of the après-conference festivities: Seoul’s latest architectural icon, the Zaha Hadid-designed Dongdaemun Design Plaza, a spaceship-like behemoth of a complex squatting in western Seoul’s sprawling fashion district.
Reporting from Korea by Andrew Salmon. For further information about Kering, go to www.kering.com.. For further information about the Condé Nast International Future Luxury Conference, go to www.cniluxury.com.