Luxury Companies’ Growing Engagement Towards Sustainability

6 mins read

The Concept of Sustainability has witnessed a growing interest in society in the last decades. Anne Michaut, Associate Dean for Education Track and Pedagogy and the Director of the LVMH Academic Chair at HEC Paris, shares her definition of sustainability, and uncovers how businesses not only focus on minimising their negative impact, but also seek to effect a positive one.

What Is Sustainability?

In proper definitions, Sustainability and Sustainable Development were seen as: The ability to meet the needs of the present without compromising the ability of future generations to meet their own needs. This definition, focusing on the notion of persistence over generations, is the most frequently cited definition of the concept to date.

Another commonly used definition is based on the so-called three pillars of sustainability. That is to say, Maximising simultaneously the biological system goals, economic system goals and the social system goals.

As the world was witnessing the negative effects of climate change, water scarcity, species extinction, etc. While acknowledging the potential role of brands in activity, championing better policies, transforming business models and influencing consumer behavior. Many companies deeply revisited their activities.

A More Holistic Vision of Sustainability Initiatives

For a long time, much of sustainability has been about limiting damage, but today that has changed. Throughout the supply chain, businesses not only chase their negative impacts, but also seek to enhance a positive one. This is about leaving “crisis” mode and recognising an opportunity to infuse a net positive mindset.

  • Seeking for Upside Benefits

The “gold” that smart companies might have from being sustainable, includes higher revenues, lower operational costs and reduced risk.

  • Managing the Downside

With efforts to cut waste and reduce resources use, can save money that drops to the bottom line.

  • Value-Based Concern

Doing the right things attract the best people, enhances brand value and builds trust with customers and other stakeholders. Also, the direct link with operations remains essential and critical.

We may question whether limiting companies’ options to this approach does not trigger a narrow view of the issues at stake. To the point of neglecting a more holistic vision of the role of companies in sustainability of society, rather than the sole business they are operateing.

First, we may argue that there is a moral obligation for companies to engage in sustainability of society as a whole. That is to say: companies have a moral duty to be sustainable.

Second, and going one step further, one may argue that every company needs tacit and explicit permission from governments, communities and numerous other stakeholders to do business. In other words, acting sustainably provides companies with a license to operate.

Third, there is a reputational dimension to sustainability: to improve a company’s image, strengthen its brand and enliven morale, and even raise the value of its stock.

If we consider sustainability from these angles, companies and individuals may consider their engagement and commitment to improving society as a whole through actions may be disconnected from the core business, but meaningful in the bigger picture.

As such, they should start from the perspective of the needs of society rather than start from their own activities. In this vision, companies engage in actions, not only coherent with their business, but also related to it.

In this mindset shift towards engagement, companies may want to revisit their role and manage not only their consumers’ expectations but also society expectations, to be accepted beyond their customers by non-customers as well.

It is not about focuing on the tension between business and society, but rather about focusing on their interdependence in the broad sense.

What About Communicating Around These Initiatives?

One essential issue with sustainability communication is to carefully consider the potential differences between consumers’ expressed requirements and their implicit expectations regarding sustainability. In other words, what consumers voice, that is to say, expressed requirements does not fully encompass all of their implicit expectations.

First, implicit expectations about the role of brands can be broader than the value delivered to their customers and encompasses a value delivered to society as a whole.

Second, their implicit expectations might at times exceed the actual brand performance on sustainability. Communication should consider consumers’ unvoiced expectations in regards to sustainable performance. And compare them with the reality of their performance. Any gap is likely to create irritation and frustration from a consumer and society perspective.

Reference: 
INSIDE LVHM: Luxury & Sustainability - Promotion May 2022
Chapter: Unlock how Luxury and Society have been inextricably linked over time

Fashion Stylist & Editor

Born and raised in Shanghai, living and working in Paris.
Academic background: English Literature, History of Western Art
Professional background: Art Curation, Fashion Design, Styling