With rapid climate change negatively impacting the globe as we know it, the new climate economy (both as an aspirational ideology as well as a project) has emerged as a tool aimed to allow corporations to redeem their carbon footprint by looking ahead with their sustainability goggles on.
COP26 demonstrated promising proposals from governments globally, and while having world leaders and governments on the planet’s side will aid in combatting climate change, the real gamechanger to paving the way for a greener planet is corporations, not politicians.
In our Luxury Change series, allow us to shed light onto on what to expect from the world of luxury from a legislative, consumer, and ecology perspective in 2022.
The Impact on the Finer Things in Life – Wine
It is unsurprising that vineyards, from the quality of the grapes to the extraction of wine, are heavily sensitive to their environment and atmosphere. As temperatures rise, vineyard sites are becoming too warm, impacting a few industry-leading grapes such as the Pinot Noir in the Burgundy region from being extracted into fruition at all by 2040.
Colder temperatures also mean producers in countries like Italy have to light candles around the buds to keep the climate warm. The industry is facing serious challenges, and so organisations are calling for regenerative agriculture investment in an attempt to preserve it. Green methods in viticulture, such as cutting out chemical fertilisers, reducing the use of agro-pharmaceuticals and natural resources, using lighter glass bottles produced from less emissions, etc, has allowed for some vineyards to maintain and even improve their quality standards. Some have chosen to focus on soil ecosystems by going old school and using sheep as natural fertiliser. However, with some regions’ climates changing permanently, most have had to adapt and alter their product entirely, such as from wine to prosecco.
LVMH boarded the winemaking train from as early as 2010, opening a vineyard in Mandarin to further penetrate the Asian market. The purpose of this wasn’t to produce in the East to sell to the West – it was catered as a domestic luxury product to be sold locally to the Chinese. And in doing so, in honour of the theme of sustainability, relationships were developed with the local villages, yak droppings were secured as natural fertiliser, and less Western wines have been shipped to China in an attempt to reduce carbon footprints.
Climate change has also had a separate knock-on effect to fine wines. Where society is leaning more towards plant-based diets, some restaurants have started offering fully plant-based menus. This has a disruptive effect on wine makers due to certain wines pairing with certain foods, such as fish or meat, that are now not being offered to consumers.
Grapes aren’t the only raw or luxurious material to be impacted. Kering published a study in 2015 highlighting six prevalent raw materials in the luxury field being threatened – silk, extra fine cotton, Vicuna wool, cashmere, sheep and lamb leather. Where luxury consumers aren’t willing to change their behaviour, the onus needs to be on the brands themselves. Luxury brands now need to start offering ecological alternatives to these luxury materials for the sake of the planet.
Gucci, for example, has been a pioneer in manufacturing new materials. It has created a plant based Demetra, joining the softness and durability from animal-free raw materials, from sustainable and bio-based sources. The fashion house has also offered the open-source material to the rest of the industry free of charge.
“Sell less but sell better” is also the attitude adopted by Vivienne Westwood, reducing the size of its ready-to-wear business by 37%, bags by 55% and shoes by 58%. For sustainable brands, Minimalism can in fact breed maximum performance.
Big brands have also been putting their money where their mouth is when it comes to reducing their carbon footprints. Major fashion houses have been issuing sustainability-linked loans and bonds. In 2020, Chanel announced the issuance of a €600 million Green Bond to decrease, by 2030, both its carbon emissions by 50% and its supply chain-related greenhouse gas emissions by 10%, as well as shift to 100% renewable electricity in Chanel operations by 2025. If these targets are not met, Chanel will pay back more than 100% of the money borrowed. Other brands who have taken out sustainability-linked loans are Moncler, Salvatore Ferragamo, Prada, and Mercedes-Benz’s parent company, Daimler, which issued its second green bond in 2021, borrowing €1 billion to ensure that hybrids and electric vehicles account for at least half of its global annual sales by 2030.
For more on this topic, check out our Sustainability & Social Responsibility and Manufacturing Futures chapters in The Collective by Lewis Silkin’s Business in 2022 Report.