Sustainability: The New Battlefield in Luxury

March 2020

The last 30 years witnessed more damage to our planet than in the previous five billion years. Environmental threats and the need for sustainability are shaping how luxury companies do business, as well as how consumers show brand loyalty. This briefing will investigate these issues and look at why they are crucial for critical business decisions across the luxury landscape, with case studies of companies and brands that are adapting to such changes in order to succeed and make a difference.

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Key Findings

Outlook for luxury lies heavily on innovation taking place across the whole landscape

Against a backdrop of macroeconomic uncertainty, tough trading conditions and shifts in consumer values and expectations surrounding sustainability issues, the outlook for luxury remains positive. Its future, however, relies heavily on sustainable innovations taking place across the whole landscape. Breakthrough technologies, new business models and investment funds need to commit to decarbonise companies’ full portfolios.

Sustainability is shaping the corporate luxury goods environment

Environmental threats and the need for sustainability are shaping how luxury companies do business, as well as how consumers show brand loyalty. Sustainability is growing in importance and increasingly being weaved into luxury business strategies, as it represents risk to both luxury brand reputation as well as access to commodities, but similarly offers huge opportunities.

Consumers drive corporate sustainability strategies

Rising incomes, the expanding middle-classes and digital technology are building confidence among consumers, and with this, consumers worldwide are becoming more sophisticated and demanding. Young urban consumers in particular are seeking out new and sustainable luxury products and experiences.

The search for unique experiences aligned with eco-conscious values

Mass tourism, rapid urbanisation and consequent rising pollution levels are increasing luxury consumers’ desire to go back to nature. We are beginning to witness the devastating impact of climate change, and with this, more luxury travellers are veering off the beaten path in search of unique experiences that align with their eco-conscious values.

New opportunities for those that can adapt to change

Luxury businesses will need to adapt to the changes in nature and energy resources in order to capitalise on new opportunities and prevent further potential risks. Corporate SDTs will play a lead role in all critical business decisions across the luxury landscape.

Introduction

Scope
Key findings
What is sustainability?
As luxury is set to reach USD1.2 trillion, sustainability will be critical
Expectations and the rise of the eco-conscious luxury consumer
A sustainable revolution is taking shape across the luxury industry
Sustainability takes on many forms across the luxury goods space

Global Challenges Facing Luxury

SDGs and global challenges facing the luxury goods landscape
Our planet’s population is reaching 8 billion
What should we expect with 8 billion people?
Implications for luxury businesses
Challenges of climate change and pollution for luxury companies
Challenges of deforestation and biodiversity for luxury companies
Challenges in the use of resources for luxury companies
Challenges in efficient water regulation for luxury companies
Challenges in efficient energy use for luxury companies
Emerging generations lead, but brands still have their work cut-out
Trust is the new currency across the luxury goods landscape
Green labelling plays a crucial role, but trust is diminishing

Corporate Landscape in Sustainability

Sustainability remains a basic principle for luxury corporate strategy
Luxury brand reputation helping to drive sustainability
Luxury CEOs becoming leading activists in sustainability
Disruptive innovation is key for sustainable luxury development

Response from Key Luxury Categories

Sustainability as a critical source of brand inspiration
Premium and luxury cars: Increasing competition in “greener” cars
Environmental regulations impact the outlook for luxury cars
Tesla’s green model remains highly competitive and aspirational
Tesla bucks the trend in the luxury automotive growth story
More women on board in luxury cars for better business and equality
Subscription models highlight the evolution of luxury car sharing
Luxury fashion: Waste sparks new legislation and commitments
Fashion industry has third largest footprint on Earth
Millennials and gen Z are core targets for sustainable luxury fashion
New luxury retail models and services turn old into the new “new”
“Greener” digital solutions, with Louis Vuitton’s “white glove” service
Luxury jewellery: Sustainable Development Goals play a critical role
De Beers introduces its own blockchain platform to help sustainability
Blockchain set to make inroads in the challenges facing luxury?
Stephen Webster repurposes once-loved heirlooms
Luxury travel: Health prognosis highlights the need for eco-tourism
Environmental pressures in luxury travel continue to rise globally
The rise of mindfulness in sustainable luxury travel
Affluent consumers double-down to give back
Nihi Sumba Resort committed to fostering the local community
Six Senses Laamu reaches new depths in marine conservation

Outlook

Outlook

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