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According to a 2007 study by the World Wildlife Foundation, luxury goods businesses were the most out of touch with ecological trends. In general, luxury brands have prompted criticism for their lack of consideration for carbon emissions or the environment overall.

However, faced with a changing, younger market that does not perceive the same value in luxury brands as its aging core customers, some of them are working hard to change the way consumers feel about them. For example, the French luxury firm PPR has produced a €10 million documentary, Home, about the human impacts on the environment. It also created a social and environmental responsibility department that reports directly to the CEO and made executives’ bonuses partially dependent on social responsibility factors, such as reducing carbon emissions and promoting diversity.

A luxury rival, LVMH also has evaluated its carbon footprint and decided to minimize its corporate travel and air-based shipment of goods. Its “Core Values” ad campaign, featuring the tennis player Andre Agassi, rocker Keith Richards, and astronaut Buzz Aldrin, supports Al Gore’s Climate Project, in that the celebrities each donated some of their earnings to the nonprofit group. Not to be outdone, Ermenegildo Zegna sells an “Ecotech Solar” jacket with solar panels on the sleeves that can recharge a battery and heat up the jacket’s collar.

However, these luxury companies need to be careful to avoid any perception of “greenwashing”—that is, paying lip service to environmental causes to promote their products but not actually committing to environmental causes. The backlash from such activities can be severe, leading consumers to disbelieve any of the companies’ claims in the future.

Discussion Questions:

  1. Why are luxury brands including the environment in their business plans? 
  2. What is greenwashing? Why is it not an effective long-term strategy?

Rachel Dodes and Sam Schechner, “Luxury-Goods Makers Brandish Green Credentials,” The Wall Street Journal, July 2, 2009.