Luxury brands have been facing legal and ethical obligations to change the way they execute their strategies in a more sustainable manner. The legal landscape globally is changing as well. Organizations in the UK have required companies to be more transparent and publish annual statements concerning animal cruelty and human trafficking. Other than that, climate change and non-renewable resources are the most difficult challenges that these kinds of brands face in their industry more recently.
What luxury brands don’t fully realize is that not only can they make huge profits when they implement sustainability in their work ethic, but also their brand image could be perceived by their consumers in a positive manner. This in turn, would encourage potential consumers to purchase from them. It is no longer enough to provide products that are good. The brand in itself must be a do-gooder as well. Large companies such as Clinique can no longer run away from the responsibility of controversial issues and aligning with forward-thinking movements that care about environmental, gender, and humanitarian issues. Failure to do so, will only push away their own consumers or stop consumers from using their products.
Co-founder and chief executive of Positive Luxury, Diana Verde Nietro, observed that millennials aligned with the sustainability concept more than any other, using their spending power to buy into companies which have a positive impact on society and the environment. “In fact, they are twice as likely to buy from brands with strong management of environmental and social issues”, she said. Even the investment community is shifting its focus into searching for sustainable business models.
Luxury brands are starting to undertake a range of activities in response, from carrying out product life cycle analyses to reviewing packaging.