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How luxury brands can keep their sustainability claims real and protect their reputation

September 5, 2023

Luxury brands need to be sure of their facts and supply chains before making sustainability claims or launching initiatives that could be seen as fake and backfire on their reputation.
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Climate Risk and Resilience

Recent years have seen a flood of sustainability initiatives and claims from brands eager to show they’re responding to climate and environmental challenges and addressing younger generations’ concerns about issues such as animal welfare.

But with that has come a growing backlash as people start to question the evidence behind such claims.

A report by the Changing Markets Foundation found that 59% of sustainable claims by both European and UK fashion brands were unsubstantiated or misleading.[1] In a UK survey just one-fifth of consumers said they trust the sustainability claims made by fashion brands.[2]

While most of this skepticism is directed at fast fashion and its perceived throwaway culture, luxury brands are not immune.

They face their own challenges in areas such as animal exploitation, pollution, and carbon emissions – along with potential accusations of greenwashing if efforts to be more sustainable fail to convince.

So how can firms show they’re more sustainable without the risk of appearing fake and potentially damaging their reputation?

Brands need to take time to set authentic, achievable sustainability goals and projects, backed by solid evidence, rather than following trends.

External horizon scanning can also help by picking up on negative perceptions of your sustainability early to inform better decisions.

The lure of sustainability marketing

With the impacts of climate change and pollution rarely out of the news, and pressure growing from consumers and regulators, brands can feel compelled to demonstrate their sustainability.

This can be good business. In a McKinsey survey of consumer sentiment, 67% considered the use of sustainable materials to be an important purchasing factor, while 63% said they would take a brand’s promotion of sustainability into account.[3]

But it’s a difficult line to tread for some luxury brands, especially those that have traditionally relied on animal products, such as fur, leather and skins, which are now being shunned by some younger Gen Z consumers.

Balancing harms and benefits

Companies can face difficult trade-offs and choices – for example between real fur and faux fur, where both options can do harm.

Until recently faux fur was considered the ethical and sustainable option but increasing focus on its plastic content has changed this.

Most faux fur is made from non-renewable fossil fuels and contains millions of plastic microfibres which can find their way into ecosystems and take hundreds of years to break down.

Some activists now advocate buying vintage natural furs rather than fake fur as the more sustainable option.

Likewise, suddenly switching from animal products can leave brands open to accusations of abandoning livestock farmers in poorer countries, reflecting badly on the social element of ESG commitments.

The pitfalls of selective storytelling

Focusing on specific sustainable initiatives, while ignoring the brand’s negative impact on other areas, can be another potentially damaging pitfall.

Good progress on recycling is not likely to outweigh bad practices in other areas of the business or supply chain, such as stock burning or animal abuse. In fact, any perceived contradiction or hypocrisy is likely to amplify accusations of greenwashing.

One luxury cosmetics company recently faced a backlash when they marketed their products as eco-friendly and renewable because they could be refilled. But consumers pointed out the product contained more plastic and packaging than non-refillable alternatives.

Another luxury brand that claimed their products were ‘cruelty free’ in order to promote sales to socially conscious consumers has had to take the claim off its packaging after being sued by an activist alleging they contained fur from animals raised in poor conditions.

How to avoid the risks and protect your reputation

Focus on targets you can achieve and be consistent

Don’t be drawn into a sustainability bidding war to win new consumers and sales. Take time to weigh all the pros and cons and decide what’s right for your brand and customers. Set meaningful goals and targets and make sure that nothing else you do conflicts with them.

Improve traceability through the supply chain

Consumers are more likely to trust brands that can demonstrate traceability throughout the supply chain and who take responsibility for sustainability rather than pushing it further down the chain to their producers and suppliers.

Back up your claims with evidence

There has to be substance behind any claims you make. Make sure that your public statements on sustainability are accurate and can be supported with reliable and up-to-date evidence.

Promote reuse and resale

Luxury clothes and goods should be more sustainable because they’re higher quality and longer lasting. Brands can enhance their reputation by partnering with reputable resale platforms and offering unused ‘deadstock’ materials to new makers and designers.

Monitor social media in real time

Track everything that’s being said about your company and its sustainability on social and news media in real time. It could help you pick up on signs that something is going wrong before it turns into a crisis.

How we can help

WTW has partnered with leaders in this field to develop solutions that can help prevent a crisis happening and reduce the impact on your business if it does.

Real time horizon scanning: to get ahead of events and prevent potential reputational issues escalating into a crisis, the AI-powered Polecat platform synthesizes data from online and social media channels into dashboards and risk alerts for relevant media.

Reviewing your risk readiness: our Reputational Risk Readiness Review can help you define and quantify your reputational risks, identify the potential impacts and map any gaps that need mitigation.

Footnotes

  1. Changing Markets Foundation, Synthetics Anonymous: Fashion brand’s addiction to fossil fuels. Return to article
  2. Just one-fifth of shoppers trust brands’ sustainability claims. Return to article
  3. Survey: Consumer sentiment on sustainability in fashion. Return to article
For further information, please contact

Industry Leader – Retail, Leisure & Hospitality for GB Risk & Broking

Global Head of Sales, Direct and Facultative

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