Radical Repositioning: The Viability of Sustainable Luxury

In an industry that prides itself on progress and evolution, luxury brands seem to be caught in an eternal struggle; whether or not to extend the boundaries of their supposed “progressiveness” to include ethical, environment-friendly production.

Fast Fashion and Luxury are Equally at Fault

Conversations around sustainability in fashion usually circle back to fast fashion being the root of the problem, but what we fail to realise is that luxury brands are not exempt from this narrative. With each generation demanding, and achieving a better quality of life, the market for consumers of luxury goods has no doubt expanded. This is evident through the projected growth of the luxury market to USD 153.97 billion by the year 2026, and one of the reasons behind such rapid growth is the willingness of Generation-Z and Millennials to pay for premium products. This expansion implies a parallel increase in production, and it should ideally raise concerns regarding the maintenance of proper ethics in production. Activist collectives have been ruthless in their ridicule of fast fashion companies, and are trying to harness their power of free speech to compel such companies to alter their business models.

Boohoo, a retail clothing giant, owned by a billionaire family, secures collaborations with celebrities and sports stars, however, they have come under fire for their ethicality. They not only grossly underpay their workers, but these workers are also made to work without sick pay and safety precautions in place. The UK's Environmental Audit Committee branded them as one of the least sustainable fashion brands, and following this, they have reassured customers that they are working towards fixing textile and supply chain management issues, in order to grow as a sustainable company. Boohoo and other fast fashion companies like Shein, H&M, Zara, to name a few, have been in the public eye for similar reasons. But it is a lesser known fact that luxury brands like Louis Vuitton and Burberry burn their unsold goods at the end of the year, because their brand image would get tarnished if they sold an item at a heavily marked down rate. As long as consumers let luxury brands get away with their callousness when it comes to the environment, there won’t be any room for real change.

Change is Both Realistic and Attainable

Luxury brands have been responsible for shaping the purchase habits of consumers by setting trends, and therefore forcing fast fashion brands to comply and follow suit. The inference that luxury brands act as industry models was drawn in a study conducted in 2014. Mass markets are heavily influenced by the innovations made by high-end brands every season, and this has resulted in scholars’ identification of the role of the luxury sector as integral to changing production and consumption patterns. It would not, in the slightest, damage their image if high-end labels shed light on social responsibility initiatives. Purchasing goods that are ethically sourced and produced would also incite positive feelings in the modern consumer, on account of having shopped responsibly. Futtera’s survey of consumers in the US and the UK showed that 96% of consumers felt that their actions of donating, recycling, and shopping ethically would make a difference. Brands would be well perceived from a public relations perspective, as they would be able to tap into a new base of customers, and thereby increase sales. Additionally, they would serve to be a blueprint for companies considering a gradual shift towards a fully circular model of production.

It is imperative to understand that a gradual shift is a pragmatic solution here. Stella McCartney, a high fashion label, has been on track to become sustainable since its inception in 2001. Brands cannot decide to change their entire business model overnight and expect a seamless transition into the world of sustainability; conversion is therefore gradual and must be initiated through the introduction of a few sustainable products before making significant changes from the outset. Given that carbon emissions from fashion alone are at 2.1 billion metric tonnes as of 2020, it wouldn’t come as a surprise if sustainability and ethical production becomes mandated in several nations.

Can Sustainability and Authenticity Co-Exist?

Mandates compel change to occur at a rapid rate. An assembly bill introduced in the state of New York in 2022 will necessitate supply chain mapping and impact of at least 50% of the products sold from raw materials to shipping. The state of New York has branded this critical initiative under the name ‘Fashion Sustainability and Social Accountability Bill’, and has enlisted the support of nonprofits that work around sustainability. Transparency would be required of both big and small players, and if successful, this bill would bring along with it, much needed change. Fashion is a difficult business, and authenticity lies at the crux as far as staying ahead of competition is concerned, so that adds to the immense list of challenges a brand will encounter on their path to sustainability, hence proving that it is unattainable overnight. A thorough innovation process that uses a proprietary blend of high quality recycled materials is what will set sustainable brands apart. Luxury brands could even potentially be privy to complete closure and bankruptcy if they are not able to quickly adapt to the need of the hour.

Some brands have begun to embark on a path to ethicality, whereas others continue to make misguided decisions. Bally, has integrated virtual showrooms as part of their new business model, and are hence reducing travelling related CO2 emissions. They are also working towards using renewable sources of energy to power their headquarters. On the other hand, Hermes has purchased several alligator farms to control its own means of supply, and ‘farm’ precious skins. Instead of working towards using faux leather in select products, Hermes has attempted towards ensuring the “welfare” of animals, and it is evidently in poor taste. Investigations by PETA revealed that crocodiles and alligators are crammed into concrete pits and filthy pools, and are killed for their skin before reaching adulthood.

A global survey by Accenture Strategy in 2018 indicated that about 62% of consumers across 35 countries find brands with ethical values more attractive. Unless brands in the luxury sector work towards integrating meaningful changes to their fundamental business model, people will continue to view luxury goods as wasteful self-indulgence that causes immense damage to the environment. The necessitation of moving to sustainability being viewed as submitting to the demands of society is a gross perception; there is a complete absence of the realisation that luxury goods are modelled around the concept of being durable because they are created from the highest quality goods- their durability can continue to exist through the use of recycled materials.

While financial incentives to shift business models aren’t high, and ample margins continue to exist, some brands are trying to focus on e-transformation. However, luxury startups stand to gain from the slow action taken by the well-established fashion houses. Startups like ‘Rent the Runway’ have fully circular models, and their ethos is based on providing an alternative to overconsumption. This allows them to stay ahead of the curve as the issue of scarcity of resources begins to plague the luxury market.

Caring for the common good is a big ask of profit-centred luxury brands. While it may seem like creativity would need to be reorganised around sustainability, the gains would no doubt outweigh the losses. In an immensely competitive space like fashion, no brand would wish to become obsolete because on account of its lack of social responsibility.