How the luxury group Kering treats sustainability as a serious business strategy

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The first rule of sustainability is don't talk about sustainability (on the runway). (AFP Photo/Giuseppe Cacace)
The first rule of sustainability is don’t talk about sustainability (on the runway). (AFP Photo/Giuseppe Cacace)

For Kering, the luxury goods group that owns brands including Gucci, Saint Laurent, Bottega Veneta, Boucheron, and Balenciaga, sustainability is not a selling point.

The Paris-based company is establishing protocols for more socially and environmentally sustainable business practices, but its big-spending customers won’t see hangtags proclaiming that the leather of a Gucci bag was tanned without the use of heavy metals—as increasingly will be the case. And that’s by design, Marie-Claire Daveu, Kering’s chief sustainability officer, tells Quartz.

The company published its first “Environmental Profit & Loss” report, which attempts to put a monetary value on its environmental impact, in May, and has set ambitious targets (pdf) for eliminating harmful chemicals from production, auditing suppliers, offsetting CO2 emissions, and reducing waste.

But Daveu emphasizes that Kering is approaching sustainability as a business strategy, not a marketing one. Customers aren’t the ones to convince that the company’s commitment to sustainability is worthy, Daveu says—the products alone should still inspire them to spend. The real stakeholders to win over are the investors, the employees, and the executives.

So how does one make the case for sustainability to them? “Alors,” says Daveu. “I will target differently all the people.”

Investors

“Investors, these kind of people are more and more convinced by sustainability—even if they don’t use the word sustainability—but for them it’s a risk management approach,” says Daveu. Global warming, for example, can contribute to the price volatility of raw materials such as cotton and leather.

On the social side, of course, it’s also about protecting a company’s reputation. No one wants their company’s name tied to an environmental disaster or a human tragedy like the factory collapse at Rana Plaza in Bangladesh.

“It would destroy your brand,” says Daveu, making a convincing argument that supply chain audits are worth the investment.

Potential hires

As the founders of companies such as Warby Parker and Toms could attest, a social or environmental mission is a powerful recruiting tool. A Nielsen poll found that nearly half of those surveyed between the ages of 21 and 34 prefer to work for a company they identify as “sustainable.”

Daveu says that for Kering, a sustainability strategy is particularly helpful when it comes to attracting talent in Asia.

“People can really choose their company, where they want to work,” says Daveu. “And for them it’s really important because they make the link between pollution, health, and this kind of thing, so they are very sensitive.”

Executives

For executives at the brands, Daveu says Kering has provided an old-fashioned incentive to engage with sustainability: cash. Their bonuses are linked to reaching the company’s sustainability targets.

Whether or not they buy into these ideals, says Daveu, it’s also a “signal to show them that sustainability is really linked with the business strategy.”

**This post first appeared on Quartz here.

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