Kering — the luxury group behind Gucci, Saint Laurent, Alexander McQueen, Balenciaga, Stella McCartney, Sergio Rossi and other big names — has many reasons to be concerned about the impact of climate change on high-end fashion brands.
Since fashion companies rely heavily on agricultural production for their raw materials, which could place them at a higher risk for adverse business effects stemming from climate change, the company collaborated with Business for Social Responsibility (BSR) to analyze climate change and identify climate priorities across the sector.
While talk regarding climate change has been met with criticism in the past, NASA and an Intergovernmental Panel on Climate Change says “scientific evidence for warming of the climate system is unequivocal.”
“The current warming trend is of particular significance because most of it is very likely human-induced and proceeding at a rate that is unprecedented in the past 1,300 years,” NASA’s website said of current climate changes.
Here are four takeaways from Kering and BSR’s report.
The Supply-Chain Factor
“Companies need to understand their supply chains and focus on supporting production systems for their raw materials that will be more resilient in the face of the shocks and volatility brought on by climate change,” the report said.
Key raw materials used in the luxury sector include: cashmere, beef leather, silk, cotton, vicuña and sheep and lamb leather.
Reduction of Availability of Raw Materials
“Both the quantity and quality of raw materials will be increasingly affected by the impacts of climate change, leading to significant business risks,” Kering and BSR noted. “Climate change is already driving reduced availability of luxury fashion’s raw materials, and will continue to do so. The impact of climate change will likely escalate over time and will lead to a reduction in raw material quality that will drive significant business risks for the luxury sector.”
“Climate change will affect many of the key production regions for luxury raw materials, with some geographies being more vulnerable than others,” according to the report. “Raw materials that are geographically restricted, such as vicuña, are particularly vulnerable.”
Vicuña are found only in Chile, Peru, Bolivia, Ecuador and Argentina, in the Puna eco-region of the Central Andes, at an elevation of approximately 2 to 5 miles above sea level — an area that is especially at risk for climate change.
Also, extra-fine cotton and cashmere face significant risks because of the “limited geographic scope of their production regions and their dependence on natural systems,” Kering and BSR note.
“Solutions at the base of the supply chain can deliver a multitude of social, environmental and business benefits,” says the report.
The report’s tips include lowering energy, water, and chemical use in product design and manufacturing; reducing energy and fuel used in operations and logistics; switching to renewable alternatives; and directing investments and procurement spending to companies and suppliers that are “climate resilient.”