In response to a world shaken by increasing global economic volatility, the luxury industry is starting to focus on sustainability and ethics. Respect for the environment, recycling materials and innovating new ones, integrity throughout the value chain, collaborative and digital economy, and social entrepreneurship are among the strategic priorities for luxury companies.
Mazars presents the 2017 Commercial Fashion and Luxury Expertise study, ‘Reinventing Luxury – Ethics as value creation’, which sheds light on the current dynamics in the luxury industry and how companies are using ethics to build value.
“The study highlights businesses that look to incorporate sustainability when making strategic decisions, in an effort to build sustainable business models and focus on ethical practices at work. The emergence of new brands built around sustainability and ethics disrupts traditional value chains and brings luxury closer to social entrepreneurship” says Fabien Seraidarian, Senior Manager at Mazars in France and author of this study.
The study is based on 112 companies in the industry, and seven federations, covering the sectors of leather goods, fashion, jewelry, watchmaking and fur.
Based on analysis of over a hundred brands, the most representative assessment of practices has enabled the study to determine four dimensions which provide an examination of ethical initiatives.
Through the analysis of these practices, the study answers several questions:
The partnership approach (towards ethics) widens the scope of responsibility in the luxury industry. It allows for created value to not only be redistributed to shareholders and employees, but also clients, suppliers, subcontractors, and local communities.
Rethinking the supply chain, preserving the environment and local manufacturing regions, respecting the workforce and improving working conditions, and considering new customer expectations produce three main strategies:
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