Kering publishes natural capital update

Staff writer | 6th August 2018

PARIS – Luxury retailer Kering, which owns brands such as Gucci and Alexander McQueen, has published its latest Environmental Profit and Loss (EP&L) report which attempts to place a financial value on the impact of its activities on the environment. The report shows that the most significant impacts are generated in the supply chain (90 per cent) and in particular from the production and processing of raw materials that represent 76 per cent of the total. Its own operations represent just 10 per cent of the impacts. Among raw materials the business uses, leather continues to be the major driver of impacts, followed by other animal fibres.

Supply chain impacts are the challenge for all apparel brands, and with this in mind, Kering says it will now focus its efforts in this area – in a similar vein to the announcement of Levi’s last week. Kering said in a press note: “… with this knowledge gained from the EP&L we have shifted our efforts and we are creating programmes to promote sustainable best practices and innovating in our supply chain. Furthermore, since the supply chain is difficult to influence as one group alone, we are collaborating with our peers, and across sectors, to drive positive change.”

The business also suggested there are small steps it can take which can have a demonstrable impact on its environmental footprint. It added: “Proactively making small-scale changes in sourcing options, such as replacing materials with recycled alternatives, can result in tangible EP&L savings.”

Looking ahead, the business said: “A key priority underlining our 2025 Sustainability Strategy continues to be focused on reducing the impacts of the raw materials we use in our products. To support our efforts, we launched our Kering Standards for Raw Materials and Manufacturing Processes in January 2018. They are the fruit of several years’ research, both internally and in collaboration with external experts and NGOs, and founded on internationally recognised principles and research.

“Where no regulations existed, Kering defined sustainability standards of our own that set the bar high and are applicable across the luxury sector. As of 2018, we are assessing all new suppliers for adherence and also working with current suppliers who have challenges in meeting the criteria within these sustainability requirements, in order to make this transition together.”

Editor’s note: you can’t manage what you can’t measure, and Kering deserves credit for taking the EP&L approach – also known as natural capital accounting – and running with it, which it has since 2012. Our only reservation is the whole idea of “putting a price on nature,” which in many ways simply does not sit right with us. Nonetheless, we will keep a close eye on Kering’s work here and will be very interested to see whether it ultimately leads to a more sustainable business model.