Abstract
This chapter explores how luxury fashion and accessories firms are adapting their CSR strategies to be more sustainable considering that the firms have been impacted by the COVID-19 pandemic. In this context, the authors explore how companies are communicating their efforts and how they engage consumers according to sustainable development. The methodology followed in this study is based on case studies analyzing the activities of luxury fashion and accessories brands operating in different countries, such as LVMH, Kering, Richemont, Chanel, EssilorLuxottica, Chow Tai Fook, PVH, and Swatch Group. The results show that almost all luxury fashion and accessories firms include the SDGs in their CSR/sustainability strategies and communicate how their efforts contribute to achieving the 17 SDGs. Nearly all these companies set long-term objectives including areas, such as 1) environmental protection as a key axis of their strategy, 2) support for the communities where they operate, and 3) promotion of equality and inclusion of their employees.
TopIntroduction
In recent years, sustainability has become an essential area for companies in all industries. Specifically, the current global context is also characterized by profound changes since the global pandemic caused by COVID-19, accelerating the need to know how companies contribute in a positive way through their activities (Barnett et al., 2020) and how firms create value for their stakeholders (Porter & Kramer, 2011; Carroll & Buchholtz, 2014). Furthermore, researchers identify consumer demands as the key driver of sustainability (Belz & Schmidt-Riediger, 2010) by requesting sustainable solutions from brands (Charter et al., 2006). Moreover, luxury brands face pressure to make their business more sustainable today (Karaosman et al., 2019; Li & Leonas, 2019). Thus, scholars also found the need for luxury brands to become more sustainable (Thomas, 2018) when considering consumer expectations (Cervellon, 2013). Today, luxury is associated with sustainability since luxury brands can positively impact society and the environment (Gardetti & Justo, 2017). Likewise, luxury focuses on obtaining transparency by including new sustainable trends in its Corporate Social Responsibility (CSR) strategies and according to the consumer expectations.
The luxury industry has been hit by COVID-19 with sales falling by around 20% in 2020, going back to 2015 levels (Bain & Co, 2020). Although the luxury fashion sector is expected to recover by the end of 2023 (McKinsey & Company, 2020), a radical change is expected in the luxury industry in 2030 accelerated by COVID-19, to meet the 2030 agenda targets and remain relevant to the new generations who are expected to make 180% of global purchases and who are interested in diversity and inclusion, in addition to sustainability and environmental issues (Bain & Co, 2020). The mobility restrictions that will remain in place because of COVID-19 have made luxury brands want to attract the local shopper and other stakeholders who are also concerned about issues such as social justice, dignity, and the working conditions of luxury fashion brand workers (McKinsey & Company, 2020).
The current study on sustainable luxury focuses on some aspects, which also analyze its effect on consumer behaviour (Kunz et al., 2020). Consequently, luxury brands work towards a more ethical luxury (Deloitte, 2020) following the United Nations Agenda 2030 and considering the new expectations of consumers. These firms communicate their activities and impacts on SDGs in CSR/Sustainability reports and on corporate websites showing how luxury fashion and accessories companies are accelerating towards more sustainable business. However, there is scarce literature that explores the contribution of luxury brands to sustainable development and how this affects their relationship with consumers, who demand information on the social and environmental commitments of these brands.
The purpose of this chapter is to analyze how luxury fashion and accessories brands contribute better to sustainable development through their CSR strategies considering the global challenges for business caused by COVID-19. Moreover, the pandemic crisis could act as an accelerator for brands adopting strategies of value creation with sustainable activities in the luxury fashion industry and considering that the fashion industry is the second largest cause of pollution worldwide (Woodside & Fine, 2019). As a consequence, luxury companies are reporting their medium-term sustainability strategies, reducing their environmental impact and making a positive contribution to society in different areas of their business.
Key Terms in this Chapter
Customer Engagement: It is the interaction of brands with their customers using a variety of channels to help brands build and strengthen a connection with them in the long term.
CSR Communication: It is the strategy of an organization to provide true information of its business operations, social and environmental concerns, and interactions with stakeholders in online/offline channels.
Agenda 2030: This Agenda is a global plan of action for people, the planet and prosperity for all the countries and acting in collaborative partnership through 17 Sustainable Development Goals and 169 targets that involve the society as a whole.
Ethical Luxury Fashion Brands: These brands are environmentally conscious and offer a high-quality product that is sustainably and ethically made.
Corporate Purpose: The purpose is a guide that gives meaning to the organization’s activity by creating ethical, social, environmental and economic value, through shared beliefs and the generation of unity among stakeholders.
Corporate Social Responsibility: A term that refers to the responsibility of companies and their voluntary contribution and positive impact on the environment and society and considering the expectation of stakeholders.