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Sustainable luxury: Key takeouts from the 2022 Positive Luxury Report

It has never been clearer that now is the time for everyone to act to ensure that we prevent crossing the critical global warming level of 2°C  in the coming decades. Global warming has reached a tipping point, and 2022 marks the last attempt to protect planet Earth for future generations to enjoy.

The Positive Luxury 2022 Predictions Report: Decoding the Next Decade of Change explores the loss of biodiversity through input from thought leaders and case studies in the luxury industry, seeking to answer the questions, ‘what does biodiversity mean to the future of the planet?’ and ‘how can luxury remain sustainable?’ 

The luxury report aims to light a path for premium companies trying to navigate this shifting landscape, exploring audience behaviours towards sustainable luxury, insights from those in the know on international legislation, inspiring luxury business models, and how luxury businesses can have a positive force and help create a cleaner, greener Earth.

For those in luxury brand marketing, understanding these shifting consumer preferences and how best to communicate a brand’s sustainability credentials in a way which is transparent is of paramount importance. 

There is no question that luxury brands must take sustainability seriously. As the luxury report notes, “2022 is no longer the beginning of the decade that prepares for climate adaptation – it is the year to take tangible action to protect, replenish and rewild what we have left.”

Here are some of the key takeouts from the Positive Luxury Report.  

Sustainable luxury: Finding alternatives and building resilience

Sustainable luxury means finding alternatives and building resilience. This means that luxury brands will need to think outside of their traditional geography as climate change impacts the materials and ingredients fundamental to their products. Consumers will also need to re-think their perception of luxury.

The Positive Luxury Report takes an in-depth look at several luxury markets impacted by climate change, including fine wines and travel, exploring the changing markets and how luxury brands are adapting and building resilience to a changing world, embracing the concept of sustainable luxury.

Luxury report on fine wine

The report highlights the effects of climate change on fine French wine. For example, Pinot Noir is at risk as the Burgundy terroir won’t support the growth of the grapes used to make the wine by 2040. As temperatures continue to rise, Burgundy is witnessing grape harvests earlier than ever before. And it’s not just in France. Wine growing regions in Italy and Spain are seeing their grapes ripen at a higher temperature, resulting in high-alcohol, honey-like wines.

Conversely, the change in temperatures has resulted in new wine regions emerging. Germany has started creating Pinot Noir, while the UK is a growing producer of sparkling wines.

This is causing luxury goods companies to re-think their geography in pursuit of sustainable luxury. LVMH is one brand that is shifting its focus from Europe to Asia. The luxury goods conglomerate recently opened vineyards in Ao Yun, a remote part of China, to create a wine that appeals to the growing consuming class in China. In turn, it reduces its carbon footprint as it no longer needs to ship French wines to China.

And it’s not just fine wine producers that are feeling the effects of climate change. Other materials for luxury products are at risk, including silk, extra-fine cotton, Vicuna wool, cashmere, sheep, and lamb leather.

Therefore, luxury brands will need to adapt their offerings in the future and think outside of their traditional geography. Conversely, luxury consumers will need to shift their perspectives on luxury goods to embrace more sustainable offerings. For example, the next generation of luxury consumers will likely have to place equal value on fine Chinese wine as they do on French wine.

Luxury report on travel 

The luxury report notes that the luxury travel market must also change with increasing numbers of people adopting an attitude of ‘fly less, stay longer.’

The luxury market report highlights that while the airline industry is working towards reaching net-zero flying by 2050, the investment required is significant. Green hydrogen is emerging as the most suitable renewable energy, but the report questions whether there will be enough for all since it currently represents less than 1% of the total global output of hydrogen.

Consumers are also placing an increasing demand on travel businesses to up their sustainability credentials and be more eco-friendly, with 52% expecting travel companies to be more sustainable, according to David Trunkfield, hospitality and leisure leader at PwC UK.

There is also an increasing demand for high-end, low-impact tourism, the report notes, which can help protect ecosystems and the surrounding communities.

Furthermore, the pandemic has spurred many communities to limit the number of visitors to avoid pre-pandemic levels that were causing harm to the environment. For example, the Maldives is now examining ways to make tourism more sustainable, resilient, and inclusive, while Italy is limiting visitor numbers to Venice.

Sustainable luxury: The importance of transparency and sustainability legislation

Ethical luxury brands must be transparent when communicating their corporate social responsiblity and sustainability story to gain the trust of consumers, the luxury report states. Their sustainability claims must also be independently validated through accreditations such as the Butterfly Mark, an independent trust mark awarded to luxury brands that evidence tangible action to make a positive impact on nature and society.

Not only must luxury green brands be transparent when communicating to customers, but they must take their entire team, including stakeholders, with them on their sustainable journey. Complex goals such as net-zero, the positive luxury report notes, will require the support of the entire organisation, as well as a luxury brand’s supply chain. Sustainability, the report notes, must be built into the DNA of a company’s strategy.

The report highlights that there will be considerable pressure on the private sector and governments to make real and measurable efforts to become greener and more sustainable. Luxury brands should not wait for legislation to come into force rather, they should prepare now and go above and beyond legal compliance if they wish to become a true ethical luxury brand. Global brands must also be knowledgeable of the markets in which they operate and work with local partners to ensure they are not falling foul of fast-paced legislation.

Sustainable luxury: The Gen Z and Millennials Myth 

According to the report, luxury goods companies have viewed Gen Z and Millennials as the driving force behind the desire for conscious consumption. However, the positive luxury report notes that conscious consumption is no longer a youthful fad. Rather, it now reaches every generation. While Millennials and Gen Z may be more vocal about their environmental concerns, the report states that the generation gap is a myth when it comes to global sustainability.

As Felix Kreuger, associate director, fashion and luxury, at Boston Consulting Group, says: “Consumers across generations will stop buying if you are not promoting social and or environmental sustainability.”

While younger consumers are driving growth in the luxury market – research by Statista shows that by 2025 Millenials and Gen X will make up 87% of the luxury goods market –  it would be wrong for brands to write off older consumers as those motivated by social issues and the environment come from every generation.

Luxury brands must therefore tailor their sustainability message across generations and backgrounds. 

Sustainable luxury: Invest in innovation and look to the Metaverse 

The latest digital technologies are changing the way global luxury brands do business. The report states that premium brands must invest in innovation, which plays a crucial role in becoming a sustainable luxury brand.

Brands should re-examine what growth means when constant expansion can no longer be sustained. According to the luxury report, the metaverse enables luxury brands to achieve double digital growth without seeing double digital growth in the consumption of natural resources.

Luxury goods companies, especially those in the fashion industry, are already exploring the metaverse. For example, Burberry released exclusive designs for the mobile game Honor of Kings in 2021; Gucci created a virtual garden in Roblox, a game platform where players could buy virtual Gucci products; and Balenciaga digitised its collections in Fortnite.

In the luxury report, creative scientist, futurist and co-founder of Kinda Studios, Katherine Templar Lewis, states: “The metaverse will become increasingly pervasive and persistent. It is the first space of its kind to offer true co-creation and interaction between consumer and brand and with it endless opportunity to add value to brand and community… It is a space where a luxury brand can reach new audiences, bypass physical constraints and diversify revenue streams by adding digital products.”

Relevance is a digital marketing agency that specialises in helping luxury brands navigate the ever-changing digital landscape, supporting luxury brands in conveying their sustainability message. Our team of luxury marketing specialists cover the entire digital ecosystem, including PR, SEO, paid media, social media, content, and website design and development. Contact us to learn how we can help you with some of the marketing topics raised in the positive luxury report.  

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