Positive Luxury: In the ‘year of nature’, greenwashing and incremental improvements won’t cut it
EXCLUSIVE: As businesses strive to tackle the intertwined climate and resource crises, they must place nature and biodiversity at the centre of all financial considerations in 2020, a new forecast featuring input from Paul Polman, WWF and Paul Hawken warns.
Published by Positive Luxury – the organisation which certifies luxury brands across the fashion, beverage, beauty, homewares and hospitality & leisure sectors with the Butterfly Mark – the annual predictions report dubs the 2020s a “decade of change” for sustainable business, in which responses to global crises must go beyond incremental improvements and result in business model transformations.
These changes, the report warns, must be grounded in consideration of natural resources, habitats and biodiversity. The document has received sign-off not only from Positive Luxury but from some of the sustainability space’s most prominent thought leaders, including ex-Unilever boss Paul Polman, author Paul Hawken and WWF UK’s chief executive Tanya Steele.
“In an age marked by economic instability and political turmoil, a mass extinction event is now 1,000 times more likely to take place compared to the days when no humans walked the Earth according to Brown University,” the report states, in a wildly starker tone than most financial market predictions.
Speaking exclusively to edie, Positive Luxury’s co-founder and chief excutive Daniela Verde Nieto explains that while the warning may seem “over the top” to some, the report was created using quantitative data from across the luxury space as well as qualitative insight from brands, thought leaders, scientists and NGOs. Moreover, it falls in the same year as China’s biodiversity COP and the UN’s work to create a ‘Paris-style’ agreement on nature.
“The scientific community that NGOs have access to is fundamental to making sure businesses get their response right,” Verde Nieto explains, when asked why Positive Luxury did not simply create its forecast within its own four walls.
“It can’t be a case of business leaders saying ‘ok, let’s plant a few trees or purchase a few carbon offsets and stop there’.”
Verde Nieto is speaking, here, to the urgency of responding to the world’s climate, resource and nature crises which, as analyses have repeatedly proven, are fundamentally intertwined
While the predicted human and natural impacts of these crises are enough to move most to make a moral decision, she explains, they must now also be translated into financial impacts and business decisions to stop greenwashing proliferating.
“I think, in the next few years, we will see a huge differentiation between brands that pay lip service and those that take true leadership action, in terms of both reputation and bottom line,” Verde Nieto says, noting that many luxury brands outside of her firm’s cohort have keenly co-opted natural imagery in their advertisements without making specific commitments around conservation or restoration.
“As physical risks become reality, margins will be hit, and the only brands that avoid this will be the ones taking action in line with what is necessary.”
Indeed, recent WWF analysis found that the destruction of nature will result in £8trn of economic losses by 2050. In the UK specifically, losses could reach £16bn annually – a figure which will be particularly hard-felt among businesses with extensive physical infrastructure or reliance on raw materials.
Work to bring this warning home is underway on both policy and private-sector levels. On the former, a major global review into the economic value of biodiversity, including the financial risks of its decline and rewards of its stewardship, was launched by the UK Government last year. On the latter, some of the world’s largest companies are now using natural capital in their sustainability approach as new metrics and tools emerge. Corporate supporters include the likes of Swarovski, Kering, Mars and Dow.
Verde Nieto believes certification schemes like Positive Luxury can also play a part by “telling consumers which brands are acting as well as talking”, and by encouraging brands to “go beyond compliance”. To maintain the Butterfly Mark, for example, brands must provide data across a range of ESG criteria – plus information on their green innovations and community investment – every two years. Requirements are updated bi-annually to take into account changing external contexts such as technology costs and green legislation.
With emissions legislation having levelled up globally over the past 18 months, against a backdrop of citizen climate action, future Butterfly Mark applications will be screened against factors such as net-zero compatibility.
But for Verde Nieto, sustainable business leadership in the current socio-economic climate – in the luxury space and beyond – must be redefined beyond just strong climate action.
“Making incremental improvements and saying ‘we’ve reduced our packaging and our emissions’ is great, but all businesses should have done that ten years ago,” she says, echoing the sentiments of Interface’s Jon Khoo.
Verde Nieto goes on to speak in favour of an “integrated” or embedded sustainability model, in which environmental and social considerations sit within all functions. Such models have become increasingly popular since Unilever began making the first corporate moves to implement them at scale.
She is additionally impassioned about the shift to servitisation models – already visible in the luxury accessories space, but which she believes will be “imperative” for all fashion firms as they begin to grapple with resource scarcity and dwindling consumer engagement amid climate activism. Luxury firms have been quick to act, she argues, not only because of their margins and product quality, but because they already “pride themselves on doing things differently and telling new stories.”
Nature or bust
Servitisation models are widely considered key components of a circular economy. But Positive Luxury works closely with the Ellen Macarthur Foundation and, therefore, posits nature restoration as a further key circular principle.
The Foundation has promoted nature restoration since inception but, as its chief executive Andrew Morlet recently told edie, believes most business action on nature to date has consisted of “short-term” plans reliant on charity donations or pilot projects – not business model shifts.
“If you’re only extending the cycle once, that’s a short-term solution rather than a full circular economy approach,” she says. “If you’re doing that and calling yourselves ‘sustainable’ or ‘circular’, is that greenwashing? In my eyes, yes.
Verde Nieto does believe the seeds of change towards nature stewardship are being sown. Timberland, for example, is developing regenerative leather supply chains; Burberry is carbon ‘insetting’ through forestry and The North Face has developed wool accessories that it calls ‘climate-beneficial’.
But given that many such initiatives are small compared to the brands which run them, and that the original proponents of regenerative supply chains – indigenous communities – typically use small-scale models too, concerns remain about their ability to scale without creating unintended consequences.
Verde Nieto admits she has no silver bullet for this upscaling challenge but emphasises, once again, the importance of collaboration between scientists, NGOs, business and policy, adding investors and indigenous communities to the list.
“We need as many brains on this as possible, because the reality is that this is where we all must aim.”
And, echoing the IPCC, Verde Nieto urges an end to “either-or” approaches in which businesses and policy pit high and low-tech solutions against each other, often failing to prioritise those which already exist.
The good news for Verde Nieto is that, shortly after she spoke to edie, Project Drawdown released a major report with conclusions aligned to both Positive Luxury’s report and her own calls to action. The question now is how business steps up environmental action quickly enough, without creating negative social outcomes.
“To answer that, we need businesses to do more than sign a pact, or a commitment, but to deliver actions with impact and to report on that transparently and regularly,” Verde Nieto concludes.
© Faversham House Ltd 2022 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.