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Luxury conglomerate Kering, which owns brands such as Gucci, Saint Laurent, Bottega Veneta and Boucheron, is committing to reduce absolute greenhouse gas emissions across its multiple businesses by 40 per cent by 2035, the company announced in New York on Friday.
The target raises the bar from a previous goal to reduce absolute emissions in Scopes 1 and 2 by 90 per cent and emissions intensity in Scope 3 by 70 per cent by 2030. Scopes 1 and 2 relate to emissions directly controlled by a company, while Scope 3 emissions are associated with the supply chain. They account for the vast majority of a company's footprint.
The pledge sets Kering apart from most of the industry where the focus is on emissions intensity. This effectively measures how efficiently a company makes products, but does not account for the fact that total emissions can continue ticking up.
“You can reduce your footprint at the product level, but at the end of the day, because your company [keeps growing], you increase your quantity of greenhouse gas emissions,” explains Marie-Claire Daveu, Kering’s chief sustainability and institutional affairs officer. A target of reducing absolute emissions, at its core, means finding a solution to the fundamental conflict facing companies in the business of selling products: achieving financial growth while simultaneously driving emissions down. “At the end of the day, what’s important for the planet is your volume of greenhouse gas emissions,” says Daveu.
Many fashion companies have set climate goals — a growing number with the Science Based Targets Initiative, which lends a level of credibility because it requires a documented plan for how the company will achieve those targets. However, these goals focus almost entirely on the intensity of emissions production — while experts tend to evaluate the merits of a company’s climate commitment by looking at its total carbon footprint, and how much it can be reduced.
Kering has been regarded as a leader on climate action within the fashion industry for years. It was the first luxury group to set Science Based Targets in 2016 and committed to carbon neutrality in 2019, the same year chairman and CEO François-Henri Pinault was tasked with launching the Fashion Pact by French president Emmanuel Macron. However, even for a company with a strong history of climate action, the new target will be a challenge, requiring a shift in the overall business model as well as expanded investment in the likes of renewable energy and initiatives to improve raw material production.
The company acknowledges there’s a steep hill to climb, but says it is up for the task. “It’s ambitious. We’re not done yet,” says Daveu. “It’s important to have ambitious targets to create movement inside the company. When you make big statements, big announcements on ambitious things, you also create momentum; you energise people inside the company.”
Three-pillar approach
The new target has been announced as part of a 2020-2023 progress report from Kering on its sustainability efforts. Activities span three pillars: “care”, “collaborate” and “create”.
Each pillar has a role to play in reducing total emissions, Daveu says. She has created a new “sustainable finance” department, she says, “to follow in depth the decarbonisation roadmap and everything linked with our strategy, and to be sure that business and sustainability go hand in hand”. Work in areas such as renewable energy and regenerative agriculture will continue, while other initiatives will pick up speed and scale, including repair and resale services, material innovation and upcycling. As an example of the latter, Gucci — Kering’s largest brand by far — launched a programme last week, Gucci Continuum, as part of a quest to figure out how to embed material waste reduction into the business in a strategic way.
Kering will place a greater emphasis on “producing what we sell”, Daveu explains. That will be achieved in part by using AI and other technology to improve capacity for monitoring and tracking inventory. In theory, that can help to reduce overproduction and increase profit margins. As Daveu puts it, “we’re prioritising quality over volume”.
Some of the work under the “care” pillar will focus on motivating employees around the world to engage with and understand what's involved. That’s part of the reason for the announcement being made in New York, Daveu explains. As a global company, Kering wants to be fully engaged in every region and market, asking the right questions and providing the right context for customers on sustainability. “Depending where you are on the planet, the questions are not exactly the same, the perceptions are not exactly the same,” Daveu says. She is also visiting a Kering warehouse in New Jersey to spend time with employees locally.
The work of reducing absolute emissions will be spread across Kering’s many houses. How exactly that will be done remains to be seen. Daveu declined to give a timeline for brands to share a strategy for aligning with the new goal. “We don’t show the action plan; what is important is results,” she says.
Also important is support from the top, which appears to be solid. “Kering and our houses have made significant strides to reach our sustainability targets over the last years, and, in parallel, we have augmented our ambitions,” Pinault said in a statement. “I am convinced that impact reduction in absolute terms combined with value creation must be the next horizon for truly sustainable companies.”
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