In our ESG Spotlight: 5 Themes to Define the ESG Landscape in 2022, we identified resource use and materials sourcing as an important theme for the upcoming year. On our ESG Safeguard platform a trend emerged at the beginning of the year for the Apparel, Accessories, & Luxury Goods sub-industry; a wave of high-end luxury fashion brands are incorporating and committing to responsible sourcing and business practices. This week, we looked to three Fashion Pact signatories, Prada, Moncler, and Tapestry, Inc., for recent developments and commitments related to responsible material sourcing and sustainable business practices.
Since the beginning of 2022, our ESG Safeguard platform reveals a wave of commitments made by companies in the Apparel, Accessories, & Luxury Goods sub-industry related to our theme of resource use and materials sourcing. As the sub-industry shifts towards sustainable sourcing and consumer trends, companies are making bold commitments for a more sustainable future. Three signatories of the Fashion Pact, a global coalition initiated in 2019 of fashion and textile companies committed to stopping global warming, restoring biodiversity, and protecting the oceans, recently made new sustainability commitments.
Moncler (MONC:IT) announced that the company will go fur-free following their 2023 collection, initiating a wave of fur-free pledges from other companies, including Dolce & Gabbana. However, this is not the company’s first responsible sourcing commitment. Moncler released a sustainability plan in October 2020, followed by the release of it’s most sustainable puffer jacket a few months later, where every material used in the collection was recycled, except the down filling. This winter, Moncler released its second collection focused on sustainable sourcing.These are only some of the strides the company has made to push the golden standard for sustainability in its industry.
Moncler has also made commitments to have more than 80% of its suppliers achieve the highest grades of the company’s social compliance standards by 2025, to utilize 100% of renewable energy at its global factories, and to incorporate 80% of ethically traded raw materials into its collections.
These commitments are certainly bold. However, we are beginning to see investment and milestones discussed alongside the commitments suggesting that the intent to act is real. Additionally, commentary from Moncler’s peers makes it clear that their fur-free commitment is a driver for industry-wide change. Collectively these trends indicate that their goals not only put them as a leader in their industry, but they also are attainable.
Tapestry, Inc. (TPR:US), the parent company of Coach New York, Kate Spade New York, and Stuart Weitzman, recently furthered the sustainability of their supply chain through a new partnership with the Savory Institute’s Land to Market Program, the world’s first verified regenerative sourcing solution. The goal of the collaboration is for the company to reduce its environmental impact by utilizing regenerative materials that have a more positive impact on the environment, improve biodiversity, and reduce greenhouse gas (GHG) emissions. The company also released its Corporate Responsibility report recently, which outlined the expansion of their ESG goals. The company expanded their goals with the launch of a biodiversity strategy and bold commitments, including to achieve net-zero emissions by 2050 by working with their suppliers, to create 95% traceability and mapping of its raw materials to ensure a transparent and responsible supply chain by 2025, and to procure 100% renewable electricity in its stores, offices, and fulfillment centers by 2025. With the company announcing in June 2021 that they had reduced emissions by 50% compared with 2017 levels, Tapestry, Inc. is on track to continue their emissions reduction and are leading their industry with their new partnership with the Land to Market Program.
Prada (1913:HK) announced that they will begin their work to achieve carbon-neutral Scope 1 and 2, with goals of reducing their GHG emissions throughout their operations by 29% by 2026 and 42% by 2029. The effort to reduce their carbon footprint throughout their operations comes after years of investing in the construction, refurbishment, and efficiency of its industrial facilities. Additionally, the Italian luxury brand recently obtained 80 LEED certifications for their stores, the largest number of certifications ever received in one single submission. The company has also committed to furthering this mission by aiming to certify 300 stores by 2024, demonstrating their continued leadership in sustainable business practices. The company, who already stopped using animal fur in its designs and products starting in 2020 and converted to regenerated nylon by the end of last year, continues to explore materials deriving from alternative processes and sources in line with consumer demands.
The companies above are making bold commitments and taking initiative to reduce GHG emissions and responsibly source materials. Each company are in their own way demonstrating significant leadership in developing a new golden standard for sustainability in luxury goods; Moncler’s fur-free commitment has led other luxury good companies to follow their footsteps, Tapestry, Inc.’s partnership with the Land to Market Program and continued emissions reduction goals demonstrate their commitment to reduce their impact on the environment, and finally, Prada’s continued leadership in deriving sustainable resources and operating carbon-saving stores highlight a leadership in both responsible sourcing and sustainable business practices.
Reducing emissions and responsibly sourcing materials is critical for the Apparel, Accessories, & Luxury Goods sub-industry. While these three companies are currently at the top of our impact tracker in their respective segments, they’ll have to maintain their edge with investment towards these goals if they want to continue to lead and capture ESG investment. We will continue to track performance in this industry in our Safeguard platform and encourage you to reach out if you’d like access to our real time insight into company actions and momentum.
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