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1、RETURN ON SUSTAINABILITY INVESTMENTIN JULY 2021 Positive Luxury issued in its report The Sustainable Finance Revolution a rallying cry for luxury companies to urgently adopt ESG principles across their operations and supply chains to secure a future.Yes,we meant a future for nature and for all peopl
2、e,but equally we meant a future for each luxury business.“Commercial success and profit not only co-exist alongside climate and social justice action to commit to and deliver on bold values and targets have been proven to improve both.”One year later,and the evidence in favour of ESG-led business tr
3、ansformation continues to mount.KEY DRIVERSWhat was once a pre-occupation of the finance&investment industry has become a mainstream concern,with a significant majority of consumers and employees globally influenced by a companys ESG credentials.THE COMMERCIAL BENEFITS OF ESG-LED BUSINESS TRANSFORMA
4、TION2I am more likely to buy from/work for a company that stands up for.Figure 1:The influence of ESG on consumer and employee behaviour Source:2021 PWC Consumer Intelligence SurveyEnvironmentalGovernanceSocial80%ConsumersEmployees80%76%84%86%83%SUSTAINABILITY VS BRANDWhen different age segments(Fig
5、 1)were asked the importance of two key factors when making a purchase,brand name lost out to sustainability in every segment.The delta between the two factors grows to a staggering 26 points by the time we reach Generation Z,with only 49%influenced by brand name but 75%influenced by sustainability.
6、For luxury to be relevant to its growth targets,it must place sustainability at the heart of its culture,products,services and communications.The luxury industry has provided a masterclass over past decades into the art of brand-building,with intangible brand equity a key historical driver of market
7、-leading multiples,more often than not derived from revenues.Luxury companies,however,need to adjust to a new reality.85%of growth in the global luxury industry is being driven by Millennials and Generation Z(source:Bain&Company,2021),whose drivers of purchase preference are very different from all
8、previous generations drawn to luxury goods and services.This paper documents in detail why investment of human and financial resources in sustainability,and collaboration with a luxury industry expert such as Positive Luxury to independently evidence and unlock the full value of those investments,pr
9、ovide competitive advantage and clear commercial returns in the near-and mid-term.“We want to do whats right for the world but there is a competitive advantage in being a sustainable business.We are profit driven,but sustainability helps create that profit.It turns out that things that are good are
10、also good for business.”-Enrique Lax Banon,White&Blue Capital,investors in Anya Hindmarch and The Conran ShopHow do you rate the importance of these factors when making a purchase?Baby BoomersMillenialsGeneration ZGeneration X54%61%49%66%60%71%73%75%Figure 2:The importance of brand vs sustainability
11、 influencing purchase.Source:2021 First Insight,Inc.Brand name of a productSustainabilty5THE NYU STERN Centre for Sustainable Business(CSB)has been a trailblazer researching the correlation between sustainability and financial performance and making those links explicit to connect the language of CS
12、Os and CFOs(click here for more details).In partnership with Rockefeller Asset Management,CSB recently examined the relationship between ESG and financial performance in more than 1,000 research papers published between 2015 and 2020.THE EXPERTSPositiveMixedNegativeNeutral58%21%8%13%SUSTAINABLE BUSI
13、NESS IS GOOD BUSINESSPositive results for investing in sustainability dominate.Very few studies found a negative relationship between ESG and financial performance.THE VALUE DRIVERSThrough their work,CSB has developed a ROSITM methodology and identified nine key drivers which improve generating reve
14、nue grown,enhanced profitability and/or higher corporate value when a company includes EGS risks and opportunities in their strategy and decision-making processes.Figure 3:The relationship between ESG and financial performance.Source:2021 ESG and Financial Performance,NYU Stern Center for Sustainabi
15、lity Business and Rockefeller Asset ManagementRISK MANAGEMENTSTAKEHOLDER ENGAGEMENTOPERATIONAL EFFICENCYTALENT MANAGEMENTSUPPLIER RELATIONSMEDIA COVERAGECONSUMER LOYALTYSALES&MARKETINGINNOVATIONROSI METHODOLOGY:9 SUSTAINABILITY DRIVERS OF PERFORMANCEFigure 4:ROSITM methodology nine key sustainabilit
16、y drivers of performance.Source:NYU Stern Center for Sustainability Business ROSITM Methodology6TOP-LINE GROWTHCOST REDUCTIONSREGULATORY AND LEGAL INTERVENTIONSEMPLOYEE PRODUCTIVITY UPLIFTINVESTMENT AND CAPITAL ASSET OPTIMISATIONResearch from McKinsey&Company,similar to that undertaken by the CSB,ex
17、amined 2,000 studies of the impact of ESG proposition on equity returns and delivered almost identical findings to CSBs work:63%of companies demonstrated a positive impact and only 8%negative.Through their extensive experience working with companies and investors,McKinsey found that a strong ESG pro
18、position links to cash flow and value creation in five important ways:top-line growth,cost reductions,regulatory and legal interventions,productivity uplift and investment optimisation.Based on McKinseys research and our own experience working with luxury companies over the past decade,this table li
19、sts examples of the financial impact of strong and weak ESG performance in commercial organisations.ESG LINKS TO VALUE CREATIONFigure 5:The Five ESG links to value creation.Source:McKinsey Quarterly,November 2019,and Positive LuxuryRegulatory and legal interventionsEmployee productivity upliftInvest
20、ment and capital asset optimisationSTRONG ESG+proposition(examples)WEAK ESG+proposition(examples)Increase customer loyalty and value through highly transparent,credible communication of ESG performance and targets Attract more B2B and B2C customers,and earn a price premium,with verified sustainable
21、products and servicesBecome a preferred supplier(suppliers to brands,brands to retailers)through evidenced sustainable products and services Lower energy consumptionReduce water intakeReduce packaging footprintStrengthen visibility and therefore continuity and quality of supply across the value chai
22、nReduce overstocks,dead stocks,discounts,returns and write-offsTake a leadership position by complying ahead of deadlines Avoid costly fines,penalties and enforcement actionsEarn government support and subsidiesBoost employee engagement and reduce turnover through a lived sustainability purpose and
23、progressive employment practices Attract talent through greater ESG credibility across operations and the value chainStrengthen workforce by embedding sustainability skills and mindsets within the organisation Embed ESG factors into core R&D and other key financial processes to identify and incorpor
24、ate future risks and opportunitiesEnhance investment returns by better allocating capital for the long-term(e.g.,more sustainable materials,formulations,plant and equipment)Avoid investments that may not pay off because of longer-term environmental issues or changing stakeholder sentimentLose custom
25、ers through poor sustainability practices,perceptions of unsustainable products/services,and/or accusations of greenwashing or greenhushingDamage brand perception and purchase preference through loss of relevancy to B2B and B2C customers Lose access to resources,impacting continuity of supply throug
26、h poor community and labour relationsGenerate unnecessary waste and pay correspondingly higher waste-disposal costsExpend more in energy costsExpend more in packaging costsExpend more in transit costsImpair margins via excess stock management and stock write-offsSuffer restrictions on advertising an
27、d point of saleIncur fines,penalties and enforcement actions Divert resources and investment to last-minute compliance effortsLose talent,often to progressive competitors,because of weak purposeReduce productivity due to impact of high leaver and absence ratesRestrict talent pool through low ESG cre
28、dibility,particularly social stigmaIncur high costs of recruitment and other HR administrative costs Suffer stranded assets as a result of premature write-downsFall behind competitors that have invested to be less energy hungryIncur disproportionately high costs of catch-up investment in R&D because
29、 of poor future-proofingLose access to financing or attraction to investors by failing to manage sustainability risks and opportunities Top-line growthCost reductions9THE FIVE ESG LINKS TO VALUE CREATIONMonica Vinader is a demi-fine luxury jewellery brand,founded by Monica and her sister Gabriela in
30、 Britain in 2007,to create timeless pieces made to last under the mantra“buy less,wear more”.Since its foundations,the company has woven innovation and integrity throughout its operations and supply chain through the three pillars of their sustainability strategy people,planet,and community.15 years
31、 on the Monica Vinader Group has been through multiple rounds of successful fundraising,enabling it to grow into a global omnichannel business providing employment to 265 people.Their ESG performance is well-measured and future goals clearly established,both of which are communicated with impressive
32、 transparency on their website,in their annual sustainability report and in their publicly available annual accounts.Monica Vinader joined the Positive Luxury community in 2020 and achieved Butterfly Mark Certification in early 2021,one of a series of investments the Group made as part of its ambiti
33、ous next phase of sustainability-led transformation.The organisation structure was modified,with a dedicated General Manager for Sustainability appointed and two teams set up for identifying and implementing change a Sustainability Steering Committee comprising C-suite and senior leadership and a Gr
34、een TeamCASE STUDY:TOP-LINE GROWTHMONICA VINADER:WHERE INNOVATION MEETS INTEGRITY720021Monica Vinader Revenues17%5-yearCAGRFigure 6:Monica Vinader Revenue Growth 2016-2021 Source:Companies House,HMRCof operational experts from across the business.Acknowledging sustainability is
35、 about more than the environment,they also established a dedicated team supporting their equality,diversity and inclusion initiatives.The Group made the bold move to start using only recycled gold and silver,reducing carbon emissions by more than 67%in the process.They also reduced their use of sing
36、le-use plastic by 90%and rolled out new packaging,redesigning it to use less,but more sustainable,materials.Their packaging is now 100%recyclable and reusable and contributes 83%fewer GHG emissions.Through this and other efforts the company is now carbon neutral,with action firmly focussed on actual
37、 reductions ahead of offsets.They have increased consumer loyalty with the introduction of a jewellery recycling scheme and,through a partnership with EdApp,embraced technology to provide sustainability education to their office and store teams.A New from Old competition involved a wider community o
38、f brand followers,and an employer-supported volunteering programme was introduced.Amazingly the list of sustainability initiatives goes on,including additional investment in effective energy management and measurement systems,updated supplier codes of conduct to which 100%of their jewellery and leat
39、her suppliers signed up,and further charitable and fundraising initiatives.The Group also repaid all previously claimed UK CJRS(furlough)grants to support the business during Covid-19 closures.These extensive efforts to strengthen their responsible business practices clearly carried costs,both human
40、 and financial.Yet revenues in 2021 grew by 25%versus pre-pandemic 2019 and,while sales were static and net profits did drop in the peak pandemic year of 2020,2021s profits after tax were the strongest the company has ever delivered.Positive Luxurys Butterfly Mark has given us the opportunity to ent
41、er a community of diverse but like-minded brands sharing knowledge and information,whilst the certification itself has provided a platform to communicate more widely with our stakeholders,from customers seeking reassurance that were operating responsibly,to suppliers and employees gaining comfort fr
42、om their professional relationships.Monica VinaderCo-Founder and CEO POSITIVE LUXURYS TAKEAWAY:The Monica Vinader Groups strong sustainability purpose,excellent ESG performance,bold transparency and demonstrable employee and supplier engagement is clearly providing return on their investments.Its al
43、so enhancing their corporate reputation,winning them in 2022 The Queens Awards for Enterprise in Sustainable Development and Positive Luxurys Responsible Luxury Business of the Year Award.Many of their relationships with suppliers have been in place for more than 10 years and their employee retentio
44、n rates are high due to their lived commitment to integrity and innovation.That is why Positive Luxury refers to the Monica Vinader Group as a poster child for sustainable business.They are a case study in the power of principles,collaboration and commercial conviction.Monica Vinader Group revenues
45、grew 124%between its 2016 and 2021 financial years,average annual growth across the five-year period of 17%.The EBITDA ratio during this period grew from 3%to a healthy 12%,with future expansion opportunities made feasible by a healthy cash position and balance sheet.1213Founded by the Scholl-Freede
46、 family in 2010,MadaLuxe Group has grown to become North Americas largest distributor of luxury goods from the worlds most sought-after luxury brands.In 2021 MadaLuxe Group joined the Positive Luxury community and in 12 months have transformed their organisation,effectively addressing sustainability
47、 risks and earning Butterfly Mark certification through a 28-point or 82%improvement in their aggregated ESG+performance between baseline and final assessment.The cornerstone of any companys ESG+performance is a strong sustainability purpose,aligning its core identity and actions around benefitting
48、society in the long-term.MadaLuxe Group has worked extensively on strengthening existing initiatives and introducing new ones that underpin the three pillars of their sustainability purpose:respect for people,respect for the planet and empowering youth.Stemming from the belief that it is the“Groups
49、duty and priority to to make an everlasting positive imprint on this world”through economic,social and environmental wealth creation,CSR is now a permanent item on the Sustainability Committee agenda and leadership has committed significant time and resources to actively engage and involve their emp
50、loyees,from community-based volunteering initiatives supporting underserved youth in South LA to organization-wide wellness initiatives.Most of MadaLuxe Groups environmental impact comes from their distribution and shipment of goods.They have now implemented a partnership with an innovative logistic
51、s company and internal policy which supports the transition of inbound and outbound shipping to be transported via the lowest impact methods,wherever possible,which is key to reducing their transportation-related carbon emissions and reducing logistics costs.CASE STUDY:COST REDUCTIONMADALUXE GROUP:I
52、NVESTING TIME,CAPITAL AND PASSION FOR PURPOSE1415MadaLuxe ESG+Performance improvementDuring the certification process,weve embedded sustainability into every aspect and decision of our business,and we worked heavily on creating and strengthening many different initiatives related to our ESG+pillars
53、of sustainability.While our efforts in a short time have benefited our own operations and local communities,our hope is that we influence our supply chain to give back in much greater ways.Adam Freede CEO and Co-founder,MadaLuxe GroupSandy Sholl Chairperson and Co-founder,MadaLuxe GroupPOSITIVE LUXU
54、RYS TAKEAWAY:Time and again throughout the assessment process,we witnessed MadaLuxes leadership“walking the talk”,i.e.,backing up with tangible actions their belief that the Group has a responsibility to usher in a more sustainable future.Rather than just a ubiquitous statement on a website page,the
55、y have invested time and money to embed innovation and sustainability at the core of their business.Because of the correlation between a strong sustainability proposition and strong financial performance,the Group is quickly realising return on investment.Nor are they resting on their laurels after
56、delivering one of the communitys strongest ESG+performances to date.An innovative system to capture mileage and calculate carbon emissions for business travel was recently introduced,supported by their sustainable travel policy,which encourages employees to question the necessity,frequency and metho
57、ds of business travel.We are confident this initiative will reduce the companys GHG emissions,upskill and engage employees and reduce business travel as a proportion of operating expenses.Additionally,we are excited by further technology-led partnerships and innovations currently in development by M
58、adaLuxe,which we believe will raise standards for packaging and logistics efficiency in the US market and provide direct and indirect financial benefit to the Group through smart capital investment,reputation enhancement,cost-savings and employee pride.Lastly,the Group has implemented an Electric Ve
59、hicle(EV)Incentive Policy to address the companys individual contributions to their overall carbon footprint.The policy offers a cash incentive to team members for the purchase or lease of a full EV.This perk goes beyond the business so that sustainability becomes an integral part of daily living.16
60、17Investments have included the appointment of in-house sustainability specialist Sarina Tounian,who joined with a clear remit to accelerate their efforts and rapidly improve their ESG+performance.Figure 7:Madaluxe ESG+assessment performance.Source:Positive Luxury 2022Environmental3356Governance2459
61、Innovation4663Social3972Baseline AssessmentFinal AssessmentCASE STUDY:REGULATORY AND LEGAL INTERVENTIONTHE SUSTAINABILITY BENEFITS OF BELVEDERESBIOMASS CAPTURE FACILITY 1819Belvedere Vodka,part of the LVMH group,represents 600 years of Polish vodka-making tradition.Belvederes distillery,which dates
62、back to 1910,was the first spirits distillery to receive a grant from the European Commission to pilot an ambitious biomass capture facility on site.Their efforts in implementing the project earned the company the Material and Manufacturing Innovation of the Year in Positive Luxurys 2022 Awards.Belv
63、edere Vodka joined the Positive Luxury community and was first Butterfly Mark certified in 2013.We spoke to Mateusz Pastka,Electrical Engineer,and a key member of the project team at the Belvedere Vodka Distillery in Poland.“Its been a very challenging project to implement but we are extremely proud
64、 of the results accomplished.”At first,we cooperated with different universities and scientists in Poland to trial the technology in controlled environments and ensure efficiency in burning biomass.Constructing the biomass facility itself was also quite challenging as it required a lot of logistic c
65、oordination:the boiler room came from Sweden,our generator is made in England,the heat system from Poland.We had to manage several working teams and cooperate as a group.It was ultimately thanks to the commitment of all the people involved that we were able to finalise everything in the set timing.T
66、oday,not only have we reduced our energy CO2 emissions by 80%but we were also able to significantly improve our energy efficiency.We source 60%less energy from the external power grid and with time we will also be able to provide to the external networks the green energy produced in house.POSITIVE L
67、UXURYS TAKEAWAY:Belvedere is now at the forefront of manufacturing innovation,generating 100%renewable energy and optimising the biomass facility to deliver a 95%reduction in energy CO2 emissions and be carbon neutral by the end of 2022.While the project clearly required the commitment of significan
68、t internal resources for a lengthy period,it was made financially possible by a grant from the EU.Government-led funding programmes are available in most major markets,many awarded specifically to businesses investing in green technologies which increase energy efficiency or reduce carbon emissions,
69、and the majority target start-ups and small businesses.Suppliers within the luxury industry focussing on sustainability-led material,manufacturing or logistics innovations;luxury brands with their own manufacturing facilities;or those companies interested in technology-based solutions to sustainabil
70、ity opportunities,are best-placed to benefit from these programmes.Having pre-established,tangible ESG credentials like those Belvedere Vodka gained from LVMHs group sustainability resources and its partnership with Positive Luxury will strengthen a companys chance of successfully receiving a grant
71、or loan,as will a companys ability to outline clear project goals that can be measured.If government-led programmes arent available to your company or your application isnt successful,there are a growing volume of impact funds and investors looking to support high-potential companies pursuing ESG-le
72、d innovations to drive positive impact and financial health.Today,not only weve reduced our energy CO2 emissions by 80%but we were also able to significantly improve our energy efficiency.We source 60%less energy from the external power grid and with time we will also be able to provide to the exter
73、nal networks the green energy produced in house.Mateusz Pastka Electrical Engineer,Belvedere Vodka2021REI Co-op(REI)is a speciality gear and outdoor apparel retailer and the USAs largest consumer co-op,with a growing community of 20million co-op members.As a purpose-led,member-owned co-op the compan
74、y is renowned for its high-performing employee base and low turnover rate compared to less purpose-driven retail competitors.REI undertook a study with NYU Stern CSB in 2020 to better understand whether its investments in an embedded sustainability strategy and a strong sustainability-focused cultur
75、e led to higher employee engagement and,by extension,higher employee retention and overall higher employee satisfaction.Sustainability,inclusive of environmental and social issues,is core to REIs brand.It is embedded into the new employee hiring process,features prominently on career boards,new cand
76、idates are made aware of commitments before applying and it is consistently communicated in employee engagement materials.In 2019,REI employees received two paid Yay Days that allowed them to go out and play.They also launched their#OptOutside campaign;in addition to closing for Thanksgiving(normall
77、y a peak trading day in the US retail calendar),REI employees also received an additional paid day off on Black Friday to spend time outdoors with family and friends.Using CSBs ROSITM methodology to quantify the direct and indirect impact,CSB found that REIs total benefit from enhanced productivity
78、was$13million in 2019.The reduced hiring and turnover costs amounted to a benefit of$27million that year,while the cost to the company associated with Yay Days and#OptOutside was$6million.This in-depth analysis illustrated that in 2019 REI yielded$34million in net benefits from increased productivit
79、y and retention,up from$25million in 2018 and representing circa 5%of their total payroll.CASE STUDY:EMPLOYEE PRODUCTIVITY UPLIFTREI:ALIGNING EMPLOYEE WELLBEING WITH POSITIVE FINANCIAL OUTCOMESPOSITIVE LUXURYS TAKEAWAY:REI may be a very large$3billion+company but its sustainability-led culture and s
80、pecific activities within its employee wellness programme are well within the reach of all luxury businesses regardless of size.And a 5%reduction in personnel costs,whatever the companys level of turnover,is a very meaningful benefit.If leadership demonstrates genuine intent and has the discipline t
81、o follow-through,providing purpose to your employees is one of the quickest and most effective routes to realising financial return on your sustainability investment.Vividly illustrated by PWC Consumer Intelligence survey illustrated in Figure 1 of this paper,more than 80%of employees wish to work f
82、or a company that has a strong ESG proposition.Employees want purpose and show far greater loyalty to those who provide it.The payroll of medium and large companies accounts on average for 30%of net revenues.In small companies the percentage is much higher.The opportunity to better manage one of the
83、 largest areas(if not the largest)of a companys cost base is significant.A 5%saving in personnel costs would significantly improve profitability or free up investment for value-generating activities.Providing a sustainability-led purpose and building from that a healthy culture prioritising employee
84、 wellness and learning,development and progression opportunities for all is,quite simply,the fiscally responsible thing to do.2223Nike is the worlds largest supplier of athletic footwear and apparel,with innovation a founding principle.Their sustainability strategy dates back to the 1990s when the c
85、ompany faced widespread public criticism over labour practices in contract factories.Having identified that its greatest impacts across the value chain were within materials and manufacturing,10 years of research and 200+prototypes led to their launch of Flyknit in 2012,a fundamental breakthrough in
86、 sustainable innovation reducing the amount of materials used and cutting waste by 80%.While conventional shoe production requires cutting and sewing multiple materials together,the Flyknit process weaves strands of yarn together to form one seamless upper.The process allows for engineering down to
87、the millimetre.In the first four years on the market,Nike saved 3.5million pounds of water and diverted 182million plastic bottles from landfills by switching to recycled polyester in all Flyknit shoes.The highest performing running shoe at the time of its introduction,Nike subsequently applied the
88、manufacturing method to other shoe lines including training,football(soccer),basketball,golf,and lifestyle,reaching 500 global Flyknit-related patents for technology and design successfully turning social and environmental risks from challenges to opportunities.At the time of the research by NYU Ste
89、rn CSB in 2016,it was estimated that Flyknit accounted for$1billion of Nikes$30billion full-year revenues.Their 2020 Impact Report illustrated that by changing how its shoes were made via more sustainable product design and supply chain processes,Nike improved company-wide profit margins by 0.25%(al
90、most$50million).CASE STUDY:INVESTMENT&CAPITAL ASSET OPTIMISATIONNIKE:SUSTAINABILITY&INNOVATION THROUGH FLYKNIT TECHNOLOGYPOSITIVE LUXURYS TAKEAWAY:You dont have to be a huge global brand or have massive R&D resources at your disposal to innovate through sustainability.Smart new materials and lower-i
91、mpact manufacturing processes are being introduced or,in the case of luxury revived,every day.By applying a sustainability lens,luxury brands can partner with suppliers to use more recycled and sustainable materials,create leaner manufacturing processes and increase supply chain efficiency.These eff
92、orts and the resulting products resonate with consumers driving retention and attraction.They build enormous pride among employees,and cement highly productive long-term relationships between brands and suppliers.Every party in the value chain wins,from cutting floor to consumer.2425POSITIVE LUXURY
93、hopes this paper provides all readers with confidence in ROSI,in both the near-and long-term.Sustainability has changed drivers of consumer preference,employee career aspirations,brand/supplier/retailer relationships and investment valuation and justification.The golden rules of luxury brand strateg
94、y have been irreversibly altered,but the core values of sustainability and luxury are synergistic craft,durability,scarcity,creativity and leveraged from a fresh perspective will provide advantage.The advice from Positive Luxury is:1 Recognise the opportunity.Thousands of highly credible studies hav
95、e been conducted,then further analysed by experts.58-63%of companies between 2015-2020 saw a positive financial impact from investment in ESG,only 8%negative.Withconsumer and employee preference swinging strongly toward sustainable companies during and since the pandemic andfinancial institutions fa
96、vouring low-risk investments,we expect the positive correlation to continue to rise.For a cohort ofsmart,progressive companies leveraging ESG to transform their organisations this is a huge environmental,social andfinancial opportunity.Positive Luxury supports nearly 200 companies who through their
97、combined impact are redefiningluxury and seeing payback.2 ESG and Financial KPIs are interdependent.The luxury industry was a follower in digital;lets learn from that and be leaders in sustainability.If this topic isnt on the agenda of Board Meetings,ExComms,and Town Halls every month,get commercial
98、 and get it there.Success in todays volatile macro-economic climate requires companies to embrace uncertainty and build resiliency and adaptation skills into the DNA of their business.The impacts of climate change will continue to exacerbate this.Prepare through effective management of ESG risks and
99、 opportunities,and you will turn adversity into advantage.3 Listen to evolving demands of your stakeholders.To build trust with B2B and B2C customers,engage employees and be valued by shareholders and investors,get serious about sustainability.Look beyond superficial statements of commitment and pur
100、pose,and aim to embed sustainability into your business strategy,operations,ways of working and full value chain.Get into the detail before legislation forces you to.RECOGNISE THE OPPORTUNITYESG AND FINANCIAL KPIS ARE INTERDEPENDENTLISTEN TO EVOLVING DEMANDS OF YOUR STAKEHOLDERSPURSUE NOT JUST SUSTA
101、INABILITY,BUT ALSO TRANSPARENCYTAKE A LEADERSHIP POSITIONCONCLUSION:KEY TAKEAWAYS“Luxury brands must make bold,definitive statements that embrace the market opportunity that sustainability provides luxury brands have an urgent mission to propose and introduce an approach that promises to deliver a s
102、ustainably driven tomorrow and beyond.There is no doubt that the brand business model repercussions may prove significant,but brands no longer have a choice”Source:Forbes,2021274 Pursue not just sustainability,but also transparency.Sustainability provides a golden opportunity to create a truly compe
103、lling and relevant vision.Crafting and communicating purpose statements are the simple parts.The more challenging,less comfortable aspects comprise living that purpose and communicating ESG performance with honesty and clear evidence.As alarmingly illustrated in this years Edelman Trust Survey,the d
104、efault position of 55%of global consumers is distrust.This declining trust between individuals and corporations is fed by issues like greenwashing and climate hypocrisy.The New York Times recently identified in a global review of net-zero pledges by corporations that fully half of them laid out no c
105、oncrete plan for getting there.Those companies who continue to speak the ubiquitous language of commitment without measurement,targets and progress updates place themselves at risk of a public backlash.This is luxury.Its the details that matter.5 Take a leadership position.Sustainability is an oppor
106、tunity for leaders of luxury brands,retailers and suppliers to create a meaningful legacy.As identified by Forbes,McKinsey&Company,Harvard Business Review and numerous other experts,innovation is the magic ingredient crucial to the long-term success of both companies and leaders.Sustainability drive
107、s innovation because it demands that we think differently about the challenge and the solution.Innovation isnt a new product.Its adapting to change to deliver a better product or service.Its uncovering new ways to operate and modifying the business model to adapt to evolving conditions.Climate chang
108、e is a game-changer we see it daily in the news,in the staff room and in our supply chains.Operating in the status quo isnt an option stakeholders will place a bet on.Leaders who recognise this will unleash innovation.Creativity will abound.This is the space in which luxury was born and to which the
109、 most successful leaders of companies large and small will return.Positive Luxury is a partner with more than a decade of experience helping luxury companies manage their sustainability risk and opportunities,accelerate efforts to improve ESG performance and leverage sustainability as a driver of po
110、sitive impact and corporate value.Our community of ambitious luxury brands,suppliers and retailers redefining luxury is growing fast,each in a different stage of its sustainability journey,but all aligned behind one well-evidenced belief.Strong ESG+performance isnt a nice-to-have.Its the responsibil
111、ity of business,and a must-have to ensure access to talent,capital and luxury consumers.Were here to help brands,suppliers and retailers adapt and not be left behind.“Good management of sustainability risks and opportunities is one of the most powerful ways to improve financial performance.”NYU Ster
112、n Center for Sustainable Business“As sustainability becomes more of a strategic and operational imperative,executives must lead the way to set up a sustainability organisation thats right for their companies.”Source:What Matters:Five priorities for CEOs in the Next Normal,McKinsey&Company,September
113、202128ASSESSMENTPositive Luxurys ESG+assessment is the most comprehensive on the market.Between baseline and final assessment,to meet our exacting standards for certification which require a minimum score of 50 at aggregate level and across each of the environment,social and governance pillars,the a
114、verage company improves its ESG+performance by 27 points on a scale of 1 to 100.CERTIFICATIONThe Butterfly Mark is earned via sustainability-led business transformation,providing tangible evidence of improvement and independently validated performance measures across 29 drivers critical to ESG perfo
115、rmance.Clients must undergo reassessment every two years to maintain certification,ensuring each company continues to improve its performance in line with evolving market expectations and growing legislation.TRUST-BUILDINGTo communicate positive impact and earn stakeholder trust,clients are supporte
116、d pre-and post-certification with a comprehensive suite of tools,the cornerstone of which is the Connected Butterfly Mark.Leveraging Web3,technology this unique tool blends ESG+performance data and sustainability journey mapping,allowing certified companies to deliver transparency with confidence an
117、d monitor consumer engagement through the back-end passport office.Product-level traceability is in development for launch in 2023.FUTURE-PROOFINGLeveraging our reporting and insight tools,including a detailed risk map,we help clients prioritise key areas of opportunity for competitive advantage and
118、 value generation.The diagnostics allow clients to set clear and ambitious 2030 targets and develop a near-term two-year roadmap.Ongoing reviews with our sustainability experts ensure certified companies are kept abreast of changes in legislation and standards,and continuously manage sustainability
119、risks and opportunities to improve ESG impact and financial performance.1234POSITIVE LUXURYS proprietary four-part methodology rejects the traditional model rating past performance.Incorporating a focus on innovation,it provides clients with a clear gap analysis enabling them to identify and address
120、 both current and future sustainability risks.This is then combined with diagnostic and communication tools to leverage areas of strength and opportunities for advantage.POSITIVE LUXURYS METHODOLOGY3031To learn more about Positive Luxury and how we help luxury brands,retailers and suppliers unlock sustainability as a driver of value please visit ,where you can also demo our ESG+assessment and directly book an appointment with a member of our Development Team.Hamish Scott,Development Director +44(0)7377 098645Rosa Spinney,Sales Executive +44(0)7964 775577