The Sustainability Department

Madeline Ravich | Saturday 23rd January 2010

Does it pay for luxury retailers to have sustainability programs? This was the topic of conversation a few evenings ago when I met with an old friend who happens to work for a major luxury department store chain. The friend --- who by the way is no hedonist--- asserted that her customers don't have much use for sustainability and that the chain therefore did not see a reason to invest in a CSR or sustainability strategy. While we all would like to believe that sustainability should be a goal for all businesses (wouldn't that be great?), she made sufficiently compelling arguments that I think the subject deserves a good hard look.

Argument #1: We don't make products. My friend argued that her company doesn't have the same type of CSR issues that many of its suppliers do.

Argument #2: Our customer wants to be beautiful and investing in sustainability doesn't help us connect with that desire. My friend contends that organic packaging is of inferior quality to regular packaging and wouldn't sell as well.

While I have a number of counterpoints to make to these arguments (particularly the former), I am going to instead use today's blog space to investigate the question of whether my friend's peers in the luxury retail space share her beliefs. For my mini-study, I visited the websites of four luxury department stores. Below you can find my findings and I would welcome your thoughts on the subject. I should note that not having a sustainability report does not necessarily suggest that the company lacks a program to maintain socially and environmental standards. However, I assume that a company with a public CSR report or webpage holds some level of appeal to its consumers--- or at least isn't a negative for them.

I should also note that while none of these companies display evidence of CSR programs, I did find a few limited instances of promotional events or products tied to sustainability (Neiman Marcus included a Sustainable Design Art Chandelier in one of its Christmas books --- price: $12,000!). I also wandered across a CSR luxury dinner held in Geneva in 2007 and a 2007 WWF-UK report presented there, which claims that "nearly one in four American adults now subscribes to a new set of values that typically includes 'environmentalism, feminism, global issues and spiritual searching'" (the report is called Deeper Luxury). I also found a more recent FT Business of Luxury Summit, although noted that U.S. luxury retailers did not make it onto the list of featured panelists.

Are luxury retailers hiding their heads in the sand? Or are we naive to think that sustainability can be financially rewarding for them? I hope to write some more about this subject in the future and would like to incorporate feedback from any green consumer insights experts out there into my next post. So if you believe that you have evidence to refute (or substantiate) my friend's claims about sustainability within the luxury goods industry, please write or post away.

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