Geopolitics and Luxury. How did the luxury goods industry score at COP28?

On Wednesday December 13, participants at the World Climate Conference (COP28) reached an agreement that President Sultan Al Jaber described as "historic". The final text called on countries to phase out fossil fuels in order to limit emissions and climate change.

Despite opposition from OPEC - the oil producers' consortium led by Saudi Arabia - this agreement opens up new prospects. Against this backdrop, what are the luxury industry's eco-compatible approaches that are not simply greenwashing? One major player in this field, the LVMH group, distinguished itself at COP28. In particular, it signed an important partnership, endowed with one million euros, with the Foundation for the Sustainability of the Amazon (FAS), and presented promising results from its 2022 commitments with the Circular Bioeconomy Alliance. These commitments include the training of over 500 farmers in Central Africa and the launch of large-scale regenerative cotton production. At the same time, other major players in the luxury goods industry, such as Kering, are also investing in similar initiatives. These efforts are often motivated by the expectations of younger customers, more attentive to production processes. Yet there is still room for improvement. WWF regularly points out the significant impact of the luxury goods sector, particularly fashion, on CO2 emissions. Wool production, for example, is responsible for the emission of 1.7 billion tonnes of CO2 per year. Natural wool is increasingly coveted by major brands, with production regions in Argentina (Zegna, among others) and New Zealand (Loro Piana, among others).

When it comes to emissions, luxury groups such as Kering are using carbon offsetting as a lever to achieve their objectives across all their activities. To this end, the Pinault family group actively supports major forest protection programs. This is the case in Gabon, where the government is aiming to replace depleting oil revenues with an economy based on sustainable forestry. French diplomats have been actively involved in this process, encouraging major players in the French economy to buy Gabonese credits. BNP Paribas and the Mirova investment fund - managing part of Kering's portfolio dedicated to nature conservation initiatives - have also been involved.

However, these efforts are sometimes hampered by problems of corruption, as observed in Gabon. These initiatives often require navigating a delicate balance: on the one hand, there is the desire to promote ecological programs to support the ecological transition in developing countries, and on the other hand, the concern of financing, even indirectly, corrupt regimes, as in Gabon.

Hermès, for its part, decided in 2017 to subject 10% of executive remuneration to CSR ( corporate social responsibility) criteria, and invested 10 million euros in 2019 to fight wildfires in the Amazon. Brazil, at the time led by the climate-skeptic Bolsonaro, witnessed their president opposing the Amazon Fund and private donations in favor of the fight against deforestation. Had the Hermès funds reached their destination? Had Kering's support for Gabon's green shift been effective and unimpeded by the corrupt maneuvers often present in this African country?

In the face of these challenges, individual efforts have their limits, just as large-scale collective actions in collaboration with governments and public institutions. This is true, for example, of the "Fashion Pact" - a global association of some 300 major companies and brands - launched at the 2019 G7 Summit on the initiative of French President Emmanuel Macron and François-Henri Pinault, to fight global warming and protect both terrestrial and marine biodiversity. Last May, Hermès, Stella McCartney and the Selfridges department store quietly left the Fashion Pact. The reason given was that the results of its actions were too slow, since 40% of the signatories had failed to formally commit to setting verified, science-based targets for reducing their emissions, which is an essential requirement of the pact.

Despite the progress made by many brands, more effective actions are needed to bring substantial change to the luxury goods industry.