How to future-proof the luxury industry according to experts

As the luxury industry navigates an era of rapid change, Luxury Tribune sought advice from three prominent leaders on integrating sustainability into luxury brands, emphasising the importance of innovation, craftsmanship, mission-driven growth, and transparent practices. An essential question, at a time when many luxury brands still have some way to go in terms of transparency and ethics throughout the value chain. Leading expert, Diana Verde Nieto is a prominent business leader and sustainability expert with over 20 years of experience in guiding companies and organisations towards sustainable growth and innovation. Her first book, Reimagining Luxury, was released in January 2024, cementing her authority in sustainability and business. Another sustainability leader, with 25 years of global experience in business transformation and strategy, Amy Nelson-Bennett is now CEO of sustainability consultancy Positive Luxury where she champions a new definition of luxury aligned with sustainability and accelerates the positive impact the industry can make on nature and people. Third expert interviewed, former CEO of Cartier, Stanislas de Quercize is the Co-founder of the Fédération de la Mode Circulaire and Founder of SAVIH, a company investing in climate tech start-ups. He serves as a board member for various brands and foundations and mentors at multiple leadership consultancies.

Recently, the luxury industry has been making significant strides in sustainability by adopting innovative materials and business models. Start-ups such as Faume, ReValorem and CrushON are pioneering circular fashion strategies, helping luxury brands enhance their eco-friendly credentials. Meanwhile, brands are also investing in new cutting-edge materials to minimise their carbon footprint and meet growing consumer demand for more ecological practices. “We’ve never seen so much entrepreneurial spirit, so much tech, and for the first time David and Goliath are working together, meaning start-ups are working with the big groups,” says de Quercize. “Material innovation is really exciting and the future of fashion; the challenge now is scaling up. Brands need to collaborate with innovators and suppliers to see a real impact,” adds Verde Nieto. “We’re starting to see the creative lead or design team using sustainability and material innovation as a creative inspiration. They see it as an opportunity rather than a restriction.” concludes Nelson-Bennett.

Craftsmanship is central to luxury, yet these traditional skills are increasingly being replaced by technology, machines, and AI. It’s the role of the luxury industry to revive these artisanal techniques, just as craftsmanship has the power to elevate luxury products and imbue them with unique value. “We need to valorise craftsmanship and promote skills like watchmaking, sewing, pattern cutting, and jewellery making through apprenticeships. These crafts are essential for extending the life of products through repair and alteration. Learning these skills at scale is imperative,” says Verde Nieto. “It’s critical for the luxury industry to protect and support craftspeople through a series of initiatives like fair pay so brands can have a future that has substance and not only the shiny gloss that to me isn’t sustainable in the long term. Crafts will always be at the heart of luxury and innovation will play its role too. Businesses who see them as complementary will gain a competitive advantage,” explains Nelson-Bennett.

The luxury industry has the opportunity to transition to business models that go beyond products to diversify into services and experiences, appealing to younger customers who prioritise lifestyle and sustainability. This approach creates deeper connections between brands and customers, and above all, helps the industry transition from extractive, wasteful practices to more regenerative ones. “Sustainability at scale requires a complete mindset and cultural change to align the company’s mission with the values of all its stakeholders. How can we grow the business not just financially but keep it alive for the next hundred years?” says Verde Nieto. “Businesses can survive and thrive on a ‘do less, do better’ business model but the challenge is bringing consumers with them to change their mentalities to more thoughtful purchasing and ultimately slow down consumption,” adds Nelson-Bennett.

Often, sustainability is reduced to a mere compliance exercise or a box-ticking activity. However, it’s crucial for sustainability efforts to gain authentic, top-to-bottom buy-in and become an integral part of the company culture. Synergies between the brand, marketing, and sustainability strategies are essential, ensuring they align closely or even merge completely. This holistic approach can then drive genuine, impactful change. “Companies must optimise for sustainability by integrating its principles into every role, from the CEO to marketing. Beyond just having a sustainability department, climate change considerations should be embedded in all business aspects, including product, material, process, and supply chain,” explains Verde Nieto. “Everybody can contribute to that vision and most people want to and are proud of it once they achieve a sustainability goal. Businesses need to see the potential in creating what is a powerful force for employee engagement and making the business march in one direction,” says Nelson-Bennett. “Brands not only have to improve their desirability but also their impact on the environment in every aspect, from design to manufacturing and customer service. This will result in a win-win situation for customers, employees, investors, suppliers, retailers, as well as for the planet and humanity,” adds de Quercize.

Consumers are becoming increasingly savvy about sustainability and are losing trust in brands that make unsubstantiated or misleading claims. Certifications such as Positive Luxury’s Butterfly Mark help customers make informed choices by rating brands with a transparent methodology and high standards. However, the proliferation of certifications has diminished their value and credibility, often confusing customers rather than guiding them. Upcoming legislation, like the Green Claims Directive, will compel businesses to adopt more transparent practices, ultimately benefitting all stakeholders. “If businesses are shifting intelligently right from the start, they put themselves in a great position to move beyond compliance and take a leadership position. They need to ask themselves whether they are measuring the right things and collecting data effectively as well as know how to read it and set targets. Only set up in the right way can a business be a force for good,” says Nelson-Bennett. “The CSRD ( Corporate sustainability reporting) a new European law that will require all large business to report on their financial results but also their environmental impact. Therefore, brands must find a lot of different solutions and one of them is engaging with circular practices,” states de Quercize. “There is an incredible amount of work to do because we’re in a system that wasn’t transparent for hundreds of years and changing that will take time, but everyone wants to move in that direction because people are realising that transparency is better for business,” adds Verde Nieto.