Environmental profit and loss accounting: how luxury group that includes Gucci, Saint Laurent audits for sustainability

In fashion, there are people who talk the talk, but don’t walk the walk. That’s certainly not the case with Marie-Claire Daveu.

The chief sustainability officer and head of international institutional affairs at Kering, a global luxury goods group whose labels include Gucci, Saint Laurent and Bottega Veneta, was in Hong Kong last month to launch a report outlining the challenges posed by climate change, new technologies and economic inequality on the luxury sector. Before this, she visited Shanghai to meet with start-ups, charities and various experts to talk about sustainability practises while staying at one of the city’s first ever “green” hotels.

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“I’m very pragmatic. If I join a company it is to see the results, not to just write strategy or policy. For me it is integral that the targets we set become a reality. If we can achieve this, it will be a strong foundation for change,” she says.

Born in Brittany, northwest France, Daveu graduated from the Paris Institute of Technology for Life, Food and Environmental Studies and later studied public administration. She embarked on a career in sustainable development before moving to the public sector, where she took on roles in agriculture and the environment, advising the likes of former French prime minister Jean-Pierre Raffarin.

A growing desire to work with a global company and be “more linked to the ground” inspired her to join Kering in 2012 after meeting with the group’s CEO Francois-Henri Pinault. By this point the company had already expressed a commitment to incorporate social responsibility and sustainability across its entire business. Daveu’s job, however, was to turn this vision into a reality.

“When Mr Pinault decided to go on this journey, it was very clear that it wasn’t about selling more products. When you buy a luxury product, it’s not just for two months, so the idea of sustainability is already ingrained within the DNA of the product itself,” she says.

“Sustainability for us is not just a matter of ethics but also about creating business opportunities. It’s a way to stimulate innovation and creativity and to be sure that in a few years we can continue our business. It’s our responsibility to show we can be successful and at the same time pay attention to planet and people. An eco-resilient business model is necessary for longevity.”

One of Daveu’s first major achievements – and still the most impressive – is the Environmental Profit and Loss tool, or EP&L. The tool values the environmental impacts of a business across its entire supply chain – from raw material extraction through to sales – in monetary terms. This has helped Kering look at where it sources its raw materials and be more efficient across the supply chain. In some cases, it has initiated the replacement of conventional materials with alternatives that have a lower impact.

“Inside the company it’s been really powerful because we now know, in order of magnitude, where the greatest [environmental] impacts are,” Daveu says. “We discovered that less than 7 per cent were linked with our own operations and over 93 per cent were outside our boundaries in the supply chain. From this we are able to put key programmes in place, whether it’s with cotton suppliers or even further down the chain [at places like] cattle farms.”

She cites initiatives such as Clean By Design, which saw 25 of the group’s Italian textile mills implement operations that helped reduce energy costs and greenhouse gas emissions without affecting production. In China the group has also collaborated with wool-scouring and silk-reeling mills.

“Take the tanning process for example. It’s an art that has a strong ancestry. The fact that we were able to invest and involve many tanneries to commit to remove heavy metals was super exciting. It will take time to do this with all the categories of products and all over the world, but it’s a big start.”

The EP&L findings also spurred the public release last year of the Kering Standards, which outline environmental and social standards for manufacturing processes and raw materials that must be met by all existing and future partners and suppliers. The 2025 Strategy, its most recent initiative, also takes a long view.

“I look at everything we do as building blocks. When you speak about sustainability you need a strong commitment and it’s key to have quantitative targets and timelines. Our goal as a group is to reduce our environmental footprint by 40 per cent across the supply chain and a 50 per cent reduction in greenhouse gas while being able to fully trace all raw materials. Not everything we are doing is perfect, but it’s important to involve everyone. We can’t make change alone,” Daveu says.

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Fortunately, all of the group’s brands seem eager to play their part in achieving the company’s targets. While Stella McCartney initially led the way as a champion of eco-fabrics and other sustainable initiatives (the brand has since split from the group), others are following suit.

Especially vocal is Gucci, which recently banned the use of fur and launched an online platform called Equilibrium that highlights its sustainability efforts. Bottega Veneta is pioneering the use of chrome-free leather, while Balenciaga announced its partnership with the World Food Programme earlier this year. Boucheron has committed to use 100 per cent ethical gold by 2020.

Then there are in-house projects that encourage designers to rethink the materials they use. The Materials Innovation Lab, for example, gives them access to over 2,000 sustainably certified fabrics, including raw materials such as a special fibre made from old fishnets.

It is initiatives like these that last year saw the group named as the most sustainable luxury company for a third time in a row by the Dow Jones Sustainability Index.

Daveu says that while leading by example is a major driver of change, responsibility goes beyond the company’s walls.

“Customers are citizens. It’s their responsibility to ask questions, be interested in how the product is made and ask where the raw materials are coming from. Our responsibility is to be transparent. Clients for me have huge power, as do the media, both digital and offline. Everyone has their own part to play,” she says.

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It is perhaps for this reason that Daveu has set her sights on education to spread the message. The group has already implemented various programmes and partnerships with institutes around the world, including Tsinghua University in Beijing, Polimoda in Italy and the London College of Fashion. With the latter, the group recently launched the world’s first online course in luxury fashion and sustainability.

“Sustainability is never finished and the most challenging part is changing the mindset,” Daveu says. “That’s why we need to target the next generation of designers and people that work within the industry. They will be the game-changers.”