Deeper Luxury Report - WWF UK

5. The growing scarcity and cost of natural resources
and sinks – as industrialisation and consumerism
spread throughout the southern hemisphere,
businesses will be forced to respond.
6. Growth in brand value relative to corporate value –
this, combined with the growing proportion of brand
value associated with environmental and social
performance, will lead investors to call for greater
corporate sustainability.
All the business reasons outlined here also apply to other
sectors, but most are of greater relevance to the luxury
sector. Of particular note are the rise in the emotional
and financial value of brands, and the consequent rise
in their sensitivity to cultural shifts. The greatest cultural
shift of the 21 st century has been the rise in concern
over environmental and social problems, and the greatest
rise in such concern is among middle-class consumers.
The Global Wave of Awareness
In our 2005 report, Let Them Eat Cake: Satisfying the
new consumer appetite for responsible brands 16
, we
showed that, in Western markets, environmental and
social issues are no longer the sole concern of a
minority of socially-conscious people, but of a sizeable
proportion of mainstream, brand-conscious consumers
who want to purchase the quality they expect at a
reasonable price, but with social and environmental
performance built in.
Since then, and particularly in 2007, we have witnessed
a rapid rise in the awareness of environmental issues
among US consumers. Nearly one in four American
adults now subscribes to a new set of values that
typically includes “environmentalism, feminism, global
issues and spiritual searching”. Most of these so-called
“cultural creatives” are well-educated and relatively
affluent. 17
No wonder, then, that sales of top-end hybrid
cars, such as Toyota’s Lexus 450h, are booming. 18
Although sometimes dubbed an “old market” for luxury,
the Financial Times reminds us that “the world’s largest
consumer market still presents far more immediate
opportunities for growth than the much discussed
emerging promises of Russia, India and China”. 19
The latest consumer research on the luxury market in
Europe tells the same story: “The wealthy are increasingly
concerned about environmental issues”, says Ledbury
Research. 20
This not only means shopping differently,
but sometimes not at all; industry specialist Luxe etc
reports that some wealthy consumers “regard luxury
products, such as fine jewellery, well crafted time
pieces and fast cars, as conspicuous wastes”. 21
Analysts at the UK’s Future Laboratory believe that
“overconsumption is no longer a signal of success” and
that it is being replaced by “conspicuous abstention”. 22
Walpole, the UK’s industry association for luxury brands,
attributes this to a broader emphasis by consumers on
ethics; in 2007, it emphasised social values as one area
to which its members should pay more attention.
In the US, this is not a passing fad but an enduring
trend, according to professors Ronald Michman and
Edward Mazze. 23
Looking at Europe, the editor of the
Financial Times, Lionel Barber, agrees that the trend
is here to stay. 24
But what of the rest of the world? There is a widespread
belief that consumers in Asia, Africa, Latin America and
eastern Europe are not aware or don’t care about the
social and environmental performance of the companies
from which they buy products and services. Given other,
more urgent and immediate preoccupations (such as the
need to escape from poverty and ill health) this has been
true to a certain degree. However, there is evidence of
a wave of eco-awareness sweeping the urban middle
classes across these continents, with significant
implications for business.
Across Asia – the focus of so much strategic planning
in the luxury sector – something surprising happened in
2007: green issues suddenly became cool. In April 2007,
Cosmopolitan Hong Kong magazine featured a 25-page
eco-awareness supplement that aimed to educate
readers on the importance of green living. Many other
fashion and lifestyle publications also discussed the
implications of environmental issues for shopping and
living. In Thailand, Singh Intrachooto, founder director
of OSISU luxury recycled furniture, confirmed that “green
consumerism is growing in Asia. A year ago OSISU