The commitment to sustainability is advancing with increasing strength among high-end brands, which means a crucial decision for companiessince the green investments represent a unique opportunity to create value and affect all categories of the high-end industry.
This is shown in the Círculo Fortuny report Sustainability as an opportunity to generate impact in the high-end sector with the analysis of McKinsey & Company, on the occasion of the Fortune Talks held today in Madrid, which brought together the managers of the leading brands in the sector.
At the event, in addition to presenting the report, the most important and sensitive points were analyzed in a round table by leading brands in the culture, wine and experience tourism sectors.
In the conversation, moderated by Ignacio Marcos, Senior Partner of McKinsey & Company and co-leader of Sustainability in consumption, fashion and luxury at a global level, Evelio Acevedo, managing director of the Thyssen Museum, participated; Enrique Macías, director of Viticulture at Vega Sicilia and Rita Jordao, director of Marketing at Sotogrande, as well as Xandra Falcó, president of Círculo Fortuny.
More sustainable consumers
An environmental situation prone to investing in ESG criteria that produces great results, directly related to the expectations of consumers who increasingly demand sustainable experiences.
According to a report, between 30 and 60% of consumers are willing to pay more for sustainable productswith Generation Z and Millennials being the most predisposed.
This translates into an unambiguous generation of value for the areas that comprise the high-end sector, ranging from fashion, accessories and jewelry to gastronomic products or furniture and interior design, including sectors such as beauty or hospitality: Sustainable products grow twice as much as traditional ones, in addition to being valued up to 30% more, according to the report.
Xandra Falcó, president of the Círculo Fortuny
ESG Investors
Likewise, the assets managed by so-called ESG investors who are committed to defense of nature have grown at a rate of 16% annual growth in recent years. Furthermore, companies that invest in sustainability are valued between two and five times more than those that do not.
In this sense, 87% of high-end industry executives believe that international, community or national regulations that advocate the reduction of emissions already impact your business.
This is stated by the members of Círculo Fortuny, the main high-end association in Spain, stating that «The greater the innovation and investment in green solutions, the greater the business margins.».
Talent acquisition
A green inclination that drives the talent acquisition, since 80% of employees consider sustainability to be an important issue, with one in four being the first factor in choosing a new job.
Likewise, the study confirms that the cEmployee engagement skyrockets by up to four in those companies with a clear purpose and in line with sustainable values.
emotional connection
For brands, develop an ESG value propositionupone weaving an emotional connection stronger with customers. Communicating an “ESG story” with objectives related to nature manages to gain loyalty among the most aware generations, in addition to meeting their expectations and greater demand for sustainable experiences.
A connection between brand and customer based on the premise that high-end is contrary to mass consumption and production, which is why brands strive to reduce consumption of goods and resources along a value chain that requires excellence in the origin and treatment of materials. A valid process both for the acquisition of skins or fibers as for the menu of a restaurant inspired by respect for natural resources.
Excellence in the value chain
The opposite also happens, consumers change brands if they recognize the negative impact of a product on natural habitats. For example, cotton linked to the loss of terrestrial habitats is penalized in markets such as the European Union.
This is valid for companies high-end food products or beverages which suggest that the decrease in soil quality reduces the yield of crop production.
All of this leads to a sustainability strategy that qualitatively increases the perceived value of the brand. Thus, promoting the traceability of renewable and non-renewable resources, collaborate with ecologically responsible suppliers or introduce -with the push of the latest generation technologies- measurement and impact standards in supply policies boost the perception of companies and boost them to leadership.
Increase brand value
Many of these measures are included in the members of Círculo Fortuny, such as the creation by Nuba of the Nuba Forest, more than 30,000 trees to reduce the carbon footprint impact of your travelsin addition to supporting the growth of communities responsible for planting and caring for trees.
Tous, in turn, has a innovation and sustainability platformAfterlife, through which it gives a second life to materials and products.
Vega Sicilia promotes regenerative agricultural practices to protect ecosystems. Castillo de Canena, addresses sustainability from three angles: the fpromotion of biodiversity, the use of renewable energy in facilities and R&D&i for the optimization of natural resources.
Reduction of dyes and detergents
More Círculo Fortuny brands illustrate this determined commitment, as is the case of Gandía Blasco, which opts for a artisan productionl, reducing chemical dyes and detergents in their processes.
Puerto Banús has obtained the Blue Flag certification, which is received by ports that protect the threatened marine biodiversity. And Cap Rocat has designed a plan for the environmental regeneration of the island through a local fishing program based on the careful selection of sustainable suppliers and local suppliers.
High-end sustainability
According to Xandra Falcó, “sustainability is in the DNA of high-end, which always produces a long-term product. limited number of objects and taking maximum care of their preparationalso using local resources for its products and respecting the environment.
«But also, today The luxury consumer is the one who demands sustainability the most when purchasingselecting brands that adopt it in their values. Likewise, investors also value companies with more sustainable practices,” adds Falcó.
Leaders in innovation and sustainability
According to Ignacio Marcos, “high-end brands have always been leaders in innovation and sustainabilityacting as an engine to bring these trends to more massive markets.
Marcos points out that “sustainability is not only a ethical responsibilitybut also a unique opportunity to generate added value. “Rather than viewing sustainability and profit as a zero-sum equation, we must understand that the two can coexist and reinforce each other.”
«Luxury brands are already demonstrating that it is possible to create high quality products that respect the environment and, at the same time, satisfy the expectations of the most demanding consumers,” says the McKinsey & Company partner, adding that “The next step in the challenge is the creation of new high-end business models “that they continue to demonstrate that achieving sustainability with benefit is possible.”
High-end sector
Fortuny Circle the main Spanish association in the high-end and excellence sectorwhose main objective is to serve as a common forum for Spanish brands and companies in the cultural, artisanal and creative fields, and defend their legacy both nationally and internationally.
Founded in 2011, today it is made up of 75 members. Since 2011 it has been part of ECCIA (European Cultural and Creative Industries Alliance), the main body that promotes and defends high-end in the EU and to which the seven main European luxury associations (Fortuny Circle, Colbert Committee, Fondazione Altagamma, Meisterkreis, Walpole British Luxury, Laurel and Gustaff III Komittee) which together represent more than 600 companies and brands.
