In a bold move, Swiss luxury watch brand IWC Schaffhausen has published a sustainability report aligned with Global Reporting Initiative (GRI) standards. Whereas publicly traded companies such as LVMH, Kering and Richemont are required to disclose financial and non-financial information, this is the first time a Swiss watch company has released information that most of its peers within the industry deem “confidential”, for example product integrity and sourcing – including quantities used of gold, bronze, titanium, steel and diamonds –, environmental performance and workforce composition.
“A pioneering step”
In 2017, IWC conducted a materiality assessment to prioritize its sustainability activities. It also decided, as a member of the international community, to commit to the Sustainable Development Goals (SDGs) set by the United Nations in 2015. IWC has set targets for several of these 17 goals, and will measure progress on gender equality (5), decent work and economic growth (8) and responsible production and consumption (12). Compared to its 2017 baseline, IWC pledges to integrate responsible production and consumption across the entire lifecycle of its products by 2020; to reduce the volume and weight of packaging by 30%; to achieve Responsible Jewellery Council (RJC) Code of Practice recertification; and to publish a biennial sustainability report. As a responsible employer, IWC also aims to reduce the absence rate by 10% by promoting health and well-being among its employees, to double the percentage of women in management positions and achieve gender equality in training participation. The company is also taking its externalities into account and commits to using 100% renewable energy at its Schaffhausen facility and is seeking to cut greenhouse gas emissions by 10% between 2017 and 2020.
Christoph Grainger-Herr, CEO of IWC Schaffhausen, believes that by publishing its first sustainability report in accordance with GRI best-practice standards, and by closely measuring and actively managing its progress, the firm is taking a pioneering step. His vision for the company is to produce timepieces of the highest quality, sustainably and profitably, thereby creating long-term social and environmental value for society while staying growth-oriented: “We are committed to demonstrating transparency and accountability regarding the impact of our business on the economy, the environment and society. Together with our stakeholders, we want to steadily work towards achieving our own targets and supporting the UN Sustainable Development Goals,” he says.
Sustainable practices will help the company to deliver top-line growth and mitigate risks.
Getting ready for more sustainability reporting regulation
According to the KPMG Survey of Corporate Responsibility Reporting 2017, GRI is the most widely adopted framework for sustainability reporting: 93% of the world’s largest 250 corporations use it to report on their sustainability performance. The practice of disclosing sustainability information inspires accountability, helps identify and manage risks, and enables organizations to seize new opportunities. Franziska Gsell, Chief Marketing Officer and Sustainability Committee Chair at IWC, believes that sustainable practices will help the company to deliver top-line growth and bottom-line results, as well as mitigate risks.
Every day, business and governments make decisions based not on financial information alone but on an assessment of risk and opportunity. Companies are therefore expected to be transparent not only about their own performance, but also about financial risks and opportunities with regard to environmental and social issues such as climate change, water scarcity and human rights. In fact voluntary guidelines are rapidly transitioning into mandatory reporting requirements in many parts of the world, including the EU, Latin America, the US, India, Taiwan and Japan. The SIX Swiss Exchange Regulatory Board, for example, adopted new regulations in 2017 that encourage sustainability reporting. IWC’s initiative comes even before the likely alignment of Swiss regulations with the European Commission directive EU/2014/95 that makes non-financial reporting mandatory for companies over 500 employees.