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Sustainability: Richemont moves up a gear
Economy

Sustainability: Richemont moves up a gear

Monday, 14 September 2020
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Christophe Roulet
Editor-in-chief, HH Journal

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5 min read

The latest sustainability report sets out significantly more ambitious goals for the group, for which 2020 is a “turning point”.

Age has a way of making us take a more philosophical view. Or so it would seem from recent remarks by Johann Rupert, chairman and majority shareholder of Compagnie Financière Richemont. Speaking during a call to present the group’s 2019-20 results, he commented that “we don’t know what all the outcomes [of Covid-19] will be, but luckily we’ve positioned ourselves in such a way that we’re not in throwaway luxury. We have to look at the way we live, because there will be changes — and maybe changes for the better.” He went on to say that “it’s up to science now to dig us out of the hole that we, as mankind, put ourselves into, by our lifestyle and our abuse of the environment and the way we were living. If you think every single human being alive today, if we had to be put in a tube and boxed in like sardines in a tin can, we could easily fit into one cubic kilometre. That’s all. And yet, look at the way we live. We’ve used and abused I would guess 70% of the world’s natural resources. We still act as if climate change is not real, we’re dumping plastic everywhere and now nature retaliated, so maybe it’s time for us to pause and to think.”

Listening to Gen Z

This way of thinking has already had some positive impact according to Richemont’s 2020 Sustainability Report, published on July 17th. Since 2006 the company had mainly concentrated on mitigating risk in the supply chain and work environment with a view to the long term. Henceforth, and with the aim of creating “benefits for all”, the group is taking a significantly more proactive approach with four focus areas: people, communities, sourcing and the environment. “This year is a turning point for Richemont,” Matthew Kilgarriff, group director for corporate social responsibility, explained. “We’re not only telling our ‘mitigating’ stories. What we’ve shown in this report are our short-, medium- and long-term goals, what we’re doing so far, with whom and how we are building the strategies to address those long-term objectives.”

Climate change, biodiversity, animal welfare and the circular economy have been reevaluated in Richemont's sustainability strategy.

Also new, Richemont is capturing the concerns of the under-25s or Gen Z. “Gen Z might not immediately seem like a key stakeholder group for Richemont, but this cohort of under-25s are already being employed across our Maisons and, for some, increasingly represent our customer base, particularly in the Asia-Pacific region. Moreover, in the coming years this generation will become ever-more important, and the perceptions they have of Richemont and luxury goods now will likely influence our future relationship.” As a result, climate change, biodiversity, animal welfare and the circular economy, all matters of importance to this demographic, have been reevaluated in Richemont’s sustainability strategy, which is set out in detail in the 100-plus page report. It describes the group’s commitment to use 100% renewable electricity by 2025, to achieve full traceability of its gold for the same year, and to source all diamonds and coloured gemstones from Responsible Jewellery Council certified partners. The group is also stepping up efforts to reduce its carbon footprint other than through the purchase of carbon offsets, the option taken so far. Other commitments include a “comprehensive” strategy to achieve zero waste to landfill and a much stronger focus on social issues, in particular gender equality, women in management positions, workplace diversity and childcare services. The report also states that the group donated €34 million (2.8% of its pre-tax profit) to charities.

Down in Louisiana

Richemont also explains, in the report, how sustainability is managed both at group and Maison level. Whereas objectives, training, toolkits and intranets come from head office, the individual brands are empowered to be a driving force for change. Illustrating this, the report features a number of case studies that describe measures taken and results obtained. IWC is singled out as a “sustainability leader”. Panerai is also cited for its use of Ecotitanium in the Submersible Mike Horn Edition. As for Yoox Net-à-Porter, it is on target to achieve its goal of 100% renewable energy by the end of 2020.

At IWC, sustainability is part of strategy

The last word goes to Matthew Kilgarriff. A few weeks ahead of the report’s publication, he was one of the speakers at World Wildlife Day 2020 in Geneva, on the subject of Louisiana alligator leather that is used to make watch straps: “Let me take you to the swamps of Louisiana. There, the alligators only lay eggs in the wild. Farmers harvest the eggs, hatch them, return some of the hatchlings to the wild and grow the rest for their great economic value. The farms are certified using standards which place animal welfare first. The fact that the alligators only lay eggs in the wild is what conserves the swamps as swamps. Otherwise the Louisiana landowners would continue to convert, not conserve, their properties and would destroy the biotopes on which 8,000 species depend, including the alligators.” Sustainability can take unexpected forms…

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