Luxury group Kering has released the results of a study it has carried out into the environmental performance of all its brands, which include Bottega Veneta, Gucci, Balenciaga, Saint Laurent, Alexander McQueen, Brioni and Sergio Rossi.
The report measures the environmental footprint of Kering’s own operations and those of its suppliers, including tanners, and puts a monetary value on it. In other words, the group has estimated the “cost to society” of changes in the environment that result from these activities.
Kering has published details of the methodology it has used, saying it hopes to provide an open-source tool “to encourage other corporations to understand their entire impact on natural capital and to support the development of corporate accounting of natural capital”. It defines natural capital as “the stock of natural ecosystems on earth, including air, land, soil, biodiversity and geological resources”. It then decided on a “valuation mechanism” to be able to present the data it had accumulated in a profit-and-loss (P&L) format, to allow it to express its environmental impact in “familiar business language”.
All of this builds on work that Kering brand Puma began in 2011. The following year, the group subjected the work Puma had done to assess its own environmental P&L to formal review by a team of academics. In 2013, it used the findings to complete an environmental P&L for one of its major luxury brands, working with consultancy PwC to carry out this exercise. Then, last year, supported by its brands and PwC, it worked out the environmental P&L of six of its biggest brands, further “refining and industrialising” the methodology.
In one example directly relevant to leather, Kering says it uses around 45 million tonnes of raw material to make calf leather in one year and that its environmental P&L analysis puts a monetary value on the impact of using this material at around €190 million.
Also specific to leather, Kering has said in the new report that it sources leather primarily from cattle, sheep and goats (it also acquired a majority stake in exotic leather producer France Croco in 2013). For leather, 93% of the entire environmental impact is “driven by the land use and greenhouse gas emissions associated with farming the animals”, with most of the rest (just 7% of the total) attributable to energy and water use by tanneries.
Therefore, although it says the scale of impacts varies between different types of leather and is also highly influenced by the location of production, almost all of the environmental P&L that Kering has calculated for leather is caused by livestock farming, the principal aim of which is to supply the meat industry, with leather as nothing more than a by-product. Consultants at PwC, who worked with Kering on this project, have told leatherbiz that the figures in the report refer to a “single-digit percentage allocation” of the whole environmental footprint of cattle that the luxury group has decided to attribute to leather.