L'Oreal the best of a bad lot

WWF is calling for luxury brands to improve their environmental and social record, as well as asking celebrities to consider these factors before endorsing a brand, in a recent report called Deeper Luxury.

The charity highlights a number of threats to the luxury industry that it feels could be solved if brands were to improve their record in social, governance and environmental issues.

L'Oreal, LVMH and Hermes come top The report rated 10 of the world's leading luxury companies, including L'Oreal, PPR and LVMH.

The companies were rated regarding their self reported performance in the area (data from the Ethical Investment Research Service (EIRIS)) and public and media perception of the company (data from Covalence).

L'Oreal and LVMH gained the C+ grade, out of the A-F grading system, with PPR gaining a D. No company was awarded higher than a C+.

From this the report concludes that "despite strong commercial drivers for greater sustainability, luxury companies have been slow to recognise their responsibilities and opportunities" to improve their record in these areas.

Call for deeper meaning to luxury The report highlights that the luxury market is changing, suggesting that consumers of luxury brands want the brands they use to reflect their concerns for the environment and the global society.

Furthermore, the authors highlight seven challenges facing the market, including the democratisation of luxury and the growth of luxury brands in societies with extremely high levels of socioeconomic inequality.

Luxury brands are becoming more accessible, according to the report, and one way to keep ahead of the game in this democratisation of luxury, would be to improve the brands social and environmental performance.

Furthermore, the rapid expansion of luxury brands in unequal societies threatens the credibility of luxury, which could be rescued by the brand's ability to create well-being in the society as a whole and not just for the lucky few, states the report.

"Luxury brands must deepen their offering if they are to continue thrive amid changing global values and realities", write authors Anthony Kleanthous and Jem Bendell.

Luxury needs to move from conspicuous personal indulgence to being and having the best of everything, say the authors.

"Products that cause misery or environmental damage are no longer considered by affluent consumers to be the best in class."

For this reason the WWF is calling for "luxury companies to put sustainability issues at the heart of their business strategy and to benchmark their progress".

Ethical endorsement from celebrities Finally, the report highlights the power that celebrity endorsed brands have on on the decisions and choices of the wider public.

For this reason the WWF has prepared a 'Star Charter' comprising six principles, which includes the recognition of celebrity influence together with the social and environmental performance of companies before they endorse them.

The report comes at time when consumer goods companies are feeling increasing pressure to clean up their act in terms of environmental and social issues.

Packaging and production methods are under increasing pressure to become greener and fairtrade is being touted as the next big trend in the cosmetics and personal care market.

Furthermore, 2007 saw the launch of the Union for Ethical Biotrade, which hopes to instigate trade in natural ingredients that is both environmentally friendly and ethically sound.