The commitment to sustainability is advancing with increasing strength among premium brands, meaning a crucial decision for businessessince the green investments represents 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 leaders of the biggest brands in the sector.
During the event, in addition to the presentation of the report, the most important and sensitive points were analyzed during a round table by the biggest brands in the sector. culture, wine and experiential tourism sectors.
In the conversation, moderated by Ignacio Marcos, senior partner of McKinsey & Company and co-leader of sustainable development in consumption, fashion and luxury at a global level, Evelio Acevedo, general director of the Thyssen Museum, participated; Enrique Macías, director of viticulture of Vega Sicilia and Rita Jordao, marketing director of Sotogrande, as well as Xandra Falcó, president of Círculo Fortuny.
More sustainable consumers
An environmental situation conducive to investing in ESG criteria which produce excellent results, directly linked to the expectations of consumers who increasingly demand sustainable experiences.
According to one report, between 30 and 60% of consumers are willing to pay more for sustainable productsGeneration Z and Millennials being the most predisposed.
This translates to unambiguous value generation for the areas that make up the high-end sector, ranging from fashion, accessories and jewelry to gourmet products or furniture and interior decoration, passing through sectors such as beauty or hospitality: Sustainable products grow twice as much as traditional products, in addition to being valued up to 30% more, according to the report.
ESG investors
Likewise, assets managed by so-called ESG investors who undertake to defense of nature have experienced annual growth of 16% in recent years. In addition, companies that invest in sustainable development 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 which advocate the reduction of emissions already impact your business.
This is what the members of Círculo Fortuny, the main high-end association in Spain, say, saying that “The greater the innovation and investment in green solutions, the greater the commercial margins.“.
Talent Acquisition
A green inclination that animates the talent acquisition, since 80% of employees consider sustainable development to be an important issue, with one in four being the primary factor in choosing a new job.
Likewise, the study confirms that the cEmployee engagement increases by up to four in companies with a clear objective and in line with sustainable values.
emotional connection
For brands, developing an ESG value propositionafter making an emotional connection stronger with customers. Communicating an “ESG story” with nature-related objectives manages to retain the loyalty of the most conscious generations, in addition to meeting their expectations and an increased demand for sustainable experiences.
A connection between brand and customer based on the premise that high-end is contrary to consumption and mass production, which is why brands strive to reduce consumption of goods and resources along a value chain that demands excellence in the origin and processing 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 that of the European Union.
This is valid for businesses premium food or beverage products suggesting that decreasing soil quality reduces agricultural production yield.
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 environmentally responsible suppliers or introduce -with the push of the latest generation technologies- measurement and impact standards in procurement policies strengthen the perception of companies and propel them to leadership.
Increase brand value
Many of these measures are included in the members of Círculo Fortuny, such as Nuba’s creation of the Nuba Forest, more than 30,000 trees for reduce the carbon impact of your travelsin addition to supporting the growth of communities responsible for planting and maintaining trees.
Everyone, 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 approaches sustainability from three angles: the fpromotion of biodiversity, use of renewable energies in installations and R&D&i for the optimization of natural resources.
Reduction of dyes and detergents
Other Círculo Fortuny brands illustrate this determined commitment, as is the case of Gandía Blasco, which opts for a handcraftedl, reducing chemical dyes and detergents in their processes.
Puerto Banús has obtained Blue Flag certification, awarded to ports that protect the threatened marine biodiversity. And Cap Rocat has designed an environmental regeneration plan for the island through a local fishing program based on a rigorous selection of sustainable suppliers and local suppliers.
Premium Durability
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 in their preparationalso using local resources for its products and respecting the environment.
“But also, today The luxury consumer is the one who demands the most sustainability when shopping.by selecting brands that adopt it in their values. Likewise, investors also appreciate companies with more sustainable practices,” adds Falcó.
Leaders in innovation and sustainability
According to Ignacio Marcos, “premium brands have always been leaders in terms of innovation and sustainabilityacting as a driving force to bring these trends to more massive markets.
Marcos emphasizes that “sustainability is not just a ethical responsibilitybut also a unique opportunity to generate added value. “Rather than viewing sustainability and profit as a zero-sum equation, we need to 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 stage of the challenge is the creation of new high-end business models “that they continue to demonstrate that it is possible to achieve sustainability with profits.”
High-end sector
Circle of Fortune the main Spanish association of 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 to defend their heritage on a national and international level.
Created in 2011, it now has 75 members. Since 2011, it has been part of ECCIA (European Cultural and Creative Industries Alliance), the main body which 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.
