Luxury Innovation Summit - Sustainability in fashion
Luxury Innovation Summit
Geneva Switzerland, October 2022
Chaired by Rudi Blatter (left) with Giji Gya (centre), Michele Casucci (right) and Francesca Manfredi
| RUDI: We have three panelists here. Let me give you some background, I have been working 35 years in the food industry so I know what sustainability stands for. And I was recently in the Canadian Arctic talking to Inuits that live off the land - they understand global climate change, they understand what goes on in this world. So, when I see the topic of sustainability and luxury the one word comes to mind that’s ‘Oxymoron’. Is it actually an Oxymoron? Can luxury and sustainability be together? For a food expert, I doubt it but my esteemed panelists will convince me to the opposite. Next to me is Giji and she will introduce herself in detail. Then we have Michele and Francesca. We have two Italians and one world traveler, I guess. So, Giji why don’t you take it up and introduce yourself quickly and give me a 2–3-minute statement of what you think about the topic. |
| GIJI: Hello. Hi. I am Giji Gya. I am the CEO and co-founder of Downtown Uptown Geneve which is a luxury consignment and ethical boutique here in Geneva. I also have a background in human security and I have also worked at Corporate Social Responsibility for 20-25 years around the UN and other circles in life. So, my perspective is coming from the fact that I have been running my own business now for nine years but also brings into the conversation of all the experience I have had, from looking at conflict zones to looking at Fairwear to looking at where we are now today with luxury and innovation. And I think there has been a lot in the media recently about sustainability, what is it? And I think there is a little bit of reticence with this word now because it’s been misused, bit of greenwash happening there. But we shouldn’t throw out the word just because it’s being misused. So, what we need is to reframe it and I am actually going to reframe it as well in a negative sense, we’ll come to that in a minute. But sometimes it’s used when you have to check where you’re going with a concept and action on that concept. So, for me real sustainability, and in fashion and luxury in particular, is about integrated approaches to the business and human security. What is human security? You might be asking. It’s actually quite logical and very simple. Human Security is about dignity. Remember that key word. So, it’s about centering what we do, what we consume and how we do business with the fundamentals of our collective and individual happiness, our well-being and the stability of where we live. Now the word is our security that in a broadest sense, it’s security from exploitation so we are not going to be exploited and its security from being subjected to pollution. And so today, how do we address that it’s really a lot about what we consume, whether in the luxury world or in another rubric. And it’s really the essential is - I am going to be a bit of a devil’s advocate today - we do need to slow our consumption down. We need to take time with innovation and technology to check. Check and balance - is it going to be contributing to sustainability in future before we go off on an innovation track without thinking about the consequences. Also, what is non-sustainability? I have three things. 1) A red flag of non-sustainability if it’s not authentic. 2) Another one, if it’s low quality because with low quality we get a lot more pollutants and toxins; and 3) it’s about fast consumption because what does fast consumption give? Exploitation. So, I will continue later on. |
| RUDI: Thank you. I will take you up for Human Security after - it's quite interesting and I want you to fill in on some philanthropic components you mentioned here as well. Michele: |
| MICHELE: Well, that’s a lot to digest. Very interesting. Oh! She is definitely raising the bar of this conversation here. |
| RUDI: That’s why she sits left of me. |
| (everyone laughs) |
| MICHELE: Okay. So, my name is Michele Casucci. I am the founder and CEO of Certilogo. And what we do is we think of the physical product. And you can argue that the physical product is the most important conveyor of value of trust and of experience for the brands towards the consumers. And what we do as a company, is we help brands expand that conveyor of trust, experience and value into the digital realm of digitizing the product in terms of for more than over…well 500 million products or luxury fashion brands already and by doing so we create the opportunity to convey confidence and services, first and foremost verification of authenticity of the product. Which was our service which we started many years ago. In which we also get our names, Certilogo. But also, other contents and services and coming back to your question, the service that we see as most relevant now today are those that help the consumer extend the life of the product for example, helping them taking better care of the product. Help the consumer to re-cycle the product properly. Help the consumer to resell the product and this is the contribution that we, I, as an entrepreneur trying to make to the world sustainability. I leave it there, I think there are a lot of other topics. |
| RUDI: Before I pass on to Francesca, the key word I take with me here Michele is, authenticity and recycling, and the verification of it. |
| MICHELE: If I can just quickly…what you two… what Giji said, you know I feel very strongly about this topic. This was the founding idea of my company again,this is why it’s called Certilogo. Fake products should not exist at all. In my definition they are not sustainable. |
| RUDI: Yeah. I like your brand name ‘Certilogo’, it’s very clear. Francesca, please. |
| FRANCESCA: Thank you Michele, thank you Rudi, thank you Giji. And thankyou everyone for being here today to know more about sustainability. I am Francesca Manfredi, Head of Sustainability at Panerai in Neuchatel, a luxury watch brand and my word for you today is, sustainability because we first have to understand what sustainability means. It was 2016 when I started understanding that the luxury world was changing at that moment I was working for Versace where I met Michele in a way or another. And then I understood that the luxury world couldn’t rely only on celebrities, wonderful garments etc. And that’s why in that moment I decided to quit my top career in a Swiss company, dedicate everything I do today for the future we have in front of us. Now, I am a mother and I know what is really I want for the future. But the goal of myself is also to create good conditions for workers around the world and the good conditions for all of us when we go to the shops and because it is important that… as Michele was saying that we have to understand that how to read the labels because if we read the labels properly, we can really make a difference. |
| RUDI: Thank you, Francesca. So, I think sustainability is the key content. I take authenticity, I take human security. Let me throw in a theory I developed many years ago when I was at this company into this Pink Freud theory. The Pink Freud theory said, you have to get demographics sometimes. We don’t talk about demographics. We don’t have target audiences. Luxury is targeted at whom? Is it the millennials, the Zs? You are a generation Z, you’re a boomer with gen Z… gen X. Forgive me. No, no. Generation Z. And Francesca, you said you are a xennial or a millennial…. When you talk about luxury as such… |
| FRANCESCA: I am Xennial. |
| RUDI: the thing for me is how can you group demographics together to find a one overriding topic. Is it sustainability? Is it climate change? And what is it that luxury is so important to be portrayed with or to be inherited with? Michele, you want to have a quick shot at that? How you look at demographics? How do demographics come into play if we talk about sustainability? |
| MICHELE: Well, the demographics are, you know I totally agree with you. This is a major point. I mean, demographics, I can tell you from what I can see from my perspective. You know, in the last 12 months alone we have had about 7 million people, connecting with the product that we had digitized by scanning the label on the product. And this gives a great opportunity to ask questions to those consumers. Of course, not to all of them but to some of them. And the recent research we did on…by the number of the consumers from all over the world was ‘how do you feel about sustainability? What’s your feeling about sustainability? What’s important to you?’ and so on. What we found out was very interesting. Of course, sustainability was very, very important to many. More than 75% of all respondents said that, sustainability is hugely important. But then we wanted to know more. We wanted to know, what exactly, which services related to sustainability are really important. Number 1 was, checking the authenticity, I guess for the same reason we mentioned before. And then very important were, to create tangible services. Less important was, certification of sustainability, was still quite important I think 22% for saying that this is very important. But it really looks like, people don’t want companies and brands just to talk about the subject. |
| RUDI: For all demographics? |
| MICHELE: I was just coming to that. |
| RUDI: Go ahead. Yes. |
| MICHELE: So, it looks like, the consumer wants is, talking about it is nice it’s important, but they want concrete services. And then if you look at the split of the generations, and you see that gen Z and millennials are super high, on top of the list with much, much higher sensitivity towards this topic. For example, if you look at… I don’t have the exact number in my head but it was overwhelming majority in the gen Z cluster that said, what is most important for me is the ability to resell the product. |
| RUDI: Now, Francesca you said that you are a mother and you have kids so you have exactly this proof. Can you verify what Michele just said? The young people actually including us, Z, X, Millennials, and Boomers? |
| FRANCESCA: Yes. Thank you, Michele for this point. I can tell you that my daughter is in kindergarten and teachers are already explaining to them, what is the difference between plastic, papers and aluminum which was totally unpredictable - when I was in school and today what is going to happen it that to be… we see young generations asking for more and for example at Panerai we have this partnership with UNESCO…with the ISE UNSECO to explain to the students, why the ocean is important. It could sound strange but in the end the oxygen we breathe comes from the ocean and in order to engage as many people as possible together with UNESCO we develop the program with one of the best universities in the world to explain students how to integrate sustainability pillars into the business model of a luxury brand and to explain to them why the ocean is important. And I can tell you that after each lecture I am impressed by the many questions they raise and by their capability to understand everything. So, I remember myself when I was at the university, I was looking for people to inspire myself. Now the situation is totally different. When I am there in front of them, they are like my source of inspiration. I look at them and say, please come to my desk and let’s discuss together because they are so well-skilled and they are definitely a good source of information and an inspiration for all of us. And let’s rely on them. |
| RUDI: Giji, I may place you as the lead on this. I miss the word ‘luxury’ here. We are clear on sustainability. We are clear that NGOs need to be involved. We are clear about doing good. Where does luxury come here? That’s you. Go ahead! |
| GIJI: I was just thinking about that. With luxury brands, as we know they can lead the way because they have the financial capacity to. So, there are many, in the fashion world, there are many, many, many smaller brands. Some are actually here today. That are, doing this innovation, in not exploiting, and using responsible materials. But they are small businesses, they are the Davids. And so, we look at luxury business, the Goliaths, they still have that divide, despite Stanislav brining us together here today - and this is excellent … |
| RUDI: They are all Goliath, by the way. |
| GIJI: And so the luxury industry is already actually doing it, leading the way in innovation for sustainability. They have the ability because in their supply chain they can have more control because they own their supply chain. So, on the human security, people being exploited in that supply chain. I must say, you have to have independent monitoring. If you own your supply chain you can’t monitor yourself. |
| But, the luxury industry can own that supply chain. We were talking in the tech panel before, about owing your own technology because you have more control over it. And I, in my opinion, the luxury industry has a bigger responsibility because they are larger and they can lead the way and they can bring in the smaller actors, the artisans, which a lot of the companies are already doing. They work with smaller artisans in their production. Where the luxury industry is falling down, in my opinion, is more on the environmental side. We are all struggling with that. And I think the younger generation, to bring that in, their demands are such that "I am young and I have a small budget, can I do this? And this is where pre-loved luxury comes in, because you have that access to the luxury market, because you have high quality - majority of the time - high quality pieces. And then of course, we are now linking in part of sustainability is authenticity and all of that can combine into, this is where the luxury industry can come in, both new luxury, it's their responsibility for all of us, as much as our responsibility as a consumer. And this fantastic innovation that we have now making it circular and pre-loved, is where we come in. One more thing with authenticity here, something that we are unaware of, and this could be because of social media, is crime. Crime has increased exponentially and I am talking about mafia, trafficking, counterfeiting that’s all related. Drugs, arms, trafficking human beings and counterfeiting. And so, it’s extremely important that we and I know Michele agrees with me, we really address that and we start making sure everyone is aware of it. And we start making sure that we have regulation in place. We have systems in place to make authenticity, because crime is a killer for sustainability. They exploit people. They exploit the environment. And this is how I see everything is interconnected and we need to anchor everything down. |
| RUDI: So, the DNA of luxury is being redefined? What we may have seen is this term of distant is being redefined by including such elements you just mentioned here. Now, Michele you wanted to add to it. |
| MICHELE: I wanted to add something to that. So, you know the luxury industry has woken up. Of course. They are looking very rigorously at the whole value chain. They are working on each step of the value chain to see how they can make it more sustainable. It’s a very long way still. I think we are very far away from where we want it to be. I think the luxury industry knows that very well. Having said that, what is the luxury industry super, super good at? It’s super good at creating value, perceived value way beyond the physical value of what they are selling because they are good at associating intangible attributes to the products that they are selling. And this is where I see a possibility to solve the growth conundrum in the luxury industry. Growth cannot come anymore from just selling more stuff to people even if you make them more sustainable it cannot only come from selling more stuff. So there needs to be another avenue of growth. And the avenue of growth is to further exploit these intangible attributes. And what this means is, experience, is services around the product and you know we are making our contribution, sole contribution, if you will, to this topic but this is an important point. You know, if I think of the metaverse for example and you know provided that it actually takes off and provided that NFTs are going to be doable without impacting the environment which is still to be seen even though (inaudible). And there I see a possibility of creating virtual goods that by definition have no… let’s say under the premises have no environmental impact and they can still create a lot of value without impacting the environment. |
| RUDI: But do I hear also luxury becomes more accessible to them? And Francesca you are both in that same space, is luxury becoming more accessible to younger target audiences now through that new development? Including the mafia things here? |
| FRANCESCA: I think there are different ways of looking at luxury and fashion industry. We always forget that the social role played by the fashion and luxury industry that these change that we saw over the 70s-80s are made… were initiated by the fashion luxury industry. If you remember we what happened, thanks to entertainment industry as well. Together with fashion and the heart. So here the role of luxury industry and fashion industry not just to create amazing products to be sold. Their role, of this industry is also to inspire and to lead the transformation because before in the previous talk and the word I heard the most was, ‘follow’. So, today we have to concentrate on integrating and anticipating because if we integrate all the sustainability pillars into what we do, we don’t have to follow, we don’t have to come to the next solution to the problem. And when it comes to sustainability the first image, we have in our mind is the emission. What weput into the atmosphere. But that is just a car, then it is a social pillar, which is related to what Giji was mentioning before. And the third one is cover which is how companies behave in this field. And what I really love to say is that, my role and the role of people working in sustainability is to transform the way we understand business and the way we govern business because we have the best environment, we can have the best schools, we can be so well-educated. But if we are not happy as human beings while working. So, to me this is the first point, happiness is important not just for this part of the globe. |
| RUDI: See that’s why the thing, ‘save planet’ is nonsense, because the planet will save itself. We have to save ourselves from not perishing before of the planet. The planet will survive for hundreds of millions of years. |
| FRANCESCA: Exactly. |
| RUDI: I have, maybe before we go to the audience here, one topic which you might appreciate, which you might actually like especially for your businesses and that’s the trend which I feel in many different areas of de-globalization. About 20 years ago everything was about globalization. There were was the circular economy that talked about food has to be from within a hundred kilometers, your recycling programs, your digitisation. What you think about de-globalization? Is that something that appears in luxury and how will it actually play out? Because if we measure e-commerce, it’s going to explode. That’s nonsense. E-commerce creates the opposite. You think there is going to be de-globalization? Anyone thinking about answering the question? |
| MICHELE: I would not be able to answer it in a competent way related to the fashion industry and to the luxury industry. But what I would like to say is, I think we need smarter globalization. We don’t need de-globalization. This is the world that has become more and more interconnected. We have intractable problems and the environment is one them and there are many others. And the solution to these problems requires collaboration, working across countries, cultures, institutions, governments, companies, and so on. And the key for us to survive, is to thrive, to collaborate in a more efficient and smart way. |
| RUDI: I agree. Giji you want to add anything and Francesca and then we open up for the questions of the audience. |
| GIJI: Francesca and I were chatting about this is, we need to also have a stakeholder perspective and what do I mean by that, it means, all the actors engage. Because we became globalized that means we are all interacting, we are all connected now more than ever we were. And so that means we have an obligation also to understand other people’s perspectives and perceptions. Which is what is needed is for us all to join together and to work towards sustainability- in the luxury area and in all the other areas. And we need better tools to measure - we were talking about this with Michele. To measure what sustainability is. It’s not just about carbon footprint. It has to be relevant to the actor and where they are in the world and their demographic and their social-economic situation. |
| RUDI: So more mutual respect. I like the words ‘smarter globalization’. Francesca to finish any last words then we open it up to the audience? |
| FRANCESCA: Yes. When it comes to de-globalization I think that word that we have to connect with it is ‘collaboration’ because to evolve we have to collaborate, to create different and cross industry connections because what we do in our industry could be useful for another one. For example, it happened already in the fashion industry that there is a small start-up from Sicily, creating a new fabric from orange waste that was adopted by a fashion brand in Milan, creating new synergies and new spaces. So to me globalization is not a devil. It is absolutely something that could be beneficial for our industries but collaboration is key when it comes to sustainability. So, the two topics could work well together only if we collaborate properly. |
| RUDI: That’s very wise words. So, any questions from the audience here to any one of the three panelists? |
| Audience Question: Thank you for the words. I'm from the High Impact Foundation on Slovenia. I would just like to relate to what you said in a way, we do a lot of consulting for the companies and different industries. And obviously what we used to do is record the process which is called Impact Design based on the google grant that we got, we now do counseling for different industries and this impact design is in a way quite holistic approach so that the companies and the industries actually see that it’s not only about solving the society’s challenges but such are that this approach actually brings innovate and more competitive programs and services on the market. And I think I am not so familiar with the luxury industry as such but the thing with all the resources and capacities that you have and what you said is a living industry you could actually show that is more holistic approach could be the right way to lead and just to relate what you said is not only about the measurement actually it’s also about doing the higher scale of the impact. I think this is one of the crucial issues. It is sometimes easy to measure but… |
| RUDI: That is more of a statement than a question I think. |
| Audience Question: Yeah. I think it’s bit of a statement but also the question for you is how to see to help the companies and the industry to help them with more I would say clear in kind of a holistic approach. |
| RUDI: Does anyone of you want answer or shall we just accept it as statement? Francesca is that okay? Good. You want to say something or? |
| FRANCESCA: Basically, the holistic approach is something that has to be taken from a-z in a company when a company decides to go to word ‘sustainability’ because sustainability may touch all the aspects of the company. And what is important to say and I would like you to keep this as a take-away is that sustainability doesn’t happen overnight. It’s a process. So, you have to deal with your strategy. Stick to it while being very close the brand DNA because consumers are really well-educated today so if you do something that is far from your brand DNA, in the end it could become brainwashing so you really have to create this approach and in a 360 degree plan. |
| Audience Question: Hi, my name is Mi. I am from Switzerland, a consulting firm. As Francesca said ESG is really a big topic. It’s 300% true. And it tackles many areas of the company. It’s really complex. So, I would like a to make a question more specific, how is your company…. What are the main challenges that you are facing now regarding ESG? |
| RUDI: Who wants to take the question? Giji? |
| GIJI: It’s an interesting question for my business because I do pre-loved, a luxury consignment. We also do ethical fashion in our boutique - new fashion as well. I don’t have any challenges there because we check the supply chain and we do independent monitoring. There is however a challenge with pre-loved in more the E-section and the G-section (of ESG). Online sales have an insane number of returns now. A recent media record said, 30%, that’s the average. We are looking at 50% online returns. And there are individuals that will buy and send back 9 out of 10 or 2 out of 3. So, what's the big problem with online returns? Anyone? Pollution. Pollution. Because things are shipped and they are sent back. And the consumer is not paying for any of this because returns particularly in the luxury industry are free. |
| RUDI: Of course, there is oxymoron. |
| GIJI: Yes. Well an oxymoron of what? It’s not free because there is always a cost. And we need to factor in these costs as we all have been saying, into the DNA - which used to be the triple bottom line - it's now the DNA of the company. So why are we not factoring this in? There is very little discussion of that - that the consumer… we don’t want to put all the weight on the consumers’ shoulders, nor all the weight on the company’s shoulders, we need to share. So, a consumer also needs to be held accountable for returns. Because someone’s got to pay for the pollution, someone’s got to pay the person that delivers it, someone’s got to pay the person to send them, pack them and receive them back and clean it, fix it, put it back on the sale. And that’s just not in pre-loved, that is a huge problem for us now. It’s also a big problem in the luxury industry. And then the "G" is the governance, the regulations factor. We are not in the EU here but there are delightfulEUregulations that allow for returns and we need to address that as an industry because it’s not helping our sustainability at all. But that’s my big challenge. |
| RUDI: So, we have… I got the eyebrow here with this one minute to go. I give each of you 30 seconds to make a quick statement about what do you want to say about sustainability and luxury. Francesca, starting with you and then we complete the session. |
| FRANCESCA: Thank you. And well my personal advice is to read a lot about sustainability, create your own idea about it because of course sustainability is based on a scientific approach, it is not a fun moment that you leave and you go. So, I invite you to read scientific publications about it and also inspiring books for you to create your own vision and then to keep it down to the shop when you go and select the product you love to support because by choosing it or another you invest in sustainable companies or not. |
| RUDI: Michele? Thirty seconds here. |
| MICHELE: Oh! You took me by surprise here so uh you know, I would like to make a statement as a citizen, as a person, just you know, I think that because the challenge for all of us is to feel overwhelmed by this, you know, necessity of solving the green transition problem. This is probably the biggest issue that humanity has ever faced and we need to get it fixed very, very soon. So, it becomes overwhelming and it becomes like, ‘okay, what can I do you know there is no way we can solve it’, and it create panic and sense of impotence. I think we need to resist this temptation which is very human. And I think we can solve it. And I think we need to do a lot of things to solve that. But if we don’t start with the idea that we can do it and that we have mastered in the past tremendous, incredible transitions without dying at all. Then we can up it. You know there are breakthroughs that we had in the technologies phase. There are government policies to be enacted and put through seriously. But we can all do our bits you know as citizen when we vote, you know, funding initiative makes sense. For example, would it encourage everybody to look at the effective altruism movement. |
| RUDI: I like the statement, Michele. Giji give me 25 seconds. |
| GIJI: I can because he said half of what I was going to say! I think let’s get back to this, it’s a tech innovation summit and that gives accessibility. So gen Z is asking, ‘what can we do?’...Guys you know how the social media and the internet works! You now have access to luxury companies. You can Facebook and Instagram them and say, ‘hey! In certain favorite luxury company and what are you doing about sustainability on that?’Accessibility also gives us access to parliamentarians. So much easier than we were activists back in gen X days, it was hard work! And now it’s actually easy. We have got the technology, accessibility, and we are all responsible for our sustainability. |
| RUDI: I like it as a final verdict. Thankyou very much. Thankyou, the panelists. Thank you very much. |
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