FRAMEWORK : Social Enterprise
What A Sustainable Supply Chain of Partners Looks LikeOctober 27, 2017
What A Sustainable Supply Chain of Partners Looks Like
Do luxury goods brands worry about sustainability?
You may think that high-end brands don’t feel the same consumer pressure and internal concern about sustainability. Yet, as Andrew Winston explains in “An Inside View of How LVMH Makes Luxury More Sustainable,” high-end brands “face important questions about the way their business impacts the world.”
Given that controversy surrounds all agriculture, leather goods and cosmetics manufacturers, LVMH still “provides a great example of how to build a sustainability program” for over 70 luxury brands.
As we wrote in our September 8 FRAMEWORK, dealing with the sheer breadth of the UN Sustainability Development Goals challenges all companies. LVMH’s corporate program is a “framework” called “LIFE” (LVMH Initiatives for the Environment)—a “‘strategic backbone’ for programs” to address environmental challenges.
Narrowing the focus to a few sustainability goals, Krug Champagne’s concentration on environmental and social impact demanded partnership and collaboration all along the supply chain—a path that led back to the brand’s roots. Krug felt that it had “lost its connection to the founder’s 19th century ideals about craftsmanship, humility, and quality.” To return to its foundational values, Krug needed to “connect in a deeper way with its growers.”
The brand started a new program to work with growers on sustainability and quality. Today, this closer partnership reduces waste and agricultural inputs such as fertilizer and water to achieve better crop yields and sustainability. Now, CEO Maggie Henriquez explains that the growers and the winemaking team “enjoy product tastings together, allowing growers to enjoy the end results of their work and their crops.”
Henriquez notes: “It’s not normal in our business, and it’s such a moment of connection.”
Krug’s partnership, collaboration and emotional connection with the business, the winemakers and the growers—all in service of environmental and social responsibility—illustrates the power of a “strategic backbone” for sustainability.