Social good and environmental responsibilities: differentiators for luxury brands

Diana Verde Nieto


Posted in: Consumers, Guest Writers, Speaking Out, Strategy, Supply Chain

Social good and environmental responsibilities: differentiators for luxury brands

May 05, 2015

Luxury brands have discovered the business value of sustainability. But opportunities to engage customers have just begun, writes Positive Luxury’s Diana Verde Nieto. 


I thought I would never see the day where it was clear that sustainable luxury has finally moved on from feel-good initiatives to recognizing the potential for creating business value.

At Positive Luxury we set out to prove that there is a real ROI for brands not only from mitigating reputational risk but from communicating social good and environmental actions at the point of sale.

Taking customers on a journey

In 2002, I started my first business, an international sustainability consultancy, and at that time I needed to explain why sustainability was important, and why integrating it into every business function, and the value chain, made not only economic sense but would deliver reputational value in the long run.

Today this is no longer the problem. Most companies understand the reputational risk of not integrating sustainability throughout the business model. However, the challenge now is to get brands to come to terms with the fact that it’s ok to communicate small, tangible progress in their sustainability journey, and to take their customers with them. Consumers are forgiving of transparent brands that are not perfect, but very unforgiving when finding out that brands may have greenwashed.

Open communication is really the next step to normalise sustainability.

This requires a different approach, where companies stop talking about “sustainability”, “eco” and “green”, and talk about what matters to people, such as animal welfare, child labour, country of provenance, conservation, packaging etc. If we can break this huge topic down into tangible bite-size pieces, then consumers can engage, share and take action.

This brings to my mind the recent Huffington Post article following the Sustainable Luxury summit in Paris, where Misha Pinkhasov talked about the marketing of “all-natural” or organic products, which often highlights the health aspects while ignoring the reality of resource intensity. “Done right, synthetic ingredients are not necessarily less healthy, while the innovation and increased efficiency helps to keep us from devouring the planet,” he wrote.

Confused? Consumers are too. They don’t know what’s right or wrong, and this is neither their fault nor the media’s. The blame should be on the companies for thinking that it’s better not to talk about their positive steps towards social and environmental good. By sharing their journey and challenges they can build consumer trust, and this will help them in the long run.

Luxury for a new generation

It’s naïve of companies to think that they can control what is said about them; the world has become more interconnected, interdependent and transparent than ever before. We have massive improvements in technology to thank for this new dimension and a new generation that has wholeheartedly adopted the latest and greatest tools and platforms.

I’m one of those fortunate people who are surrounded by ‘millennials’ in the workplace and I must confess, sometimes I love working with them but sometimes I fail to understand them.

They are a more sophisticated generation, who have grown up in a technologically advanced age where the economy has prospered and freedom is a given. They are digital natives; the first generation that live through the screen, where there are no real boundaries or lines between the physical and the digital world, where mobiles enable them to move around between the two, completely seamlessly. They are shaping the world.

What is refreshing about millennials, and older generations adopting a millennial mind-set, is that they are one of the most socially compassionate generations ever. Research shows that millennials will seek out and buy brands that support causes which align with their core values. They want to work for companies that can tangibly prove they are having a positive impact in society and the environment, and because this is something that is not easy to find they are one of the most entrepreneurial generations, with 70% of millennials wanting to set up their own businesses.

Wherever they are on the planet, millennials are passionate about luxury and they are prepared to sacrifice a lot to own luxury goods without feeling guilty. However, they are demanding a new kind of open, experience-oriented, innovated, socially and environmentally minded luxury. Affluent millennials do not see luxury as a sign of achievement, but rather a symbol that they “can” achieve.

Selling experiences

With brands no longer regarded as status symbols to be aspired to, the focus is on the desire for experiences. Brands will need to be socially responsible, ethically motivated and producing a depth of quality that will last and be a true classic. Millennials want heritage and respect history, seeing them as a validation of investment value.

“But they don’t have disposable income to buy luxury,” I hear you say. But a new breed of “HENRYs” (High-Earners-Not-Rich-Yet) is emerging across 3 continents – America, Asia, and Europe. As millennials, still living with their parents and/or in multiple occupancy spaces, they have more disposable income than ever before.

As they are just starting out they want to make sure they’re buying appropriately, hence why they are choosing luxury. Being increasingly introspective, millennials want to associate the positive ethos of a luxury brand with the intrinsic value of what that luxury represents, making them proud about what they are buying. They want brands that represent who they are, brands that represent their values.

By focusing on this emerging consumer, luxury brands could open up access to a much larger number of people who are not only eager to purchase their products, but engage more deeply and become brand ambassadors for their products – a win-win for all.


Diana Verde Nieto is Co-founder and CEO of Positive Luxury, the company behind the interactive Trust Mark.