Luxury Brands: The new haute bed of sustainable innovation?

16 Jun 2011 – Preetum Shenoy

Luxury brands have long suffered the wrath of environmentalists for their perceived role in fueling excessive, conspicuous consumption, promoting materialism, yielding unnecessary waste, and driving further inequity. However, it seems lately that luxury brands are keen to turn over a new leaf. Many are repositioning themselves to tout environmental and social responsibility, perhaps as a point of differentiation when competing for the ever-tightening share of consumers’ wallets in the economic downturn — as the Financial Times reported in its most recent The Business of Luxury report.

Despite being one of those aforementioned skeptical environmentalists, I find myself pleasantly surprised by some of these recent developments in the luxury space. In fact, I’ll dare to say that luxury brands are beginning to show considerable potential in promoting a new era of market innovation around sustainability, and in turn, greater adoption by a wide range of consumers, not just the affluent.

I see this potential particularly in the recent flurry of activity in the luxury automotive space. Just in the last few months alone, BMW, Porsche and Rolls Royce all announced ambitious sustainability commitments and prototypes that marry high performance and high design with low environmental impact.

Porsche’s concept, due out in the US in 2013, is the 918 Spyder Hybrid. It boasts a 500 hp V-8 engine that achieves a top speed of 199 mph (up to 94 on electric power alone!) and 0-60 mph in just 3.1 mph…all at a whopping 78 miles per gallon, and of course, in Porsche’s characteristically sleek, sultry packaging. It’s been designed to completely blow away previous notions that hybrid vehicles must be based on compromise. No longer are consumers forced to have to leave behind their aspirations for performance, utility and design, when paying a premium for higher fuel efficiency and lower emissions. But now you can have it all, and make a statement too – that you demand the best, and the best is now redefined as high luxury, high design, high performance, but low environmental impact.

Correction: it’s all yours if you can part with $845,000, and are one of the 918 lucky people around the world who can manage to get their hands on one of these limited edition vehicles. (Though relative to the new 6,000 lb. $3-million “land yacht” concept that is the Rolls-Royce 102EX Phantom Experimental Electric, the Porsche could be considered a bargain!)

And there’s the rub. The exclusivity of this branded sustainability experience adds fuel to the fire behind arguments that:

1. Most sustainability innovations are great in concept, but are typically luxuries reserved exclusively for the affluent. And,
2. Luxury brands just fuel excessive, conspicuous consumption.

On the first point, it’s commonly held that for a movement or concept to be truly sustainable and impactful, it must be scaled and made accessible to benefit the masses. This notion is most commonly aired out as part of the ongoing debate around the sustainable food movement, with the biggest critics of the organic movement clamoring that it’s simply too elitist and impractical for most of the world’s population to afford to go organic – in other words, really only the wealthy can afford to “eat well” under the tenets of the organic movement. To that, renowned author and sustainable food expert Michael Pollan pointed out in a recent interview that the concept should not be faulted for having elite roots, but it should be if it hasn’t, over time, served to inspire the spread of innovation and its benefits more widely:

A great many social movements in this country have begun with elites, with people who have the time and the resources to devote to them. You go back to abolition, women’s suffrage, the environmental movement. That’s not unusual. And to damn a political and social movement because the people who started it are well-to-do seems to me not all that damning. If the food movement is still dominated by the elite in 20 years, I think that will be damning. It would need to be more democratized.

And this is precisely where I think that luxury brands could possibly – albeit somewhat ironically – be a beacon of hope, helping to democratize access to better design, better quality, and a better experience around sustainability over time, and in a way that other efforts have failed to do. The truth is, luxury brands are almost unrivaled in their ability to captivate and seduce the broader marketplace through making an idea or experience seem irresistible. And as such, they command a high degree of influence over the rest of their industry, even down-market. We see this play out year in, year out in the fashion industry, as elements of haute couture on the runways in Paris and Milan serve to inspire designers at H&M and Target to adopt and reengineer key elements into ready-to-wear discount apparel, making the latest fashions accessible to all.

Just as Chanel may be able to help inspire that season’s “must-have” look, I’m optimistic that luxury brands are well poised to help re-define sustainability as the new, must-have classic, and one that will endure. So, what if we were to take a longer-term view at the recent commitments announced by BMW, Porsche, or Rolls-Royce? Beyond just bringing greener transportation options to the wealthy in the short-term, my hope is that they will help catalyze a broad shift in mindsets and redefinition of market expectations and aspirations for the sustainable mobility experience. In time, these shifts in perceptions will shape market demand and baseline expectations for what a sustainable mobility solution can offer. Companies, always eager to please, will oblige in innovating new ways to fulfill consumer demand for high design and performance at lower cost and be “on-trend” as a means for remaining competitive.

As for concerns around fueling conspicuous consumption, that is where I hope other industry players – automotive or otherwise – will adopt and scale more holistic, systems approaches. BMW’s new foray into urban mobility solutions – so-called “vehicle-independent” offerings such as smart technology and transport-sharing services – may be an early step in this direction. Such ideas are compelling because they promise to meet consumer needs without necessarily requiring the consumption of more material goods.

Similarly intriguing is the set of recent, bold announcements made by the luxury group PPR, parent company of such iconic fashion brands as PUMA, Gucci, Yves Saint Laurent, and Balenciaga. Early press points to these initiatives, housed under the name PPR Home, to be the group’s “contribution to a better world, by developing innovative and sustainable initiatives for our different economic models that rely on our creativity and our imagination in order to influence our lifestyles and inspire others to follow us in the long term.” In an industry that is constantly pushing the boundaries of design, is it possible that its members will also push the boundaries of sustainability performance? Let’s hope so.