Debate has raged over the ability of luxury fashion to contribute to sustainable development and of the industry’s potential to be a trailblazer in setting an example of how business can contribute to wider ethical, social and environmental good. The recession has brought this debate into even sharper focus.

A report by WWF entitled Deeper Luxury argues that: “Luxury companies must do more to justify their value in an increasingly resource-constrained and unequal world. Despite strong commercial drivers for greater sustainability, luxury brands have been slow to recognise their responsibilities and opportunities. We call upon the luxury industry to bring to life a new definition of luxury, with deeper values expressed through social and environmental excellence.” It rates ten luxury brands on their environmental and social performance and none score highly.

Others argue that despite their reputation for being less than ethical that ‘change is in the air’ for luxury brands. The guardian argues that “Major players [in the luxury fashion industry]….appeared to be tripping over themselves to reduce energy consumption, announce water projects or phase out excess waste (in an industry where faulty or end-of-line products are incinerated to “protect” the brand) at a recent sustainable-luxury conference in Delhi. Meanwhile LVMH, returned to the FTSE4Good Index Series, has just become a shareholder in Edun, the socially conscious clothing company set up by Ali Hewson and her husband Bono.”

Luxury fashion has not been necessarily immune from the financial crisis, but it has certainly been faring better than its less luxurious counterparts. Some luxury brands have bucked all recession trends with Hermes and Mulberry reporting strong profits for the first quarter of 2009, particularly with the sale of accessories, such as handbags, which satisfy consumers’ shopping itch and are longer-lasting and more versatile than a season-only dress. Hermes and Mulberry have effectively targeted consumers move away from conspicuous consumption: ‘Mulberry with its authentic and understated designs is striking a chord, not just in the UK, but also worldwide, because over-the-top extravagant consumption just isn’t in favour right now.”

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Does luxury fashion therefore have an even more important role to play in upholding high social and environmental standards in the context of a struggling global economy where other sectors struggle to survive and perceive their immediate priority to be their bottom line, let alone a second or third bottom line?

Sustainable slump argues that the recession is an ideal opportunity for luxury brands to forge a new image for themselves based on real, reportable and transparent efforts towards environmental and social sustainability. This will provide an important source of competitive advantage and consolidate market share, even whilst the recession rages, adding value for consumers – not just through the quality and presitge of their brand, but through their potential for superior environmental and social perfomance – and setting a precedent for how businesses can work with producers (and all the players in the value chain) and the environment to deliver long-lasting, meaningful change at scale.

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