Keywords

1 Introduction

Coco Chanel once defined luxury as “(…) a necessity that begins when necessity ends” [Coco Chanel quoted in Okonkwo (2007)]. In this same line Heine (2011) defines luxury as something desirable and more than a necessity. However luxury has been a sign of prosperity, power and social status since ancient times (Kapferer and Basten 2010). Also, according to Ricca and Robins (2012) luxury is a source of inspiration, controversy, admiration and considerable economic success. Sustainable luxury is the return to the ancestral essence of luxury, to the thoughtful purchase, to the artisan manufacture, to the beauty of materials in its broadest sense, and to the respect for social and environmental issues (Girón 2009). The foundations of sustainable luxury are social entrepreneurship and craftsmanship. Social entrepreneurs are well motivated to break the rules and promote disruptive solutions to the environmental and social issues. They are leaders who transform, inspire, and care deeply about people and the environment (Short et al. 2009). They reappraise native culture and craftsmanship.

This paper shows the analysis and results of an exploratory study into the high-end luxury fashion market drawn from surveys conducted to fifteen entrepreneurs of different nationalities with sustainable premium and luxury projects. These entrepreneurs have participated in the above mentioned award and have been nominated or even awardees. These findings have been combined with those extracted from in-depth analysis of several case studies of entrepreneurship in the sustainable luxury sector, which have been published in Gardetti and Giron’s (2014) book. The purpose of this study is not only to get to know what entrepreneurs understand by sustainable luxury and, particularly sustainable luxury fashion, but also to learn from their vision about the future of this sector.

We begin this paper with an overview of the concept of luxury, fashion, sustainable development. Then we describe the relationship between sustainable luxury and entrepreneurship. We then describe our methodology and analyse the main findings emerging from our study.

2 Luxury, Fashion, and Sustainable Development

Luxury depends on cultural, economic or regional contexts. This transforms luxury into an ambiguous concept (Low, undated) and shows for some researchers such as, Scheibel (unknown year), the absurd aspect of this industry. Thus, luxury is a matter of seeing and being seen. ‘Seeing’ as a search of the latest distinctive signifiers that can be used to ‘be seen’ in different distinctive group processes (Mortelmans 2005). Christopher L. Berry in his work “The idea of Luxury” from 1994—one of the most interesting and comprehensive pieces on the concept of luxury particularly its intellectual history—establishes that luxury has changed throughout time and that it reflects social norms and aspirations.

True elements of (authentic) luxury rely on the search for beauty, refinement, innovation, purity, the well-made, what remains, the essence of things, the ultimate best (Girón 2012). However this luxury has given way to the new luxury through its democratisation (massification?) that occurred when family and artisanal luxury companies sagged against the large conglomerates which had a strong focus on economic aspects. It means that the image—neither reputation nor legitimacy—was the way, and marketing was the function (Gardetti and Torres 2014).

Already in 1999 Robert H. Frank stated in his book ‘Luxury Fever—Weighing the Cost of Excess’ the need to minimise the culture of “excess” to restore the true values of life. And this is in line with the World Commission on Environment and Development (WCED 1987) report, Our Common Future, also known as the Brundtland Report, which defines sustainable development as the development model that allows us to meet present needs, without compromising the ability of future generations to meet their own needs. Luxury—according to Kleanthous (2011)—is becoming less exclusive and less wasteful and more about helping people to express their deepest values.

In the introduction of the book titled “Sustainable Luxury: Managing Social and Environmental Performance in Iconic Brands,” Gardetti and Torres (2014) describe the evolution of the sustainability-luxury relationship between 2003 and 2011—a relationship that they first noticed in the book “Deluxe—How Luxury Lost its Luster,” by Thomas (2007). Some of the aspects of this evolution are as follows:

The two most important conferences of this sector held in 2009 addressed these issues and focused their discussions on the assessment of these changes in the consumer and the new concept of success for achieving a “sustainable” luxury. One of them, organised by the International Herald Tribune in New Delhi (India) was called ‘Sustainable Luxury Conference’. The other, promoted by Financial Times in Monaco with the attendance of Prince Albert was titled “Business and Luxury Summit - Beyond Green: economics, ethics and enticement”.

The book “Inside Luxury” written by Girón (2009) that presents a documented study of luxury and its future and how “sustainability” has influence on it.

The conduction by UNCTAD -United Nations Conference on Trade and Development- together with Green2Greener of the Conference ‘Redefining Sustainability in the International Agenda - Inspiring Greater Engagement in Biodiversity Issues’ with the participation of several luxury brands and the subsequent creation of the RESP (Responsible Ecosystem Source Platform) initiative.

The creation -in early 2010- of the “Centre for Studies on Sustainable Luxury” which mission is to assist companies in this sector in the transition towards sustainability, thus encouraging sustainable business practices across all areas of the organisation and their supply chain. To this end, academic learning and research will become vital and current for future ‘sustainable’ leaders.

Sustainable luxury would not only be the vehicle for more respect for the environment and social development, but it will also be synonym of culture, art and innovation of different nationalities, maintaining the legacy of local craftsmanship (Gardetti 2011). The foundations of Sustainable Luxury are social entrepreneurship and craftsmanship.

According to Giacosa (2014) in order to set the context of luxury fashion and, then, sustainable luxury fashion, we need to differentiate the terms fashion and luxury. While the term fashion refers to products, such as clothing and accessories, according to Fletcher (2008, 2014) fashion is the way in which our clothes reflect and communicate our individual vision within society, linking us to time and space. Clothing is the material thing that gives fashion a contextual vision in society (Cataldi et al. 2010). Luxury represents items perceived as a symbol of status. Luxury is also a symbol of elegance and sophistication with emphasis on the intrinsic value of many categories.

Godart and Seong (2014) show us that the relationship between luxury and fashion is quite an ambiguous one, as fashion does not fully belong to the luxury world, but overlaps with luxury in its most expensive and exclusive segments. These authors also show us that the relationship between luxury and fashion is quite an ambiguous one, because fashion does not fully belong to the luxury world as it once did up until the turn of the 19th Century, but overlaps with luxury in its most expensive and exclusive segments. Luxury fashion is a recurrent change at its highest level, and it is distinguished from other luxury segments by its constant pressure to change. In other words, we can say that when we talk about fashion we are referring to clothes and accessories, while the term luxury means status, elegance and sophistication given by a brand, quality, price, originality and creative content.

According to Kapferer (2012) both luxury and fashion share the common need for social differentiation, but they differ in two major aspects: first, whereas luxury is timeless, fashion is ephemeral, and whereas luxury is for self-reward, fashion is not. Thus, luxury fashion seems to be a contradiction in terms: as luxury, it is supposed to last, although as fashion it is supposed to change frequently. However, since the essence of fashion is change, luxury fashion gives exclusive access to enforced change. Luxury fashion is recurrent change at its highest level, and it is distinguished from other luxury segments by its constant pressure for change. This is shared by Pinkhasov and Nair (2014) who add that in a celebrity-driven culture, fashion has come to dominate the image and attitude of luxury.

The term “sustainable development” dates back to the United Nations Conference on the Human Environment in 1972 where it was first coined. Sustainable development is a problematic expression on which meaning few people agree. Each person can take the term and “reinvent” it considering his/her own needs. This is a concept that continuously leads us to change objectives and priorities since it is an open process and as such, it cannot be reached definitely. However, one of the most widely accepted definitions of sustainable development—though diffuse and non-operating—is the one proposed by the World Commission on Environment and Development (WCED) report—Our Common Future, which defines sustainable development as “the development model that allows us to meet the present needs, without compromising the ability of future generations to meet their own needs” (WCED 1987: 43). At its core is the notion that all natural systems have limits and that human well-being requires living within those limits. The essential objective of this development model is to raise the quality of life by long-term maximisation of the productive potential of ecosystems with the appropriate and relevant technologies (Gardetti 2005).

Some authors, such as Walker (2006) and Koefoed and Skov (unknown year), have studied the contradictions between fashion and sustainability: sustainability requires a drastic reduction in our ecological footprint, and increasing a product’s useful life; fashion, on the other hand suggest a passing trend or fad—something transient, superficial and often rather wasteful. But, beyond these contradictions, fashion should not necessarily come into conflict with sustainable principles. Indeed, fashion plays a role in the promotion and achievement of sustainability, and it may even be a key to more sustainable ways of living. According to Hethorn and Ulasewicz (2008) fashion is a process, which is expressed and worn by people, and as a material object, it has a direct link to the environment. It is embedded in everyday life. So, sustainability within fashion means that the development and use of something or process are not harmful to people or the planet, and once put into action, such thing or process can enhance the well-being of those people who interact with it, and the environment it is developed and used within. Also Sustainable fashion is an approach to the fashion system intended to minimise negative environmental impacts, and, in turn, maximise positive impacts (benefits) for workers and their families all along the value chain, hence playing a decisive role in poverty reduction. For this reason, Kate Fletcher (2012) in the preface of the book “Sustainability in Fashion and Textiles: Values, Design, Production and Consumption” wrote, “For me the fostering of alternatives to the status quo in fashion and textiles is essential if we are to deeply engage with the process of sustainability…” So, our challenge is to adjust sustainability paradigms and develop new ones that would fit the nature of the luxury fashion industry, one of the sectors called “core luxury sectors” within the luxury framework.

According to Godart and Seong (2014) luxury can offer a unique opportunity for creating sustainable business environments due to its two core features that set it apart from other market segments or industries. First, luxury is (often times) based on unique skills. This allows luxury to provide high-quality and rewarding business conditions. And, second, luxury is characterised by its peculiar relation with time, for its value is inscribed in the long-term. This allows luxury to offer a sustainable business model for resource management and high-quality product development, just to name a few relevant elements of sustainable luxury.

3 Sustainable Luxury, Entrepreneurship

The development of the luxury industry has gone in parallel to extensive economic growth and increases in the quality of life over the last century. Despite these benefits, there remains significant concerns that this growth has also had substantial negative effects on the natural environment and on some of the most vulnerable populations around the world. It is believed that this, in turn, will diminish the vitality and sustainability of our economies and communities (Schmidheiny 1992; United Nations 1987; World Resources Institute 2004).

Most studies based on traditional views on environmental and welfare economics tend indeed to consider business activities and the preservation of the environment or social welfare are inherently contradictory. Some indeed consider that market failures generally motivate environmentally degrading entrepreneurial activities (Tietenberg 2000; Cropper and Oates 1992; Balor 1958). However, more recently experts have stated to argue that entrepreneurship can in fact help resolve environmental problems through the exploitation of opportunities inherent in environmentally relevant market failures and thereby help move global economic systems toward sustainability (Anderson and Leal 1997; Cohen and Winn 2007; Dean and McMullen 2007).

There are indeed entrepreneurs with a profound perspective towards environmental and social issues and who are well motivated to “break” the rules and promote disruptive solutions to these issues. They are less constrained by existing realities than larger organisations, have less vested interest in the status quo, and have less to lose and more to gain from innovation (O’Malley 2011), including the type of innovation that addresses social or environmental issues (Cohen and Winn 2007; Senge and Carstedt 2001). They are transformational leaders that inspire, provide intellectual stimulus, and care deeply about people and the environment. And leadership and inspiration are crucial to move towards sustainability in the luxury sector (Gardetti and Girón 2014). Personal values are very important: idealistic values regarding environmental and social goals can be translated into valuable economic assets (Dixon and Clifford 2007). These entrepreneurs inspire and guide the fundamental transformation that sustainability requires (Egri and Herman 2000). Some of them were equally able to impact the decision-making of the giants. For example, Tesla Motors, a Silicon Valley car manufacturer founded during the last decade, was able to prove that eco-friendly electric cars can be appealing and efficient.Footnote 1 Their success is credited for pushing BMW to develop a green offering, despite it being centred on performance and polluting cars.Footnote 2

And, in practice, the characteristics prevailed in the process of the first four editions of the IE Award for Sustainability in the Premium and Luxury Sectors at a global level.Footnote 3

Yet, despite the increasing interest for sustainable entrepreneurship, and in particular in the sector of luxury, there remains considerable uncertainty regarding the nature of entrepreneur’s role in the area of sustainability and how it may unfold (Hall et al. 2010). In particular, we still have little understanding of how entrepreneurs in the luxury industry discover and develop those opportunities that lie beyond the pull of existing markets and why they decide to embark in such an unusual and uncertain journey. The aim of our study is to be a first step towards answering these questions.

4 Objectives and Work Methodology

The purpose of this study is not only to get to know what entrepreneurs understand by sustainable luxury and, particularly sustainable luxury fashion, but also to learn their vision about the future of this sector.

To develop this paper, the authors conducted an open question survey to fifteen entrepreneurs of different nationalities with sustainable fashion projects in the premium and luxury sectors. See the questions in Appendix. All these entrepreneurs participated in the IE Award for Sustainability in the Premium and Luxury Sectors. Some of them won in the category “fashion and accessories” and others reached the final stages of the award. In addition to the results stemming from the survey, we have also relied on insights emerging from in-depth analyses of several case studies of entrepreneurship in the sustainable luxury sector, which have been published in Gardetti and Giron’s (2014) book. The book recognises the exemplary work done by several organizations like the London based Elvis and Kresse that reuses firefighters’ hoses to create handbags and belts; Aïny Savoirs des Peuples of France that focuses on selling organic cosmetics and contribute in the development of indigenous communities in South America or We Are Knitters of Spain that surfed on the knitting and do it yourself trends to sell natural Peruvian wool.

5 Findings

One of the main findings derived from the surveys as well as the in-depth interviews realized with the sustainable entrepreneurs subject of our study, is that they both have common features and stark differences. In what follows we will details the communalities and differences that span across a wide range of interviewees.

5.1 Two Different Understandings of “Sustainable Luxury Fashion”

As can be seen from the appendix, our survey includes four sets of questions. The first question inquires about the entrepreneur’s personal understanding of the concept of sustainable luxury fashion. The third one focuses instead on explaining they key factors that make the studied enterprises sustainable. Given that all the entrepreneurs’ interviewed belonged to the Sustainable Luxury Fashion industry, our initial assumption was that entrepreneurs would give similar answers to questions 1 and 3, or that we would find at least some of the components of question 1 reflected in their answer to question 3. Our findings revealed instead that this was not always the case. Specifically responses revealed the existence of two categories of sustainable luxury entrepreneurs (see Fig. 1):

Fig. 1
figure 1

Two types of sustainable luxury entrepreneurs. Source Made by authors

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  • The first category of entrepreneurs, which we have called “Integrators”, share a holistic view on sustainable luxury. Indeed, eight of our respondents directly associated ‘sustainable luxury’ as both outstanding products and sustainable practices at the same time. In that sense, their answer to question 3 (keys to sustainability) was similar or englobed part of their answer to question 1 (understanding of sustainable luxury fashion).

  • Contrary to our expectations, however, there exists a second category of entrepreneurs whom we have labeled as “Decouplers” because, unlike the previous set of entrepreneurs, they decouple the concepts of Sustainability and luxury and seem to regard “sustainable luxury” as two components: luxury on one hand, sustainability on the other. Indeed, 6 entrepreneurs out of the 14 gave different answers between question 1 and 3. Their answers answer to question 1 seemed to regard the product itself, and words like “Quality”, “Durability”, “Materials” and “Design” were frequently used. However, the entrepreneurs did not mention the sustainable aspect/production of the product. Their answer to question 3, on the other hand, introduced the sustainable aspect of the products. For example, entrepreneurs referred to aspects such as using “upcycled materials” or “a sustainable approach in each of the life cycle phases of our products” and “giving authorship and pride back to the artisan”.

Thus, it is only when specifically asked about sustainability that those entrepreneurs include it in their answer. The sustainable aspect of a luxury brand, according to those entrepreneurs, usually comes from traceability, sustainable materials and respect of the artisans. Therefore, it seems like luxury is often assigned to the object/product itself while sustainability is assigned to the process. This observation comes in contradiction with the answers given by the second set of entrepreneurs who have sustainability aspects as a prominent aspect of their notion of sustainable luxury, as exemplified by the following responses to answer 1: “… incorporates sustainable strategy across environmental, social and economic aspects” and “will contribute to, rather than detract from, the lives of all current and future potential stakeholders and citizens.”

In many ways we can say that the Decouplers share the same approach to sustainable luxury as traditional luxury brands which have recently adopted strategies that might help improve the sustainability of their business, while preserving their financial interests. Memorable examples are those of Loro Piana and Ermenegildo Zegna, two Italian high-end brands that developed a local culture of vicuñas in the Peruvian Andes, respecting the environment, empowering local societies and benefitting to their business. Even famous French brand Saint Laurent Paris has created capsule collection made out of vintage fabrics.Footnote 4 This increased attention underlines a higher awareness where the future of the planet is valued much more than a simple Corporate Social Responsibility program. The Integrators instead, stand out from traditional luxury brands in the sense that they have created their businesses in the first place in order to give a new more authentic meaning to luxury.

5.2 Personal Motivation and the Identification of a Need Versus Its Creation

A clear pattern in motivations emerges with most of the entrepreneurs falling into two categories. Most of the Decouplers have started their social business after having identified a need in the market, which was the core motive for the creation of the venture. On the other hands, many of the Integrators first founded their business idea/product out of passion and then created the need for their products in the markets in which they were involved. For the latter, the motive that pushed them to create their social business was the will to do something good for society of the passion for a material. Market opportunity was not what triggered their businesses. However, it may be interesting to note that the company We Are Knitters followed both behaviors described: They first felt passionate about the product and then succeeded in identifying in the market prior to launching their venture. In any case, available information does not allow us to assess whether one pattern is more successful than the other.

5.3 Different Generations and Views of the Future

While the entrepreneurs interviewed varied in their personal background and profile, a closer look at the age distribution across the two categories identified above reveal some interesting insights that might deserve a deeper inquiry in future studies. Indeed, the average age of the entrepreneurs, as a whole, is 35.31 years old. However, on average, the set 1 of entrepreneurs is higher than set 2: the first is 38 years old while the latter is 32, which suggests that some age factor could be at play in the differing approaches taken by entrepreneurs with respect to sustainable luxury.

In addition, another trend appears in relation to the views our entrepreneurs hold about the future. To the question whether they think that think brands will continue integrating sustainability to their business, or whether, in contract, the number of those doing it will decline, Decouplers are of the view that the integration of sustainability will happen, but remain sceptic that its success will depend on external forces such as market, entrepreneurial commitment or consumer knowledge. Integrators, on the other hand, are quite affirmative about the successful integration of sustainability and used phrases such as ‘for sure’, ‘will increase’, ‘will become a norm’. Underlying this more optimistic view of the future of sustainable luxury seem to be a belief that there exists a broader and growing consensus among all stakeholders of the organization (industry members but also consumers regulators and the general public) about the importance of having sustainability as a key aspect of the very definition of luxury.

5.4 Additional Insights

Beyond the insights derived from the survey, interviews and desk research on the sustainable luxury entrepreneurs featured in Gardetti and Giron’s (2014) book reveal some interesting patterns described below.

An entrepreneurial mindset: just like conventional entrepreneurs, the ones examined in this study exhibit “typical” entrepreneurial attitudes and mindsets. For example, either from the creation of the business or throughout the venture’s journey, the entrepreneurs in this book have paired-up or have heavily relied on their team. The second pattern identified regards their attitudes toward failure. Many of them have experienced previous setbacks but see failure as a powerful learning tool and insist on the importance of overcoming the difficulty and growing from it. Last patterns regards the feeling of never being satisfied that some of the entrepreneurs share. They always want to keep on improving every aspect of the business, especially with respect to the sustainability aspect of their business.

Environmental and Social Impact: Most of the social ventures presented analyzed in this study have a social impact on a developing community or supports causes from which their product is derived. However, the impact those businesses have on their community is very wide. Among the social businesses, the entrepreneurs could either focus on environment, society or environment and society. Yet even for the ventures started out of the passion for nature such as Elvis and KresseFootnote 5 or Estancia Peuma Hue,Footnote 6 the business has a positive impact on the society. Thus, no ventures presented in this book are engage only in sustainable environment and many are active both for the society and nature, and some of them, such as AÏny savoir des peuplesFootnote 7 have focused their effort on promoting native communities in developing countries.

Supply Chain: As explained earlier, sustainable luxury often involves a complete reevaluation of the supply chain and production processes. However, our research indicates that this is easier said than done as working out successfully through the production chain was a challenge for many of the entrepreneurs examined. Specifically, half of these entrepreneurs faced a same difficulty: finding a producer that accepts to work with their unusual material or production pattern. This difficulty illustrates probably the fact that we are dealing with visionaries who are in many way ahead of their time. In that sense, they often need to create a completely new commercial/entrepreneurial set up to design, manufacture and distribute their products or services.

6 Discussion and Conclusions

The field of luxury is witnessing today a strong shift that realigns its priorities and resets its values, morals and finalities. This change, largely due to a strong shift in consumers’ perceptions and expectations has forced several luxury powerhouses to question their methods and practices and rethink the image and lifestyle they are promoting. The materialistic approach, largely promoted during the last decades has been ousted by more experience oriented conscious and responsible patterns that value authenticity and respect for communities and human nature.

Formerly greatly disconnected from the increasing awareness about salient social issues, luxury had to get out of its artificial bubble and to address growing customer requirements in terms of sustainability, an issue attracting continuously attention in the last years and affecting business practices in the world. If the luxury sector has been only a little affected by the change until recently, it is now forced to completely rethink its methods, valuing sustainability and its three pillars: people, planet, and prosperity.

But most importantly, the new mindset lead to the creation of a multitude of start-ups in different countries that are eager to give a new more authentic meaning to luxury. These innovative businesses follow an approach that diverges significantly from the more static and conservative well-established powerhouses and promote new diverse ideas in various fields. They are extremely entrepreneurial and profoundly reactive, thus profiting of the larger firms’ inability cope rapidly with change.

Our exploratory survey of 15 sustainable luxury entrepreneurs operating in the fashion industry reveals two differentiated patterns. Older sceptic entrepreneurs often assign luxury to the object/product itself while sustainability is assigned to the process. On the other hand, the younger affirmative group of entrepreneurs sees ‘sustainable luxury’ as a combination of an outstanding product and a sustainable process together.