Some luxury brands have previously treated sustainability and social responsibility as “nice additions” to their products. However, Generation X and millennials expect a bigger focus on social responsibility from brands compared to earlier generations. Crain’s Chicago Business found that 75 percent of consumers have a more favorable view of businesses whose social values align with theirs, and 33 percent of the current generation will boycott companies that go against their chosen causes. As such, luxury brands can no longer treat corporate responsibility as an afterthought if they want to remain competitive. Social norms encourage brands to stay environmentally conscious, and many celebrities, like Leonardo DiCaprio, are pushing for more sustainable practices.
The clean label movement is one way brands are adapting to the Millennial and Gen X expectations. This movement, popular within the food industry, focuses on ingredients that are natural, sustainable and understandable. While this trend started with food, it is also increasing transparency and shaping product sourcing in other industries. Customers want to know the social causes they’re directly or indirectly supporting with the purchase of products. Consumers have many brand choices, so they can vote with their dollars if they don’t like the way a brand’s social responsibility measures appear. A lack of focus surrounding any social causes, such as environmental friendliness, can reduce a brand’s standing among millennials and Gen X.
Climate change also has an impact on sustainability efforts for luxury brands. As weather patterns shift and temperatures rise, biophysical limits are introduced. Some areas are unable to keep up with previous crop production while places like California must deal with massive drought. Sustainable production helps brands adapt to these environmental changes from a logistical standpoint while also improving their reputation as a socially conscious company.