Luxury Fashion's Sustainable Revolution: Chanel Mission 1.5º
Chanel is a French fashion house that specialises in haute couture and ready-to-wear womenswear, as well as cosmetics, fragrances, and other luxury accessories. Renown worldwide, it consistently ranks as one of the world’s leading luxury brands, a pioneer of the field since its inception under the revolutionary Coco Chanel. However, Chanel has evolved far beyond just a brand, a logo, or a product; As eloquently summarised by sustainability-focused luxury magazine Luxiders “It’s an institution, a leader of the luxury world. When Chanel starts making changes towards sustainability, the rest of the market listens.” In its new plan – entitled Chanel Mission 1.5º – the brand aims to move to 100% renewable electricity for its operations by 2025, in accordance with the 2015 Paris Climate Agreement, which aims to reduce global temperature increase to 1.5ºC.
Chanel Carbon Report Breakdown (Via)
Chanel is no newcomer to making changes for the better; With strong integrity and transparency, it announced a ban on fur and other exotic skins in 2018. In 2019, it invested in Evolved by Nature, a green company providing silk-based alternatives to toxic chemicals used in manufacturing. Another effort includes working with sugar-beet farmers in France, where all alcohol in Chanel’s fragrance line is produced from these sugar beets.
Chanel’s former creative director Karl Lagerfeld re-constructed an iceberg for 2010’s climate change-inspired fashion show (Via)
Over the past two years, the French firm has adopted a number of ambitious carbon reduction goals, raising a $700million bond whose terms are linked with sustainability goals. Prada was the first luxury fashion house to sign a deal of the sorts, and “Chanel hopes to support the development of the sustainable financing market and the wider social and environmental progress that this type of financing can advance”, said the company's chief financial officer Philippe Blondiaux. Jean-Laurent Bonnafé, CEO at BNP Paribas, which advised Chanel on structuring the bond, said that “sustainability-linked Bonds can be game changers for accelerating climate action”. At the core of the brand’s values lies the creation “fashion with long-term value”, so it becomes easy to see how a step towards sustainability seems like the natural progression. As part of its mission, the French house has also told British Vogue it had pledged to “reduce emissions across Chanel operations by 50 per cent by 2030, and to reduce supply chain emissions by 40 per cent per unit sold, by the same year”.
Simplified, bonds are fixed income instruments that represent a loan made by an investor to a borrower. Owners of bonds are debtholders of the issuer. Green bonds, as is the case here, are designed to fund climate and social-friendly initiatives. “The value of sustainable bonds issued globally hit a record nearly $ 100 billion in the second quarter of 2020” (Instant).
What’s interesting is that Chanel is not alone in fuelling the luxury fashion sector’s sustainable revolution. VF Corp (which owns big name brands such as Vans, the North Face, Napapijri, and Timberland) and Burberry have each “taken on debt linked to environmental initiatives within the final 12 months. And simply this week, Adidas issued a €500 million (roughly $590 million) sustainability bond to fund environmental and social initiatives” (24x7 News). Chanel alone amassed $12 billion in gross sales in 2019, about 11% of the $106 billion luxury fashion market, just behind Louis Vuitton. Imagine what could happen if other top players joined the game against climate change.
In all, “the move is the latest sign that fashion firms are seeking to bolster their environmental credentials in an industry that has been frequently criticised for wasteful practices. A number of leading firms have recently pledged to switch to more sustainable fabrics and materials and to cut back the carbon impact of their energy use.” (BusinessGreen)
Find out more about Chanel Mission 1.5º in their Carbon Report here
