Why Kering, HPE, Unilever Link Business Strategies to Sustainable Development Goals

Luxury goods company Kering has committed to several new environmental management goals across its 16 brands include Gucci, Stella McCartney and Puma.

The company says this “next phase of its sustainability strategy” will be guided by the UN Sustainable Development Goals  — a trend that is gaining traction as corporations are finding environmental and financial benefits from incorporating the SDGs into business strategies. Sustainable business models could open economic opportunities worth up to $12 trillion by 2030, according to the Business & Sustainable Development Commission.

Kering’s new environmental management commitments include:

• Using a science-based approach to reduce carbon emissions from Kering’s business activities by 50 percent in scope 1, 2 and 3 of the GHG protocol by 2025. The company’s scope 3 emissions include those from upstream transportation and distribution, business air travel and fuel and energy use.
• Addressing all supply chain environmental impacts with a goal to reduce Kering’s Environmental Profit and Loss account by at least 40 percent, including the “all remaining carbon emissions” — the company says these are scope 3 emissions from purchased goods and services as well as raw materials at Tier 4 — as well as water use, water and air pollution, waste production and land use changes.
• Developing a Supplier Index of Sustainability and ensuring Kering’s standards for raw materials and processes are implemented by 100 percent of its suppliers by 2025. These standards also address traceability, animal welfare, chemical use and social welfare.
• Promoting sustainable design and minimizing the environmental impact of a product at every stage, from sourcing and manufacturing to transportation and consumer use, and creating an open-sourced tool to assess products based on Kering’s standards.
• Establishing a materials innovation lab (MIL) focused on watches and jewellery that provides access to sustainable material alternatives, similar to Kering’s MIL for fabrics and textiles.
• Expanding its offsetting commitment to include a new “insetting” approach to ensure that actions across the supply chain deliver climate benefits as well as social value.

Kering says its environmental impacts are already less than 45 percent of the global average, based on businesses with comparative annual turnover. This is according to the company’s most recent environmental profit and loss report, which measures the environmental footprint of Kering’s direct operations as well as across its supply chains, and placed a monetary value on these environmental impacts.

The company also pledged to develop an industry-leading performance metric system that will measure achievement of the UN Sustainable Development Goals.

“More than ever, I am convinced that sustainability can redefine business value and drive future growth,” said François-Henri Pinault, chairman and CEO of Kering, in a statement. “As business leaders, we all have a crucial role to play … our strategy outlines how we will redesign our business to continue to thrive and prosper sustainably into the future, while at the same time helping to transform the luxury sector and contributing to meet the significant social and environmental challenges of our generation.”

Kering’s commitment to link the SDGs to its business strategy follows a similar pledge by Hewlett Packard Enterprise — and several recent reports that find the SDGs open new avenues for business growth across multiple sectors including infrastructure, food and agriculture, and information and communication technologies, among others.

In an HPE blog post, Lara Birkes HPE’s chief sustainability officer and vice president, living progress, highlighted the company’s RE100 commitment to reach 100 percent renewable energy and its interim goal to source 50 percent of its total energy consumption from renewable sources by 2025. Both of these advance Goal 7: Affordable and Clean Energy.

HPE also takes a value-chain approach to mitigating its carbon footprint, Birkes writes.

We know that the use of our products represents the largest share (53%) of our greenhouse gas emissions. What’s more, the majority of that footprint—mostly related to carbon and water from energy consumption—gets transferred to our customers during the use phase of our products. We work in support of Industry, Innovation and Infrastructure (Goal 9) by delivering environmentally sustainable IT through transformative products such as ProLiant servers, which enable up to 20% energy savings. We are committed to increasing the energy performance of our product portfolio by 30x from a 2015 baseline by 2025.

Unilever is another company incorporating sustainability into its business plan, focusing on the SDGs.

“At a time when our economic model is pushing the limits of our planetary boundaries and condemning many to a future without hope, the Sustainable Development Goals offer us a way out,” said Unilever CEO Paul Polman in an earlier statement.  “Many are now realizing the enormous opportunities that exist for enlightened businesses willing to stand up and address these urgent challenges. But every day that passes is another lost opportunity for action. We must react quickly, decisively and collectively to ensure a fairer and more prosperous world for all.”