2022 finds the luxury industry on the verge of transformative change. From the metaverse to sweeping legislation, the next 12 months will act as the blueprint for the ‘climate decade’. We unpacked this in in our first webinar of the year, hosted by Positive Luxury co-CEO Diana Verde Nieto, and featuring creative scientist Katherine Templar Lewis, Chêne Bleu’s Nicole Rolet and Partner at Baker & McKenzie Reagan Demas.
The webinar can be watched in full below, and we have broken down the main points of interest in an executive summary. Positive Luxury’s 2022 Predictions Report can be downloaded here
LEGISLATION: ‘A GAME CHANGER’
We were surprised there were not more developments in the legislative space in 2021 under the Biden administration. However, Regan Demas recommends that we look to the SEC for incoming change: ‘it has been threatening for nearly a year to use its powers to force disclosure of metrics on sustainability and social matters – to require companies to disclose these things in public findings… now it’s set to come through this year.’
This lack of action does not reflect a lack of commitment. Instead, luxury brands should see this as US legislators going through the same process that businesses themselves are going through. What information should or can be quantified relating to climate risk? Should there be different requirements depending on the industry or company or place of operation? How should these be enforced and assessed? We are expecting the answers to come any time and when they do, they will transform sustainability on a global scale. According to Demas ‘the changes will flow down from all of these US-based companies to their subsidiaries and their suppliers’.
The SEC is not the only force driving change in the US. Executive Orders from the Biden administration are offering a ‘carrot and stick’ approach to sustainability. By encouraging companies to act more sustainably in regards to the supply chain and climate, and punishing them for failing to do so, it is making a concerted effort to reshape the US economy.
Outside of the US, in the EU Demas pointed to incoming due diligence legislation as something that will drive change in 2021. These directives are expected to encourage similar attitudes to due diligence as the OECD and – although we don’t know exactly what will be in them – Demas expects them to be a ‘game changer’.
For more on legislation, read our full interview with Regan Dumas in our 2022 Predictions Report.
THE METAVERSE: ‘A WORLD WHERE YOU CAN CREATE INFINITE POSSIBILITIES’
The webinar’s conversation on the metaverse started with an explanation of exactly what it is in layman’s terms. Katherine Templar Lewis lays it out as ‘a persistent digital space, a 3-D internet’ that currently ‘exists in pockets in the gaming world’. Over the past few years, it has evolved from existing exclusively in games like Roblox and Fortnite to being a place where people can just hang out – and beyond that it has now become a digital space where people can meet, train, and co-create.
But why is this important for luxury brands? According to Templar Lewis, there are ‘infinite possibilities’ in the metaverse for businesses. It is an entirely new way to interact with the customer and build your customer base without increasing products and consumption – essential for businesses looking to simultaneously expand and meet their climate goals.
Some brands have already seen the potential: Balenciaga even have a metaverse strategy department, and we expect more brands to do the same this year. In many ways this reminded the webinar panel of 1999, when brands were still saying ‘we don’t need a website’. If brands do not want to be left behind, they will need to develop a metaverse strategy: it is going to be the new normal sooner than you think.
VITICULTURE: ‘A CANARY IN THE COALMINE FOR AGRICULTURE’
Chêne Bleu’s Nicole Rolet outlined some of the changes that she was expecting to see this year and beyond in agriculture. According to her, many people in the fine wine world are craving a roadmap for navigating the minefield of sustainability, searching for the right certifications and practices that will build trust with consumers. As one of the very few forms of agriculture that has a B2C presence – except perhaps coffee and chocolate – viticulture is being forced to light the way for other producers.
As a forerunner for change, we can look to winemakers to see how agriculture is going to evolve over the coming years. Winemakers have to be sensitive to every nuance of change as it has a multiplier effect on their final product. Their attentiveness to the fragility of the whole climate system means that they are far ahead of other producers on key ideas like biodiversity and long-term R&D, so we expect to see many of their ideas emulated on a larger scale.
This is cause for hope because, although agriculture represents only around 17% of the planet’s carbon footprint, it has a unique responsibility as the only way to take carbon out of the atmosphere. As agriculture can reverse the damage that has been done, we expect to see more producers take note of the ideas being trialled in viticulture.
The Positive Luxury 2022 Predictions Report is our most ambitious yet. It analyses 5 key topics – generational divides, transparency, global legislation, resiliency and adaptation, and inspiring new business models – equipping you and your organisation for the coming decade of change. You can receive your complementary copy here.