Haute-Couture CSR: The True Cost of Luxury is Not on the Price Tag

London Fashion week kicked off last Friday and the New York Fashion week is going on this week. Every designer that matters is showing off their fall/winter collection and every critic, celebrity and retailer is taking note of runway trends within this tiny microcosm. It might be tiny but this mostly ethically callous microcosm is a multi-billion dollar industry. Ethical Consumer, the UK's leading alternative consumer organization since 1989 recently released a report by Bryony Moore. The report entitled 'Style over Substance'  covers 15 designer fashion companies. Many of the high-street brands like H&M and Primark have CSR initiatives in place that ensure proper working conditions for their workers apart from supply chain accountability. However designer brands face little pressure to invest in CSR. The report calls "for the luxury sector to take responsibility and start reporting on its social and environmental impacts."   According to the report, the reason why luxury brands have gotten away with the lack of CSR initiatives is that they have "been riding high on a reputation established years ago around high quality, crafted items." However, a designer item is more likely to be made in China than hand-crafted in Italy. Campaigns usually target only middle-of-the-road brands which leaves luxury brands scot-free. In 2007, WWF reported that luxury goods companies do not engage in CSR and this report shows that nothing has changed.

The report observes that, "as a sector which reaps huge profits from the sky-high mark-up on its products, it has perhaps the most scope to ensure its business does the minimum harm. But we have found that in fact it is being far outperformed by companies who sell clothing at vastly lower mark-ups."

There are several issues that luxury brands need to be accountable for. One of the biggest issues is the use of fur - not only does the use of fur amount to animal cruelty, it is also very environmentally harmful. Apart from the use of fur, many brands still continue to test their fragrances on animals. These perfumes and cosmetics contain phthalates which are linked to endocrine-disruption as well as cancer and other health issues. Many luxury brands also offer jewelry and most of them do not know where their gold and gemstones come from. Another report called ‘Uplifting Earth’ found that only two out of the ten brands surveyed were active in addressing the impact of their business throughout their supply chain. All these issues stand apart from the environmental and social repercussions. Most worrying however, is that many brands indulge in tax avoidance by either having holding companies or subsidiary companies based in tax havens. This means that the company can avoid paying the higher rates of tax in the country of their operation, which has a negative effect on finances of those countries. Ever wonder how luxury brand executives can afford to pay themselves generous annual bonuses? This is how. Even those brands that claim to be eco-friendly and ethical have discrepancies. Stella McCartney is vociferously anti fur and leather but her brand is owned by Gucci which uses fur in its other brands. Personally Vivienne Westwood may be committed to fighting climate change but her company has no environmental policy in place to reduce the impact of its own operations. Couture does have a bigger price tag than main street brands but unfortunately, the people who are buying aren't bearing the true cost of luxury. Image Credit: top - Wikimedia Commons, Chanel Haute-Couture Fall/Winter 2011. Bottom - Ethical Consumer Report cover.