Luxury brands like to do things their own way. It’s only natural. They have a powerful voice, a clear identity and stand-out-from-the-crowd confidence.

They communicate clearly and directly with their audience. They tap into the current zeitgeist and can even help shape the future.

There is a real desire to push the envelope in everything they do, and that can be fantastic. But it can sometimes lead to misplaced confidence, or perhaps more accurately “premature confidence”, in their next move.

We all know that, across all luxury sectors, from haute couture and high jewellery, top end technology, to the latest SUVs, super-yachts and luxury travel experiences, without exception, luxury is taking a long hard look at itself in the mirror, and thinking hard about what it can do to be more ethical, socially responsible and sustainable.

Consumer expectation is that change can be drastic and almost instantaneous.

In reality, anything worth doing, and worth having, takes time.

It is a challenge to shout about the great progress a brand is making in terms of updating its products, its services, its supply chains, and its practices, when it will inevitably be taking steps on a journey, rather than jumping straight to its final destination. And who wants to jump straight to the end point of anything?? How dull!

Change is incremental, but consumers are impatient. They want to hear not just about what a company has changed, but what a company plans to change, and they want to know how quickly that change will come.

In turn, luxury brands understand and to a large extent share that frustration. They want to talk about the progress they’ve made in the most effusive terms, and they want to talk about what’s just around the corner. More changes. Broader improvements. Bigger strides forward towards those sustainability goals. 100% recycled and 100% recyclable materials. Luxury items that last a lifetime, several lifetimes. And not just carbon neutrality, but a net benefit to the environment and the economy! Expectations are high and increasing.

It is against that backdrop that luxury brands are naturally keen to make specific claims about their products – what proportion of the materials come from sustainable sources, are organic, are recycled, or are recyclable (unless owners/custodians of the products plan to keep them for generations, in which case they are built to last). And luxury brands are often in a much stronger position to do this than many other industries, especially compared with those other industries that ‘pile them high and sell them cheap’.

A word of caution though is that the UK’s Competition and Markets Authority (CMA) is keeping a close eye on any and all such environmental claims, with a particular focus on textiles and fashion, travel and transport, and FMCGs such as food and beverages and beauty products. In early 2022, the CMA will transition from what it considers to be an open, friendly and approachable regulator that is trying to educate and engage with brands, to a stern, powerful and impassive regulator with the power to bring prosecutions against companies that make misleading claims (including misleading exaggerations or omissions) about their green credentials. They will be looking to send a message to other businesses. In other words, they will be looking for scalps – and the more coiffured and recognisable the scalp, the better as far as they are concerned.

The trend I am seeing so far is that many companies are becoming concerned about this quite late in the process when there is limited time to roll out changes. But even for brands that find themselves in that situation, my advice is usually to make those necessary changes in the kinds of media where change is possible, first. For example, a company’s website, social media, its digital ads and digital brochures and apps. Change might not be desirable, but it might be necessary. When it comes to glossy printed brochures and catalogues, or labels on stock that might have been sitting in a warehouse or in another country for many months, out of reach, that can’t be amended until the 2022 Spring/Summer or even 2022 Autumn/Winter stock hits the shelves, the regulator will, by then, have limited patience for misleading or unclear green claims.

When we get down to brass tacks, the main barrier to amending those materials will often be the cost, rather than other logistical issues. And while the CMA has indicated that it will take a proportionate approach, and said it does not want to see tonnes of materials being added to landfill unnecessarily, the CMA is not likely to have much sympathy with the fact it would cost a significant amount to fix a misleading claim or omission on a product, or that solutions such as stickering over products will be considered by a brand to be aesthetically unappealing at best, and unsellable at worst. The CMA will not look at those issues through the eyes of a brand, that has carefully curated and protected its image over many decades. Instead, the CMA will look at the claim and, if it is misleading, will want to see urgent changes as well as holding the brand to account.

If brands are considering their position, especially if they are notified, they are under investigation by the CMA, luxury brands will have to make decisions that balance risk, cost, and protecting their brands. But such brands should be aware that what they might consider to be ‘impossible’, the CMA might regard as entirely possible. Even if a brand considers a solution to be so undesirable or aesthetically displeasing as to be not worth contemplating, the CMA may not see it that way. So, to avoid being placed in that situation, the best defence is attack. In other words, the solution lies in pre-empting these issues and bake-in compliance with the Green Claims Code as early as practical, take whatever steps are reasonable, proportionate and practical to your business, and during any protracted transitional phase while legacy claims are still on show to consumers, hope that the CMA is distracted by some shinier target elsewhere. In that process, some luxury brands might have some hard choices to make, and hard cash to spend, if they aren’t quite compliant, yet, but they feel it is important to stay on the right side of the CMA in 2022, and avoid standing out for all the wrong reasons.

By Geraint Lloyd-Taylor, Advertising and Marketing Group – Lewis Silkin

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