Who has even heard of Kering? Until a few months ago it was knowns as PPR. However, you might know some of the 18 brands it owns like Puma, Gucci, Stella McCartney and Saint Laurent.
While the Kering name might be unknown to many it is actually one of the prominent leaders in the business sector when it comes to sustainability, from the release of the first-ever Environmental Profit & Loss account (EP&L) by Puma in 2011 to Kering’s involvement in creating the B Team earlier this year.
Kering is the quiet type among the group of sustainable leaders which is why I was glad for the opportunity to meet with Marie-Claire Daveu, Kering’s Chief Sustainability Officer and Laurent Claquin, head of Kering Americas at a recent New York media briefing. (Full disclosure: Kering picked up the tab for the lunch).
Our conversation focused on the company’s overall approach to sustainability and the challenges it faces moving forward. The following summarizes some of the main issues raised in this conversation. They showcase the path Kering is taking and also provide some good lessons to other companies interested in following in their footsteps.
1. It all starts with the CEO – “I believe sustainable business is smart business, for sustainability is both a business and a leadership opportunity inherent in the quality of our products,” writes Francois-Henri Pinault, the company’s Chairman and CEO.
Pinault's passion for sustainability convinced Daveu to join the company. “You can’t do sustainability in a company if you don’t have a boss, a CEO, totally convinced,” she said.
At Kering, sustainability is seen as an opportunity. Sustainability creates value and stimulates innovation, explained Daveu. In our vision, she added, sustainability is not only philanthropy, but a new way to change the business and identify new business models.
2. We are the best, but we can do better – one thing I like about Kering’s approach is that just like Unilever or Nike, Kering feels confident enough in its achievements that the company can admit that there is still so much left to do.
“Of course we don’t say we’re perfect and everything is right…we have to try to do our best,” said Daveu. “It means we are the best, but each day each one can change something. This is the spirit in the Kering group,” she added, noting again that it all starts with the CEO who tells Kering’s employees, 'You can do something and you have to do something.'
This continuing improvement process becomes obvious when looking at all the company has accomplished so far – from publishing the group’s Ethical Charter and Code of Conduct outlining its sustainability commitments in 1996 to establishing a sustainability department in 2003 to publishing Puma’s EP&L in 2011 (and committing to publish one for the entire group by 2016) to announcing a five year sustainability plan in 2012.
3. Sustainable business requires green manpower – Kering comes down in favor of having a robust sustainability department. The company has with 50 people in total involved in determining and implementing the Group’s sustainability policy – 15 in the group’s sustainability department and 35 in the different brands.
4. Creating the right synergy between the group and its brands – Kering, like other companies that own many brands, is looking for the right synergy between the group and the brands to get the best results. For Kering it’s important to achieve its goals like reducing the company’s carbon emissions, water usage and waste by 25 percent by 2016, but with the intention that each brand will keep its own identity.
How do you achieve such a balance? The company implements a "freedom within the framework" system, in which some things are shared with the brands like knowledge, expertise and other tools, but some aren’t like supply chain resources. This way the company hopes to leave the brands with sufficient flexibility to meet the shared goals and to encourage innovation. The result is that Gucci and Bottega for example source leather from different resources, while both are committed to the company’s goal of having 100 percent of leather from domestic livestock sourced from responsible and verified resources.
At the same time Kering also created a library that is focused on material innovation and is aimed at helping the brands identify new raw materials that are more sustainable. The library allows brands to take advantage of their siblings' expertise - like Puma’s experience with PVC. Other brands under the Kering umbrella can utilize this information to assist them in meeting the company's goal of becoming PVC-free by 2016.
5. Imagine – One concept that was brought up once and again was imagining – from solutions at the micro-level to the adoption of EP&L by the entire group. It’s clear that Kering doesn’t have all the answers. The company has set goals it doesn’t yet know how to meet. At the same time company leadership knows that only by aiming high and approaching sustainability as an opportunity for innovation can it utilize sustainability to actually create value and competitive advantage.
Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and Parsons The New School for Design, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.
Raz Godelnik is an Assistant Professor and the Co-Director of the MS in Strategic Design & Management program at Parsons School of Design in New York. Currently, his research projects focus on the impact of the sharing economy on traditional business, the sharing economy and cities’ resilience, the future of design thinking, and the integration of sustainability into Millennials’ lifestyles. Raz is the co-founder of two green startups – Hemper Jeans and Eco-Libris and holds an MBA from Tel Aviv University.