Socially responsible products in all forms are more critical than ever to a consumer brand's core offerings, one of the hot topics at the first virtual Luxury Law Summit on 3 September.
The effect of the coronavirus crisis on the luxury business means nearly all luxury brands suffered revenue drops of more than 20 percent in the first half of the year. Closed boutiques and travel curbs stopped luxury shoppers from shopping and traveling. And lock downs, work from home routines, and new-found frugality have radically decreased demand. Analysts and investors are paying close attention to demand, and monthly retail sales numbers are being used to gauge the impact of the coronavirus pandemic and possible routes to recovery.
"But while consumer spending is down and fashion companies are focused on costs, socially responsible products in all of their forms are becoming even more critical to a consumer brand’s core offerings,” says Stephanie Keen, Corporate and Finance Lead for Asia Pacific at Hogan Lovells. On September 3, the firm is hosting a virtual workshop at the Luxury Law Summit Europe, which will look at sustainability, ethical sourcing, and brand purpose as increasingly central to brand value. Stephanie will be joined by Kelly Tubman Hardy, Global Head of Hogan Lovells’ Consumer sector, as well as Fredrik Galtung, CEO of True Footprint, and David Ireland, Senior Partner at Navis Capital.
The workshop will discuss how consumer companies, and luxury brands in particular, are incorporating business integrity into their daily businesses by procuring ethically sourced or organic products, ensuring fair pay and safe working conditions, and using environmentally-friendly manufacturing processes, among other things. The panellists will talk about what brand integrity means; its importance to consumers, employees, and investors; and how legal departments can deal with some of the challenges of developing appropriate brand integrity and sustainability goals and achieving and measuring such goals.
“Regulators around the world are beginning to shift from laws that require disclosure, like the Modern Slavery Act, to laws that require companies to undertake due care that their supply chains do not include products made using child or coerced labor, or have begun seizing or prohibiting the import of such products, with recent U.S. sanctions and import bans disrupting supply chains,” said Hardy. Keen added that damage to consumer perception of a brand is a much larger risk and can have long-lasting impact.
“As consumers are becoming more focused on business integrity, this is increasingly important in the success or failure of a product or business. It is no longer sufficient to dabble in philanthropy or to pay lip service to corporate responsibility and sustainability,” Keen explained. Hardy added, “Investors and consumers are quite sophisticated. In developing a brand integrity program, it is important to set goals that are measurable and address material impacts of the brand’s particular industry.”
According to recent research from McKinsey & Company, there is a renewed concern for health, safety, and “care.” Keen added, “Companies are expected to go above and beyond by adopting the right practices and integrating business integrity values at the core of their business models.”