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Case Study

Chanel 1.5°: A sustainability journey

By Vanina Farber, Stéphane J. G. Girod and Martin Králik

25 pages

December 2021

Reference: IMD-7-2339

In a short span of five or six years, CHANEL embraced CSR (corporate social responsibility) and ESG (environmental, social, governance) initiatives that stretched far beyond its established comfort zone of artistic direction and creative output. The progression of these initiatives culminated in March 2020, when the company launched CHANEL Mission 1.5°, a strategy for embarking on a decarbonization journey across the business as well as the value chain. In keeping with the timeframe of the United Nations Sustainable Development Goals (SDGs), the “1.5°” represented the commitment to help limit average global mean temperature increases to 1.5 degrees Celsius above pre-industrial levels. Entering the 2020s, Global CFO Philippe Blondiaux felt confident that CHANEL was primed to execute on its vision and usher in a “decade of delivery” in sustainability. The Group was about to transform every aspect of its business; help its partners do the same; innovate at every point in the value chain; and support change beyond its own operational footprint. Yet a host of challenges loomed on the road ahead: (1) Could an industrial group that was highly decentralized continue to spearhead initiatives and shape an integrated sustainability strategy? (2) In addition to creating a cultural glue and a shared sense of inspiration and purpose, could accountability trickle all the way down the organization with a worldwide workforce of nearly 28,000? (3) In the long term, was the company in a position to live up to the commitments it had encapsulated in the CHANEL Mission 1.5° document, and was there sufficient clarity on what the sustainability push would mean in the long run for CHANEL, as a luxury brand, as we know it?

Learning Objective

Apply a financial lens to sustainability and ESG objectives and metrics; explore the link between sustainability and accountability, the rise of a data-driven and knowledge-sharing culture, and the resulting organizational transformation, especially cascading sustainability objectives and purpose to a large, decentralized organization.
Evaluate prospects of luxury fashion in 2050 – are sustainability efforts relevant? Are sustainability and growth compatible?
For a luxury audience, discuss “purposeful luxury.”

Keywords

Sustainability, Luxury, Environmental Social and Governance, Organizational Transformation, Strategy Execution, Financial Strategy, Materiality Analysis, Good Health, Well-being, Gender Equality, Decent Work Conditions, Economic Growth, Reduced Inequalities, Responsible Consumption, Responsible Production, Climate Action, Diversity, Equity, Inclusion, Strategy

Settings

Channel, Manufacturing, Design, Consumer Goods, Luxury Goods and Jewelry
2011 – 2021

Available Languages

English, ,

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