A whole new era of changes in sustainability are driven by forces of change by the governments, corporations and consumers in terms of environmental, social and governance.
The luxury footwear industry, being a consumer driven market, the demand is inclining for trendy apparels, the leaders of the market are including sustainability practices in the market, working to negate the environmental damage caused by the commercial exploitation of natural resources, which gradually lead to degradation of environment creating an adverse impact on the biodiversity, negatively impacting in the sphere of ESG.
Commercial exploitation of the natural resources and the adverse effects caused by the production process that adversely impact human health at social scale are the factors which impact the market in terms of ESG. The United Nations’ Sustainable Development Goals (UN SDGs) is a comprehensive framework that helps companies in this market obtain a perspective on the impact of their products and operations on ESG parameters.
A wide range of challenges can be found in the industry in the spheres of environmental and social aspects of ESG, since the major material used for manufacturing the goods of the market is leather, the sourcing of the leather is a challenge for the companies in the luxury footwear industry. This market is challenged, in terms of environment, in terms of biodiversity exploitation and eutrophication.
The environment is adversely impacted, due to deforestation, for using the bark to polish the products. According to reports around 40% around 10 million hectares of forest is lost per year due to deforestation, majorly for getting bark for tanning the leather.
A recent study has suggested that as a consequence of deforestation, eutrophication of the water bodies is taking place. Eutrophication is a phenomenon, in which the minerals in the land get excessively deposited into waters, making the water’s a dead zone for the animals.
The usage of raw leather itself has been subjected to controversy, since the hide is peeled from animals, reptiles and which have been reported to cause major imbalance in the biodiversity, further impacting the ecosystem. The aforementioned phenomena are in conflict with the UNSDG goal of Life on Land (SDG 15).
The challenge in terms of social aspect is that the production involves tanning of the leather, in which arsenic, a chemical compound linked to cancer and lung diseases is produced as a consequence of the process. A study has found out that communities living near the leather manufacturing are the one’s adversely affected along with workers, who take part in manufacturing process, indirectly leading to infringement of human rights, hurdling the UN SDG goals of good health and wellbeing (SDG 3) and sustainable cities and communities (SDG 11).
One of the key players of the luxury footwear industry in an effort to tackle the issues pertaining to the environment, has taken measures and initiatives to produce more than 60% of its products line up from sustainable materials such as vegan leather, a plant-based material. And also initiated a policy for protecting the workers from toxic and hazardous substances while manufacturing leather goods and products, by integrating safe manufacturing practices to promote the UN SDG goals of Life on Land (SDG 15) and UN SDG goals of good health and wellbeing (SDG 3).
The luxury footwear market at global scale was economically valued at USD 31.61 billion as of 2019 and forecasted to expand with a CAGR (compound annual growth rate) of 5.6% from 2021 to 2027. The main challenges in the market arise from the usage of leather, where many key companies are trying to create a positive impact.
• Chanel S.A.
• Silvano Lattanzi
• Prada S.p.A
• Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape
• Key insights on infrastructure developments and ESG issues affecting the theme
• Identify key initiatives and challenges within the industry
• Identify ESG leaders within the industry
• Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process
• Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment
• Offers a global perspective of the luxury footwear industry and the policies and measures taken by the players, for overcoming the challenges faced in terms of Environment, Social and Governance.
• Key insights into the sustainability practices of major players in the market.
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