INTERNATIONAL. Last week over 50 newspapers and magazines from the UK, Brazil, Australia, New Zealand, Italy and Switzerland reported on the corporate responsibility of the world's largest holding companies of luxury brands.

For the first time producers of the world's luxury goods had been ranked on their ethical performance in the report 'Deeper Luxury: Quality and Style When the World Matters', which was published by environmental group WWF-UK. The news went 'viral' through trade journals and blogs on fashion, jewelry, and celebrities.

The report "could herald a huge change in the way global luxury brands operate," stated Fashion UK.

"The luxury goods industry looks like it's having its own Nike moment," suggestsed UN corporate reporting expert Dr Anthony Miller, referring to the mid-1990s criticism of labour practices in Nike's supply chain that made the company invest heavily in its corporate responsibility programme. Within days, Just-Style.com reported that "PPR Group commits to improving sustainability" as a result of the publication.

Brands such as Bulgari, Tiffany and Tod's fail miserably in terms of their ethical and environmental credentials, said the first major audit of sustainability in the world's top ten companies for luxury brands, published by the WWF-UK charity. Luxury brands were rated on susceptibility and social performance. All the brands were rated on an A-F scale. None of the top brands tested scored more than C+.

The report exposes many major designer jewellers and fashion houses as barely passable in the ethical and environmental stakes.

None of the top ten labels analysed score more than a C+ grade from the report's A-F scale and two of the labels - Bulgari and Tod's - fail the test, emerging with a dismal F grade.

The companies are ranked according to their own reporting both of their sustainability and social performance, as well as reports by non-governmental organisations and media on their working practices.

L'Oreal comes out as the best of a mediocre bunch, with a C+, while Tod's languishes at the bottom of the chart with an abysmal score of 34.9%.

Richemont and PPR, whose brands include Chloe and Gucci respectively, are both graded D for their ethical efforts. The report says that with their greater budgets, producers of luxury goods could in fact be leading the way in social and environmental performance.

Anthony Kleanthous, senior policy adviser for WWF, said: "This report is a call to action for the world's top brands to improve the way they do business. Luxury companies must do more to justify their value in an increasingly resource-constrained and unequal world.

"Despite strong commercial drivers for greater sustainability, luxury brands have been slow to recognise their responsibilities and opportunities," said Kleanthous.

Celebrity endorsement of ethically questionable luxury goods also comes under fire in the report, which says that while Hollywood stars such as Sienna Miller are good at raising ethical issues, they do not apply the same principles to the labels they choose to promote. Miller, who has given her face to the Global Cool environmental campaign, also promotes Tod's, the worst offender in the ethical audit.

Kleanthous, said: "The world of celebrity leads by example and generates an aspirational desire for branded products. These stars have the responsibility to make sure that the brands they are endorsing are not damaging the planet."

A spokesman for Tod's said: "Tod's is committed to the process of developing long-term strategies to address the very serious issues of global warming, ethical production and the potential environmental crisis."

Researchers found that in some cases the luxury goods industry, which is worth an estimted US$206 billion worldwide, is depleting natural resources, exploiting labour and hiding its supply chain from outside scrutiny.

Conflict diamonds were still a prevalent concern in the high-end jewellery industry despite high-profile campaigns on the mining and selling of the gems in war zones following the Hollywood film Blood Diamond.

The investigation also exposed the gold mining industry as still being conducted without due social or environmental concern, often displacing communities, destroying environments and contaminating drinking water.

According to WWF, consumers are increasingly keen to buy into an ethical standard as well as the promise of quality when they purchase luxury goods.

"These consumers use luxury products as a symbol of success," the report says. "The definition of success and the way it is perceived by others is changing. Increasingly, successful people want the brands they use to reflect their concerns and aspirations for a better world."

And what of the reaction? "Some executives might be stung by the coverage, and some environmentalists confused," notes Lala Rimando of the Authentic Luxury Network. "But WWF-UK should be applauded for sticking its neck out by publishing this report" says the Manila-based business journalist and consultant.

"The scale of the environmental challenge is so great and pressing, and the reach of NGOs into Asian societies currently so limited, that if the brands that affluent Asians love can excel in sustainability, then awareness of sustainable living may grow in emerging economies fast enough to offer a chance of curbing global consumption and pollution within environmental limits."

Lifeworth has launched the Authentic Luxury Network to bring together executives, designers, analysts and entrepreneurs who want to lead the creation of more sustainable and ethical luxury. For more information log on to www.authenticluxury.net

The company has also launched a site for people to keep up to date with celebrity reaction to the report and its proposal of a Star Charter for responsible brand endorsement www.starcharter.net

To download the report log on to www.wwf.org.uk/deeperluxury

To contact Lifeworth Consulting log on to www.lifeworth.com

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