Business students crave luxury with a conscience

European business schools are a rich source of graduates for the global luxury goods sector. No fewer than 19 of the 22 business schools with luxury programmes are in Europe, according to the US-based AACSB accreditation body, with more than half of these courses in France and a fifth in Italy.

But luxury brands — and those teaching about the industry — are under growing pressure from millennial and generation-Z consumers and students to promote sustainable and ethical practices, says Julia Pueschel, director of the MSc in luxury marketing at Neoma Business School in northern France.

This is a cohort conscious of climate change and keen to align with brands trying to make a difference. In a time when greenwashing is rife, and in a sector in which some businesses wear paper-thin eco-credentials on their sleeves, engaged consumers want more than covetable products with snappy sustainability straplines. Many want more detail.

Some 72 per cent of generation-Z consumers take into account companies’ commitment to sustainable development when deciding their purchases, according to a survey this year by Boston Consulting Group and Altagamma, an Italian luxury trade body.

“Many of our students on luxury programmes frequently highlight sustainability concerns when discussing luxury brands,” says Pueschel. “In presentations given by representatives from luxury companies, students consistently ask about sustainability initiatives and policies and, when these students undertake research projects, sustainability consistently emerges as a central theme.”

Barbara Slavich, academic director of the Master in Fashion Management at Iéseg in France, says that in response, business schools must equip students not only with sustainability awareness, but also detailed understanding of ethics and social responsibility.

“They need knowledge of ethical business practices, such as labour rights, fair trade, and responsible sourcing, and environmental expertise, such as regulations, certifications and standards,” Slavich says. “They need an understanding of sustainable materials and processes, including eco-friendly packaging and product design, as well as familiarity with key sustainability concepts such as the circular economy, sustainable sourcing and carbon footprint reduction.”

FT European Business Schools Ranking 2023

This story is from the ranking report publishing on December 4

Students must grasp concepts such as lifecycle analysis and new ownership business models from the circular economy, including renting, second-hand, recycling and upcycling, says Isabelle Chaboud, programme director of the MSc in fashion, design and luxury management at Grenoble Ecole de Management. The programme includes a one-week study trip with the theme: Sustainability and Innovation in the Fashion and Luxury Sectors.

In 2024, Audencia Business School will launch the first specialised MSc in sustainable luxury management at its new Paris campus in Saint-Ouen. “Students feel responsible for shaping their future,” says Michaela Merk, professor in luxury marketing and director of the new programme. She says the course will aim to align business skills with sustainable thinking so that graduates learn how to make companies both more sustainable and more profitable.

The history of ‘centenary maisons’ . . . could make it difficult to question existing frameworks

“Generation Z vehemently condemns ‘fast fashion’ related to the incredible amount of waste and pollution, and it supports the idea of giving products a longer life,” Merk adds. “The concept of pre-loved brands, sold through increasingly professional second-hand channels, is perfectly in line with the values of this generation, which will represent the biggest group of luxury shoppers and talent by 2030.

“Before Covid, just a few premium brands like Stella McCartney or Patagonia placed sustainability at the heart of their business strategies,” Merk notes. “Now many luxury brands want to become sustainable champions in record time, hiring chief sustainability officers, organising sustainability events, speaking in public about their sustainability efforts and fixing ambitious goals to reduce their carbon footprint.”

Marie Veyrier-Montagneres graduated with a Masters in Management from Audencia in 2020 and is now an innovation and sustainability project manager for Christian Dior Couture in Paris. Dior parent LVMH’s Life 360 programme includes commitments to eliminate plastic from packaging by 2026, to reduce its overall water consumption by 30 per cent by 2030, and to use 100 per cent renewable energy in its factories by the same date.

“My level of awareness around sustainability was relatively high when I went to Audencia but, while I understood actions I could take in my personal life, I lacked an understanding of how this translated into my work,” she recalls. “Sustainability was part of all the business cases I worked on as a student and the environmental and social stakes were evaluated and challenged with the same level of requirement and importance as for what we might call pure business.”

During her induction week at Dior, two days out of the five were focused on sustainability, diversity, inclusion and “transmission of savoir-faire”. Veyrier-Montagneres says it has become common to hear clients ask about raw material sourcing conditions, traceability and production location.

“The histories and legacies of ‘centenary maisons’ like Dior are so strong that, at first sight, students could feel it’s difficult to question existing frameworks,” concedes Veyrier-Montagneres.

“Business schools can help students by providing concrete tools and examples of how early career professionals can make positive impacts at their level.”

Students also need to understand the complexity of sustainability, says Alessandro Brun, director of two masters in luxury management at Polimi Graduate School of Management in Milan.

“Faux-fur will produce less animal cruelty and by eating quinoa, we will kill fewer animals,” Brun says. “But faux-furs are made from microplastic, and washing them will result in a million tiny pieces of plastic in the oceans. And the sharp rise of quinoa prices forced large groups of Latin American populations to start feeding families with cheaper, but less healthy fast food.

“Sustainability is a delicate balance of environmental, ethical and social aspects — students need to consider these as a whole to make the right decision,” he adds.