Gucci is driving tangible change through deeper supply chain understanding
Gucci’s total environmental impacts associated with our business activities are rigorously calculated on an annual basis. Making the invisible become visible, and the cost to the environment measurable and accountable. Unlike the majority of companies that focus exclusively on their own direct operations and not on their “externalities”, otherwise known as supply chain impacts, Gucci believes it is a business responsibility to address all the impacts on nature and given the global climate and biodiversity crises. This means that the total footprint associated with the production and sourcing of our raw materials, the manufacturing and processing of our collections, and all the way up until they reach our stores has also been measured. To understand our products’ footprint once they reach our clients, we also now measure consumer use and end of life.
To do this analysis we use Environmental Profit and Loss (EP&L) accounting, which was pioneered by our parent company Kering. An EP&L measures greenhouse gas emissions, air and water pollution, water consumption, land use, and waste production along the entire supply chain and then calculates what the approximate cost to society is in monetary terms and based on the changes in the environment that can happen as a result of business activities. To get a closer look at how the EP&L works, see this graphic.
By measuring all our environmental impacts, we can focus in on the most significant drivers of impacts from our business and make better-informed decisions. This data-driven approach allows us to develop robust policies and programmes to reduce our footprint and drive tangible, positive change. With this deep knowledge, we can also respond to the risks and opportunities presented by environmental challenges.
Gucci started implementing EP&L accounting for internal monitoring back in 2011 and we began publishing our annual results externally as part of the Kering Group EP&L in 2015. To provide even greater transparency, we launched a customized Gucci Digital EP&L in 2019 and shared unprecedented data online. We are hoping that this open source platform can help our peers understand their impacts on nature and, ultimately, facilitate positive change and collaboration within our sector and other industries.
Using the EP&L as a benchmark to chart our sustainability progress, we have been working hard to meet our ambitious reduction targets: -40% for our total footprint and -50% for greenhouse gas emissions by 2025 (2015 baseline). Already in 2021 our EP&L analysis revealed that we achieved a reduction for our combined impacts, surpassing our target of -40% four years ahead of time (reaching a -49% reduction), and, in 2022, we continued this trajectory, achieving a -58% reduction of our EP&L intensity.
As another step in our climate strategy, we also adopted our parent company Kering’s science-based goals, approved by the Science Based Target initiative (SBTi), around reducing our GHG emissions in alignment with a 1.5°C pathway by 2030. We are committed to reducing our absolute greenhouse gas emissions in scopes 1 and 2 of the Greenhouse Gas Protocol by -90% and our scope 3 emissions by -70% per unit of value added by 2030, from a 2015 baseline. We are making progress to reach these goals. In 2022, we achieved a -68% absolute reduction for greenhouse gas emissions in scopes 1 and 2, as well as a -55% greenhouse gas emissions intensity reduction in scope 3, from a 2015 baseline.
These excellent results are directly linked to our focus on driving improvements in high impact areas across our value chain, which has led to positive and quantifiable change. Some of these sustainable improvements are around: increasing the use of recycled raw materials and organic fibres in our collections and incorporating responsibly sourced precious metals, like 100% ethical gold for our jewellery; extending our sustainable processes and manufacturing efficiencies, like Gucci Scrap-less for leather and Gucci-Up for circularity; and switching to green energy, whereby we have reached 100% renewable energy for our stores, offices, warehouses and factories in accordance with RE100 guidance. For a deep dive into our results, go to our interactive Digital EP&L here.
SCOPES 1 AND 2 ABSOLUTE GHG EMISSIONS REDUCTION YEAR-ON-YEAR (tCO2e)
Science Based Target: -90% Absolute GHG Emissions Reduction by 2030 (baseline 2015)
*Scopes 1 and 2 as defined by the GHG Protocol
SCOPE 3 INTENSITY GHG EMISSIONS REDUCTION YEAR-ON-YEAR (tCO2e/MEUR)
Science Based Target: -70% Intensity GHG Emissions Reduction by 2030 (baseline 2015)
*Scope 3 as defined by the GHG Protocol
WHAT IS AN ENVIRONMENTAL PROFIT & LOSS?
An Environmental Profit & Loss (EP&L) account is a tool that provides an in-depth analysis of our environmental impacts, revealing our issues and our opportunities to generate positive change. By measuring and then monetising the greenhouse gas emissions, water use, water and air pollution, waste and land use associated with our direct operations and supply chain, starting from raw material production through to manufacturing, and all the way to product use and end of life, we can identify and prioritise key actions to reduce our impacts and track our sustainability progress.
It measures the environmental footprint in our own operations and across our entire supply chain, as well as the impacts associated with consumer use and product end of life
And then calculates its monetary value
It facilitates more effective decision making and provides critical insights into our business
It provides a better understanding of the value of natural resources
What are the benefits?
- Provides valuable information so we can understand what our largest impact drivers are and where they are located
- A decision-making tool to create targeted programmes
- Integrates its findings into our day-to-day operations and strategy, influencing our product design, sourcing decisions, manufacturing and innovation
- Analyses our products from cradle to grave
- Monitors progress of our sustainability strategy
- Helps create more resilient supply chains to manage future risks
- Guarantees more transparency with stakeholders
Understanding our impacts
To measure our total environmental footprint, we analyse:
Greenhouse gas emissions
And to truly understand the impacts associated with our business activities and our products we analyse these factors across our value chain.
Operations & retail
Product end of life
How does it convert into monetary value?
An EP&L measures our environmental impacts and values the data that is collected in economic terms. It estimates the cost of the changes in the environment resulting from our business’ activities.
Monetising our environmental impacts allows us to easily compare our environmental performance:
- In different areas of our business: theresults are translated into a languagebusiness understands
- Between our different impacts and business units: it shows clearly where it is best to implement initiatives
- Over time: it shows where we are making progress and how we can reduce our footprint
For a deep dive into our results, go to our interactive Digital EP&L here.