PARIS — Since unveiling its first sustainability initiative in 2011, Kering has emerged as an industry leader in the field of corporate social responsibility, and is this year’s recipient of the WWD Honor for Corporate Citizenship.
In addition to fixing ambitious environmental goals for its brands, the French luxury group has set the agenda on topics such as the well-being of models and the position of women in the workplace, not just in the fashion industry but also in film, via its Women in Motion initiative, a precursor of the #MeToo movement.
François-Henri Pinault, chairman and chief executive officer of Kering, and his wife, Mexican actress Salma Hayek-Pinault, have been vocal champions of women’s issues through their work with the Kering Foundation, which aims to combat violence against women.
As a member of the B Team, a nonprofit group of business leaders founded by Sir Richard Branson and Jochen Zeitz with the aim of promoting environmental and social well-being, Pinault also hopes to spur governments to support measures that tackle pollution in the textile industry.
The owner of brands including Gucci, Saint Laurent and Balenciaga has not been afraid to tackle daunting subjects, whether confronting sensitive issues like female genital mutilation or delving into the minutiae of environmental profit and loss accounting.
Since joining the group in 2012, Marie-Claire Daveu, chief sustainability officer and head of international institutional affairs, has become the public face of this strategy. Last year, she unveiled the second phase of Kering’s sustainability plan, to run through 2025, targeting environmental impact, social aspects and innovation.
The program includes a target to reduce the firm’s environmental footprint by 40 percent from a 2015 base. In order to foster the innovation required to achieve this, the group has teamed with Plug and Play and Fashion for Good to launch a start-up accelerator for sustainable textile innovation in Amsterdam.
It also hopes to spread awareness by partnering with the London College of Fashion on the first open-access digital course in luxury fashion and sustainability. Gucci ceo Marco Bizzarri took advantage of the last Kering Talk at the London school a year ago to announce that the Italian luxury brand would go fur-free.
Pinault now wants to tackle working conditions in the Indian embroidery industry, which he says “border on slavery.” In a wide-ranging conversation with WWD, the executive talked about how he became woke, balancing creativity and responsibility, and how he hopes to make corporate culture more female-friendly.
WWD: Where does your environmental consciousness stem from? Was it something you were brought up with, or was there a watershed moment?
François-Henri Pinault: It was a bit of both. I developed a strong awareness of environmental issues through my mother, who was a vegetarian, and the other women in my life. My first wife worked for the World Wildlife Fund, and obviously I was extremely struck by Salma’s commitment to humanitarian causes and women’s issues.
When I decided to take the leadership of the group, which was called PPR at the time, I was convinced — and this was something my father taught me — that companies should have a cause that is meaningful to them and reflects their values. My predecessor had laid the groundwork for that, since PPR at the time was very involved in the education of young people in disadvantaged suburbs through the Institut Télémaque, which we helped to found. Around the time I decided in late 2005, early 2006, to refocus PPR on the luxury sector, I decided the group’s cause should be coherent with its new profile. That’s when I met Salma, who introduced me to Eve Ensler in New York. She opened my eyes to the reality of violence against women. I thought it was something that affected mainly developing countries, and I found out instead that this issue is rife in every country, including France and the United States, and its effects are disastrous. It came as a shock, and I remember feeling distraught, because you wonder how you can be blind to this problem when it’s right on your doorstep, and as a father of daughters, it’s simply unbearable to realize this is going on. So I began to think that a group like ours, which was becoming very female-centric as it was transitioning toward luxury, could be very legitimate in joining the fight to end violence against women, which we began to do with the creation of the Foundation in 2007.
At around the same time, I acquired Puma, which was already very active in the environmental domain thanks to its boss at the time, Jochen Zeitz. For him, it was a question of personal conviction, and he explained to me what he had done and why he had done it. His approach stood out at the time, because he didn’t think of sustainability as an obligation, but rather as a new way of thinking that would create opportunities for companies that are early adopters. That surprised me, and since we had also decided to push the sustainability agenda, I asked Jochen Zeitz to help me devise a strategy in tune with the group’s future activities. He told me that given what had been done at Puma, and what we planned to do at Kering, given the scale of the group, we had the potential to become one of the global leaders in this field. That’s when I decided to commit to sustainable development and to push that agenda beyond our own boundaries, by trying to come up with solutions for problems on a much larger scale than our own. We were the first company on the CAC 40 stock index to create a board-level sustainable development committee. We recruited a team of 10 full-time staffers, headed by Marie-Claire Daveu, to spearhead sustainability issues. We asked each brand to designate one full-time member of staff in charge of sustainability. We also pegged a portion of executives’ pay to meeting their sustainability goals.
In the beginning, I didn’t want to publicize it, as we hadn’t done very much. I told Jochen Zeitz we would first work on it internally, because I didn’t want people to think we were doing it for publicity. After two years, Jochen Zeitz and Marie-Claire Daveu convinced me we should go public with our efforts. Marie-Claire told me that what made Kering different was the sincerity of its approach, and that we should share it in order to influence others. That’s how we developed this very generous approach to sustainability. It’s based on the premise that if we do it only for ourselves, there’s no point. We have to do it for the community and share everything we do, and I found that very refreshing. Instead of having this very competitive approach, where it’s everyone for themselves, we were taking a more unusual approach based on sharing.
WWD: Nonetheless, I remember that at the press conference in 2011 when you announced the launch of your sustainability initiative, a lot of journalists were skeptical. At the time, people didn’t really understand your idea of sharing your new environmental profit and loss (EP&L) accounting methods with other firms.
F.-H.P.: Jochen Zeitz developed his sustainability approach against all odds in a very harsh competitive environment. [Puma] was truly the first to do that, and the idea of sharing their methods, including with their competitors, was counterintuitive.
We used Puma as a testing ground and from there, we expanded EP&L accounting to the rest of the group. That’s when I said, “If we keep this to ourselves, what’s the point? It’s a fantastic tool.” I went even further, because when I later joined the B Team, I argued that EP&L accounts should eventually be made compulsory for companies to measure their ecological impact.
WWD: The method allows companies to measure in monetary terms the costs and benefits they generate for the environment. When did you first publish EP&L accounts at group level?
F.-H.P.: We published the first group of EP&L accounts in May 2015, covering our 2013 financial year, and then in November 2015 for the 2014 financial year.
There was some internal debate over whether we should make the figures public. Our investor relations teams said, “You’re nuts, you’re going to show that our EBIT would be halved if we took into account all the environmental costs.” The calculations showed the net cost to the environment came to around 800 million euros. In the end, the market took it well.
WWD: Since you embarked on this journey, what have been your notable achievements, both in terms of shifting the company culture and convincing external investors?
F.-H.P.: The first step was to tackle our supply chain. The nature of our sector means that we work with a lot of suppliers, mainly in Italy but also a little bit in France. They also work with subcontractors, so we have done a lot of work on traceability and working conditions. We have reviewed all of our supplier contracts one by one, and by next year, all of our main suppliers will be audited annually. I think we are the only luxury group to do this. We completed 2,424 audits last year.
WWD: The issue was highlighted once again during Milan Fashion Week, when The New York Times ran a report on Italy’s low-paid home workers.
F.-H.P.: Because Italy operates like that, it’s very important to be thorough. There have been examples when we have caught out suppliers and we immediately stopped working with them. People hear about it, and this has had positive repercussions on our supply chain.
We have also done a lot of work on leather, with the introduction of three new processes. One is a process that cuts out the need for heavy metals, which are very dangerous. It took us more than two years to develop this with Swiss universities, and it’s a process we have publicly shared. We have extended vegetable tanning to almost all our tanneries, and more recently we have started researching and testing leather substitutes as part of our 2025 sustainability goals. We are working on leather made from mycelium, the underground root structure of mushrooms, through a partnership with a U.S. company called Bolt Threads.
We are looking to channel innovation in the service of sustainable development. We study failure scenarios in three fields: raw materials, economic models and organization methods. For the first one, we look at what would happen if tomorrow we could no longer use leather, precious skins or cotton, for example. We try to find technological solutions, and we do this either through acquisitions, or industrial and research partnerships. We work with different start-ups on these topics.
WWD: You also have your own research facility in Italy.
F.-H.P.: In the area of textiles, we have the Materials Innovation Lab in Milan, which gathers all the practical research we do with suppliers. We are working on a separate Innovation Lab for watches and jewelry in Switzerland.
WWD: What is your progress on the use of ethical gold?
F.-H.P.: We should be close to 100 percent next year. We have managed to do this because we’re dealing with small quantities. We’re not like Richemont, which uses much more gold.
WWD: Gucci announced last year that it was going fur-free. Would you consider banning fur at group-level?
F.-H.P.: In this instance, the approach is different, because Gucci’s choice was a creative decision and that makes it durable. What is important to me is finding solutions that are economically viable in the environmental field in general. For it to be viable for fur, if it’s an obligation that is imposed but people don’t really agree with it, it could be reversed as soon as the designer or ceo changes.
In a company like ours, if you don’t take sustainability into consideration during the design phase, and you try to add it on afterward, it’s fragile. Once I realized that, I met with all the creative directors face to face. I was told that this approach wouldn’t work, that they need total freedom to work. I was convinced this wasn’t true. After all, they are people like us and they are highly sensitive. In my personal discussions with them, I found out that many creative directors are extremely sensitive to these issues, and some of them had been wary of speaking up because they thought the company might not listen.
In the beginning, the ceo’s of the brands had some reservations, but if you look at our ceo’s today, the majority of them were recruited internally, so they have been professionally educated by Kering on these issues.
Brands are starting to implement measures of their own volition. I remember two years ago, Marco Bizzarri came to me and said, “We have the metal-free tanning process, but how can we produce more?” He found that if you cut the skins before tanning, you could reduce the carbon impact of tanning by 20 percent, which is huge. So the teams are starting to table very important initiatives.
When Marco came to see me last September and said [Gucci creative director] Alessandro Michele had decided, for creative and personal reasons, to stop using fur — that’s a very solid decision.
WWD: So you’re saying it has to come from the designer.
F.-H.P.: It has to be a choice, obviously. Then there is the whole issue of what kind of fur we use, which is not the responsibility of the designer. We have worked with Marie-Claire Daveu on guaranteeing the total traceability of our furs and making sure that animal welfare standards are enforced. Then it comes down to whether you use it or you don’t use it. Gucci no longer uses it. Balenciaga doesn’t use it, and Bottega Veneta uses very little.
WWD: I’d like to talk a little more about your initiatives to end violence against women, as I believe you will make a further announcement on this topic in November.
F.-H.P.: I can’t talk about it yet, because it involves other companies.
WWD: What struck me about what you said earlier is that you were surprised when you found out about the scale of violence against women. A lot of men have expressed similar feelings since the #MeToo movement started. Why do you think so many men fail to realize the scale of the problem? And is it the role of private companies to educate the public on these issues?
F.-H.P.: Because for a very, very long time, there was an omertà in place. People didn’t talk about it. When we started this in 2006, 2007, to be honest, it was a forgotten issue. Nobody talked about violence.
WWD: It was brave for a company to tackle this topic.
F.-H.P.: I was advised against it. I was told, “Come on, you’re a luxury firm — you’re not really going to talk about violence.”
WWD: I remember when you hosted a screening of a film about female genital mutilation, it was not considered a topic that a luxury group should be raising.
F.-H.P.: It was called “Desert Flower” and when you watch it, you can’t remain indifferent — it’s impossible. On the back of that, I met Pierre Foldes, a surgeon specialized in reconstructing victims of female genital mutilation. He told me that an estimated 3,000 to 5,000 young girls undergo female circumcision on French soil every year. We helped him to set up the first clinic specializing in reconstruction.
The group’s commitment to social concerns always has two dimensions: internal and external. On the external side, the group is committed to ending violence against women. The work of the Foundation covers all forms of violence, from domestic violence to war crimes and slavery. It covers a staggering spectrum of violence against women that needs to be tackled. For that matter, I would like to see a public debate on an even tougher topic, incest, which is something that has come up a lot in my discussions with people about violence against women. If I remember correctly, 9 or 10 percent of children are victims of incest every year in France.
WWD: You’ve also campaigned to increase the representation of women in cinema through your Women in Motion initiative, which has since snowballed into the #MeToo movement.
F.-H.P.: Obviously, the priority is the fight to end violence against women, and within the group, it’s the position of women in the workplace, which covers gender diversity, leadership, equal remuneration and sexual harassment.
We decided to tackle this internally, but we also wanted to address the sectors we work with closely — cinema and sports — where there are some very serious issues.
We chose to highlight what is happening in the film world through our partnership with the Cannes Film Festival and the enormous audience that comes with that.
In our work on women in the workplace, in particular on how to promote women to leadership positions, we came across the issues of workplace harassment and we realized the two were linked. The Women in Motion talks in Cannes raised the issue of harassment in the industry, which were subsequently exposed a year ago.
WWD: You also launched a charter on the well-being of models in partnership with LVMH Moët Hennessy Louis Vuitton. It tackled issues such as nutrition and working conditions, but it seems that fashion is having a harder time confronting the issue of sexual harassment. Is that going to be included more explicitly?
F.-H.P.: Some accusations have been made against leading photographers, but if there are further issues, we will discuss them. It’s true that the initial focus of the charter was on health issues and working conditions. It’s important to keep up our efforts. All our brands without exception are applying the charter, but we have to remain vigilant, because bad habits are hard to break.
WWD: So far, you have failed to rally other brands to your cause. Will you continue to try?
F.-H.P.: Yes, it’s important for the other big groups to join us. We will try to take up our pilgrim’s staff early next year and convince some others to come on board.
WWD: There still seem to be a lot of underweight models working in Paris.
F.-H.P.: There’s a lot of work to be done, because not all brands are vigilant. The charter requires models to present a recent medical certificate proving their overall health, and bans size-zero models. At Balenciaga, for example, we don’t take the information provided by the model agency at face value. If they tell us a model is between a size zero and a size two, we measure them to be sure, and we have found discrepancies. So it’s important to be extremely vigilant.
There is another issue we have tackled after facing some issues: even if a girl is healthy and she has the right weight, she can give off a different image. We have insisted that the directors of communication at all our brands make sure that every campaign and visual passes the bar in terms of perception. It would be a mistake if we didn’t.
When the director of communications is unsure about an image, and there is a debate with the artistic director, the matter is referred to the ceo of the brand or to me, and we decide whether to publish it or not.
WWD: There is talk that French President Emmanuel Macron would like to spearhead a push on sustainability and that he has asked you to rally other leaders in the luxury sector behind it. Can you confirm this?
F.-H.P.: The B Team, of which I am a member, has a new president: Paul Polman, the ceo of Unilever, who is an extraordinary guy. Paul met President Macron at the United Nations General Assembly, and we are working with the team at the French Ministry for the Ecological and Inclusive Transition on whether we should present an initiative by the B team in the framework of the G7 meeting in France next year aimed at the textile industry, the world’s second-most polluting, to see how we might tackle that issue with industry leaders. The problem is not so much luxury brands as mass-market retailers.
If I can help, I want to help. I believe major luxury brands have two responsibilities: one is to bring creativity to the entire industry, and the other is to be an industry leader in terms of sustainable development. It’s up to us to research and run tests, and to help the rest of the textile industry to adopt best practices.
WWD: Talking of sustainable development, some analysts and investors are worried about Kering’s explosive growth rates in recent quarters. Is it sustainable?
F.-H.P.: I can confirm that despite our rapid growth, we continue to respect our commitment to sustainability. These pledges can’t be sacrificed at the altar of growth, so while it’s true that we’re growing fast, we’re not lowering our standards in terms of sustainable development. In fact, the more we grow, the more we’re raising them. We are always tackling new topics, such as embroidery. The situation simply can’t remain as it is.
WWD: What’s the issue?
F.-H.P.: There has been a lot of progress […] but we have to move faster. The working conditions in which some — fortunately, not all — luxury embroidery is produced in India border on slavery. It’s an issue we must tackle. It’s complex because it’s in India and we’re not talking about the whole production, just a small part of it. It’s often subcontracted. We want to act fairly quickly on this.
So in terms of growth, if in order to grow we had to lower our sustainable development goals, we would choose slower growth.
WWD: Last year, you extended parental leave with full pay to your 29,000 employees, regardless of their location. Is there anything else you’re doing to improve the well-being of your staff?
F.-H.P.: We would like to become a sort of laboratory of what a working woman can expect, ideally, from a modern company. What we did with parental leave was simply to offer everyone else what we have in France. Seen from the United States or some other countries that offer very little, it might seem like a huge deal, but we don’t think we went very far. There’s still a lot to be done, especially in terms of parity in leadership positions.
We’re implementing a software solution that allows us to benchmark salaries worldwide, which we think will allow us to get rid of income inequalities for people with identical skills.
But in terms of the gender pay gap, we need to work with leading business schools to sensitize their students to female psychology in the workplace.
In this domain, we’ve been educated to apply masculine performance appraisal standards to both male and female employees, without distinction. We’re realizing today that by doing that, we’re losing out on a huge pool of female talent.
WWD: In the last few years, Kering has emerged as an industry leader on the topic of sustainability. Are you comfortable with that status?
F.-H.P.: Not only are we comfortable with that status, but we consider it our obligation. You can’t be a big company in the luxury sector without taking on that kind of responsibility. Even if some of our competitors are doing less — though I know they’re quite active — it’s up to us in the luxury sector to set the example and find solutions for other companies in the sector.
If we don’t do it, who will? Our sector is on a structural growth path, we have high margins, we have resources and knowing some of my peers, I believe we’re more inclined to do it, so it’s up to us to make it happen. We’re not going to sit in a corner and do nothing, and it gives so much meaning to our work. If tomorrow we manage to clean up the textile industry just a little, and if luxury brands have contributed to that effort, I think we will be very, very happy.