Sustainability in Luxury

LuxCo 2030: A vision of sustainable luxury

Bain & Co, in partnership with Positive Luxury, predicts what a sustainability champion might look like in a decade—and how brands can get there.

“In luxury, the sustainability decade is underway.” That’s how Bain & Company, in association with Positive Luxury (which helps brands adapt to the new sustainability economy) introduces a new report on what a thriving, sustainable brand might look like in 2030. Their analysis of the emergence of ‘LuxCo’ makes compelling reading in the context of the future of sustainability in our industry.

Setting the scene, the authors note: “Luxury brands feel the expectation rising. Many have issued powerful declarations of intent, with the aim of becoming agents of change when it comes to sustainability, not late adopters. The next ten years will be about delivering on these commitments. Executive teams face the daunting challenge of identifying the actions needed to realise that longer-term goal of sustainable, profitable trading, while simultaneously positioning the business for the immediate post-Covid recovery.”

The brand created notionally for this report, LuxCo, was established long before sustainability “climbed the corporate agenda”. By 2021, LuxCo had changed its culture and business model, and over the ensuing decade, made sustainability core to its strategy.

Five strategic evolutions were key to the rise of this sustainability champion. LuxCo redefined the purpose of its brand, decoupled growth from volume, made its supply chain fully transparent and traceable, maximised its environmental and social commitments, and created economic value from sustainability.

LuxCo’s 2021–2030 revenue growth was fueled by rental and resale

Indexed revenue growth, by source (100=2021 revenue)

Source: Notional forecast based on Bain & Company and Positive Luxury analysis

Redefining brand purpose

Having provided products and services for many years, LuxCo repurposed its idea of luxury into something more like the ancient Greek concept of kalokagathia―loosely translated as ‘what is beautiful and good’―both for people and the planet, in this case, say the authors.

The report notes: “The pandemic struggle was a particular catalyst for change. As the post-Covid recovery began, LuxCo laid the foundations for long-term change with a strategic exercise visualising the world and the industry in ten or 20 years.

“A makeover was never going to be enough; LuxCo realised it had to profoundly reimagine its work. Openness was vital to its purpose-driven transformation. Consumers would have punished it for inauthenticity if it hadn’t owned its mistakes along the way. Consistency was also key. LuxCo spread its updated values far beyond the C-suite, embedding them in its hiring, performance assessment, pay structures, and training. Patience was another virtue, given that these weren’t instant-payback investments. But LuxCo’s resolve was aided by a keen sense of the risk entailed in not investing.”

In 2030, reselling luxury goods could lift a brand’s profit margin by 40%

Indexed profit margin structure for resale (100 = first sale price)

Notes: Gross margin based on avergae promotional pressure faced by a luxury company in 2021; profit margin defined as revenues after taxes and discounts, net of cost of goods sold direct variable costs

Source: Forecast based on Bain & Company and Positive Luxury analysis

Decoupling growth from volume

From the vantage point of 2030, say the authors, the luxury industry can look back on nine years of recovery, a reminder of its solid fundamentals.

“Yet the headline figures were only part of the story,” they add. “Even more striking was the way some companies produced sales growth without relying on volume increases, minimising their environmental impact in the process.

“LuxCo was one of these brands. Its sales outperformed the market from 2025 without an increase in the volume of items manufactured each year. Instead, sales gains came from its nurturing of circular business models such as resale and rental, which were experimental in 2021 (and often pioneered by third-party platforms), but gradually matured over the decade. In 2030, it focuses on the “product life-cycle value” derived from reselling the same item to many customers, as well as the old benchmark of lifetime value of individual customers.

“LuxCo also now makes more of its products to order (giving the customer more personalisation options in the process). Artificial intelligence boosts its forecast accuracy and pinpoints demand on a city-by-city level, further reducing overproduction. Most dead-stock fabric is upcycled into future collections or limited editions that can command a higher price.

“LuxCo began reselling through a multibrand third-party platform, but took the process in-house after a few years when it realised the importance of controlling the resale conversation—shaping the narrative around “pre-loved” products, vouching for their provenance and condition, and giving resale an alluring sense of exclusivity. Second-generation near-field communication (NFC) has sped up both returns and authentication before resales.”

In 2030, note the authors, resales provide 20% of LuxCo’s revenues, helping it to reach a broader range of consumers.

A transparent and traceable supply chain

By 2030, LuxCo has progressed on its stated environmental goals and set new ones.

Its greenhouse gas emissions are now well on the way to net zero by 2050, partly thanks to the rollout of renewable energy in all offices and factories, and in those of most of its partners.

The report notes: “Some of its sites are poised to generate all their own energy from wind, solar, and biomass sources. But net zero isn’t LuxCo’s goal anymore in 2030; it’s targeting a net reduction in atmospheric carbon dioxide through innovative, nature-based solutions.

“LuxCo’s workforce and boardroom is still not a perfect microcosm of the communities in which it operates, but it’s a lot more representative than it used to be. That’s partly a reflection of the work of its chief diversity officer, an empowered presence internally and externally. Her deft coordination of initiatives has helped LuxCo close the gap between aspiration and achievement on a range of diversity issues, and then increase expectations to spur further progress. But that hasn’t meant a one-size-fits-all approach across LuxCo’s global operations. Much of the progress is down to the way it has tailored measures to the specific conditions in local markets.

“The same inclusivity is now at the heart of its marketing, which strives to avoid outdated beauty standards and embraces diverse body types, ethnicities, ages, sexual orientations, and gender identities. It collaborates with independent social media “think-fluencers,” who act as an extra conduit between customers and brand, and serve as an early-warning system for any marketing that fails the inclusivity test.”

In 2030, the profit margin on renting out luxury goods could be about 40% by the 20th hire

Indexed profit margin structure for subscription rental (100 = notional first sale price)

Note: Profit margin defined as revenues after taxes and discounts, net of cost of goods sold and direct variable costs

Source: Forecast based on Bain & Company and Positive Luxury analysis

Creating economic value from sustainability

In a segment that will resonate with many in our channel, the report notes that in 2021, “it was still common for executive teams to see sustainability as a source of additional cost, rather than a long-term contributor to cash flow”. LuxCo, they say, was a rapid convert to the latter point of view. In the early 2020s, it developed an economic value model for sustainability that’s now central to its corporate performance in 2030.

“For taxes, the model includes maximising incentives designed to align companies with national goals on reducing greenhouse gas emissions. LuxCo’s early work in cutting emissions across its entire supply chain allowed it to qualify for maximum relief. Its investments in regenerative agriculture, reforestation, and community programmes cut its tax bill further. More broadly, key performance indicators that used to be isolated in silos marked “sustainability” and “finance” are now integrated successfully across the business, powering its decision making in areas such as customer loyalty. Likewise, the chief financial officer is a powerful sustainability champion.

“LuxCo’s embrace of reporting reforms (both the financial and the environmental, social, and corporate governance kind) and cutting-edge metrics has helped it prove that sustainability creates economic value in its own activities. In 2030, it hasn’t issued quarterly results for years, having moved to annual reporting as soon as regulators and investors allowed. That lets a clearer narrative emerge, free of short-term noise. Global investors, under pressure to avoid firms that pollute the environment or damage communities, have confidence that LuxCo offers lower risk and higher growth than opaque peers. Its shares trade at a lofty multiple that reflects this trust.”

A holistic approach

Concluding, Bain & Company and Positive Luxury note that the picture they paint may be utopian but also argue that management teams don’t need to aim for perfection but rather work towards their goals through a process of experimentation and refinement.

Takeaways for brands embarking on their journey towards great sustainability over the next decade include:

• setting a bold strategic vision and redefining the company’s purpose; • establishing a transparent baseline for all key sustainability issues; • defining science-based targets and qualitative objectives for positive impact by 2030; • designing a portfolio of projects to realise the vision and objectives; • identifying shields and swords―defensive and offensive strengths; • building commitment to sustainability among the leadership team; and • aligning the organisation and operating model to the new challenges.

The authors conclude: “What’s vital is to approach sustainability in a holistic way that spans consumers, employees, suppliers, communities, and all corporate departments.

“The history of digitalisation can provide lessons. As digital technology evolved, there came a point when the standalone digital team had to become a companywide digital mindset. That’s where we are with sustainability in luxury today. The holistic approach is the best way to turn declarations of intent into quantifiable action—then meaningful change and economic reward.”

The full report can be accessed clicking the report cover below.


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The Moodie Davitt eZine Issue 292 | 15 March 2021

The Moodie Davitt eZine is published 15 times per year by The Moodie Davitt Report (Moodie International Ltd). © All material is copyright and cannot be reproduced without the permission of the Publisher. To find out more visit and to subscribe, please e-mail

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