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CHIEF SUSTAINABILITY OFFICER
Report created by Katerina Vargova
Compagnie Financière Richemont SA, also known as Richemont, is a Switzerland-based luxury goods holding company founded in 1988 by South African businessman Johann Rupert. Through its various subsidiaries, Richemont produces and sells jewellery, watches, leather goods, pens, firearms, clothing and accessories. It operates through the following segments: Jewellery Maisons, Specialist Watchmakers, Online Distributors, and Other.
The Jewellery Maisons segment produces jewellery products which include Cartier and Van Cleef & Arpels. The Specialist Watchmakers segment offers precision timepieces, which comprises Piaget, A. Lange & Sohne, Jaeger-LeCoultre, Vacheron Constantin, Officine Panerai, IWC Schaffhausen, Baume & Mercier, and Roger Dubuis.
The online Distributors segment relates to the online sale of luxury goods through YNAP and Watchfinder. The Other segment includes Montblanc, Alfred Dunhill, Chloé, Peter Millar, Azzedine Alaia, investment property companies, and other manufacturing entities.
The company was founded by Johann P. Rupert in September 1988 and is headquartered in Bellevue, Switzerland.
Company Sustainability Activity
In 2019 Richemont launched its Transformational Strategy (‘Strategy’), which reflects aspiration for Better Luxury – improving the way luxury is created, in a way that is more sustainable and responsible and creating a positive impact for the many different stakeholders involved in its value chain. The Strategy builds upon its previous CSR Plans of 2014 and 2017 and more than a decade of continuous improvement.
Richemont’s ‘Movement for Better Luxury’ is supported by four focus areas: People, Communities, Sourcing and Environment – each of which has an owner at Group level and a series of commitments. These four areas are encompassed by strong governance, active engagement and continuous innovation in materials and processes. Richemont’s Strategy combines three levels of ambition over the short-, medium- and long-term, providing its Maisons with greater flexibility.
- Overall, women represent 58% of Richemont’s total workforce, which represents an increase of 1% compared to the previous year. Women represent 34% of the Group’s 440 Top Management positions. In addition, 17% of the Group’s CEOs are women, including Maisons & Regional functions.
- Committed to source responsibly, ensuring the integrity of their products, and respecting ethical business practices, human and labour rights, and the environment.
- Several Richemont’s Maisons, including Cartier, Chloé, Montblanc and Peter Millar as well as YNAP have chosen to stop buying or selling fur. For the other Maisons using fur, the WelFur certification is mandatory.
- The overall carbon footprint for 2019 amounted to 284 227 tCO2e
- Richemont in the UK developed a programme “Be Kind To Your Mind”, which gives practical advice to employees and has generated considerable engagement.
- Identify a tool to list the hazardous chemicals used within the Group and to manage hazardous chemicals safety data sheets
- Roll-out the global volunteering framework and intensify volunteering activities worldwide
- RJC certifications and CSR audits
- 100% certified gold
- Establish a waste taxonomy, including plastic
- Reduce plastic in branded packaging
- 100% renewable electricity by 2025
- Get LEED or BREEAM certification
- A suitable online chemical management tool has been identified and made available. Prioritizing operations in Switzerland first, the tool is being rolled out to high users of hazardous chemicals. The need for this tool will aid Richemont to understand the chemicals used and provide relevant safety and environmental information to users. It will also aid legal compliance for hazardous chemical control
- Virtual volunteering initiatives have been largely promoted as employees have shown great interest in giving back to communities. The results of this effort are seen in the increase in volunteering hours in 2019/20. Richemont employees contributed a combined 5,203 hours of their time to volunteering initiatives in 2019/20 which represents double the time in 2018/19 (2,567 hours).
- RJC certifications are a key objective and continuous efforts are made to continue the deployment of RJC Standards. When a supplier is not within the RJC scope, such as leather, it must be audited. Accordingly, a significant number of audits have been performed in their leather supply chain at Tiers 1 and 2. This has increased their knowledge and understanding of this activity.
- 90% of the gold purchased by Maisons is CoC certified and comes from recycled origins. 97% of the semi-finished gold components entering Richemont’s manufacturing processes are from RJC COP certified members, some of them already RJC COC certified or on the way to becoming certified.
- A waste taxonomy has been prepared not only for manufacturing sites and warehouses, as originally planned but also for boutiques and offices. The preliminary findings indicate that the taxonomy needed very few amendments and that it has encouraged Richemont’s businesses to further engage with their landlords on waste management. The waste taxonomy was a Foundational goal on which to build future waste management targets in the Aspirational and Transformational periods and to effectively monitor such targets.
- The inventory of existing local infrastructure and systems in place for waste recycling should start in all Richemont’s industrial sites during autumn 2020
- During the year, the types and volumes of plastics used by all Maisons were analysed by material type, by carbon emissions and by Maison. A pilot study by one specialist watchmaker was started, focusing on alternative materials. Whilst that pilot study has been slowed down by the pandemic, other Maisons are learning from the preliminary findings and expect to apply them in the years ahead, applying common decision-making tools. The result will be a reduction in the volume of plastic components used in branded packaging and a broader choice for customers.
- For paper and packaging materials, Maisons and Group operations have chosen, whenever possible, to use 100% responsibly-sourced wood-based materials. Recognised certification schemes include the Forestry Stewardship Council standards linked to recycled content.
- Richemont joined the Renewable Energy 100% initiative (‘RE100’) in due course
- Renewable electricity now accounts for 64% of Richemont’s overall electricity consumption
- Buildings emissions decreased by 6%
- RJC certification – Supplier Code of conduct signed – Watch/jewellery 96% of purchases covered by suppliers having signed or are RJC certified
- RJC COP certification jewellery – a certification system applicable to all members’ businesses that contribute to the precious metals, diamonds and coloured gemstones supply chain
- Kimberley Process Certification Scheme (KPCS) – all rough diamond exports and imports of participating countries to be documented, uniquely certified and approved via a government bureau, in order to put an end to the trade in conflict diamonds.
- ISO 14001/LWG – 70% of Richemont’s tanneries have an environmental certification
- Welfur – mandatory
- BREEAM/LEED – Some ten boutiques have been certified. Example: Cartier’s One Peking Road boutique in Hong Kong SAR, China, which received GOLD LEED certification. As the Group has committed to 10% of all new buildings and refurbishments being certified each year by 2025, many more boutiques will be added.
- Renewable Energy Certificates via the RECS system
UN Sustainable Development Goals
UN SDGs Compliance
- Richemont has expanded its benefits programme for childcare services, including parental leave. In its supply chain, Richemont promotes equal remuneration for women and men, equal opportunities and diversity through certification schemes such as the Responsible Jewellery Council.
- the launch of the employee-led network ConnectHER, which addresses gender topics in the workplace and empowers women within the Group. The network was established in the Richemont Regional Function teams with 130 individuals across the regions. 9 events were held in markets with over 325 attendees.
- Several Maisons invested in initiatives around diversity and inclusion, among which Chloé’s new UNICEF partnership assists girls to access higher education and helps them learn to dare. As a #GirlsForward initiative, Chloé will support UNICEF’s programmes over three years to equip adolescent girls and young women with the digital skills, entrepreneurial spirit and confidence that leads to greater freedom, limitless possibilities and equal opportunities.
- Delivering a baseline of training that address topics such as Discrimination and Harassment in the workplace as well as Unconscious bias awareness. eLearning around these topics were rolled out to the entire workforce.
- In 2019, Cartier signed the Women’s Empowerment Principles (WEPs), a set of guiding principles established by the United Nations (UN) Global Compact and UN Women to promote gender equality and women’s empowerment in the workplace, marketplace and community. The WEPs are grounded in the recognition that businesses have a stake in, and responsibility for gender equality and women’s empowerment.
- Richemont has established luxury retail academies in Asia and North America.
- Richemont seeks to promote and influence responsible behaviour wherever possible. This is largely achieved through active involvement and promotion of the Responsible Jewellery Council and the dissemination of the Group’s Supplier Code of Conduct (the ‘Code’). The Code includes Richemont’s expectations of suppliers regarding ethical business practices, labour conditions, employment practices, human rights and the environment.
- Richemont is committed to ensuring that the diamonds in its products have not been used to fund conflict or terrorism. All diamonds purchased by Group companies are Kimberley Process compliant. Richemont requires its suppliers to comply with the ‘System of Warranties’, a continuation of the KPCS that also applies to polished diamonds. Compliance is closely monitored.
- Richemont has established an Environment, Health and Safety audit programme for significant manufacturing, operational and administrative sites: some 20 site audits are conducted each year by a specialised independent auditor. The results from those audits are used to drive continuous improvement plans over and above compliance with local laws and regulations. The process to achieve certification with the RJC’s Code of Practices also includes a review of environmental matters.
- Richemont’s long-term goals include the crafting of fully sustainable business models based on circular economy principles. Richemont has taken the first steps with the international expansion of a specialist pre-owned watch business. In the meantime, Richemont is primarily using recycled gold in its new watches and jewellery pieces to minimise its environmental impacts and is reviewing all aspects of product packaging to minimise waste in the production and consumption phases. An example is IWC Schaffhausen’s alternative packaging project, which offers customers smaller, lighter ways to travel with new watches.
- Richemont has committed to establishing Science-Based Targets in line with the Paris Agreement. The targets will be set in the year ahead for Scope 1, 2 and 3. In parallel, Richemont has also committed to lowering its carbon emissions from business travel and to source 100% renewable electricity by 2025. Details of those commitments and their current emissions data may be found in the Environment chapter.
- From 2008 to 2020, Richemont has purchased carbon offsets to neutralise its measured footprint for buildings, business travel and more recently logistics. The cost of carbon offsets varies depending on the volume of carbon credits and the average price per offset. The cost of offsetting Richemont’s prior year footprint was some € 1.1 million.
- Many of their Maisons use American alligator leather for making watch straps. The alligator farming methods, including animal welfare certification, has helped to return the species’ population to safe levels in recent decades. In parallel, the farmers conserve the biotopes on which 8’000 species depend, including the alligators. Moreover, the Louisiana wetland biotopes are critical for climate change mitigation as they sequester a significant amount of carbon. These observations regarding biodiversity preservation and carbon sequestration have encouraged their Maisons’ efforts to source American alligator leather.
- Through partnerships, Richemont can contribute to the SDGs beyond its operations. Richemont’s partnerships can be through commercial relationships with suppliers and distributors, and philanthropic relationships. An example is the Laureus Sports for Good Foundation and the benefits it brings to hundreds of thousands of disadvantaged children around the world each year. Company’s partnership with standard-setting organisations enables Richemont to build capacity beyond its operations as they promote dialogue and multilateral partnerships to achieve progress on the Global Goals.
Compagnie Financière Richemont SA is listed in leading indices like FTSE4Good, CDP, the United Nations Global Compact and more. Richemont reporting complies with the GRI Index.
Richemont pays attention to the sustainable acquisition of materials and is expecting the same from its suppliers. All precious metals, diamonds and coloured gemstones are certified, the same as fur and leather.
Richemont is committed to certified its buildings (LEED, BREEAM), most of its tanneries have an environmental certification.
Richemont complies with 5 of the UN Sustainable Development Goals. Richemont is on its way toward a more sustainable future thanks to implementation of more sustainable policies and practices, as such, is rated C.
Analyst Outlook: Neutral
Richemont has set up some goals towards a sustainable future but is still using offsetting for its carbon footprint and no direct positive strategies.
- Racial discrimination at Richemont’s offices in London
- Carbon footprint for 2019 amounted to 284 227 tCO2e
- Stopped buying or selling fur
- Committed to 100% renewable energy by 2025
- Richemont destroyed more than $500 million worth of watches in two years, though they claim they did so in a sustainable manner
- Richemont has a partnership with the Ellen MacArthur Foundation’s Make Fashion Circular Initiative, where they join other leading organizations to work towards a circular fashion economy.