Profit and purpose: The case for sustainable luxury fashion

The development of the fashion industry into a large-scale multinational operation and the resulting potential for damage to planet and people has attracted the attention of environmental and social activists since at least the 1960s, but consumers on the whole remain broadly ignorant of how their personal fashion purchases and widespread industry practices contribute to negative environmental and social impact (Connell and Kozar, 2014). The luxury sector, in particular, has much to lose in terms of reputation by revelations of exploitation and irresponsible environmental actions along the supply chain, given that much of its premium-pricing is based on notions of authenticity and quality production (Kapferer and Bastien, 2012). Previously, a focus on eco or sustainable fashion was seen as marginal or niche, but more recently consumers demonstrate a desire for greener products creating potential for businesses to work for profit and purpose (Ottman, 2011). This change has resulted in a new hybrid business model- the social enterprise- which adds value by meeting market needs and wants through responsible business and employment practices (Radclyffe-Thomas and Roncha, 2016).

Tengri, a London-based luxury knitwear label is one such social enterprise business and this paper explores social enterprise in the luxury sector through a case study of Tengri’s business model that combines social and environmental awareness with luxury product development to create a virtuous cycle of ethical fashion production and consumption. Founder Nancy Johnston was inspired by her experiences travelling with Mongolia’s yak herders where she was confronted with the harshness of the nomadic way of life and threats to its continuing existence from land degradation and exploitative business practices. She was driven to action when she juxtaposed these conditions with the promoted glamour of the luxury fashion industry, which relies on supplies of ingredients from just such workers in supply chains that stretch across the globe.

Informed by primary research with Tengri and industry experts supplemented with analysis of Tengri’s business, product development and marketing materials, this paper investigates how Tengri works to balance environmental and social engagement with launching a start-up luxury business aimed at engaging the new global sustainable luxury consumers, a group described by Caroline Holme Director of Globescan as the ‘Aspirational’ consumer – a segment that combines a desire to be ethical with a love of style, design and shopping, particularly prevalent in emerging markets.

Keywords: sustainability, luxury, fashion, social-enterprise, innovation