Comparative Implications of Decarbonization of Luxury: Emission Profile and Strategic Limitations

The paper compares carbon footprint structures and decarbonization plans of the four most popular luxury conglomerates (LVMH, Kering, Prada, Richemont) based on Environmental, Social and Governance (ESG) reports. Carbon Disclosure Project (CDP) disclosures, and financial reports (2019-2024). The main findings are as follows: (1) Carbon intensity( tCO2/e Million euros revenue) has a multifaceted connection with revenue growth: whereas LVMH and Prada recorded absolute decoupling (decrease of intensity with growth of revenues), Kering reported steadier increase in intensity using first-order volume scaling and not supply-chain innovation, corroborating H1 with reservations regarding its applicability to all corporations, and overriding H2; (2) Scope 3 emissions (encompassing 68%-90% of Decarbonization will need to implement selective transparency mechanisms (i.e. permissioned blockchain) as well as commercialization of high cost abatement technology (i.e. bio-based material) through high-end product lines with policy supportive supplier capacity building to deal with the collective action problems of Scope 3. The tools of regulation such as Corporate Sustainability Reporting Directive (CSRD)/Carbon Border Adjustment Mechanism (CBAM) should be supplemented with the transition support to avoid displacement of suppliers.