Subject category:
Strategy and General Management
Published by:
International Institute for Management Development (IMD)
Version: 02.12.2021
Revision date: 5-Jan-2023
Length: 25 pages
Data source: Field research
Topics:
Sustainability; Luxury; Environmental social and governance integration; Organizational transformation; Strategy execution; Financial strategy; Materiality analysis; Good health; Well-being; Gender equality; Decent work conditions; Economic growth; Reduced inequalities; Responsible consumption; Responsible product
Abstract
In a short span of five or six years, CHANEL embraced CSR (corporate social responsibility) and ESG (environmental, social, governance) initiatives that stretched far beyond its established comfort zone of artistic direction and creative output. The progression of these initiatives culminated in March 2020, when the company launched CHANEL Mission 1.5 degrees, a strategy for embarking on a decarbonization journey across the business as well as the value chain. In keeping with the timeframe of the United Nations Sustainable Development Goals (SDGs), the '1.5 degrees' represented the commitment to help limit average global mean temperature increases to 1.5 degrees Celsius above pre-industrial levels. Entering the 2020s, Global CFO Philippe Blondiaux felt confident that CHANEL was primed to execute on its vision and usher in a 'decade of delivery' in sustainability. The Group was about to transform every aspect of its business; help its partners do the same; innovate at every point in the value chain; and support change beyond its own operational footprint. Yet a host of challenges loomed on the road ahead: (1) Could an industrial group that was highly decentralized continue to spearhead initiatives and shape an integrated sustainability strategy? (2) In addition to creating a cultural glue and a shared sense of inspiration and purpose, could accountability trickle all the way down the organization with a worldwide workforce of nearly 28,000? (3) In the long term, was the company in a position to live up to the commitments it had encapsulated in the CHANEL Mission 1.5 degrees document, and was there sufficient clarity on what the sustainability push would mean in the long run for CHANEL, as a luxury brand, as we know it?
Time period
The events covered by this case took place in 2011-2021.Geographical setting
Region:
World/global
Featured company
Chanel Corp
Employees:
10000+
Turnover:
USD 10.1 billion
Industry:
Luxury goods and jewellery
About
Abstract
In a short span of five or six years, CHANEL embraced CSR (corporate social responsibility) and ESG (environmental, social, governance) initiatives that stretched far beyond its established comfort zone of artistic direction and creative output. The progression of these initiatives culminated in March 2020, when the company launched CHANEL Mission 1.5 degrees, a strategy for embarking on a decarbonization journey across the business as well as the value chain. In keeping with the timeframe of the United Nations Sustainable Development Goals (SDGs), the '1.5 degrees' represented the commitment to help limit average global mean temperature increases to 1.5 degrees Celsius above pre-industrial levels. Entering the 2020s, Global CFO Philippe Blondiaux felt confident that CHANEL was primed to execute on its vision and usher in a 'decade of delivery' in sustainability. The Group was about to transform every aspect of its business; help its partners do the same; innovate at every point in the value chain; and support change beyond its own operational footprint. Yet a host of challenges loomed on the road ahead: (1) Could an industrial group that was highly decentralized continue to spearhead initiatives and shape an integrated sustainability strategy? (2) In addition to creating a cultural glue and a shared sense of inspiration and purpose, could accountability trickle all the way down the organization with a worldwide workforce of nearly 28,000? (3) In the long term, was the company in a position to live up to the commitments it had encapsulated in the CHANEL Mission 1.5 degrees document, and was there sufficient clarity on what the sustainability push would mean in the long run for CHANEL, as a luxury brand, as we know it?
Settings
Time period
The events covered by this case took place in 2011-2021.Geographical setting
Region:
World/global
Featured company
Chanel Corp
Employees:
10000+
Turnover:
USD 10.1 billion
Industry:
Luxury goods and jewellery