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Environmental Profit and Loss accounting

Gucci is driving tangible change through deeper supply chain understanding

Gucci’s total environmental impacts associated with its business activities are rigorously calculated on an annual basis. Making the invisible become visible, and the cost to the environment measurable and accountable. Unlike the majority of companies that focus exclusively on their own direct operations and not on their “externalities”, otherwise known as supply chain impacts, Gucci believes it is a business responsibility to address all the impacts on nature and given the global climate and biodiversity crises. This means that the total footprint associated with the production and sourcing of our raw materials, the manufacturing and processing of our collections, and all the way up until they reach our stores has also been measured.

To do this analysis we use Environmental Profit and Loss (EP&L) accounting, which was pioneered by our parent company Kering. An EP&L account measures greenhouse gas emissions, air and water pollution, water consumption, land use, and waste production along the entire supply chain and then calculates what the approximate cost to society is in monetary terms and based on the changes in the environment that can happen as a result of business activities. To get a closer look at how the EP&L works, see this graphic.

By measuring all our environmental impacts, we can focus in on the most significant drivers of impacts from our business and make better-informed decisions. This data-driven approach allows us to develop robust policies and programmes to reduce our footprint and drive tangible, positive change. With this deep knowledge, we can also respond to the risks and opportunities presented by any environmental challenges.

Gucci started implementing EP&L accounting for internal monitoring back in 2011. We began publishing our annual results externally as part of the Kering Group EP&L in 2015 To provide even greater transparency, we launched a customized Gucci Digital EP&L in 2019 and shared unprecedented data online. We are hoping that this open source platform can help our peers understand their impacts on nature and, ultimately, facilitate positive change and collaboration within our sector and other industries.

Using the EP&L as a benchmark to chart our sustainability progress, we have been working hard to meet our ambitious reduction targets: 40% for our total footprint and 50% for greenhouse gas emissions by 2025 (2015 baseline). We have made significant inroads so far and we are close to reaching our goals. Our 2019 EP&L revealed that we have already achieved a 39% reduction for our combined impacts and a 37% reduction for greenhouse gas emissions alone since 2015, relative to growth. When we compare this data to our 2018 EP&L, we can see that our emissions decreased by 18% and our total impacts by 21%, relative to growth.

These excellent results are directly linked to our focus on driving improvements in high impact areas across our value chain, which has led to positive and quantifiable change. Some of these sustainable improvements are around: increasing the use of recycled raw materials and organic fibres in our collections and incorporating responsibly sourced precious metals, like 100% ethical gold for our jewellery; extending our sustainable processes and manufacturing efficiencies, like Gucci Scrap-less for leather and Gucci-Up for circularity; and switching to green energy, whereby we have reached 83% renewable energy for our stores, offices, warehouses and factories with a 100% target by the end of 2020. For a deep dive into our results, go to our interactive Digital EP&L here.

2019 EP&L in numbers:
– 39% reduction of total footprint since 2015, relative to growth
– 37% reduction of greenhouse gas emissions since 2015, relative to growth
– 21% reduction of total footprint and a -18% decrease of greenhouse gas emissions, compared to 2018 EP&L and relative to growth
EP&L Y2015 Y2018 Y2019
EP&L value (th. €) 172.782 284.860 260.127
Revenues (mln €) 3.898 8.285 9.628
EP&L Intensity (EP&L/Revenue) 44,33 34,38 27,02
Annual variation -21,42%
Variation from target baseline (2015-2019) -39,05%
EP&L
EP&L value (th. €)
open
Y2015
172.782
Y2018
284.860
Y2019
260.127
Revenues (mln €)
open
Y2015
3.898
Y2018
8.285
Y2019
9.628
EP&L Intensity (EP&L/Revenue)
open
Y2015
44,33
Y2018
34,38
Y2019
27,02
Annual variation
open
Y2015
Y2018
Y2019
-21,42%
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