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The Economics of Luxury

Luxury and Sustainability

How luxury brands are responding to pressure on sustainability, from destroying unsold goods to durability and repair, and whether luxury can be greener.

Luxury faces growing pressure over its environmental and social impact.

Destroying unsold goods

In 2018, Burberry revealed it had destroyed tens of millions of pounds of unsold goods to protect its brand. After a public backlash, it stopped the practice. France banned the destruction of unsold non-food goods from 2022.

Durability argument

Luxury brands argue that well-made products last longer, making them more sustainable than cheap fast fashion.

Repair and resale

  • Brands offer repair services.
  • Some launched certified resale programmes.

Supply chains

  • Concerns about animal welfare in fur and exotic skins; many brands stopped using fur.
  • Labour conditions: in 2024, Italian authorities investigated suppliers of some luxury brands for exploiting workers.
  • Traceability of materials like gold and diamonds.

Lab-grown diamonds

Lab-grown diamonds, chemically identical to mined ones, have become much cheaper, challenging the natural diamond industry, including Surat’s diamond polishers.

The repaired bag

A customer brings a ten-year-old leather bag to the brand's repair service. It's restored and used for another decade.

Thinking luxury is automatically sustainable

Durability helps, but supply chains and waste practices matter.

Key takeaways
  • Burberry stopped destroying unsold goods after 2018 backlash.
  • France banned destroying unsold goods from 2022.
  • Durability, repair and resale can support sustainability.
  • Labour conditions and lab-grown diamonds are shaking up luxury.
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