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Gucci took action on climate change. Now it’s daring other companies to do the same

The $8.8 billion fashion giant is offsetting the carbon footprint of its entire supply chain. CEO Marco Bizzarri is challenging other business leaders to join him.

Gucci took action on climate change. Now it’s daring other companies to do the same
[Photo: Pietro D’Aprano/Getty Images/Gucci]

If we want to avoid the most devastating consequences of global warming—things like mass starvation, frequent natural disasters, and the drowning of coastal cities—we’ll need to radically transform the way we live. Last year, the United Nations convened a group of 91 scientists who analyzed more than 6,000 scientific studies to come up with guidelines that will help world leaders mitigate the worst impacts of climate change. One of those scientists, Myles Allen of Oxford University, put it to the New York Times: “We need to . . . turn the world economy on a dime.” But given the scale of change needed to do so, it’s easy to feel powerless. After all, what can one person—or even one company—do to transform the world economy?

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Gucci’s CEO, Marco Bizzarri, doesn’t want business leaders to fall into a sense of paralysis. Today, he’s launching a program called the CEO Carbon Neutral Challenge, in which he invites other executives to officially join the fight against climate change. In an open letter, Bizzarri asks other leaders to follow Gucci’s lead in reducing and offsetting its greenhouse gas emissions. He makes the case that companies can’t just focus on long-term strategies that will reduce their carbon emissions and move toward greener business practices: They should also immediately offset their emissions, which refers to investing in a project or technology that removes carbon from the atmosphere. This might involve, for instance, donating to reforestation projects.

As the CEO of an $8.8 billion company in the fashion industry—a sector that generates more greenhouse gas emissions than all international flights and maritime shipping trips combined—Bizzarri’s message is likely to resonate with the leaders of other fashion houses. But he explains that he’s making this appeal to CEOs across different industries. For instance, later today, he will speak at the Salesforce’s Dreamforce conference, which tends to attract business leaders from the technology sector. “We don’t have the luxury of doing nothing,” Bizzarri tells Fast Company exclusively. “We need to act now, and we will be able to amplify our impact if we all work together.”

Marco Bizzarri [Photo: Petra Collins/courtesy Gucci]
Bizzarri makes it clear that CEOs must be comprehensive in their offsetting efforts, taking into account all the carbon emitted across the entire supply chain. There are many ways to measure a company’s carbon emissions. Some businesses that claim to be climate neutral only offset their direct emissions, which refers to the greenhouse gases generated from parts of the supply chain that they own and manage, like their offices and distribution centers. But studies show that the vast majority of carbon generated by companies occurs much earlier in the supply chain, such as the growing of raw materials and manufacturing in factories.

“The reality is that the majority of the GHG emissions linked to day-to-day business activities are created upstream in the supply chain,” Bizzarri writes in the letter. “I firmly believe that we must all be accountable for these emissions and redefine corporate carbon neutrality to encompass the entire supply chain.”

In practical terms, CEOs must follow some guidelines in order to participate in this challenge. Within a year of signing on, they must have their company’s greenhouse gas emissions measured by an objective and internationally recognized organization, and this measurement must encompass the entire supply chain. These are known as “Scope 3” emissions, a term coined by the Greenhouse Gas Protocol to describe all of the emissions a company generates both directly and indirectly. Gucci will highlight all companies that sign on in its dedicated CEO Carbon Neutral Challenge website, which will, in turn, help consumers identify what companies are working toward carbon neutrality.

Gucci itself will not monitor or audit the companies that sign on to the challenge. The project is meant to encourage executives to hold themselves accountable by transparently documenting their progress in a report that will be publicly available. Part of the challenge requires CEOs to publicly announce a timeline and plan of action that involves both reducing the amount of greenhouse gases they emit and then offsetting unavoidable emissions using nature-based solutions (like planting trees). These leaders must then provide annual reporting about the impact and outcomes of this project, using third-party verification.

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If Bizzarri feels confident in this plan of action, it’s because Gucci itself has followed all of these steps over the last two years. As I reported in September, Gucci has been following an ambitious strategy to reduce, measure, and offset its carbon emissions. All of its 2018 emissions have already been offset through an international initiative called REDD+, which supports forest conservation projects in developing countries.

Rajiv Joshi, a founder of sustainability nonprofit The B Team and special adviser to climate action campaign Mission 2020 (which is committed to helping the world achieve some key milestones) had a chance to examine Gucci’s challenge before it went live. Joshi believes that Bizzarri’s initiative will spur other companies to move more quickly toward their sustainability goals. Since the challenge asks companies to publicly report on how quickly they have achieved their carbon neutrality goals, Joshi thinks this could encourage friendly competition among businesses. After all, peer pressure is a proven way to get individuals to make eco-friendly actions. “What piques my interest with the Gucci challenge is that it is a good example of companies not just taking accountability for their own operations, but also the emissions generated by their suppliers,” he says. “This challenge encourages companies to be in positive competition to get as much of the emissions out of their whole supply chains as possible.”

Joshi points to data from the recent United Nations Climate Action Summit stating that if we want to avoid a climate apocalypse, humans must halve global greenhouse gas emissions by 2030 (and then continue halving those emissions every decade until 2050). “It’s an almost exponential trajectory,” he says. “This would end up with about 95% reductions by 2040, and the remaining 5% will need to be managed through nature-based solutions.”

The U.N. has developed a strategy to help achieve some of these goals through the Paris Climate Agreement, which was ratified by 55 countries in 2016. The goal of the agreement was to keep the increase in global average temperature to below 1.5°C over the next decade, which would substantially reduce the risks and impacts of climate change. According to the plan, each country would determine, plan, and report on their efforts to mitigate global warming. This would mean that governments would develop regulations that would force companies to reduce and mitigate their emissions. But in a huge blow to climate activists, President Donald Trump announced his intention to withdraw the United States from it in 2017 (although based on the terms of the agreement, the earliest effective date for withdrawal is November 2020).

Joshi says that Trump’s stance on climate change shouldn’t discourage us. He points out that many countries—including, most recently, Russia—have signed on to the agreement, and even in the United States, states like California are continuing to abide by the agreement despite what the federal administration chooses to do. “If you accumulate all that action, it means that we’re definitely pushing in the right direction,” Joshi says. “And companies can take leadership to help us get to our goals. There’s hope that things could change course.”

Bizzarri agrees. With this challenge, he makes the case that even in the absence of government regulations, companies can and should self-regulate. And most of all, he encourages other CEOs to feel a sense of urgency and act immediately, rather than drafting long-term strategies. It’s possible to take immediate action by measuring and offsetting their companies’ current impacts, while also pushing toward long-term goals of restructuring their businesses to emit less in the first place.

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“Given the scientific evidence . . . we don’t have the leisure to just work to avoid and reduce our impacts on climate and biodiversity over the long-term,” he says. “Nor can we wait for technology and climate smart solutions to catch up, and to scale up, to meet the sustainability challenges we all face. This could take years we don’t actually have.”

To read Bizzarri’s open letter and learn about the CEO Carbon Neutral Challenge guidelines, you visit the site here.

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About the author

Elizabeth Segran, Ph.D., is a staff writer at Fast Company. She lives in Cambridge, Massachusetts

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