According to Oxfam, since 2020, the five wealthiest men in the world have more than doubled their fortune. During the same period, the combined wealth of over 60% of humanity has decreased.
The wealthiest individuals tend to experience exponential growth in their holdings, while the poor experience declines in their spending power and quality of life. The wealthy also typically indulge in higher-impact lifestyles. Fifty of the world’s richest billionaires on average produce more carbon through their investments, private jets and yachts in just over an hour and a half than the average person does in their entire lifetime.
The luxury sector crystalizes resentment, especially in a context where people perceive they are less well-off than previous generations. From an environmental perspective, the industry can be seen as resource-intensive and overly reliant on extraction of precious natural resources. From a business perspective, luxury has recently come under fire for rising prices, over-industrialization, declining quality and hidden labor issues. Against this backdrop, it’s fair to ask: is the luxury sector still socially, culturally, and ethically relevant?
In 2024, BSR did some research into the “social acceptability of luxury,” the economic, cultural and social factors driving relevance and desirability of the industry. We found a landscape full of paradox. From an economic perspective, an industry that crystallizes resentment between have’s and have not’s but one that also weights about 40% of the French CAC 40, invests in revitalization of manufacturing infrastructure and know-how in rural regions and has created thousands of new jobs.
From a social and cultural perspective, the industry is leaning into transparency related to sourcing decisions, to employment of more diverse talent and to opening up its cultural capital so that its heritage can be more widely shared and enjoyed, even by those who may not be able to afford luxury products. And yet, criticism about certain behaviors – elitism, overproduction and encouraging high-impact lifestyles, persists.
How can the industry overcome these paradoxes and square the circle? By embracing one additional paradox, that of being sustainable and exclusive at the same time. Sustainable because the industry reimagines traditional models and moves towards more circular and regenerative practices while better sharing wealth creation with all the actors along the chain. As it serves the 1%, the luxury industry has a huge opportunity to promote the economic resilience of its ecosystems, by investing with its suppliers in modernization and climate adaptation programs and upskilling, and by implementing living wage programs, for example. Exclusive because of its strong, distinct creative points of view. This is what industry observers call “aesthetic elitism” (Eric Briones) or “cultural cachet” (Brittany Sierra).
Sustainability + creative distinction.
This is how luxury can redefine desirability and relevance in the years to come.
