Aegon Asset Management, a.s.r asset management and Actiam have joined forces in engaging luxury brands for sustainable practices.
Fur farming is not only a controversial issue, but also a complex one. Pro-fur campaigns heavily criticize the environmental impact of faux fur, whereas anti-fur campaigns often lead with ethical arguments. The normative debate has shifted and there are potentially negative financial consequences for brands using fur and exotic leather. Investors may therefore be hesitant to be exposed to companies that produce products that contain these materials. One of the tools to better understand and mitigate this risk is engagement with investee companies.
Over the course of two years Aegon Asset Management, a.s.r asset management and Actiam collaborated on engagements with five globally listed luxury brands to address the controversies related to the topic of fur and exotic leather in their collections. Objectives of the engagement were to:
- Understand how the company is using fur and exotic leather
- Understand how the company deals with negative consumer sentiment around fur and regulatory developments
- For the company to commit to phasing out or stopping the use of fur
To reflect on the learnings of the engagement, a collaborative paper has been created. The key learnings are:
- Increased concerns around the use of fur have sparked a call from investors for luxury brands to go fur-free
- Europe is leading the charge in humane regulations guaranteeing the freedom and welfare of animals
- As some luxury brands are shifting the responsibility onto their designers, others are embracing the call to implement new standards for the sake of the environment and animal welfare
- Although headwinds remain, changes within the luxury goods industry appear to be taking shape as a result of investor demand and an increased call for accountability