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Not Just Gucci: Kering Wants to be Carbon Neutral Across Entire Portfolio

French luxury conglomerate Kering announced Tuesday that the entire group will become carbon neutral in its own operations and across its supply chain by paying to offset emissions it isn’t able to eliminate.

The move comes just weeks after Gucci, one of its tentpole holdings, said it will pour millions of dollars into forest conservation projects worldwide, in effect becoming the world’s first “entirely carbon neutral” luxury house.

While critics of carbon offsets say the schemes allow companies to pay to pollute without addressing the root causes of the problem, Kering says it’s resorting to offsets only when it has exhausted all other avenues.

To “effectively avoid and reduce” greenhouse gases, Kering says it has been using its annual Environmental Profit & Loss account, which places a monetary value on a company’s environmental impact, to assess the group’s emissions—“up to the base of the supply chain,” where raw materials are generated—and establish mitigatory supply chain initiatives and efficiency programs. Simply adopting the Natural Resources Defense Council’s Clean by Design mill-improvement methodology, for instance, saves the group 12 percent in carbon emissions every year.

Besides increasing its use of renewable energy to account for 67 percent of the group’s total use, Kering has also set a Science-Based Target to reduce all carbon emissions related to its own operations and supply chain by 50 percent of 2015 levels by 2025.

“When it comes to climate change, we can no longer wait to take real action. We all need to step up as businesses and account for the greenhouse-gas emissions that we generate in total,” said François-Henri Pinault, chairman and CEO of Kering, who recently rallied 32 clothing and footwear companies to pledge to tackle climate change, ocean protection and biodiversity at the G7 summit.

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Kering calculates that it will offset roughly 2.4 million tons of carbon dioxide for 2018 through REDD+ projects—the acronym stands for “reducing emissions from deforestation and forest degradation”—that will prevent logging, protect biodiversity and support local livelihoods in nearly 2 million hectares of forests around the world.

“Kering is committing to become completely carbon neutral as a group across all our operations and supply chains,” Pinault added. “While we focus on avoiding and reducing our greenhouse-gas emissions to meet our Science-Based Target, we will offset all our remaining emissions and support the conservation of vital forests and biodiversity around the world.”

The fashion industry accounts for 8.1 percent of the world’s carbon emissions, or as much as the total climate impact of the entire European Union, according to environmental consultancy Quantis.