Gucci’s sustainability claims rely on carbon offsets and accounting tricks

New investigative report from Follow the Money exposes Gucci’s tricks.

In 2012, a French company called Pinault-Printemps-Redoute (PPR) bought a 5% stake in the US-based carbon project developer Wildlife Works Carbon LLC. In 2011, PPR had bought 95,100 carbon credits from Wildlife Works’ Kasigau Corridor REDD project in Kenya.

In a press release, Jochen Zeitz, PPR’s Chief Sustainability Officer said that,

“Investing in Wildlife Works Carbon, LLC rounds out our 5-year plan, linking our long-term strategy of a more sustainable business model to an investment that results in net-positive social and environmental impacts. The acquisition is a win-win-win for us as an investor, for the local community and for the land that is being conserved.”

In 2013, PPR changed its name to Kering. It owns the brands Gucci, Balenciaga, Bottega Veneta, Yves Saint Laurent, Creed and Alexander McQueen.

In September 2019, Gucci claimed to be “entirely carbon neutral”:

To build on longstanding efforts to reduce environmental impacts and drive positive change, Gucci announced today that it is offsetting all remaining Greenhouse Gas (GHG) emissions annually from its own operations and the entire supply chain through four critically important REDD+ projects that support forest conservation around the world. As an unprecedented commitment to sustainability leadership in luxury and fashion, Gucci’s supply chain has become carbon neutral.

In 2018, Gucci bought 1.4 million carbon credits at a cost of US$8.4 million. These carbon credits came from four REDD projects: Alto Mayo REDD project in Peru; Chyulu Hills REDD project in Kenya; Southern Cardamom REDD project in Cambodia; and Rimba Raya REDD project in Indonesia.

All four of these REDD projects are controversial. And Gucci has bought carbon credits from other projects that are, if anything, even worse. But that’s not really the point. Meaningful action on the climate crisis requires corporations to stop burning fossil fuels, not to buy offsets so that they can make ridiculous claims of being “carbon neutral”.

A new article published by Follow The Money exposes how Gucci’s sustainability claims are based on accounting tricks, not by reducing emissions. The article is written by Ties Gijzel and Mira Sys and highlights the contradiction at the heart of Gucci’s green claims. To make more money, the company has to sell more bags and clothes. “This is at odds with reducing the brand’s climate impact,” Gijzel and Sys write.

Follow the Money reveals Gucci’s accounting tricks:

Trick 1: Use relative emissions

Gucci’s 2021 sustainability report shows a 46% drop in emissions since 2015. But this is misleading. Gucci looks at emissions per garment produced and hides the fact that the company sold more in 2021 than in 2015. In 2015, Gucci emitted 801,000 tonnes of CO₂. In 2021, the figure was 1.09 million tonnes. That’s an increase of 36%.

Trick 2: Offsets

In its 2021 sustainability report, Gucci lists two REDD projects that it bought carbon credits from: the Kariba REDD project in Zimbabwe; and the Madre de Dios Amazon REDD project in Peru.

In January 2023, Follow the Money revealed that almost two-thirds of the carbon credits issued by the Kariba REDD project were fictitious. And the Madre de Dios Amazon REDD project consists of two logging concessions, one of which overlaps with the territory of the Mashco Piro, an uncontacted Indigenous tribe.

Trick 3: Leave out important information

Under the EU’s Corporate Sustainability Reporting Directive, Kering has to report on environmental and social risks that the company faces and the impact of the company’s operations on people and the environment.

In February 2023, the New Climate Institute and Carbon Market Watch published a report looking at 24 major companies’ climate strategies. The report found that “most companies’ climate strategies are mired by ambiguous commitments, offsetting plans that lack credibility, and emission scope exclusions”.

Trick 4: Allow subsidiaries to offset

In 2022, the New Climate Institute and Carbon Market Watch called out Unilever and Nestlé for claiming not to use offsets to meet their net zero targets. But both companies allow their subsidiaries to do so.

In 2022, Unilever’s subsidiary Dove claimed it would be “CO₂ -positive by 2030”. It will do so by buying offsets. The EU has banned green claims that are “based solely on carbon offsetting schemes”.

Trick 5: Use the pandemic

In its 2021 sustainability report, Kering states that it emitted less between 2019 and 2021 than in 2015. That may be true, but the COVID pandemic is likely to have had far more impact on Kering’s emissions than the company’s net zero target.

Gucci did not provide an on the record reply to the questions that Follow the Money sent to the company.

Gucci has changed the format of its sustainability report. Instead of the more than 80-page 2021 sustainability report, for its 2022 report the company put out a 3-page summary that links back to Gucci’s online reporting.

There’s no mention of offsets in the 2022 sustainability report, despite the fact that the carbon credits bought from the Madre de Dios Amazon REDD project were to offset Gucci’s 2022 emissions.

In May 2023, Gucci quietly removed its claims to be carbon neutral from its website.

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