Renewables Power Luxury Retail’s Latest Partnership

Miami Design District Amidst the artistry and activity of Art Basel and Design Miami in early December, luxury conglomerate LVMH announced its latest partnership with Miami Design District (MDD) in pursuit of improving the environmental performance of its stores. For 15 of LVMH’s Maisons, including Louis Vuitton, Dior, Fendi and Tiffany & Co. , the partnership set out an actionable roadmap to achieve 100% renewable energy in each existing store across the 30-acre design district.

This will be facilitated by Florida Power & Light Company’s FPL SolarTogether® program and is part of a wider endeavour to minimise the footprint of the group’s 5,600 stores world-wide. This latest drive, labelled as ‘Life in Stores’, which falls under the umbrella of LVMH’s Life 360 strategy is described by Antoine Arnault, Head of Image and Environment, as “essential to optimize the environmental performance of our retail footprint. ” Accelerating renewable energy usage, water management and circularity In the official agreement signed and announced on Tuesday 5 December at the Moore Building underneath Zaha Hadid’s Elastika, Craig Robins, CEO of Dacra Development and Anish Melwani, Chairman & CEO of LVMH Inc shared the mission behind the deal.

Accelerating renewable energy adoption for tenants of the district is one element. The deal also encompasses the initiation of a centralised energy monitoring system and a stormwater management plan where stores are now committed to using rainwater in all new buildings, for gardens, toilets and maintenance. Both areas have clear targets.

Firstly, to transition to 100% green electricity by 2025 and secondly, to keep building water use 20% below the baseline calculation in line with the Energy Policy Act of 1992. Both parties emphasised the importance of bringing employees and suppliers into the fold – critical given that in particular. A holistic strategy which focuses on circularity and water, as much as carbon reduction is important.

The collaboration has renewed focus on sourcing store materials locally from Florida, as well as aiming to have 100% of wood used to be FSC certified by 2025. Equally, consideration has been given to other building materials and substances as the stakeholders relayed that all paints, glues and varnishes will be water based. With punchy short-term targets, how will both LVMH and Miami Design District be held accountable? As part of the partnership, a Sustainability Action Group has been formed to track progress against objectives.

The group includes representatives from each of the 15 LVMH Maisons involved, as well as stakeholders from the MDD. The cadence for measuring progress includes monthly reviews and both parties will disclose progress in annual sustainability reports. Such an initiative is integral to LVMH’s Life360 strategy, described as the group’s ‘environmental performance roadmap’ which has set out to improve the environmental performance indicators of all sites, reduce carbon dioxide equivalent (CO2e) emissions and has also recently seen a .

“LVMH’s business model is based on our Maisons’ ability to extract the best of nature to create the most desirable products. Climate change threatens this business model and this is why sustainability is an imperative for LVMH. ” commented LVMH’s North America CEO Anish Melwani.

A replicable solution for controlling power supply These developments come at a time when retail tenants have historically been challenged to make gains in environmental efficiency in stores because they do not have control over what power is used, recounted Melwani during the announcement. Embarking on the partnership seems like a logical next step for the design district which is considered best in class, having been awarded the USGBC LEED Gold certification in 2021 – becoming the first neighbourhood in the world to do so. Its commitment to biodiversity and to ensure there are trees or shade structures over more than 40% of the length of the neighbourhood’s streets, as well as efforts to reuse or recycle at least 75% of constructor and demolition debris by 2025, demonstrate this is more than a one-time tick box exercise.

The holistic approach of the district has also seen Dacra Development focusing on health and wellbeing standards with ambitions to advance progress in areas including climate resilience, resource management, wellbeing, sustainability transactions and communication. Undoubtedly, the deal has the potential to create a powerful multiplier effect if renewable energy supply is used for all 200 of the district’s tenants. “This is a project to be imitated,” said Craig Robins, CEO of Dacra Development.

He highlighted the importance of raising the benchmark and that whilst the utility context is different in every place, the playbook can be applied everywhere and is easily replicable. “Additional brands will join the program, demonstrating a collective will to safeguard our environment,” Robins shared with the audience. LVMH and Miami Design District announce the news of their partnership on Tuesday 5th December at the The climate context of Miami Applying a hyper local lens makes the partnership even more important, given Miami’s vulnerability to climate change.

Described as “ground zero” by the Miami Herald’s Jane Wooldridge during the panel conversation to share news of the announcement, she confided that “Climate is always on our mind. ” Miami is deemed to be a hotspot for climate gentrification, making opportunities to drive progress on access to clean energy sources whenever possible, even more critical. In October, scientific research published in Environmental Research Letters found that more than half of the 2.

6 million residents in the Miami area will experience “climate gentrification” and pressure to relocate if sea levels rise by 40 inches. Rising oceans will push many coastal residents inland, where they will force an increase in housing costs that could . These findings highlight the physical and transition risks for global companies like LVMH who have a retail store presence in surrounding areas.

Zooming out, at a global level, the efforts displayed through the partnership in Miami follow a similar playbook applied to other areas of the world. Last year, in China, , the landlord for nearly 100 LVMH stores, in a three-year climate and sustainability pact in retail real estate in Hong Kong and mainland China. Elsewhere, in the Middle East, announced at COP28, a has been struck to similarly drive energy efficiency and considered design as well as water and waste management to improve the environmental impact of shopping malls at the site level.

A global retail plan for store sustainability must touch many regions. Melwani sees the ability of LVMH to replicate the model of the partnership with MDD as a broader indicator of success in working with other landlords across the U. S.

, as well as in other continents. “We hope that this announcement with Miami Design District will inspire other landlords to work with LVMH, as well as others in the industry and beyond,” said Melwani. Sustainable stores – the state of play The partnership and wider efforts of LVMH are part of a growing number of global retail players reviewing how to leverage building performance as progress towards decarbonisation and their Science Based Targets.

Under The Fashion Pact, luxury competitor Kering Group has embarked on . It saw 12 CEOs of member companies, including Kering, commit to generate 100,000 MWh of solar energy every year to feed into the grid and increase the availability of renewable energy for purchase. This is a similar trajectory for other market segments, including high street retailers like H&M Group and Inditex.

While the Spanish company claims to , H&M Group’s ambitions to increase the annual sourcing of renewable electricity to 100% by 2030 saw . H&M Group has also publicly committed to circular interiors, measuring the CO2e of office spaces and has embarked on a partnership with IVL Swedish Environmental Research Institute to build a . Will a decorrelation strategy work? Collaboration is clearly paramount in helping guide retail groups and individual stores through the transition towards clean, renewable energy sources for their global retail footprint.

Measuring impact and progress regularly and upholding transparency at every level of the supply chain, beyond Scope 1 and 2 on energy efficiency and performance, is an important piece of the puzzle too. For fashion in particular, environmentalists and campaigners might argue that overhauling store energy supply is not enough to abate the industry’s impact and have issued wider . Melwani put forward LVMH’s long-term strategy centred around decorrelation at the global level, articulating that “We aim to reduce environmental impact and carbon emissions, while continuing to grow our Maisons’ business at the same time.

We don’t see these two goals as mutually exclusive. ”.