The Future of Fashion Is Mushroom Leather

The CEO of Kering, François-Henri Pinault, already has billions, is married to Salma Hayek, and controls the most sought-after fashion brands. Now to save planet earth one vendor at a time.

McCartney, Pinault, and Hayek at the spring 2016 London Fashion Week.

Photographer: Rune Hellestad/Corbis via Getty Images

As you slip into heels or a tux to toast the New Year, you probably won’t be thinking about the fact that the leather in your shoes polluted drinking water in Indian villages, or that merino sheep were made miserable for your suit—and François-Henri Pinault doesn’t want you to have to. This year, the 54-year-old Frenchman is toasting the results in his 2016 sustainability report. The fashion industry pollutes heavily and relies on subsistence-wage earners and poorly treated animals. So the chief executive of Kering, which owns 16  brands, including Yves Saint Laurent, Gucci, Boucheron, and Puma, in 2012 set a series of goals to be met in four years that address every damaging aspect of the supply chain.

Kering hasn’t hit them all—the word “challenges” appears 34 times in the report—but its companies are using more recycled paper in packaging, improving working conditions, and eliminating some toxic chemicals, among other accomplishments. The $13 billion giant may represent only a small slice of the multitrillion-dollar apparel and accessories industries. But think of it as proof of concept, says Pinault, whose company’s stock has doubled in the four years since he’s implemented his plan.

Included in the Good Business Issue of Bloomberg Businessweek, Dec. 26, 2016-Jan. 8, 2017. Subscribe now.
Illustration by Caroline David

Why did you set out to make Kering sustainable?
The [2007] acquisition of Puma was a game-changer. At that time, Puma was run by Jochen Zeitz. Jochen is someone who was personally committed to the environment. He went very far with it through Puma. And he gave me this new approach of sustainability. If you do it right, you can create for yourself amazing opportunity creating good for the planet, for your employees, for your shareholders, for stakeholders. It’s a completely different vision.

We spent three years putting in place this EP&L [environmental profit and loss, a model that factors in environmental costs] methodology that is very complex. We did that with international partners, NGOs, and we invested a lot of money in that. This is available for everyone on a completely free basis. [Kering also developed an app called MY EP&L that allows designers to calculate the impact of any product using a criteria of 5,000 factors.] You need to make sure that the company is organized to deal with that commitment. And one of the first moves we did, it was in 2008, if I remember well, I created a sustainability committee at the board level. We were the first listed company in France to do that. For all my CEOs, part of their yearly bonus is linked to sustainability achievements. Everyone has to have a full-time position in charge of sustainability.

Is there a philosophical or spiritual component to your decision to run this kind of business?
I succeeded my father. I always heard him telling me that whatever the size, a company needs to pursue a cause that is beyond the profit target you usually have. It’s a matter of being a part of the society where you want to do business, or not. I’m here for a certain number of years, and I hope I will transmit [Kering] to someone else, be it my son or anyone. The question is, What am I going to build in the meantime? My father built something extraordinary; I want to leave something that is. I strongly believe this will be, I hope, my legacy.

You say sustainability is now part of luxury. Isn’t luxury about excess?
Desires are short-term; we’re all about dreams. Fast fashion is about desire. Luxury is about dreams, so it’s all the time. You cannot make people dream if you’re cheating by offering a product that is a nightmare behind the scenes.

Do you ever go personally to look at these efforts, such as the python skins used at Gucci?
Gucci is one of the biggest brands using python skins. It’s not an endangered species, but if we don’t change anything, this will become an endangered species, because there is no transparency in that trade. You cannot just say, “Well, I’m compliant with the certificate that you need,” because we all know that most of the certificates are not really … . We decided with Gucci to go much beyond that. And the only solution in that case is to integrate ourselves into the farming of python. So we are now investing in Thailand and in China in python farms.

What’s it like?
Special. The python is an animal that needs to eat living animals. So you have to raise rats on the side. It’s also about making sure [we’re] respectful of the communities around the farm—we buy pythons from them. We use the [flesh] of the pythons, it’s used in those areas.

We did that in crocodile farms also. It’s about the only way to really completely control the supply chain.

Was it hard to get your individual brands on board with the mission?
Not that difficult. But you have to understand that in a luxury brand, you have the creative people and the rest of the company. There’s always this thinking of, We have to let them do whatever they want. They cannot have rules or constraints around them, so don’t bother them with sustainability things, it will be a disaster.

The first thing I did in 2008 was to see all the designers on a one-to-one basis. I said, “This is the commitment I’m thinking about. Where are you on that?” And it was amazing to see that they were even beyond me. I remember [Bottega Veneta Creative Director] Tomas Maier, for instance. No one would have thought it in the company, but Tomas was so involved. It was the first brand that reached 99 percent PVC-free. In less than two years. You should have seen Tomas pushing everyone, redesigning part of the collection.

Stella McCartney’s Resort 2017 platform is made with a leather substitute using renewable vegetable oil and recycled polyester.
Courtesy: Kering

What are your conversations like with Stella McCartney, known for not using leather?
Stella is always one step further than anyone. I follow her! We have internally what we call the “new business model.” Stella is very much involved in the thinking of what that should be. For instance, [to reduce landfill waste,] we did a partnership with H&M and this company called Worn Again. [They’ve developed a recycling technique that separates blends back into original fibers and removes chemicals so the fiber can be rewoven.] This was brought by Stella.

We also are working very significantly on new technology coming from biotech—trying to create leather from living animal cells. They get the animal cells from the skin of a living animal, and then they grow them. They’re going to do transparent leather. Not before 10 or 15 years. One of the students that won the award from Kering [at the London College of Fashion] was based on mushroom leather. Those big mushrooms that grow around trees, beautiful things—it’s a parasite, by the way.

Are you finding that the rest of the fashion industry is paying attention to this now?
I do consider that the luxury segment of that industry is leading the race in sustainability, because we have the resources.

But again, what is very complicated in the fashion industry as a whole is that it’s not integrated. It’s a value chain with many, many players. And what is striking, and this is the first learning from our EP&L when we released it for the first time, 93 percent of our footprint is outside our legal boundaries.

Presumably, if more people use your methods, it’ll make it more cost-effective, right?
As usual, you find things and people come to you and say, “Well, we know how to do that in a more sustainable way, but it costs more.” What do we do? Of course it’s more, because it’s not the way we were doing things before. But there’s no reason why it has to be. So, the example of metal-free tanning process, it’s 20 to 25 percent more expensive because we have to salt the skins at the beginning of the process, and only a certain number can go through that. Those that can’t are considered waste.

And this is where I told the team we are not an NGO specializing in sustainability. We are a corporation, and through our creativity we have to find economically viable solutions. So we are trying to find ways of reselling those skins to other industries that could use that quality. We’re down to 10 to 12 percent more expensive now. We also need to scale to lower the cost. But we will reach that point.

What do you think about U.S. President-elect Donald Trump’s possible opposition to the Paris climate pact?
Sustainability for me has nothing to do with politics. Politics can help, but it’s much above any political issue. If it’s part of the political debate, there’s something completely wrong. So I couldn’t imagine that America wouldn’t be part of the Paris agreement.

It’s above the four years of any president in the world. A country like China is moving so fast. Could you imagine that America could be the slowest? America should lead the race in that, of course. It’s the new moon. In the ’60s, America was walking on the moon. It was the big thing. The new frontier is the sustainability frontier.

(Corrects the year Kering acquired Puma in the third paragraph.)