Unsustainable: are watchmakers backtracking on green initiatives?

Let’s return, again, to the subject of sustainability. I’ve been tracking the watch industry’s attitude to sustainability for a number of years now, looking at its approach to reducing emissions and making watches in a way that’s kinder to the environment.

There have been good news stories and clear signs of growing transparency along the way, but of late, I’ve begun to wonder if the sky is clouding over.

At the beginning of the year, I was writing for the Financial Times on the subject and I approached three major watch brands that have been at the very public vanguard of the industry’s sustainability movement for comment.

But they all declined. Which was odd.

Then in late February, I visited one of those brands. Having been genuinely open on the subject, publishing its own sustainability reports and vaunting superstar sustainability ambassadors, suddenly it had pulled up the drawbridge. From now on, was the message, whatever it’s doing is behind closed doors.

Prompting the question: what have they got to hide?

Well, I really don’t know. But I’d like to. Because the assumption I’m left with is that it can’t be good.

I’ve been trying to figure out what might be behind this sustainability cold front. Half a dozen possible explanations come to mind. Let’s start with the least serious and work our way up.

First. Watches are inherently sustainable. This is the line trotted out since time immemorial that because well maintained mechanical watches will last a lifetime, they’re inarguably sustainable. And compared to evil smartwatches, lithium-guzzling electric cars and baby-killing Primark tees, I suppose they are. Using some loose maths,

I recently worked out that by weight, Switzerland’s annual watch exports are roughly equivalent to just 230 Tesla Cybertrucks. By that standard, is imposing ESG targets on the watch industry unreasonable? Perhaps.

Second. Resource distraction. Building an ESG (environment, social and governance) team, calculating your greenhouse gas (GHG) emissions, setting reductions targets, attempting to meet them and maintaining a positive public narrative are all hugely resource intensive.

And the return on investment, even if you believe consumers are queuing up for watches with a strong sustainability story to tell (and we’ll come back to that), is likely to be negligible, assuming you can measure it. Simply put, it’s very likely to be more profitable not to invest the time or money.

Third. The law. At the moment, private companies like Rolex and Patek (the latter pilloried in the WWF’s industry report last year for being “non-transparent”) don’t have to tell a soul about their ESG practices.

Listed companies typically do, only not by brand or division. But the direction of travel is against them. Last year, the Swiss passed the Climate and Innovation Act, which is expected to enter into force next year and that will oblige Swiss companies to have net zero emissions by 2050 at the latest, with various interim GHG reduction targets along the way.

And large-scale Swiss companies will also almost certainly have to comply with the EU’s Corporate Sustainability Reporting Directive (CSRD), which came into effect last year and come 2028 will oblige ESG reporting from Swiss companies with EU revenues of more than 150 million euros. The net appears to be closing in.

Fourth. Customers don’t care. Or do they? Read a report such as the one put out every year by Deloitte analysing the behaviours of luxury watch consumers, and you could easily believe that unless a watch company can prove it loves dolphins, it’ll have gone bust before you can say Gen Alpha.

But then in a focus group, if you ask people whether they care about the environment, most will say yes. And then drive their SUV to Starbucks. On the other hand, in a recent report by Teads, I read that only 2 per cent of US customers and only 1 per cent of UK customers consider that a brand’s sustainability commitment is even a “nice to have”. If that’s the case, brands driven by profits will find other things to do and talk about.

Fifth. Impossible Scope 3 emissions targets. Those brands and retailers that have set themselves GHG reduction targets are learning fast that most of the emissions they can reasonably be held responsible for aren’t strictly theirs. And worse, there’s precious little they can do about them.

As a rule, Scope 3 (or indirect) emissions, such as those emitted by manufacturers in high-polluting, ethically limp countries and by sooty cargo planes and lorries, make up the majority of a watchmaking company’s carbon footprint.

At Richemont, it’s 86 per cent, Oris 85 per cent and Breitling 81 per cent. Watches of Switzerland Group says its Scope 3 emissions account for 98 per cent of its total GHG emissions. And yet by 2030, the group has pledged to reduce these by 42 per cent.

How? Good luck to them, but not my question to answer.

And sixth. The perennial threat of greenwashing. Cynics have a quick response to the question of why brands and retailers are withdrawing from the sustainability conversation, and it’s this: because there is no sustainability.

While I’ve seen plenty of evidence that this isn’t true, I’ve also seen plenty that it is. Brands looking to build new factories, up production, increase boutique networks and sink huge sums into 360-degree global marketing campaigns simply can’t run parallel schemes to reduce their emissions and expect them to work.

And while a story about a recycled this or a sustainably sourced that might look nice in the marketing mix, if it’s followed by the dreaded jabbing finger of accusation on social media, the net impact can only be negative. If there’s one thing worse than not being sustainable, it’s saying you are and then being caught out for even the smallest mis-step.

All of which would mean it’s easier, safer and more profitable to keep your mouth shut. But that doesn’t mean you’d be right.

Does this matter? Well, unless you think climate change is a hoax, yes. Relative to its production volumes and customer numbers, the industry has a disproportionately large influence over what people think. That comes with responsibility, although few brands are taking theirs.

The law may yet force the issue, but for now it appears that as the world warms up, the luxury watch industry is cooling on sustainability.