Putting people at the centre of your luxury sustainability strategy

It takes people to make a luxury fashion product sought after, valuable and exclusive. The prestige of a heritage house rests entirely on the meticulous craftsmanship of its artisans, the service provided by its retail teams, and the labour embedded within its deep, global supply chains. Yet,  the social aspect of sustainability is often overshadowed by urgent environmental and climate issues.

As the regulatory landscape fractured in 2025, companies faced contradictory pressures. They had to contend with some governments moving to relax reporting rules, while others strengthened them.  For the luxury fashion sector, placing the people behind the products at the centre of strategic sustainability planning is no longer just an ethical imperative. It is the foundation of a resilient business model.

Building a strategy that lasts

The initial response to broader regulation like the Corporate Sustainability Reporting Directive (CSRD) was naturally compliance driven — followed swiftly by confusion as regulators moved to rein in the scope. But a “compliance-first” mindset on sustainability strategy is insufficient for long-term commercial success. In 2025, 79% of senior executives described their sustainability approach as either embedded throughout the organisation or critical to business transformation^[1]. True transformation requires moving beyond tick-box exercises to integrate social goals into the core strategic operating model.

Despite headwinds, boards, senior leadership and investors remain focused on how sustainability initiatives can strengthen resilience and future-proof their businesses. A key part of this is completing a robust double-materiality assessment to identify which sustainability issues are the most strategic priorities for your business, ensuring that time and resources are focused in the right places. 

Particular attention should be paid to the social impacts, risks and opportunities across a company’s entire value chain when conducting this exercise. For the luxury fashion sector, this could range from ensuring fair wages in the supply chain to providing inclusive recruitment practices. We provide our top tips in 7 steps to conduct an effective double materiality assessment. 

The social pillar: Going beyond compliance

Putting people first means actively safeguarding the workforce at every level. 

Upholding human rights across the supply chain and fostering a safe, equitable workplace are non-negotiable elements of a holistic and resilient sustainability strategy. By going beyond regulatory requirements and actively investing in social sustainability, luxury fashion can foster increased trust among key stakeholders, such as employees and consumers. This is increasingly important, with nearly three in five luxury consumers considering environmental and social factors when purchasing a designer item^[2]. 

To align with international best practices, companies should look to established frameworks such as the International Labour Organisation standards to guide their approach to labour and human rights across the value chain. These frameworks provide a foundation for identifying the most material social risks and embedding responsible business conduct into corporate strategy. We’ve set some examples out below.

Within their own operations, luxury fashion companies should prioritise diversity, equity & inclusion and health & safety to attract and retain specialised talent. A strong focus on workplace culture and employee wellbeing can enhance engagement, productivity and organisational longevity, all while supporting relevant regulations.

Across the supply chain, robust human rights due diligence (HRDD) is imperative, especially when it comes to luxury fashion’s complex and far-reaching network of subcontractors and manufacturers. Companies that invest in these processes, including effective supplier mapping, risk assessment and continuous monitoring, stand to mitigate legal and reputational risks while strengthening supply chain quality and reliability. Once a strong HRDD process is in place, luxury fashion companies can start engaging suppliers on labour rights, working conditions and health & safety to further improve long-term stability and performance.

HRDD starts with a detailed understanding of your supply chain. Read more about how to map your full supply chain in Beyond the first tier: Mapping your full supply chain.

Despite the growing focus on social issues, many luxury companies still shy away from detailed disclosures on key social issues, particularly around working conditions in the supply chain and cultural appropriation in design. For further insights, read Context’s 2025 Luxury Fashion Sustainability Benchmark. 

Next steps for the year ahead

In 2026, sustainability professionals in the luxury fashion sector must remain laser-focused on integrating social considerations into their company’s strategy and operations. Your checklist for the year ahead includes three crucial steps:

• Refresh your double materiality assessment. A robust double materiality assessment is a key tool to help you stay on track, however regulation evolves, since all major reporting frameworks have materiality at their heart.
• Measure and prove. Credibility will come from hard data. Granularity is key to having data that can be used both for reporting and making the business case internally. Ensure your social metrics are as auditable as your financial and environmental ones to build transparency and trust.
• Refreshed message house. Clear, consistent messaging is the foundation of strong communication. Adapting the language, style, and tone for each stakeholder group helps the message to land more effectively.

How Context Sustainability supports social strategy development

Context Sustainability assists companies with creating a clear sustainability strategy that emphasises the importance of environmental, social and governance issues. Our team helps with stakeholder mapping and engagement, materiality impact assessment, implementation plans and performance metrics – all in alignment with key regulatory frameworks if required. We support clients as they develop strategies and governance systems, evaluate risks, and prepare disclosures that reflect best practice in the social sustainability space.

[1] https://www.business.hsbc.com/en-gb/insights/sustainability/how-sustainability-is-unlocking-a-new-era-of-business-growth

[2] https://www.bbc.co.uk/culture/article/20231108-can-luxury-fashion-ever-be-fully-sustainable