{"id":19888,"date":"2024-04-24T10:25:06","date_gmt":"2024-04-24T09:25:06","guid":{"rendered":"https:\/\/affidaty.io\/blog\/?p=19888"},"modified":"2024-04-24T10:25:09","modified_gmt":"2024-04-24T09:25:09","slug":"sustainability-blockchain-technology-luxury","status":"publish","type":"post","link":"https:\/\/affidaty.io\/blog\/en\/2024\/04\/sustainability-blockchain-technology-luxury\/","title":{"rendered":"Blockchain technology to create sustainability in luxury\u2028"},"content":{"rendered":"\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Introduction<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The attention towards the environment and the consequent awareness in pursuing <strong>sustainable behaviors<\/strong> by institutions, businesses, and families is becoming increasingly widespread in many countries characterized by advanced economies. Particularly in recent years, it is observed how large segments of the population are willing to change habits with the aim of reducing their overall ecological footprint.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In this context, a central role is played by <strong>businesses<\/strong>, which are called upon by civil society to take concrete commitments in the field of <strong>environmental and social sustainability<\/strong>. <strong><em>Luxury brands<\/em><\/strong> are not exempt from this discourse; on the contrary, the segment of luxury consumers, especially younger ones, is increasingly inclined to prioritize sustainability among the top reasons for choosing one brand over another. To meet these demands, luxury brands have been increasingly committed for several years to developing technologies and solutions that allow them to comply with regulations and reduce the environmental impact of their activities. In this context, <strong>blockchain technologies<\/strong> play a significant role, representing a major source of competitive advantage for these brands. In this article, we will examine the <strong><em>Aura Blockchain Consortium,<\/em><\/strong> which is a perfect example of this.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The Concept of Sustainability<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">While the initial reflections leading to the elaboration of this concept can be traced back to the works of the &#8220;United Nations Conference on the Human Environment,&#8221; held in Stockholm in 1972, the reference text for sustainable development became the &#8220;Our Common Future&#8221; report, prepared in 1987 by the World Commission on Environment and Development, chaired by the then Prime Minister of Norway, Gro Harlem Brundtland, and commonly known as the Brundtland Report. In it, <strong>sustainable development <\/strong>is defined as &#8220;development that meets the needs of the present without compromising the ability of future generations to meet their own needs.&#8221;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">From that moment on, the path towards the goal of sustainable development at the international level has globally translated into some best practices, based on continuous and constant debate, which from the <em>Millennium Ecosystem Assessment<\/em> project, promoted by the United Nations in 2005, led to the elaboration of the <strong><em>Millennium Development Goals<\/em><\/strong> in 2000 and subsequently to the <strong><em>Sustainable Development Goals (SDGs)<\/em><\/strong> in 2015. These represent a series of objectives, specifically 17, to be achieved by 2030, and they &#8220;provide a roadmap for achieving a better and more sustainable future for all.\u201d<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/ART.-DOTT.SSA-GIORNI-IMAGE-1-1-1024x507.png\" alt=\"\" class=\"wp-image-19898 lazyload\" style=\"width:662px;height:auto\"><noscript><img decoding=\"async\" width=\"1024\" height=\"507\" src=\"https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/ART.-DOTT.SSA-GIORNI-IMAGE-1-1-1024x507.png\" alt=\"\" class=\"wp-image-19898\" style=\"width:662px;height:auto\" srcset=\"https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/ART.-DOTT.SSA-GIORNI-IMAGE-1-1-1024x507.png 1024w, https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/ART.-DOTT.SSA-GIORNI-IMAGE-1-1-560x278.png 560w, https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/ART.-DOTT.SSA-GIORNI-IMAGE-1-1-150x74.png 150w, https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/ART.-DOTT.SSA-GIORNI-IMAGE-1-1-768x381.png 768w, https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/ART.-DOTT.SSA-GIORNI-IMAGE-1-1-750x372.png 750w, https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/ART.-DOTT.SSA-GIORNI-IMAGE-1-1-1140x565.png 1140w, https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/ART.-DOTT.SSA-GIORNI-IMAGE-1-1.png 1239w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/noscript><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">The goals address various global challenges, such as poverty, climate, peace, reducing inequalities, clean and accessible energy, facilitating economic growth, and sustainable, inclusive, and sustainable employment. These are closely interconnected themes for development and represent common objectives, in the sense that they concern all member countries and all citizens.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Sustainability and Luxury Brands: Commitment to Shape the Luxury of Tomorrow<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Today, more than ever, <strong>sustainability<\/strong> represents a crucial priority in the context in which we live. We are facing unprecedented global challenges, such as climate change, loss of biodiversity, and depletion of natural resources. Consumers have become increasingly sensitive to this issue: a critical consciousness regarding the models of development pursued so far is emerging, albeit with varying intensities, which have resulted in environmental and social problems.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This also applies to <strong><em>luxury brands<\/em><\/strong>: consumers, especially those belonging to younger generations, have shown themselves to be increasingly attentive to the origin and impact, both social and environmental, of what they purchase. <strong>Social commitment <\/strong>and<strong> sustainability <\/strong>have thus become key elements in determining the success of a brand and, as such, require a proper communication strategy to constitute added <strong>value<\/strong> for customers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is undeniable that, at least at first glance, there is a significant distance between the principle of luxury and that of sustainability: while the dimension of luxury is linked to vertical social stratification and entails ostentation, uniqueness, and prestige, that of <strong>sustainability<\/strong> implies social responsibility and respectful horizontal mutual relationships, based on altruism and moderation. And it is also undeniable that <strong><em>luxury brands<\/em><\/strong>, initially, remained detached from the issue of sustainability;<br>however, considering the increasing concern of consumers about the environmental and social impact of their consumption choices, most of them have realized that they could no longer ignore the subject, both for reasons of <em>brand equity and brand reputation<\/em>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It has been the same key characteristics of luxury products, namely quality, rarity, and durability, that have allowed them to move with coherence and credibility into the territory of sustainability. Thinking about the fashion sector, just as sustainability is the enemy of fast fashion, considering all the ethical and environmental issues it entails, so are luxury brands, whose products are meant to last forever, not to be replaced quickly. In general, it is in the distance from the &#8220;throwaway&#8221; mentality and in the valorization of craftsmanship that the bridge between <strong>luxury<\/strong> and <strong>sustainability<\/strong> is built, and the initial discordance between the two dimensions fades.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In recent years, luxury companies have taken decisive steps to increase their commitment to sustainability, resulting in frequent attempts to limit energy consumption and the use of toxic materials and preserve natural resources. It is precisely in many of these areas that <strong>blockchain technology <\/strong>can provide a very important contribution, configuring itself as a decisive driver for the implementation and communication of the sustainability practices adopted.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Blockchain Technology for Sustainability<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Blockchain technology<\/strong> is certainly a valuable ally for companies pursuing the path of sustainability, offering a transparent and reliable mechanism for validating and recording the actions carried out by users. Here are the main areas in which it operates:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Traceability<\/strong>: Blockchain is a distributed technology that enables secure and immutable recording of transactions and information. It can be used to monitor every single phase of the <strong><em>supply chain<\/em><\/strong>, meaning everything involved in the production process, from sourcing raw materials to distributing the finished product. In an increasingly globalized market, operations involved in this process become more complex, and many issues can arise in the supply chain. For example, the loss of some information about the origin of raw materials, which, for luxury brands, must always be clear and transparent. It is in this regard that blockchain technology comes to the rescue, ensuring traceability, immutability, and data security, thus reducing the risks of malfunctions and fraud. The benefits of all this are not only for companies but also for consumers, who have the opportunity to verify very important product-related data, such as origin and quality.<\/li>\n\n\n\n<li><strong>Speed and efficiency of transactions:<\/strong> Thanks to the use of <strong>blockchain technology<\/strong>, transactions occur more quickly and efficiently, which helps to reduce the energy needed for processing them. Furthermore, <strong>blockchain<\/strong> can be used to create decentralized electronic payment systems that are not dependent on banks, thus reducing the need for paper and other materials used for traditional payment systems, thereby reducing waste. Savings are achieved both in terms of costs, from the most trivial such as paper, to the most substantial ones such as the remuneration of specialized personnel who check and analyze data, but also in terms of time, as this system, in addition to being secure and reliable without the need for verification checks, is shared in real-time and decentralized.<\/li>\n\n\n\n<li>Implementation of corporate <strong>social sustainability<\/strong>: thanks to the creation of digital records, working conditions can be recorded, ensuring that workers are treated fairly, without any risk of exploitation.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">The Aura Blockchain Consortium<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Sustainability represents undoubtedly a major challenge for<em> luxury brands<\/em>, which must be addressed with a view to maintaining consistently high standards. To respond to this challenge, in 2021 the <em>Prada<\/em> Group, together with the <em>LVMH<\/em> Group and <em>Cartier<\/em>, a brand of the Richemont group, created the <strong><em>Aura Blockchain Consortium<\/em><\/strong>, a project that promotes the use of a single global blockchain solution, open to all luxury brands, to provide consumers with greater transparency and traceability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The system utilizes a private multi-node<strong> blockchain technology<\/strong> protected by <em>ConsenSys<\/em> in collaboration with Microsoft, thus ensuring the security and non-reproducibility of<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">the recorded information. The project&#8217;s goal is to bridge the gap between consumer expectations and the ability of luxury goods producers to provide reliable information on the <strong>traceability<\/strong> and <strong>authenticity<\/strong> of their products.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The consortium&#8217;s objective is to enhance the customer experience throughout the entire <em>customer journey<\/em> by creating <strong>blockchain<\/strong> solutions easily accessible to all brands operating in the luxury sector, thereby increasing customer and <em>stakeholder<\/em> trust.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Recently, the number of brands joining the Aura Blockchain consortium has grown rapidly, including names such as <em>Bulgari<\/em>, <em>Tod\u2019s<\/em>, <em>Mercedes-Benz<\/em>, among others. This widespread participation reaffirms the importance that companies attach to creating a reliable and secure authentication and traceability system for their products.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The system is based on a platform that utilizes a decentralized network to store product information, creating an immutable and secure <strong>register<\/strong>, accessible to anyone with authorization. In particular, Aura uses the <em>Quorum<\/em> blockchain, based on <em>Ethereum<\/em> technology, which offers specific functionalities for enterprises, such as permission management and data protection. The Ethereum platform supports both a cryptocurrency and a system for developing applications and uses the decentralized architecture of blockchain technology to transform its network into a computer. Each connected device collectively constitutes the Ethereum Virtual Machine, or EVM. This EVM is low-cost, massively scalable, avoids downtime, and has security integrated into all its functions. Solutions can be developed using its proprietary programming language called Solidity.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Product data is recorded on the blockchain in the form of digital certificates, which contain information such as the date and place of production, the material used, and the supply chain. Each certificate is unique and immutable: this means that it cannot be altered or modified in any way, thus ensuring complete authenticity and integrity. Customers, through a QR code, have the opportunity to access this information easily and intuitively. These digital certificates are created and managed by the manufacturers themselves, who use them to ensure the authenticity of their products and to provide consumers with detailed information about their origin and history.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The advantages that the<em><mark class=\"has-inline-color has-vivid-purple-color\"> Aura Blockchain Consortium<\/mark><\/em> brings to both luxury brands and consumers can be summarized as follows:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Transparency<\/strong> of the supply chain: by making every step of the supply chain accessible to external parties of the Company, all information regarding the production of a luxury product is verifiable by consumers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Authentication<\/strong> of <em>luxury brands<\/em>: every transaction is permanently and immutably recorded, and then shared among all nodes of the network, so once the information regarding the authenticity of a product is entered into the blockchain, it cannot be altered or deleted without the consent of the majority of participants. In this way, consumers can be sure that a product bearing a digital seal of authenticity is indeed authentic, and likewise, luxury companies have valuable assistance against the risks of counterfeiting.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Ownership transfer:<\/strong> in luxury, the second-hand market is increasingly growing, and with it, the risk of encountering counterfeit products increases. In Aura, the digital certificate accompanies the product throughout its life cycle, even when it passes from one owner to another, allowing new owners to enjoy all the services that brand offers: primarily, the product repair service which, in a circular economy perspective, is increasingly important.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Starting from the product <strong>repair<\/strong> service, one can exemplify one of the ways in which the Aura Blockchain Consortium has helped the brands that adhere to it, in this case, Cartier, to ensure product traceability and after-sales support, thereby increasing customer satisfaction.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The after-sales service system of this brand, like that of many other luxury brands, involves customers sending their watches for repair to specialized laboratories. However, the traditional traceability process was not without errors; Cartier then resorted to Aura, which allows the entire life cycle of the watch to be recorded on the blockchain, from production to sale and after-sales service.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Customers can monitor in real-time the repair process of their goods, receiving updates on the status of the work. This scheme shows very well the application of the Aura platform to the after-sales services of Cartier:<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/image-1-1024x949.png\" alt=\"\" class=\"wp-image-19918 lazyload\" style=\"width:559px;height:auto\"><noscript><img decoding=\"async\" width=\"1024\" height=\"949\" src=\"https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/image-1-1024x949.png\" alt=\"\" class=\"wp-image-19918\" style=\"width:559px;height:auto\" srcset=\"https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/image-1-1024x949.png 1024w, https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/image-1-560x519.png 560w, https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/image-1-150x139.png 150w, https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/image-1-768x712.png 768w, https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/image-1-750x695.png 750w, https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/image-1-1140x1057.png 1140w, https:\/\/affidaty.io\/blog\/wp-content\/uploads\/2024\/04\/image-1.png 1263w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/noscript><figcaption class=\"wp-element-caption\">Source: <em>Aura Blockchain Consortium, 2022<\/em><\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">The functioning of the <strong><em>Aura Blockchain Consortium<\/em><\/strong> platform and its multiple uses thus offer a valid answer to the question of how technological innovations can be used to promote and communicate <strong>sustainability<\/strong> in the luxury sector.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In conclusion, among all the advantages that <strong>blockchain technology<\/strong> can bring, both in the short and long term, one can also add that of promoting corporate responsibility and helping them shape sustainable luxury today and tomorrow.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n\n\n\n<p class=\"wp-block-paragraph\">Sources:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.akconsulting.com\/magazine\/supply-chain-planning\/supply-chain-cose-acosa-serve-perche-importante-gestirla\/\">https:\/\/www.akconsulting.com\/magazine\/supply-chain-planning\/supply-chain-cose-acosa-serve-perche-importante-gestirla\/<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/auraluxuryblockchain.com\/about\">https:\/\/auraluxuryblockchain.com\/about<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/auraluxuryblockchain.com\/members\">https:\/\/auraluxuryblockchain.com\/members<\/a><br><a href=\"https:\/\/auraluxuryblockchain.com\/wp-content\/uploads\/2022\/07\/Cartier-After-sales_Case-Study.pdf\">https:\/\/auraluxuryblockchain.com\/wp-content\/uploads\/2022\/07\/Cartier-After-sales_Case-Study.pdf<\/a><br><a href=\"https:\/\/www.ilsole24ore.com\/art\/nasce-aura-gruppo-prada-lvmh-e-richemont-si-uniscono-nome-blockchain-AEJrFLC#U4032196175A0E\">https:\/\/www.ilsole24ore.com\/art\/nasce-aura-gruppo-prada-lvmh-e-richemont-si-uniscono-nome-blockchain-AEJrFLC#U4032196175A0E<\/a>\u00a0<\/li>\n<\/ol>\n\n\n\n<ol class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.pradagroup.com\/it\/news-media\/news-section\/aura-blockchain-consortium.html\">https:\/\/www.pradagroup.com\/it\/news-media\/news-section\/aura-blockchain-consortium.html<\/a><br><a href=\"https:\/\/unric.org\/it\/agenda-2030\/\">https:\/\/unric.org\/it\/agenda-2030\/<\/a>\u00a0<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"<p>Environmental sustainability of luxury brands: blockchain technology guides companies in shaping the sustainable luxury of today and tomorrow.<\/p>\n","protected":false},"author":282,"featured_media":19916,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":{"subtitle":"","format":"standard","video":"","gallery":"","source_name":"","source_url":"","via_name":"","via_url":"","override_template":"0","override":[{"template":"2","single_blog_custom":"","parallax":"1","fullscreen":"0","layout":"right-sidebar","sidebar":"default-sidebar","second_sidebar":"default-sidebar","sticky_sidebar":"1","share_position":"float","share_float_style":"share-normal","show_share_counter":"1","show_view_counter":"1","show_featured":"1","show_post_meta":"1","show_post_author":"1","show_post_author_image":"1","show_post_date":"1","post_date_format":"default","post_date_format_custom":"Y\/m\/d","show_post_category":"1","show_post_reading_time":"1","post_reading_time_wpm":"300","show_zoom_button":"1","zoom_button_out_step":"2","zoom_button_in_step":"3","show_post_tag":"1","show_prev_next_post":"0","show_popup_post":"1","number_popup_post":"1","show_author_box":"1","show_post_related":"1","show_inline_post_related":"0"}],"override_image_size":"0","image_override":[{"single_post_thumbnail_size":"no-crop","single_post_gallery_size":"crop-715"}],"trending_post":"0","trending_post_position":"meta","trending_post_label":"Trending","sponsored_post":"0","sponsored_post_label":"Sponsored 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