AI, luxury and sustainability: the paradox of the next decade

Over the past decade, luxury groups have invested heavily in reducing their environmental footprint. Supply chains have been optimised, renewable energy has expanded, traceability has improved, circular business models have emerged, and responsible sourcing has become a strategic priority.

At the same time, another transformation has accelerated just as rapidly: the adoption of artificial intelligence.

These two dynamics are generally presented as complementary. Yet they may also come into tension.

Artificial intelligence is widely recognised as a powerful driver of sustainability. According to McKinsey, AI can significantly improve demand forecasting, helping companies reduce excess inventory while optimising logistics and strengthening supply chain traceability. Other studies, including research from Boston Consulting Group (BCG), highlight AI's potential to reduce transport-related emissions through more efficient logistics and planning. Across the luxury industry, AI promises greater operational efficiency while supporting ambitious environmental objectives.

The real question, however, lies beneath the technology itself.

AI also has an environmental footprint

Every AI model relies on physical infrastructure. Behind every generative AI query are data centres, computing power, cooling systems, electricity consumption, water usage and growing demand for critical raw materials such as lithium, cobalt and rare earth elements.

According to the International Energy Agency (IEA), global electricity demand from data centres could more than double by 2030, largely driven by artificial intelligence. The U.S. Department of Energy also estimates that data centre cooling can require between four and six litres of water per kilowatt-hour consumed, illustrating the growing environmental implications of large-scale AI deployment. At the same time, the world's leading technology companies continue investing billions of dollars in new energy infrastructure to support this expansion.

This creates a paradox. The very technology that helps organisations reduce their environmental impact also generates a growing environmental footprint of its own.

Luxury groups are taking different paths

The industry's leading companies are approaching this challenge from different strategic perspectives.

LVMH has embraced large-scale industrialisation through initiatives such as its AI Factory and strategic partnership with Google Cloud, integrating artificial intelligence across operations while investing heavily in sovereign data capabilities.

Kering, long recognised for pioneering environmental measurement through its Environmental Profit & Loss (EP&L)framework, is progressively extending its governance to address the ethical and environmental implications of AI, building on a sustainability approach that has long influenced the luxury sector.

CHANEL is exploring artificial intelligence more discreetly, particularly in material innovation, circularity and textile research through initiatives such as NEVOLD, where technology supports the development of more sustainable materials and production methods.

Hermès, meanwhile, continues to adopt a deliberately selective and measured approach, reflecting a business model built on craftsmanship, scarcity and long-term value creation rather than technological acceleration, as reflected in its long-standing sustainability strategy.

From carbon footprint to digital footprint

The irony is striking.

After spending more than a decade measuring emissions linked to transportation, packaging, manufacturing and raw materials, luxury companies may soon have to measure those generated by their digital infrastructure and artificial intelligence systems.

This challenge extends far beyond technology. It directly affects governance, corporate reputation and long-term value creation. Sustainability teams have learned to measure carbon emissions, water consumption and waste. Tomorrow, they will also need to understand the environmental impact of AI models, cloud infrastructure, computing power and digital resource consumption.

A new capability is emerging: digital sustainability.

The next strategic KPI

The debate is therefore no longer whether luxury companies should adopt artificial intelligence. That question has largely been answered.

The new challenge is understanding how AI can be deployed without undermining long-term environmental and social commitments.

In the years ahead, brands may communicate not only about their carbon footprint, but also about their digital footprint. Investors, regulators and consumers are increasingly likely to ask a new set of questions: What is the environmental cost of your AI strategy? Do the sustainability gains generated by artificial intelligence outweigh the resources it consumes?

Very few organisations are currently able to answer these questions with measurable data.

The next challenge for the luxury industry may not be artificial intelligence itself. It may be sustainable artificial intelligence.

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