A collector, a conservationist and an analyst offer their opinions.
Like their counterparts in industries such as fashion, construction and automaking, Swiss watchmakers are facing increased pressure to prove their commitment to sustainability. But what that means in practice differs, depending on whom you ask.
Some brands, like Oris and Mondaine, have made achieving carbon neutrality a cornerstone of their manufacturing strategies. Other brands, such as Breitling and Panerai, are using recycled materials in an effort to attract environmentally conscious buyers. Still others view sustainability through a financial lens — and wonder what the current consumer mania for a quartet of brands implies about the health of the watch industry as a whole.
We asked three people well-versed in the high-end watch trade — a collector, a conservationist and an equities analyst — to assess the industry’s scorecard on sustainability. Their answers have been edited for clarity and condensed.
Sam Lerner
A collector with about 25 watches, based in Farmington, Conn., and a member of the New York chapter of RedBar, a global community of watch collectors
How do you approach sustainability as a consumer?
I am vegan. That plays a part in all aspects of my life: in what I choose to buy and what I choose to wear. I try to source most of my food from a C.S.A., community-supported agriculture, at a local farm. I’m trying to do things that keep my environmental impact as small as I can. It’s looking at where things come from and how they get to where they’re going because that takes a big toll on sustainability.
How do your environmental concerns play out when you’re buying a watch?
Watch straps. A lot of brands do leather straps and for me that’s a nonstarter, so I talk to brands when I buy watches to get a bracelet. Also, a lot of companies are now switching to alternative leathers, whether they’re vegan leathers or synthetic products. That definitely checks the box when I’m looking at watches.
But I’m also looking at how the company is run — things like, are they climate neutral or are they making steps toward that? How are they investing their profits? Are they putting them back in the company or are they putting them back in the world when dealing with climate change? A lot of brands have moved into that space, so I’m not just focusing on the watches, but on how they’re making them.
You mentioned Oris, which announced in late August that it has become climate neutral. Are there other brands you think are doing a good job on the sustainability front?
Oris has been on my radar for quite a while partially because their price point is generally affordable — the amount of watch you get for the dollar is pretty good — and they’ve constantly done watches that raise awareness of climate change or other issues. They recently released a watch where the face is made from P.E.T. plastic that’s been recycled. They’ve made watches for coral reef projects. Their climate neutral announcement was a big thing for me.
IWC is another brand working toward that. They use renewable energy in one of their manufacturing facilities. I know Chopard only uses ethical gold in their watches and have invested in small mines in South America. I try to keep brands on my radar that are doing the right thing.
A lot of watchmakers are criticized for their lack of transparency about the sources of their raw materials. Does that kind of information matter to you?
I try to be an informed consumer as best I can. How they’re affecting the world, how they treat their employees, where they invest their money — that all plays a part. Some companies, like Rolex, are super secretive, and you have to use your best judgment. But being an informed consumer, you want to know where your dollars are going and how they’re going to be used.
What are some things you’d like to see watchmakers do to become more sustainable?
Packaging is a big one. I would like to see watch manufacturers reduce packaging on watches. But also the transparency you mentioned: Where are they sourcing their materials from? Are they trying to invest in local communities?
Do you get the sense you’re an anomaly among your collector friends for caring about these issues?
If you have a watch that’s $250,000, sustainability may not be your first concern — then again, it may very well be. A lot more people are thinking about it now.
Even the ancillary manufacturers — companies that make accessories and things like that — are starting to get into this. Wolf, which does watch winders and watch boxes, did a watch box for RedBar with vegan leather, and that made me very happy.
Damian Oettli
Head of markets at WWF Switzerland, a division of the international wildlife conservation organization
In November, WWF Switzerland is planning to release a follow-up to its 2018 report on the jewelry and watch industries. What’s changed?
Some of the luxury groups stepped up their commitment to the climate, and to the Science-Based Targets initiative. Richemont and Kering have sent their target commitments. And there have been some tentative first attempts to bring transparency to their supply chains.
But overall, not much has happened. I’ve been working in this area for quite a while. I remember the retail sector was challenged — you asked them where their resources came from and they’d say, “I have no idea.” Now they have huge sustainability sectors while the watch industry still appears to be stuck in the ’70s or ’80s.
When I spoke to WWF Switzerland last year about where watch companies obtain gold, I was told the Swiss watch industry was not addressing the biggest issue of all: the raw materials that go into their products. Is that still the case?
Yes, unfortunately this is still a huge problem. Responsible sourcing of raw materials is indeed the most urgent topic that needs to be addressed by the watch and jewelry sector. Especially because raw materials such as metals, diamonds or colored gemstones are often mined under difficult conditions that turn biodiversity-rich rain forests into moonscapes. And they are often associated with human rights violations.
There are some initiatives that are trying to tackle some of the social or environmental problems — Swiss Better Gold Association, Fairmined, Fairtrade, Responsible Jewelry Council, Initiative for Responsible Mining Assurance — but often traceability itself is the problem. Plus, these initiatives only account for a small share of globally mined gold.
Have any watch brands made advances?
To mention one interesting example: Inspired by the WWF report in 2018, a start-up called ID Geneve was founded, and it has a completely circular and responsible sourcing approach. However, to our knowledge, most companies still have too little understanding of their value chains.
Are you optimistic about the industry’s chances of improving its sustainability track record?
I’m always very optimistic. I wouldn’t last long in this job if I wasn’t. I strongly believe that companies have the ability to improve — they just need the right incentives. A very good incentive is pressure from investors.
The issue with this industry is that many companies are privately owned. In that case, we’re hoping consumer pressure can rise. We’re hoping for a tipping point that leads to leapfrog development.
Jean-Philippe Bertschy
Luxury goods analyst at Vontobel, a private banking and investment management group based in Zurich
Four independently owned brands — Rolex, Patek Philippe, Audemars Piguet, Richard Mille — are seeing soaring demand for their limited production. But what’s happening to the rest of the industry?
There’s a polarization. The brands you named — as well as a few smaller producers like De Bethune and F.P. Journe, with production that goes up to about 2,000 units per year and with a very high average price — they are doing very well. In between, it’s a mixed picture.
In the low-end segments, we have seen a recovery from 2020, but there is huge pressure from smartwatches, meaning Apple, which is now selling more watches than the entire Swiss industry. And then you have some watch brands like Breitling, which was taken over by private equity a few years ago and is now performing very well.
If we want to make a sharp picture, the independents are very strong and the brands owned by the big groups — Swatch, Richemont, LVMH Moët Hennessy Louis Vuitton and Kering — are suffering.
How do you explain the surge in demand for the Big Four and the smaller independents following in their footsteps?
I have a very simple answer: C.P.O., or certified pre-owned — the secondhand market and the pricing transparency it enables. Consumers want to have some value when they are buying a watch. And the C.P.O. market has been a fantastic booster. I bought a Blancpain in 2017 and the value went down 30 to 40 percent, whereas Rolex continues to go up. Audemars and Patek — you’ve seen the prices; they’re unbelievable.
There are many different companies very active in the secondhand market: WatchBox, Chrono24 and Bucherer, which just bought Tourneau. It’s a very dynamic market, already at 20 billion Swiss francs (about $21.7 billion).
Look at, say, the Rolex Daytona, which is sold for 12,800 Swiss francs and when you go to one of these sites, they’re selling it secondhand for 40,000. The calculation is easy.
What does a polarized market mean for buyers?
In the high end, we are set for a couple years with those brands on top. But don’t forget you still have some brands in the midsegment. I mentioned Breitling and some newcomers, including one with a good concept: Norqain. They have started to make some noise, have fabulous management and an interesting concept. And another brand: Maurice Lacroix owned by DKSH here in Switzerland. They were in the midsegment and tried to go high, but they stopped and are now producing some very easy, accessible watches priced from 2,000 to 4,000 Swiss francs — and they’re not doing too bad.
For years the volume of Swiss exports has declined, even as values increase. What does this suggest about the sustainability of Switzerland as an industrial base for the watch industry?
There will be a consolidation of the market in the coming years. The low end is set to die a slow and painful death. And for the Swiss-made label to remain competitive, Swiss-made watches will continue to go in the direction of the high end.
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