Leaders with Lacqua Goes Green: José Neves, Farfetch founder, chairman and CEO

José Neves was a child when he first understood the power of technology. “When I was eight, I got a computer for Christmas, and it came with no games, so all I could do with it was code,” he recalls. This was the 1980s, during the rise of tech giants like Microsoft and Apple. “Technology was completely revolutionizing everything. I remember thinking, as a little kid, I would love to be a part of that revolution.”

Fast forward several decades, and as the founder, chairman and CEO of Farfetch, an omni-channel platform for high-end fashion brands and retailers, he’s turning his childhood ambition into a reality. And he’s transforming the industry along the way, especially when it comes to the role his company can play in making fashion — which produces 10% of global carbon dioxide emissions — more sustainable.

“One of the biggest issues in our industry is overproduction, and I think if we can make sure that a product’s life is extended as much as possible, that goes a long way towards solving the problem,” he notes. “We were one of the first multi-brand platforms that sells new products to incorporate pre-owned and resale items.”

Another huge contributor to the fashion industry’s environmental footprint is the impact of shipping. While online stores can be better for the planet than their bricks-and-mortar counterparts, getting products from a warehouse to the customer’s front door emits a not-insignificant amount of carbon. “That’s why we have shipping from 50 countries,” Neves explains. “So that we can optimize local and domestic shipping.”

In keeping with his techie roots, Neves believes technology offers some of the best hopes for making the fashion industry sustainable. He’s already seeing that play out with the issue of online returns, which generate a surprisingly high amount of carbon dioxide (CO2) — the equivalent of more than 3 million cars each year in the U.S. alone.

While returns on Farfetch are lower than industry standards, “they’re still a double-digit percentage of sales,” Neves says. His company is harnessing the power of technology to get those figures even lower. “We’ve acquired and developed a virtual try-on company, and we’re seeing a lot of success with things like sneakers and shoes,” he points out. Another potential game-changer is “using artificial intelligence to figure out what a customer’s size is, based on past behavior, purchases and returns.”

It’s these types of innovations, which allow Neves to combine his passion for both technology and fashion, that he thinks will help move the needle. “These things are very powerful, and we’ve seen that they consistently have a positive impact on the level of returns.”

More importantly, Farfetch data shows that innovations like these can be good for both the planet and business, as customers are increasingly looking for more sustainable options. “We have a filter that customers can use that allows them to only buy conscious products,” he explains, referring to a third-party sustainability rating given to all brands and products on the platform. “Those who shop conscious products are growing much faster than the average of the marketplace, so we can go back to the brands with this data and say, ‘look, if you do the right thing, customers will appreciate it.’” In fact, eco-minded customers are putting their money where their mouth is. “They will pay more if they believe that a product or a specific brand is good for the environment,” Neves claims.

Ultimately, he believes, creating these types of win-win situations will do far more environmental good than simply finger wagging. “Different businesses will move at different speeds and there should be no judgement,” he says. “We should have a positive attitude about this.

In the second episode of Leaders with Lacqua Goes Green, sponsored by Zurich, Bloomberg’s Francine Lacqua sat down with José Neves, Farfetch founder, chairman and CEO. Watch the full video, first aired on June 22nd 2023, for more insights.

During the Zurich sponsored Bloomberg Green Summit held earlier this year, Zurich unveiled an inspiring video, "Listen to the Zurich Forest”. It tells the story of the Zurich Forest Project in Brazil, a small but tangible example of how Zurich is taking action to address climate change.