LVMH Annual Report

materials and suppliers, which ensures the environmental excellence of practices. One of the initiatives in this area involves securing Leather Working Group (LWG) certification for the tanneries that provide the Maisons’ leather supplies. The Fashion & Leather Goods companies are committed to ensuring the well-being of the animals that provide raw materials such as leather, wool and fur. LVMH shares this commitment with civil society, and the Group has been the driving force behindmany real-world improvementsmade in this area. It isworking to coordinate efforts with the business sectors concerned in order to lead the way when it comes to improving breeding prac- tices. This represents a long-term investment to promote ethical and sustainable social development, one that protects farmers and guarantees the use of best prac- tices to promote animal welfare. For example, LVMH has launched a certification program for all the crocodile farms that supply the Heng Long exotic leather tannery. It also aims to offer customers who wish to wear fur, products that are made as responsibly and ethically as possible. LVMH prohibits the use of fur from endangered species and works hand in hand with its suppliers to give preference to certified pelts from farms that meet very high standards. With regard to sustainable winegrowing, while all French vineyards owned by the Group have been certified along these lines since 2017, the Maisons encourage their grape suppliers to take their own measures. For their part, all of the Group’sWatches & Jewelry companies have received certification under the Responsible Jewellery Council (RJC) system. While maintaining this drive for progress, LVMH is working to increase the accountability of its suppliers. They must all agree to comply with a specific Code of Conduct first issued in 2008 and updated in 2017. The Group carries out frequent audits to evaluate their performance and help them make improvements where necessary. Some Maisons have set up their own sustainable supply chains, such as Loro Piana for vicuña wool and Guerlain for Australian sandalwood. Several of them, like Parfums Christian Dior, are working to protect plant species by carrying out ethnobotanical studies. LVMH lays the groundwork for future progress by taking part in numerous workgroups and discussions aimed at sharing best practices and developing new standards.

against climate change. With LIFE 2020, the Group has committed to reducing its energy-related CO 2 emissions by 25% compared with 2013 levels. In 2018, this goal was already more than halfway met, with such emissions down 16%. To continue making progress in this area, the Maisons have access to an unprecedented resource in the worldof luxurygoods: an internal carbon fund. Set up in late 2015, the price per metric ton of CO 2 emitted by Maisons was doubled in 2018 to€30. The amounts collectedfinance their initiatives to increase energy efficiency, improve monitoring and reporting, and expand the use of renewa- ble energies. In 2018, the fund raised a total of €11.4million, enabling the launchof 112pivotal projects ledby 28Maisons. Some of these projects are particularly innovative, such as the one launched by Belvedere to produce steam and generate electricity from biomass. To reduce its carbon footprint, LVMH also enters into framework agreements with green energy suppliers to increase the number of sites powered by renewable energy. In addition, a number of Maisons aremaking themove tomore environmentally friendly modes of transport. In 2018, Sephora introduced electric vehicle delivery to its downtown retail locations in San Francisco, a solution it already offers in France, Spain, Italy and China. Year after year, LVMHworks to reduce the environmental impact of its sites and stores. The Group’s actions are underpinned by a sustainable building policy and by pro- grams that aim to expand the use of low-energy lighting systems, or process and prepare for reuse several thou- sand tons of waste each year, particularly via a dedicated recycling platform. Under the LIFE 2020 program, LVMH Maisons are required to implement an environmental management system at each of their production sites and must reduce at least one of the following by 10% relative to 2013: water consumption, energy consumption, or waste production. LVMH has also set two specific targets tomake the Group’s stores more sustainable. One of these was met in 2017: an average improvement of 15% in the energy efficiency of existing retail locations. The second relates to new stores, which must achieve an environmental performance score of at least 50 out of 100 on the LVMH Store Guidelines assessment scale, developed on the basis of international standards. The Group supports its Maisons through initiatives such as the LVMH LIFE in Stores award program, which was held for the second time in the spring of 2018 in Paris. SITES Improving key environmental performance indicators by at least 10% at all manufacturing, administrative and retail sites

CO 2

Cutting energy consumption-related CO 2 emissions by 25%

LVMH began monitoring its greenhouse gas emissions in 2002 – the year that the Bilan Carbone® assessment was introduced in France – and is fully engaged in the fight

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