ENVIRONMENTAL REPORT 2017 CONTENTS 03 Message from the Chairman and Chief Executive Officer 04 Joint interview on the 25th anniversary of the LVMH Environment Department with Antonio Belloni, Deputy Chief Executive Officer, and Sylvie Bénard, Environment Director 09 Environmental excellence, a long-term goal 25 The LIFE Program, a goal in action – Target “products” – Target “supply chain” – Target “climate change” – Target “sites” 26 3 questions for Antoine Arnault, Chief Executive Officer of Berluti and Chairman of Loro Piana 51 Our environmental reporting methodology 55 Statement summarizing the information relating to the Decree of April 24, 2012 58 Report by the independent third-party body on the consolidated social, environmental and societal information provided in the management report 01 02 LVMH 2017 . Message from the Chairman F O C U S ON LIFE 2020 Twenty-five years ago, the first Earth Summit was held in Rio. Issues concerning ecology did not then arouse a great deal of interest in society, but our Group maintained a longstanding conviction that future development would necessarily be sustainable. That was back in 1992. We opted for a unique approach: a real Environment Department directly responsible to General Management. We thereby consecrated our commitment and assigned a mission to this new Department: to fix, at Group level, ambitious environmental targets and to support our Maisons in attaining these objectives. As the world leader in luxury, it is the duty of LVMH to be exem- plary. Our Maisons make use of rare and precious natural raw materials in the formulation of their products. We have no option other than to seek to preserve these resources which constitute our common heritage. With regard to the environment, just as in our products, we strive for excellence. In 2015, on the occasion of the COP21 in Paris, I decided to set up a carbon fund assigning a price to our greenhouse gas emissions. In 2016, another important step forward was taken with the launch of LIFE 2020 which set each of our Maisons four objectives aimed at achieving a single goal: reducing the CO2 emissions linked to our energy consumption by 25%. Our inclusion of ecological imperatives as a source of innovation and creativity has a leverage effect on our growth strategy. To continue moving forward, facing our future, with our determination and our crea- tivity. LVMH Group is proud to have been a precursor. It is committed to remaining one. Bernard Arnault Chairman and Chief Executive Officer 02 03 LVMH 2017 . Joint interview: Antonio Belloni and Sylvie Bénard JOINT INTERVIEW ON THE 25TH ANNIVERSARY OF THE ENVIRONMENT DEPARTMENT ANTONIO BELLONI, SYLVIE BÉNARD, DEPUTY CHIEF ENVIRONMENT DIRECTOR EXECUTIVE OFFICER Celebrating the action taken… group requires us to set an example. It is an oppor- by Sylvie Bénard, Environment Director tunity, because protecting the environment is not a “We are currently celebrating this amazing path that restriction for us, but an innovation driver that con- LVMH ventured down twenty-five years ago, in order stantly broadens the scope of possibilities and leads to reduce its impact on the environment and develop us further forward. This is true in all our businesses! its expertise in the service of the excellence of its When I look at everything we have accomplished, and products. Protecting natural resources is both an the amazing energy we have displayed on a daily basis, imperative and an opportunity for our Group. It is an I am proud of the collective work performed, and imperative, because our business activities depend determined to continue, with you, to make it grow.” directly on ecosystems, on the quality of our raw materials and our supply chains: we are genuinely striving to secure our company’s long-term future, while our position as the leading global luxury goods 04 LVMH 2017 . Joint interview: Antonio Belloni and Sylvie Bénard … preparing for the future reached the full rollout stage for the four LIFE 2020 by Antonio Belloni, Deputy Chief objectives. This is an approach based on increasingly Executive Officer high standards and ongoing improvement. It is a goal “In true LVMH style, I would say that the best is yet shared with the Group’s 145,000 employees. Most to come. We are looking to the future, and to Future importantly, they are detailed commitments, and we LIFE! The launch of the LIFE program in 2012 has are prepared to allocate the resources required to enabled us to structure our environmental approach, fulfill them. We have a responsibility to be above to identify the challenges most relevant for our com- reproach in this field, to give even greater meaning pany, and to adjust them to the wide diversity of our to our position as leader in the luxury goods market. Maisons. Each Maison has incorporated this program Meanwhile, we are determined to do this by drawing in its strategic plan. This work has been very valuable on the values of excellence, competitiveness, and the in terms of involving a large number of employees entrepreneurial spirit that best describe us.” and creating a common language. We have already 04 05 LVMH 2017 . Environment LVMH and the environment, a long story Twenty-five years ago, LVMH confirmed its determination to become involved in order to protect natural resources. The Group and its Maisons have constantly strengthened their commitment since that date. Let us review the key dates of an environmental policy in keeping with a long-term approach. 1992 2003 LVMH sets up a pioneering body, the LVMH joins the Global Compact, a United Environment Department. The same year, Nations initiative that aims to encourage Hennessy launches the first analysis companies to adopt a socially responsible of a product’s life cycle. attitude. 1995 2004 The Maisons in the Perfumes & Cosmetics Two tools are created to help the Group’s business sector set up an ethno-botany Maisons eco-design outstanding products: department. The aim of this department “an environmental trend handbook”, is to protect plant species that are of interest and an online “materials library” that lists for cosmetics. environmentally-friendly components and materials. 1998 Hennessy was the first wines and spirits 2005 company in the world to obtain ISO 14001 At the Aichi World Expo in Japan, Louis Vuitton certification, which has been renewed every highlights the subject of the environment and three years since that date. the reduction of greenhouse gas by creating a Maison built entirely of salt, a natural 2001 and high-quality material. This temporary LVMH innovates in the luxury goods industry building was dismantled after the event, by producing a first environmental report. and the salt thrown back in the sea. Bernard Arnault goes further by signing an Environmental Charter that confirms 2006 the Group’s environmental goals in the name Louis Vuitton inaugurates Eole in Pontoise, of all the company’s employees. the first warehouse in France built according to the High Environmental Quality (HEQ) 2002 method. While ADEME (French Environment and Energy Management Agency) is still reviewing the carbon report method, most of the LVMH Maisons are already trialing this new tool, which enables them to measure their CO2 emissions. 06 LVMH 2017 . Environment 2008 2017 LVMH draws up a Code of Conduct for its LVMH celebrates the 25th anniversary suppliers, in order to extend the commitments of its Environment Department at an evening made in its Environmental Charter. event called Future LIFE (see page 22) The following year, this Code is supplemented and presents its LIFE 2020 environmental by a Code of Conduct intended for objectives that will enable the Group the employees. to pursue its historical commitment to the environment. 2009 In Pithiviers, CEDRE (Environmental Center for Environmentally-Friendly Packaging Elimination and Recycling) begins to treat metric tons of waste generated by the Group’s Maisons. 2012 LVMH commits to the French National Strategy for Biodiversity. The Group gives an internal boost to its environmental policy by launching the LIFE (LVMH Initiatives For the Environment) Program. 2015 LVMH sets up an internal carbon fund, a pioneering initiative in the luxury goods industry to mark COP21 in Paris. The aim of this fund is to finance projects launched by its Maisons to help combat climate change. 2016 The Group launches the “LVMH LIFE in Stores” Program to encourage and support environmentally-friendly best practices in its sales areas. 06 07 LVMH 2017 . Environment ENVIRONMENTAL EXCELLENCE, A LONG-TERM GOAL IN 2017, LVMH PURSUED ITS INITIATIVES TOWARDS ACHIEVING ENVIRONMENTAL EXCELLENCE. THIS LATEST YEAR OF EFFORT IS IN KEEPING WITH A LONG-TERM APPROACH, WHICH BEGAN ALMOST A QUARTER OF A CENTURY AGO. AT A VERY EARLY STAGE, THE GROUP MADE PROTECTING THE ENVIRONMENT A CORNERSTONE OF ITS GROWTH STRATEGY. IT DREW UP A FRAMEWORK FOR ACTION AND PROGRESS DRIVERS, TO WHICH WERE ADDED, OVER TIME, AN INCREASING NUMBER OF BEST PRACTICES IN ORDER TO IMPLEMENT ITS ENVIRONMENTAL POLICY EFFECTIVELY. 09 LVMH 2017 . Environment THE FRAMEWOR K updated in 2017, LVMH confirms five goals: achieving a high FOR ACTION level of environmental performance, creating a collective com- mitment, optimizing the management of environmental risks A pioneering and strategic commitment including the environmental aspect in product design, and Protecting the environment is a priority for LVMH. This approach becoming involved and taking action outside the Group. is not merely the brand of a company conscious of its duties LVMH’s action for the environment is part of a framework created and responsibilities towards the community. For the Group, it is by many voluntary, national, and international commitments. In also a means to confirm its values of excellence, sustainability, 2003, the Group joined to the United Nations Global Compact, and transmission, as well as its development model, which is which promotes companies’ sense of civic responsibility.