LVMH

2 0 1 9 E n v i r o n m e n t a l R e s p o n s i b i l i t y R e p o r t

56

REINFORCING TRACEABILITY A NUMBERS GAME

LVMH s Animal-Based Raw Materials Sourcing Charter was developed to guarantee full traceability back to the country

of origin, and even to the farm in the case of farmed fur. To

achieve this, the Group must have in-depth knowledge of its

Maison s suppliers and the way they operate. Because we work

with such a considerable number of suppliers, this represents a

real challenge and requires a multi-faceted approach.

Finely tuned knowledge of the chain of responsibility in each

sourcing channel: A chain of responsibility demonstrates the physical or administrative connection between the veri-

fied production unit and the claim made about the finished product. For example, some of the certifications issued by the Group include a traceability component to ensure raw

materials are purchased from suppliers who have imple-

mented verified responsible practices. This is the case for RWS-certified wool, for example, which offers segregated traceability, and BCI-certification which uses a mass balance system. Some certifications, such as GOTS, even demand responsible practices at every stage of the raw material s

harvesting and processing.

Integrate sourcing channels: Many of the Group s sourcing

channels are considered strategic because the raw material

is so exceptional, rare and precious. Because LVMH has full

visibility over the entire value chain, it can closely monitor the

environmental, ethical and social impacts. The Group capital-

izes on its global leadership position to put in place a number

of visionary practices that set a new benchmark in the industry,

including the crocodile standard, which was developed and

approved by a committee of technical experts including an

independent expert organization specialized in animal welfare

and farm certifications. This standard meets four objectives: - Preserve the species and respect local communities

- Safeguard the animals welfare at every stage of their life

- Ensure fair working conditions for employees on the farms

- Protect the environment

LVMH is committed to ensuring that all the farms supplying

the Heng Long exotic leather tannery are certified against this standard by the end of 2020. In 2017, Heng Long was the first exotic leather tannery in the world to obtain the Leather Working Group (LWG) certification for respecting the environment and its teams working conditions. All the Maisons that purchase crocodile leather from Heng Long are

therefore assured that their skins are fully traceable, come

from a certified farm, and are tanned using methods that minimize the impact on the environment.

The same assurance is provided for cashmere and vicuña

wool by Loro Piana, which supplies Group Maisons and other

luxury goods companies, and guarantees full supply chain

visibility and responsible practices.

Perfect traceability methods: For several years, the Group

and its Maisons have been investing, either on their own,

or as part of industry groups, to improve the traceability

techniques used for each sourcing channel. Technological

progress is key to facilitating the task. For example, the Aura project offers downstream traceability for the luxury industry while also working on upstream traceability. Furthermore, the

Group plays an active role in industry initiatives. For example,

Fendi took part in a fur traceability trial linking each pelt to

the farm on which the animal lived.

LVMH s Maisons believe excellence cannot be achieved without creative beauty and the highest levels of quality. Traceability and safety are also key.

G UA R A N T E E I N G P R O D U C T T R A C E A B I L I T Y A N D S A F E T Y