14

THE FRAMEWORK FOR ACTION

MONITOR THE PROGRESS MADE AND IDENTIFY

AREAS FOR IMPROVEMENT

LVMH quickly equipped itself with the means to assess the impact of its activities on natural resources, to identify the improvements to be pri- oritized, and to measure the progress achieved in order to go further. Cascade, its reporting tool for the main environmental issues, was rolled out in 1998. The data collected by Cascade is audited by an independent third party, Ernst & Young. The data is published in the Environmental Report that LVMH has prepared each year since 2001, and has been consolidated since 2004 in the Management Report prepared by the Group s Board of Directors. This information is also made available online on the website www.lvmh.fr and sent on request to the company s stakeholders. LVMH regularly improves Cascade in order to enhance the quality of the reporting. In 2018, the questionnaire on purchases of raw materials sent to the Houses was redesigned to collect more complete and precise information.

The audits launched at Group level, in addition to those conducted by the Houses, are another assess- ment tool widely used by LVMH to direct its en vi - ronmental policy. In 2018, 877 suppliers were the subject of 1,092 social and/or environmental audits. For a number of years, LVMH has also launched sector audits to validate, in the field, the implemen- tation of sustainable practices and the quality of the raw materials obtained. For example, after the plants coming from Thailand, China, Madagascar and Burkina Faso, the cashmere from Mongolia, the mines of Colombia and the crocodile leathers from several countries, the Group in 2018 focused on the only farms in the world (all established in France) that raise Orylag® rabbits, the fur of which is used by several Houses. The audit revealed an excellent sector, in which practices exceed the requirements of the best standards, particularly with regard to

animal well-being. In addition to the audit cam- paigns, LVMH develops studies to prioritize its envir onmental actions and assess its results. Since 2015, for example, the Group has evaluated the environmental impact of its supply chain every two years. The results of the second study will generate additional action channels in 2019.

LVMH also relies on outside evaluation to find new challenges to social and environmental challenges. The Group responds to certain questionnaires issued by independent, non-financial ratings agen- cies when they do not include a request for a finan- cial contribution; it permanently ensures that there are no conflicts of interest, either real or perceived. Its historical commitment to the environment has also earned it a position among the companies selected in the main indices based on responsible investment criteria: the FTSE 4Good Global 100, the EuroNext Vigeo Eurozone 120, and the Ethibel Sustainability Indices Europe.