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                                                               LVMH 2011


— The environment has long been                of involvement, customers expect our           strategy and future with regard to
a concern of the brands of the LVMH            brands to reflect their aspirations for         the challenges facing climate, biodiversity
group. In fact, LVMH is one of                 a better world and to safeguard resources as   and natural resources in the medium
the first corporations to create its own        much as possible. All of our operations        and long term.
environmental department, which                follow specific guidelines. Designing luxury
it introduced in 1992. This commitment         products that draw on the Maisons’             Protecting the environment is not just
to the environment became entrenched           considerable heritage requires not just        a common ideal or legal obligation but
in the Group’s strategy in 2001,               innovation, creativity and first-class          a group-wide challenge that underpins how
when Bernard Arnault signed the                execution but also consideration of            we conduct our operations. It also builds
Environmental Charter encouraging              environmental performance.                     a set of values that we share with our
each Maison to set up a system                                                                stakeholders. LVMH’s broad range
of environmental management,                   This environmental dimension is also           of businesses and specific issues are widely
and each Chairman to become involved           a vital concern for all our employees          recognized as one of the Group’s defining
in the various initiatives.                    and suppliers, who look to our initiatives     characteristics. This is both an asset and
                                               and good environmental practices for fresh     a challenge. We are constantly challenged
Sustainable and responsible production,        perspectives, motivation and expertise.        by the importance of regulatory changes and
coupled with environmental protection,         Without question, the Group’s                  the global nature of LVMH, which requires
is at the heart of our business model.         environmental policy strengthens and           us to anticipate changes in consumption
Moreover, it is what our customers expect.     reflects the quality of our performance         patterns throughout the world and find ways
Regardless of their profile or level            and investors’ confidence in our company’s      to tailor our innovations to local conditions.

                                                          2011 HIGHLIGHTS

   • Working with pilot Maisons – at least       • ISO 14001 certification of two Louis          • Installation of 1,218 solar panels on the
one Maison per business group – to imple-      Vuitton workshops, one production site,        roof of the Louis Vuitton San Dimas work-
ment a strategy to identify key environmen-    corporate headquarters and the Guerlain        shop in California, for a total installed
tal issues and thus better manage the issues   stores in Paris.                               capacity of 286.2 kW, meeting 31% of the
involved. Each issue is assigned a set of                                                     site’s electricity requirements.
indicators to monitor the performance of         • Responsible Jewellery Council (RJC)
each Maison. The entire process is managed     certification for some of the Watches and
and overseen by the Maison’s executive         Jewelry Maisons, including Bulgari, TAG
committee and the LVMH executive com-          Heuer (plus distribution subsidiaries in the
mittee. The program will gradually be          United Kingdom, Japan and the United
extended to all Maisons.                       States), Hublot, Zenith, Chaumet and Fred.       Since 2002 environmental indicators
                                               Bulgari, TAG Heuer, Chaumet and Fred             have been veri ed by the Group’s statutory
  • Successful deployment to all Group         were certified in 2011 and Zenith in             auditors and since 2008 have been based
Maisons of the new Cascade environmental       January 2012. Hublot and the Louis Vuitton       on a reasonable level of assurance.
reporting web tool.                            jewelry business aim to be certified in the       Questions for the Group may be addressed
                                               first half of 2012.                               to:

                                  LVMH 2011

              Message from the Chairman and Chief Executive O cer

                A LONG TERM VISION

        The dreams and excitement associated with our brands
        are aspirations that are universal and transcend time.
   These aspirations rely on the quality of our products, a quality
     guaranteed both by the expert way in which they are made
   and the perpetuation of our skills, and on the talent of the men
   and women in the Group. Combined with this is the protection
    of the environment, something that has been taken on board
by all the Group’s Companies. The quest for an article of exceptional
quality, and the desire for authenticity and sustainability are aspects
           that are more valued than ever in today’s world.

     Our company never stops seeking to increase its value and
perpetuate its model of responsible development based on a long term
            vision shared by every one of us in the Group.


                             Bernard Arnault
                        Chairman and Chief Executive O cer

                                                LVMH 2011

                               Message from the LVMH group Managing Director

                        AMBITIOUS ACTIONS AND POLICY

                                    Each of the Group’s Companies has a unique culture which has
                                    a stood the test of time, in some cases for over two centuries.
                                    It is absolutely vital to preserve the uniqueness of these exceptional
                                    brands while at the same time steering them in the direction of
                                    new ideas and initiatives to accentuate their modern feel.
                                    Entrepreneurial spirit, innovation, excellence and creativity are
                                    therefore part and parcel of the long-term strategy of our
                                    Companies and are present in everything we do, including our
                                    environmental policy.
                                    The Environmental Department, which will celebrate its twentieth
  Antonio Belloni
                                    anniversary in 2012, defines the environmental strategy and assists
  LVMH group Managing Director      the Companies in implementing initiatives relating to sustainable
                                    development. The year 2011 saw many projects. A strategic
think-tank process aimed at identifying environmental issues that will strengthen management of
environmental issues was rolled out in collaboration with certain pilot Companies such as Hennessy,
the Champagne Maisons, Sephora and Guerlain. Louis Vuitton, for its part, completed the installation
of the Group’s largest photovoltaic power production unit with the roll-out of 1,218 modules on
the roof of the San Dimas workshop in California. Bulgari, TAG Heuer, Zenith, Chaumet and Fred
were certified by the Responsible Jewellery Council which ensures the implementation of social
and environmental best practices in the gold and diamond industries. Other initiatives are described
in this 11th Environmental Report and the quality of these projects continues to be underscored by
financial bodies which regularly rate LVMH as one of the top companies in terms of performance.

                                                                          LVMH 2011


                                                               FOCUS 2011: TRANSPORT AND SHIPPING

         Electric and photovoltaic vehicle at Newton in California.

                                                             Assessing the Carbon Footprint®

  Climate change considerations are part of LVMH policy. Since                       These Carbon Footprints® provide information that can be used
2002 the Group has assessed the Carbon Footprint® of many of its                  to develop appropriate strategies to reduce greenhouse gas emis-
Maisons: Louis Vuitton, Moët & Chandon, Veuve Clicquot,                           sions. For example, Veuve Clicquot’s 2006 Carbon Footprint®
Hennessy, Parfums Christian Dior, Guerlain, Parfums Kenzo,                        showed that 17% of CO2 emissions were related to transport, par-
Parfums Givenchy, Givenchy Couture, Make Up For Ever, DFS,                        ticularly champagne, 90% of which is exported. Most of the emis-
Sephora and Le Bon Marché. To date, all of the Group’s major                      sions were from packaging and dry solids purchased from
Maisons have completed their reports and are working to imple-                    suppliers. By contrast, at Louis Vuitton, transporting goods to
ment priority initiatives when it comes to product transport.                     some 450 stores worldwide represents one of the main sources of
                                                                                  greenhouse gas emissions along with store lighting. The Maisons
   The Carbon Footprints® take into account quantitative informa-                 therefore developed transport solutions to address their specific
tion relating to emissions that correspond to the following report-               challenges and local conditions. In 2011, Sephora North America
ing parameters:                                                                   performed a comparative analysis to assess the carbon footprint of
   – “parameter 1”: emissions directly produced by permanent and                  freight. The resulting data base will help guide future decisions
     mobile sources owned or controlled by the Maison (for                        and negotiations regarding the impact of transport solutions. In
     instance, emissions from fossil fuels used to heat buildings or              partnership with its shipping contractor, Sephora North America
     from a Maison’s vehicle fleet);                                               also launched a program to offset CO2 emissions related to the
   – “parameter 2”: indirect emissions related to energy purchased                transportation of its products. This program includes a variety of
     from outside producers, such as electricity or steam;                        solutions, such as reforestation, carbon capture and storage, waste
   – “parameter 3”: emissions related to other activities (shipment               water treatment and methane recovery.
     of goods, employee travel, and so on).

                                                                      LVMH 2011


                                                  FOCUS 2011: TRANSPORT AND SHIPPING

                                                      “Bike in Style” in New York

  Already a sponsor of the “Summer Streets” project, which closes                 create items that a cyclist would need – poncho, jacket, unisex bag
the route between Brooklyn Bridge and Central Park to vehicles                    – focusing on style, practicality and a ordability. The students were
during certain periods and makes it available only to green modes                 mentored by Donna Karan International, which helped develop the
of transport, LVMH USA launched an operation in 2009, in coop-                    prototypes selected. Chosen from a large number of candidates, the
eration with the Department of Transportation of the City of New                  three winners received their award at a ceremony attended by
York and the Fashion Institute of Technology, to showcase how                     Marion Cotillard, the ambassador for Lady Dior, known for her
artistic design can be combined with environmental protection. As                 commitment to the environment.
part of this “Bike in Style” challenge, design students were asked to

                                                     Raising employee awareness

   The Group and each Maison organize a variety of awareness                      emissions resulting from their own travel methods. Since 2010,
campaigns targeted at employees. During European Mobility Week,                   Hennessy has run eco-driving training programs for its drivers.
Louis Vuitton conducted a number of initiatives at all of its French              This training is also part of France’s right to individual training,
sites, featuring a poster of best practices at each site and circulating an       available to all employees.
“eco-mobility wheel” – a “Workshop” version and a “Headquarters”
version – to make it easier to compare transport modes and identify                 As a reminder, in 2005 LVMH signed the European Road Safety
green options. The campaign was an opportunity to count how many                  Charter drawn up by the Transport Department of the European
people used carpools, which was more than 60% at the Ducey work-                  Commission in Brussels to improve road safety. In ratifying this
shop, and to launch a bicycle challenge, with a prize for the internal            Charter, the Group committed itself to educating staff in France
department with the lowest amount of CO2 emissions.                               and at its subsidiaries, as well as the thousands of visitors each year
                                                                                  to the Moët & Chandon, Veuve Clicquot, Hennessy and other
  During this same Mobility Week, Guerlain educated its employ-                   Group Maison sites, about the importance of adopting a responsible
ees about initiatives and resources available to them to reduce CO2               attitude.

                                                                 LVMH 2011


                                              FOCUS 2011: TRANSPORT AND SHIPPING

                                                    Supply chain challenges

   For Louis Vuitton’s “Green Supply Chain” project, transport and           network. This tool will provide faster and more accurate informa-
logistics providers are fully integrated in the plan to obtain               tion about CO2 emissions per flow and mode of transport.
ISO 14001 certification for the leather goods supply chain. In 2011,
the Maison once again called for bids for its international transport.          Local supply solutions are sought whenever possible. Service
The first selection criterion was based on an analysis of the contrac-        providers in multiple areas, from maintenance and cleaning to
tors’ commitment to the environment and what progress they have              logistics, boxes and waste disposal, are selected for their proximity
made in this regard. In addition, a logistics loop was established           to the Louis Vuitton workshops or sites. For the Barbera workshops
between the various suppliers and the Louis Vuitton workshops to             in Spain, leather is purchased from five tanneries located no more
significantly reduce transport flows. In collaboration with a service          than 60 km away. Domestic transport between workshops has thus
provider, Louis Vuitton is developing a tool to calculate CO2 emis-          been reduced by 30%. Similarly, 10% to 15% of the workshops’ metal
sions from transporting leather goods across the entire logistics            hardware suppliers are concentrated within a 35 km radius.

                                                      Optimizing packaging

  International and European regulations have led to more strin-             can be shipped from workshops to stores around the world using
gent environmental requirements in the design and manufacture of             the same packaging. In 2006, for example, 100 metric tons of card-
packaging, in particular, the volume and weight. Reducing the size           board were saved by doing the final packaging of small leather
of packaging is therefore an underlying transport issue that can             goods at the workshop and making sure the shipping cartons were
lead to lower shipping costs and emission levels.                            as full as possible. In addition, the soft paper pouches in which bags
                                                                             used to be inserted prior to packaging have been eliminated. Since
  Louis Vuitton, for example, has found innovative ways to                   the fall of 2010, forty stores in North America have followed the
decrease the size of shipments by reducing not only empty space              lead of Paris and Tokyo by receiving leather goods and other acces-
but also outer packaging. All workshops have been sent a tool                sories in reusable plastic containers, rather than in cardboard boxes
to help them with packaging decisions. Louis Vuitton has also                that can only be used once. Initial results indicate that this has
continued its e orts in this regard by eliminating tissue paper and          already saved almost 1,200 MtCO2e.
plastic protection in its cartons for shipments of shopping bags,
trunks, pouches, presentation boxes and shoe boxes. In 2010, the                Veuve Clicquot also developed the Design Box, a new single-
leather goods manufacturer produced a report on the Carbon                   material box made of cardboard from sustainably managed forests
Footprint® of the Neverfull bag, comparing the old and new ship-             (FSC certification), optimized for weight and volume and com-
ping packaging. The resulting initiatives led to a 60% reduction in          pletely recyclable. Inks, glues and solvents account for less than 5%
shipped volume, representing an annual saving of more than                   of the total product weight. Delivered flat in reusable packaging
950 MtCO2e (2009 saving: 964 MtCO2e). Reduced packaging also                 made in Reims, these boxes reduce levels of CO2 emissions due to
cuts down on the number of shipping containers used. For several             transport. The Champagne Maison also uses new, lighter shipping
years Louis Vuitton has been improving packaging so that products            crates, saving a total of 55 metric tons of cardboard per year.

                                                                                  LVMH 2011


                                                      FOCUS 2011: TRANSPORT AND SHIPPING

                               Sephora is the first selective retailer to use electric trucks to deliver its French stores.

                                                                    Shipping initiatives

  For medium- or long-distance shipments, the Maisons make it a                                network of 200 participants, supported the publication in
priority to reduce the portion sent by air or road. At DFS, for exam-                          September 2006 of a guide entitled “Environmental Performance
ple, the main avenue for improvement has long been the reduction                               of Shipping and Logistics Practices,” the goal being to analyze the
in air freight when shipping goods between suppliers and ware-                                 environmental impact of shipping and logistics, propose new meth-
houses. At the Champagne Maisons, air freight has been limited to                              ods and illustrate good practices.
emergencies only and accounts for less than 1% of shipments. The
Maisons thus opt for the most suitable alternative that will generate                            The Maisons favor maritime transport. This is the case with
the least amount of CO2. Acutely aware of these challenges, the                                Louis Vuitton, which has substantially increased the percentage of
LVMH group, in partnership with the Orée association and a                                     sea shipments over the last eight years. Similarly, since 2004 it

                                                                LVMH 2011


has been standard practice for Sephora to send shipments to the                Road transport is an excellent alternative to air transport for
United States by boat. Today, 90% of finished goods are shipped               destinations close to the source warehouse. Louis Vuitton’s two
by this method of transport versus 10% in 2003. Hennessy, which              new warehouses on the East and West Coast of the United States
has always had an international market, ships almost 90% of its              have cut down the need for air freight, which had previously been
products by sea. When infrastructure allows, inland waterways are            unavoidable when the sole warehouse was in Memphis, some
preferred, as in the case of Louis Vuitton and Moët & Chandon,               1,500 miles from most of the stores supplied. Since this new
which ship goods for export from Gennevilliers to Le Havre. The              organization was introduced in 2011, total emissions from air and
Maisons also encourage rail transportation. For its part, in 2003            road shipments have halved (estimated reduction between 2010
Louis Vuitton stepped up its use of combined rail/road transport             and 2011: 46%). By the same token, road freight for Louis Vuitton
between the Barbera workshop in Spain and the logistics center               to Germany and Austria rose from 63% in 2010 to 91% in 2011.
in Cergy. This resulted in a reduction in CO 2 emissions of                  This produced emissions savings in Germany and Austria of
105,400 metric tons in 2003 compared with road transport.                    844 MtCO2e and 550 MtCO2e respectively.

   E ective handling of expected change is of major importance                  For short-distance shipments, European cities try to limit
and a managerial challenge. Since 2008, Guerlain has been using              goods delivered to town centers and encourage clean forms of
a tool to monitor on a monthly basis the overall percentage of sea           transport.
transportation for each geographic region and campaign. Results                 Louis Vuitton therefore opts for electric vehicles when appro-
are reviewed by the Maison’s Executive Committee. A report of                priate. An electric vehicle pilot scheme was developed in 2010 and
costs and CO2 emissions compared with the year’s target is then              will eventually be extended to all Louis Vuitton sites. Its scope
sent to all entities. Louis Vuitton, meanwhile, has set its logistics        includes delivery of Ready-To-Wear and Shoes to stores in Paris
teams a target of 60% for sea freight for Leather Goods flows,               and the supply of leather goods to Printemps Haussman from
while Parfums Christian Dior uses air/sea ratios so that its teams           Cergy. Similarly, Louis Vuitton’s corporate headquarters in Paris
can be extra vigilant and limit air transport to shipments with              and New York, and its o ces in Switzerland, use a bicycle courier
particularly tight deadlines.                                                service.
   This trend has required the Maisons to rethink their logistical              In France, Sephora has been working with transportation com-
organization. Thus, the location of a new building or a logistics            pany Deret since December 2009 to deliver 80% of its shipments
supplier becomes a strategic decision for the Maisons as they try            to its 250 stores by electric vehicle. In 2010 and 2011, more than
to reduce shipping distances when forward planning.                          1,200 MtCO2e were saved per year.
                                                                                For short distances, such as the supply of its Paris stores,
   For several years, Louis Vuitton has been analyzing its transpor-         Guerlain issued a call for tenders at the end of 2011 for night
tation challenges and has totally overhauled its logistical arrange-         transport and clean vehicles. At the end of 2011, 50% of courier
ments. Sales at each store are analyzed almost in real time to               trips between Guerlain’s headquarters in Levallois-Perret and its
better identify customer requirements and anticipate needs. This             stores were made by bicycle rather than scooter.
improvement to the planning and the reorganization of the Cergy                 Céline has also increased electric truck deliveries within major
logistics center have increased e ciency and o set the additional            urban environments. Electric vehicles are used to supply its stores
time required for maritime transportation. Thus, since 2007, 50%             in Paris in conjunction with GF Services, a company specializing
of leather goods destined for maritime transport are shipped by              in the transportation of high added value goods and which also
inland waterway from Gennevilliers to Le Havre.                              collects packaging from stores, thus combining safety, traceability
   For Champagne, a logistics platform shared by all the Maisons             and sustainability.
optimizes the efficiency of the transport phase and facilitates                 In 2009, Hennessy and Domaine Chandon California acquired
maximum use of maritime transport (over 90% in metric tons/                  small, solar electric vehicles to transport employees and visitors
kilometers). In April 2009, Hennessy moved its logistics platform            around the wineries.
from Anvers to Le Havre. The benefits were undeniable: increased
storage capacity, greater proximity to the Cognac site, improved
environmental performance, reduction in shipping costs and an
opportunity to use more rail transport.

                                                                                LVMH 2011


                                                   FOCUS 2011: TRANSPORT AND SHIPPING

                            Training to ecodriving at Parfums Christian Dior.

                                            Practical solutions for employee travel

  Although it is difficult to include all business travel in the                           Louis Vuitton has embarked on an ambitious program at its
Maisons’ Carbon Footprints®, it is nevertheless essential to seek                       facilities around the world to optimize employee travel. In all coun-
alternative transport solutions and reduce business travel by                           tries, employees are encouraged to use public transport and clean
Holding company conference call meetings whenever possible.                             transport. For example, at Cergy and some other sites, surveys have
                                                                                        been carried out to determine the habits and needs of employees in
  Guerlain has developed a variety of measures under its Business                       terms of transport methods, travel time, travel distance, and so on.
Travel Plan. A carpooling scheme was set up at the Chartres site in                     Carpooling and shuttles are now widespread at most workshops. At
2009 and by the end of 2011, 44 employees were sharing their daily                      the Ducey and Sainte-Florence workshops, for example, 60% of
commute. The facility at Chartres has joined forces with two local                      employees carpool. Bicycle fleets have been set up to encourage the
companies to develop software and a website to advertise carpool-                       use of bicycles. In 2009 during Mobility Week, Louis Vuitton pub-
ing o ers and requests for commuting and business travel. For the                       lished the “Guide to Green Transport in Paris” (bicycles, boats,
car fleet owned or leased by the Maison, vehicles may emit no more                       electric vehicles) and in 2010 reimbursed subscriptions to Vélib’
than 140 g of CO2/km and should aim for 120 g of CO2/km – a                             (self-service bike program) for employees at its Paris headquarters.
much lower threshold than the European regulatory target of 130 g                       Some sites, such as the Drôme Workshops, have terminals for
of CO 2/km by 2015. Starting in 2012, the Maison will have to                           recharging electric cars. Finally, innovative solutions for remote
include hybrid vehicles in its fleet. Employees who bike to work                        meetings, such as videoconferencing or, since 2011, telepresence
have a designated bicycle parking area at the headquarters in                           solutions (when a meeting room is recreated using videoconferenc-
Levallois-Perret. Lastly, video conferencing and conference-call                        ing), have been set up so that virtual meetings can be held between
facilities have been set up at the offices in Levallois-Perret,                         several individuals yet still o er the resources of an actual meeting
Chartres, Orphin and Béville-le-Comte to reduce sta travel.                             room.

   Parfums Christian Dior introduced a Business Travel Plan at its                        Hennessy has invested in green vehicles as part of its Carbon
Saint-Jean-de-Braye facility for the period from September 2008 to                      Footprint® “internal transport” action plan aimed at reducing its
March 2009. This led to agreements with the Urban Community of                          greenhouse gas emissions. In 2011, it introduced four hybrid vehi-
Orléans to develop a route and scheduling for two bus lines so that                     cles and four electric vehicles into its fleet.
employees who work in teams could use public transport. In 2011,
the Maison launched an internal initiative to make some thirty
electric bicycles available to employees for commuting and trave-
ling within the site.

                                                                      LVMH 2011


                                    A GROUP WIDE STRUCTURED

                                           A GROUP WIDE STRUCTURED APPROACH

                                                                                                                An e cient
   A clear vision of                       Appropriate organization           Tools and key
   the issues involved                     and commitment                     management processes

   Set up in 1992, the Environmental                 commitments and focuses on processes,          A CLEAR VISION OF THE ISSUES
Department defines the Group’s strategy              programs and initiatives that support the                INVOLVED
and as such reports both to Pierre Godé,             actions of each Maison. The Environmental
Vice Chairman of the Board of Directors,             Charter signed by Bernard Arnault in 2001
and Antonio Belloni, Group Managing                  embodies and updates the vision of the        Like any human activity, the businesses of the
Director of the Executive Committee. The             LVMH group on integrating environmental     LVMH group have an impact on the environ-
strategy is based on a clear analysis of the         protection into its businesses.             ment that varies in type and magnitude depend-
issues involved. It is implemented through-                                                      ing on the sector. The challenges faced by
o u t t h e G ro u p by m e a n s o f va r i o u s                                               each business have been clearly identified.

                                                                           LVMH 2011


                                                ANALYZING THE MAIN CHALLENGES OF
                                                      EACH BUSINESS GROUP

                    Wines                         Fashion                       Perfumes                  Watches                       Selective
                    & Spirits                     & Leather Goods               & Cosmetics               & Jewelry                     Retailing

Saving energy       • Packaging production.       • Store lighting and          • Packaging production.   –                             • Store lighting and
resources                                           air-conditioning.                                                                     air-conditioning.
                    • Distillation.                                             • Transportation
and combating                                     • Transportation                of product shipments.                                 • Transportation
climate change      • Transportation of product     of product shipments.                                                                 of product shipments.

Protection          • Water consumption          –                              • Protection and          –                             –
and saving            (irrigation of vines in                                     saving of water
of water              Australia, New Zealand,                                     resources.
                      Argentina and California).
                    • Production of e uents
                      containing organic
                      matter during wine-
                      making and distillation.

Protection          • Particularly plant          • Particularly plant       • Particularly plant         • Packaging.                  –
of ecosystems         resources (vines)             resources (textile bers)   resources required
                      required for production.      required for production.   for production.            • Stones and precious
and natural                                                                                                 metals.
resources                                         • Leather.

Waste               • Wine-making and             –                             –                         • WEEE (Waste from            –
recovery              distillation processes.                                                               Electrical and Electronic
                                                                                                            Equipment, such as

Reduction           • Packaging.                  • Packaging.                  • Packaging.              –                             –
of the impact of                                  • Cotton and                  • Constituents of
production and                                      other textiles, leathers.     perfumes
transformation                                                                    and cosmetics.
of raw materials,

                                                                    RISK MANAGEMENT                           identification of risk using a mapping tool
                                                                     AND COMPLIANCE                           and common standards; the prevention of
                                                                                                              product-related risks (HACCP/Hazard
                                                         Overall risk management measures:                    Analysis Critical Control Point method,
                                                      analyzing and monitoring changes in the                 legal watch) and the reduction of industrial
                                                      issues involved are underpinned by an envi-             risk; the protection of people and property;
                                                      ronmental risk management policy based                  and a system of crisis management. With
                                                      on four key areas of focus: the systematic              regard to the program to monitor industrial

                                                                           LVMH 2011


                           DEVELOPING THE KEY DRIVERS
                            OF ENVIRONMENTAL ACTION
                                           More e ective
                                     and innovative processes
                                     and products that address
                                         environmental and                                              BEST PRACTICES
       Demonstrate                                                                  Employees
                                       biodiversity challenges                                          SUPPLIERS
   the Group’s capacity
    to manage its risks                                                             Informed,
     and opportunities                                                         aware and motivated      • Louis Vuitton: The successful upstream
     in environmental                                                           by environmental
                                                                                                        integration of relationships with suppliers
         protection                                                                   drivers
                                                                                                        is based on a two-pronged approach:
                                                                                                        awareness and regulation. For Louis Vuitton,
                                      Consumer associations
                                                                                                        suppliers in the broad sense of the word
                              NGOs                                                                      (i.e., product manufacturers, shippers
                              Trade unions                                                              and contractors), particularly those
                                                                                                        associated with the leather goods chain, are
         Society                                                                                        strongly encouraged to obtain ISO 14001
                                                                               Partners and suppliers   certi cation. This creates a dynamic that
         Listen to            Governments and             Professional
     communities and          local authorities            federations           Choose the best        encourages a growing number of suppliers
   promote a responsible                                                           suppliers and        to commit to environmental initiatives.
        production                   Multinational organizations                share our approach
     and consumption                                                             with our partners      Examples of this include the installation
          model                                                                                         of solar panels by one of our partner
                                                                                                        tanneries, reclamation of production waste
                                                                                                        (waste-to-energy recovery from residues
                                                                                                        used for merchandising or for certain
                                                                                                        products), waste water treatment, green
                                         Meet information                                               roofs at two suppliers in Asia, and
                                                                                                        the implementation of clean technologies
                                        and customer values
                                              regarding                                                 to reduce water pollution during tanning
                                          the environment,                                              operations. In terms of methods and
                                         health and safety
                                                                                                        organization, it is now standard for internal
                                                                                                        control to include a questionnaire on
                                                                                                        “environmental practices.” As part of local
                                                                                                        regulatory monitoring, the legal department
                                                                                                        provides support in multiple areas such
                                                                                                        as waste, eco-taxes, transport, energy
                                                                                                        (e.g. store lighting and light pollution),
                                                                                                        noise, water, and more. Meanwhile,
and environmental risks, 30 sites were              right to conduct compliance audits at any
                                                                                                        a speci c product working group has been
audited in 2011 (the same number as in              time and without notice. Thus, in 2011,
                                                                                                        tasked with drafting speci cations for
2010) . Some Maisons are bringing their             453 social and/or environmental audits
                                                                                                        a substance monitoring tool.
sites into regulatory compliance, particu-          were conducted at 346 suppliers of the
larly those classified for environmental            Group’s Maisons. Of these, 80% were con-
                                                                                                        • Loewe has adopted an “environmental
protection. For example, Guerlain, Loewe,           ducted by external auditors. For example, as
                                                                                                        compliance program” with the help
Louis Vuitton and MHCS have developed               part of its approach to sustainable purchas-
                                                                                                        of a specialist rm. The program primarily
tools that monitor and analyze potential            ing, Hennessy educates its suppliers and
                                                                                                        provides information about regulations and
non-compliance with regulations in areas            outside contractors about environmental
                                                                                                        implements an improvement plan called
such as water treatment and discharge,              matters, assists them with their environ-
                                                                                                        “zero legal non-compliance,” which serves
waste storage, application of the WEEE              mental initiatives and assesses their pro-
                                                                                                        as a basis for the auditing of three Spanish
European Directive (waste electrical and            gress, particularly that of suppliers of dry
                                                                                                        production sites.
electronic equipment), storage of chemical          solids, who are assessed annually. For the
products, fire protection, and so on.                Perfumes & Cosmetics business group, the
   Supplier relationships: with regard to its       entire jasmine sector is audited. This issue
supplier relationships, LVMH requires its           is examined in more detail on page 11 of the
partners to subscribe to its Supplier Code of       Annual Report.
Conduct by virtue of which it reserves the

                                                                            LVMH 2011


                          BEST PRACTICES

     • Guerlain actively manages its supplier
         relationships on a number of levels.
      All calls for tender include a paragraph
       formally setting out what is expected
of contractors in terms of their commitment
to sustainable development. A questionnaire
       has also been sent to more than 80%
        of strategic suppliers to assess their
         environmental and social practices.
Finally, a special audit was performed on one
            of the Maison’s strategic suppliers.

  • Hennessy organized the rst Hennessy
           Technical Forum at its winery for
  its wine-growing partners. The event was
 designed to meet wine-growers’ increasing
           need for technical information on
      sustainable development and provided
                                                       The Guerlain Sustainable Development Committee.
             examples of e ective solutions.
          The program included topics such
         as the carbon footprint® of cognac                        SPECIFIC INTERNAL                             vision since 1992. Its tasks consist of support-
  production, the use of weather stations in                         ORGANIZATION                                ing the Maisons in their respective initia-
        managing phytosanitary treatments,                         AND COMMITMENTS                               tives, ensuring that the Environmental
methane fermentation of distillation vinasse,                                                                    Charter is observed, and running the
        energy savings during the distillation                          COMMITMENTS                              Environment Committee, which brings
      process (new-generation gas burners)                                                                       together a network of some 50 environmen-
                                                         International charters and agreements
       and phytosanitary e uent treatment.                                                                       tal correspondents from the Maisons several
                                                       signed by LVMH provide the framework
  Almost 500 partners attended the forum,                                                                        t i m e s a y e a r. T h e E n v i r o n m e n t a l
                                                       for the initiatives led by the Group and its
        which featured talks, workshops and                                                                      Department also runs a variety of specialist
                                                       Maisons. The “Environmental Charter”
              individual networking sessions.                                                                    in-Maison working groups which deal, for
                                                       signed by Bernard Arnault in 2011 defines
                                                                                                                 example, with the European REACH regula-
                                                       the LVMH group’s goals and dynamics.
                                                                                                                 tion, eco-design and energy consumption in
                                                                                                                     Although the Maisons are represented
                                                          The main goal of the internal organiza-                within the Group’s Environment Committee
                                                       tion adopted by the Group is to harness the               agent network, they also have their own
                                                       commitment of all Group personnel and                     steering committees. Each Maison has addi-
                                                       train sta by o ering them resources best                  tional means, depending on local conditions
                                                       suited to their particular situation.                     and the size of its in-Maison projects.
                                                          The Group’s Environmental Department                       In 2011, for example, Louis Vuitton
                                                       has been a driving force behind this shared               increased the resources dedicated to

                                                                                                                       Foster a collective
                                                                                                                       commitment by sta
                                                                                                     Design luxury
• United Nations Global            • Environment Charter
                                                                                                     products by                                   Aim for a
Compact (2003)                     (2001)                                 Control
                                                                                                     integrating                                   high level of
• Gordon Brown’s “Millennium       • Supplier Code of Conduct             environmental
                                                                                                     environmental                                 environmental
Development Goals” (2007)          (2008)                                 risks
                                                                                                     innovation and                                performance
• Watches and Jewelry Maisons   • Code of Conduct                                                    creativity
members of the RJC (Responsible (2008)                                                                                 Make commitments
Jewellery Council)                                                                                                     outside the company

                                                                          LVMH 2011


                               INTO ITS BUSINESSES

 Aim for a high level            Foster a collective              Control                             Design products by                  Make commitments
 of environmental                commitment                       environmental risks                 integrating environmental           outside the company
 performance                                                                                          innovation and creativity

 In developing its businesses    The environment is the           In addition to the most             Guided by its overriding concern    LVMH intends to contribute
 internationally, LVMH works     responsibility of every          stringent compliance with           for high quality, LVMH is working   to the protection
 to align its own practices      individual, and LVMH             environmental regulations,          to improve control and better       of the environment
 with those that o er the        believes that awareness,         which is an absolute duty,          anticipate the environmental        above and beyond the
 best level of environmental     education and training of its    the Group intends to focus          aspects related to the life         aspects directly related
 protection around the           employees are top priorities.    on risk prevention. As a            cycle of its products. LVMH         to its own businesses.
 world.                          To ensure a high level of        result, it allocates human          encourages all processes            Because it considers that
                                 environmental performance,       and material resources to           that result in environmental        promoting respect for the
                                 the Group believes it is         this goal.                          innovations and accepts its         environment is essential,
                                 vital for each company to                                            duty to exercise prudence and       LVMH is developing an
                                 set precise environmental                                            take precautions to ensure total    active partnership with
                                 targets and implement                                                safety for the consumer.            groups of businesses,
                                 a management system                                                                                      local communities and
                                 dedicated to this process.                                                                               the associations which
                                                                                                                                          contribute to this objective.

environmental issues. In North America,                 2011, Loewe’s Executive Committee decided                    training in this area. In 2011 more than
fifteen individuals and seven working groups             to publish an internal report in 2012.                       15,602 training hours were devoted to this
are tasked with supporting ongoing initia-                 The LVMH Mind website reports on the                      purpose. The new initiatives being imple-
tives. In the Asia-Pacific region, a steering           Group’s principles and initiatives in matters                mented are extremely diverse and range
committee was set up to focus on four key               of Environmental and Corporate Social                        from the creation of specific training mod-
areas: recycling of o ce waste, internal com-           Responsibility including diversity, equality,                ules at Hennessy, to site visits, study trips
munications, energy consumption reduction               ethics, environmental protection and                         to La Samaritaine department store in
and eco-gestures in the office. A “CSR                  responsible procurement. The site is avail-                  Paris, evaluation questionnaires and per-
Ambassador” is currently being appointed to             able to all Group employees and is both an                   formance scoring in the Champagne
cover China and Japan, and various working              information resource and a collaborative                     Maisons. During Europe’s “Green Week,”
groups have been set up to focus on training,           working tool for the environmental corre-                    informational flyers were given to all
communications, press, and so on.                       spondents. It is also a means for employees                  G ro u p e m p l o ye e s t o p ro m o t e e a c h
   For its part, Guerlain has its own Sustain-          to receive newsletters and subscribe to                      Maison’s energy initiatives with regard to
able Development Committee, with 15                     newsflashes.                                                  lighting, shipping, renewable energy and
members as at the end of 2011 drawn from                                                                             heating/air-conditioning. This event was
all company departments.                                                                                             also an opportunity to seek suggestions
                                                                 AWARENESS AND TRAINING
   Some Maisons publish their own sustain-                                                                           from sta and assess their feasibility.
able development or corporate responsibil-                The Group’s Maisons raise staff aware-
ity reports for internal or external use. In            ness of environmental issues and provide

                                                       Group Managing Director

                                             GROUP ENVIRONMENT DEPARTMENT 1992

    Group special committees            Group Environment                       Business Group                             Maison
                                           Committee                                                                                                    • Finance
  • Examples:                                                           • Examples:                            • Steering Committees and                • Risks
    “REACH Committee”             • Network of 50                         “Perfume & Cosmetics                   Speci c Committee                      • Purchasing
    “Purchasing working Group”      correspondents meeting                Ecodesign Committee”                                                          • R&D
                                    4 times/year                          (2009)                                                                        • Communication
                                                                                                                                                        • HR

   Management and coordination                                               Support and assistance                                                  Skills exchange

                                                                LVMH 2011


                                                    INVOLVEMENT OF THE MAISONS                   the China region and a second edition of
                                                          IN SUSTAINABLE                         the environmental challenge, “Earth Day
                                                        DEVELOPMENT EVENTS                       Corporate Contest,” at the North American
                                                   The “European Sustainable Development         corporate headquarters on April 22, 2011.
                                                Week” (April 1 to 7, 2011) is an annual event      During “European Week for Waste
                                                that raises awareness in France of sustainable   Reduction” from November 19 to 27, 2011,
                                                development issues and encourages people to      two talks were held at the Paris Region
                                                act more responsibly. The 2011 edition was an    offices of LVMH Fragrance Brands on
                                                opportunity for many of the Group’s Maisons      “Sorting and eco-design in our Perfumes
                                                to showcase their commitment and actions,        and Cosmetics industry.” At the same time,
                                                which included:                                  Guerlain set up new sorting facilities at its
                                                – circulation of a web-based brochure and        headquarters in Levallois-Perret for coffee
             BEST PRACTICES                                                                      capsules, plastic bottles, cans and other refuse,
                                                  sustainable development quiz at Guerlain;
TRAINING AND INTERNAL SKILLS                                                                     end-of-life products, testers and perfume
                                                – initiatives on the theme, “Let’s Change
                  EXCHANGE                                                                       and cosmetic packaging. These facilities
                                                  our Behavior and Help Reforest the
                                                  Earth” at Le Bon Marché, La Grande             supplemented the existing facilities for
        •In 2011, Hennessy introduced new                                                        sorting paper and cardboard, batteries,
                                                  Épicerie and Franck & Fils;
  environmental training modules for sta ,                                                       printer cartridges, and so on. To raise
                                                – a presentation on changes in wine-grow-
                 particularly those involved                                                     awareness and assist employees, Guerlain
                                                  ing practices, on specific eco-design
    with maintenance, distillery operations                                                      established a waste-sorting procedure and
                                                  examples, and on the challenges related
  and cooperage. It also introduced overall                                                      produced a “Sorting Guide,” explaining how to
                                                  to corporate social responsibility in the
          awareness training for new hires.                                                      sort the various types of waste.
                                                  Champagne Maisons;
                                                – the 6th Sustainable Development Week at          Some Maisons organized events as part
  • Bodegas Chandon launched an internal                                                         of European Mobility Week, which took
                                                  Louis Vuitton corporate headquarters;
     communications campaign addressing                                                          place from September 16 to 22, 2011 (see
                                                – events based on the theme “International
        the challenges of food safety and                                                        “Focus 2011: Transport and Shipping”).
                                                  Year of Forests” (Hennessy);
                         Health & Safety.
                                                – circulation of a sustainable development
                                                  newsletter to all Kenzo Parfums employees.
            • Belvedere organized a seminar
                                                   Some Maisons, such as Louis Vuitton,                  KEY MANAGEMENT
for employees and suppliers, in conjunction
                                                were also involved in other international           AND EXTERNAL CERTIFICATION
   with some scienti c bodies (a university
                                                environmental events: “World Water Day”                     PROCESSES
          and the Institute of Soil and Plant
                                                on March 22, 2011 and “World Environment
  Cultivation), to promote best practices in                                                        In 2011, LVMH collaborated with a num-
                                                Day” on June 5, 2011. The Maison organ-
   rye cultivation. The main purpose was to                                                      ber of pilot Maisons – at least one per busi-
                                                ized “Earth Hour” on March 26, 2011 for
analyze the comparative impact of various                                                        ness group – to devise a strategy for
         grades of rye and to gain a better                                                      identifying key environmental topics to
          understanding of eco-cultivation.                                                      strengthen its management of the environ-
                                                                                                 mental challenges involved. Each topic was
  • Make up For Ever set up “Environment                                                         assigned a set of indicators so that the per-
            Stops” at its ve sites and ran                                                       formance of each Maison could be moni-
       awareness campaigns for Packaging                                                         tored. This initiative is managed and
           & Marketing Development sta                                                           monitored by the executive committee of
          on the challenges of eco-design.                                                       each Maison and by the executive commit-
                                                                                                 tee of LVMH. It will gradually be intro-
     • The Champagne Maisons introduced                                                          duced in all Maisons.
  a number of initiatives, including training                                                       To comply with Group strategy, the
   and awareness-raising, for all personnel                                                      Maisons may need to devise additional tools
                (permanent and seasonal)                                                         that take account of their own specific chal-
       on the environment and food safety.                                                       lenges and activities. Loewe, for example,
  It also issued assessment questionnaires                                                       has adopted a “Vision 2020” road map that
and established a system to monitor water                                                        covers multiple areas related to risk preven-
                  and energy consumption.                                                        tion and mitigation, cost savings, innova-
                                                                                                 tion, value creation, image protection and
                                                                                                 image promotion. More than 150 people

                                                                                    LVMH 2011


                                                                                                                          BEST PRACTICES
                                                                                                                          TRAINING AND INTERNAL SKILLS

                                                                                                                          • Louis Vuitton increased some of its training
                                                                                                                          and internal communications initiatives,
                                                                                                                          particularly those involving a correspondents’
                                                                                                                          network. In 2011 it organized two seminars
                                                                                                                          on “Carbon Footprints” and “ISO 14001,”
                                                                                                                          featuring outside specialists and site visits.
                                                                                                                          The Maison has furthermore set up
                                                                                                                          a broad array of tools to meet the challenges
                                                                                                                          involved in ISO 14001 certi cation, speci cally:
                                                                                                                          – regular employee awareness campaigns
                                                                                                                            at all Maison sites; as such, more than
                                                                                                                           700 training hours were conducted
                                                                                                                           at the Sainte-Florence workshop and
                                                                                                                           111 training hours at the Barbera workshop;
The “Napa Green Certified Winery” certification at Domaine Chandon California.
                                                                                                                          – the design of a fun training module
                                                                                                                            for immediate use by workshops as part
were involved in working groups and vari-                               ISO 14001 CERTIFICATION                             of the SIRIUS project to obtain ISO 14001
ous reviews that led to the definition of a                                    AND SMES                                     certi cation for the leather goods
program to take account of all of the com-                                                                                  workshops;
pany’s operations. It is based on seven key                       Louis Vuitton is continues its ISO 14001                – training of internal auditors in ISO 14001.
business aspects: employee commitment,                          certification e orts after obtaining certifi-
product durability, sustainable leather,                        cation for its logistics sites in France, the             • Guerlain holds training sessions for
responsible selling, stakeholder dialogue,                      Paris headquarters at Pont-Neuf and the                   all employees. Members of the Sustainable
responsible and energy-e cient operations,                      workshop in Barbera. Certification plans                  Development Steering Committee thus
and a responsible supply chain.                                 includes for all workshops, the downstream                received training so that they in turn could
                                                                supply chain and regional headquarters.                   pass on their knowledge to more than
                                                                  The Champagne Maisons (Moët &                           800 employees. To supplement this training,
                                                                Chandon, Dom-Pérignon, Mercier, Ruinart,                  head o ce employees and stores were given
                                                                Veuve Clicquot and Krug), MHCS, obtained                  an ISO 14001 passport. The International
   One of the major components of the                           the renewal of their ISO 22000 certification               Seminar, an annual event focusing on
Environmental Charter adopted in 2011                           and are also ISO 14001-certified. In addition              marketing challenges, took place in April 2011
requires each Maison to establish an environ-                   to introducing a tool to monitor regulations              and included an environment track in its
mental management system as part of a man-                      and non-compliance, MHCS completed the                    plenary program. Other events, such as the
agement-driven policy. At the end of 2011,                      standardization of its Environmental                      “Auteuil Greenhouses Convention” in June
46% of manufacturing, logistics or adminis-                     Management system. Specifically, it created                2011 and the “Chic & Green” competition for
trative sites were ISO 14001-certified, and                     and implemented a computerized manage-                    all Guerlain employees around the world,
27% had been audited. In all, 49 external and                   ment tool for improvement initiatives and                 promoted ecology and biodiversity initiatives.
95 internal audits had been performed, with                     created and implemented a single document
some sites audited several times during the                     m a n a g e m e n t d a t a b a s e ( I S O   22 0 0 0,
year.                                                           ISO 14001, HQE). It also standardized the
   The entire Champagne-Cognac-Vodka                            hazard analysis (HACCP) for all Champagne
division is also ISO 22000-certified in food                    Maisons.
safety management. The aim of this certifica-
tion is to standardize food safety management
practices and guarantee maximum safety for
the consumer.

                                                                          LVMH 2011


                       BEST PRACTICES

      • Sephora US has embarked on a LEED
    (Leadership in Energy and Environmental
      Design) certi cation program involving       Aerial view of the future Samaritaine.
sixteen of its stores. Although the goal is not
                                                      The environmental policy of Domaine               ISO 14001 certification was the main envi-
to obtain certi cation as a matter of course,
                                                   Chandon California and Newton is based on         ronmental goal in 2011 for Guerlain’s produc-
   the Maison nevertheless draws broadly on
                                                   “Napa Green Certified Winery” certification.        tion sites, headquarters and six Paris stores.
the methods and recommendations of LEED
                                                   This certification, o ered by an independent       Although steps toward certification began at all
   certi cation when opening or renovating a
                                                   third party, represents the most comprehen-       sites in 2010, the certification audit did not take
                                                   sive best practices in wine-industry produc-      place until the end of November 2011 for the
                                                   tion in the United States. The control scope      Chartres site and early December for the
            • In 2011, Château Cheval Blanc, a
                                                   focuses on a commitment to conserving             Levallois-Perret site and the Paris stores. With
  Saint-Emilion Premier Grand Cru, o cially
                                                   water and energy, preventing pollution and        regard to the production center in Orphin, the
 opened its new wine cellars, built according
                                                   reducing waste.                                   certification audit is expected to take place in
        to a design developed by Christian de
                                                                                                     June 2012. More than 800 employees received
  Portzamparc, the renowned architect and
                                                                                                     training during internal training sessions and
    winner of the Pritzker Prize in 1994. The
                                                                                                     all Guerlain employees were given an
 cellar has been awarded HQE® certi cation
                                                                                                     ISO 14001 passport. As a result, all Guerlain
                    as a result of the materials
                                                                                                     sites and operations will be certified as of 2012.
used and e orts it is making in water, energy
   and waste management, humidity control
                                                                                                                BUILDING STANDARDS
                     and employee wellbeing.
                                                                                                        Most of the LVMH group’s new construc-
                                                                                                     tion or renovation projects, whether indus-
                                                                                                     trial sites, warehouses, stores or
                                                                                                     administrative offices, now incorporate
                                                                                                     environmental criteria. For construction,
                                                                                                     renovation and building operation, the
                                                                                                     Maisons apply various standards and certi-
                                                                                                     fications such as HQE®, BBC, BREEAM and
                                                                                                     LEED. In the last ten years, more than
                                                                                                     28 buildings have been built to these
                                                                                                        The design of the renovation project of
                                                   The sustainable development chater of Guerlain.
                                                                                                     La Samaritaine in Paris includes 70,000 m2
                                                                                                     (753,474 sq.ft) of amenities comprising a
                                                                                                     hotel, shops, social housing, offices, car
                                                                                                     parks and a 60-cot children’s daycare

                                                                LVMH 2011


center. This extensive program was devel-       waste with very high targets for recovery
oped in cooperation with the City of Paris      and recycling. Water and electricity
as part of its Climate Plan and reflects a      consumed by jobsite trailers and the site
stringent approach to urban ecology that        itself have been closely monitored since the
calls for:                                      project began. A newsletter (“Journal
– environmental certification (France’s         HQE®”) has been circulated to workers and
  “Bâtiments tertiaires – Démarches HQE®        sta to raise awareness about environmen-       BEST PRACTICES
  Bureau and HQE® Commerces”) and the           tal quality, and information has been          BUILDINGS
  BBC label for the o ces and shops;            posted covering various aspects of the
– the “Heritage, Habitat & Environment”         HQE® approach. In an e ort to control the      • Ambitious targets have been set for
  standard, and the BREEAM and LEED             environmental characteristics of the           the extension of the Moët & Chandon
  standards for o ces, shops and the hotel;     materials used at the site, more than          Montaigu site. They include implementing
– the low-consumption building label, BBC-      600  licenses have been obtained for           the “High Environmental Quality® Buildings”
  E nergie/Rénovation Logements.                the products concerned. Monitoring is          pilot program, adopting the THPE high
   To meet energy reduction targets, a strict   reinforced by monthly visits focusing on       energy performance label for the winery,
ceiling has been set for both the renovated     environmental protection measures. Finally,    and meeting the BBC standard for o ces
portions (Very High Energy Efficiency           the Carbon Footprint® of key specific items     and administrative premises.
standard: 80 kWhPE/m2/year) and the new         is updated as the work progresses.
portions (BBC-E nergie low-consumption                                                         • Some the best practices implemented by
standard: 50 kWhPE/m2/year). The plans                                                         Louis Vuitton are showcased in the new
                                                        RESPONSIBLE JEWELRY
provide for lining the historical facade with                                                  leather goods workshop in France’s Drôme
                                                           AND CERTIFICATION
an interior facade, creating winter gardens                                                    region. An audit showed the premises met
to improve the thermal and acoustic com-          The Watches & Jewelry business group of      the criteria for high environmental quality
fort of the premises, and the inclusion of      LVMH is a member of the Responsible            HQE®. Perfectly integrated into the
solar thermal panels. The project must          Jewellery Council (RJC), an organization of    environment so as to preserve the
meet rigorous low-nuisance standards that       more than 160 professionals around the         con guration of the original site, the
respect local residents and are based on a      world committed to the promotion of eth-       workshop has France’s largest industrial
waste sort/recovery target of 75%.              ics, human and social rights and environ-      green roof (5,000 m2). The green roof has a
   The project to build the Louis Vuitton       mental practices throughout the product        system for capturing rainwater which is then
Foundation for Creation Museum was              chain, from the mines to the points of sale.   used to water ower beds during spells of
launched in 2011. The museum was                The RJC has developed a certification sys-      very hot weather. The steepest part of the
designed by architect Frank Gehry and is        tem for members involved in gold and dia-      land has been landscaped to incorporate a
under construction in the heart of the Bois-    mond work which requires audits by             self-su cient sanitation system. Waste
de-Boulogne. It applies exemplary stand-        accredited independent auditors. The certi-    water is puri ed by lter basins planted with
ards and technologies taken from a              fication scope within the Watches &            anti-pollution plants. Windows and skylights
“Museum” high environmental quality pilot       Jewelry Maisons includes Bulgari, TAG          allow natural light into the building, while
program. It is a consummate project by vir-     Heuer, Hublot, Zenith, Chaumet and Fred.       thermal insulation is provided by the green
tue of its many architectural features (geo-    Bulgari, TAG Heuer, Chaumet and Fred are       roof and the use of heat pumps. The site’s
thermal energy, materials bearing the NF        RJC-certified. Zenith was certified in         heating is managed entirely by natural
Environnement label and European                January 2012, while Hublot and Louis           processes without the need for conveying
Ecolabel). In terms of waste management,        Vuitton’s jewelry business aim to be certi-    gas and oil to the site. Solar thermal panels
there are five sorting facilities for jobsite   fied in the first half of 2012.                  also cover the workshop’s hot water needs.
                                                                                               Furthermore, materials have been carefully
                                                                                               chosen to create quiet areas in the
                                                                                               workshop. Lastly, the site features solar
                                                                                               panels for lighting in the parking areas and
                                                                                               recharging terminals for electric cars. These
                                                                                               combined e orts help reduce overall energy
                                                                                               consumption at the site by 43% compared
                                                                                               with the most recently built workshops.

                                                            LVMH 2011


                                     MANAGEMENT OF
                                 ENVIRONMENTAL IMPACTS

                                 MANAGEMENT OF ENVIRONMENTAL IMPACTS

  Site management and resource saving
                                                        Emission and waste prevention
  Product design and product life-cycle                                                         Impact reduction

   Assessing environmental, health and                RESOURCE SAVING                     sources. In descending order, this con-
safety impacts requires a two-pronged                    INITIATIVES                      sumption was attributed to Selective
approach: first, site and production cycle                                                Retailing (36%), Wines & Spirits (30%),
management, and second, product design         In 2011, the companies included in the     Fashion & Leather Goods (19%) and
and product life-cycle management. Since     reporting scope consumed 554,354 MWh,        Perfumes & Cosmetics (11%). The remain-
2011, the Group has carried out comprehen-   broken down by energy source as follows:     ing 4% was generated by Watches &
sive measures to incorporate key environ-    67% electricity, 19% natural gas, 6% heavy   Jewelry and other Group activities. The
mental indicators in Maison and Group        fuel, 5% fuel oil, 1% butane-propane, 1%     energy consumption of the sales areas
strategy.                                    steam and less than 1% renewable energy      excluded from the reporting scope (60%

                                                                                          LVMH 2011


of the total sales area) is estimated at                                Renewable energy: Among the most sig-
315,972 MWh.                                                        nificant projects was the installation by
                                                                    Louis Vuitton of 1,218 solar panels on the
                     ENERGY USE                                     ro o f o f t h e Sa n D i m a s wo r k s h o p i n
   Energy savings: After completing Carbon                          California, for a total installed capacity of
Footprint® assessments (see page 29) and                            286.2 kW, meeting 31% of the site’s elec-
energy audits, the Maisons embarked on a                            t r i c i t y r e q u i r e m e n t s . Fo r t h e n e w
series of initiatives with regard to store                          European warehouse, which is fitted with a
lighting and air conditioning, transporta-                          photovoltaic membrane, electrical power
tion, energy e ciency and the promotion                             generated by renewable sources ended up
of renewable energy sources. The Carbon                             being higher than expected. By the end of                            BEST PRACTICES
Footprint® produced by Louis Vuitton for                            September 2011, more than 100 MWh had                                ENERGY
its businesses and activities identified four                        been produced, i.e., the equivalent of 43%
                                                                    of the power consumed by the new build-                              • Louis Vuitton is developing a variety
key areas for action: energy consumption
                                                                    ing. Finally, solar panels have also been                            of innovative solutions in Green IT.
in stores, freight, raw materials used
                                                                    fitted to the facade of the store on the                             Since early 2011, some of the servers have
(leather, canvas and other textiles) and the
                                                                    island of Guam.                                                      been virtualized, reducing electricity
employee travel policy. As part of the goal
                                                                                                                                         consumption by 66%. Some forty obsolete
to reduce overall energy consumption,
                                                                                                                                         servers have been replaced by eight
each workshop conducted an energy audit
                                                                                                                                         virtualization servers. The technology
which led to the development of energy-
                                                                                                                                         allows for several operating systems
reduction measures such as the installation
                                                                                                                                         to run on just one physical machine instead
of sub-meters (for water, gas and electric-
                                                                                                                                         of several. Some sites automatically shut
ity) to identify excessive consumption
                                                                                                                                         down computer equipment at night and
more easily. At the Parfums Christian Dior
                                                                                                                                         weekends. In the United States, this
production site in Saint-Jean-de-Braye,
                                                                                                                                         practice has led to energy savings of
new compression equipment was installed
                                                                                                                                         48,118 kWh and won the in-Maison “Earth
to recover and re-use (for heating and
                                                                                                                                         Day Corporate Contest.”
domestic hot water) more than 60% of the
heat emitted during operations.
                                                                                                                                         • The Champagne Maisons have embarked
                                                                                                                                         on an energy e ciency program
                                                                                                                                         that applies to their full reporting scope
                                                                                                                                         but with particular focus on industrial
                                                                                                                                         buildings. The goal is to distinguish
                                                                                                                                         the main areas of energy consumption,
ENERGY CONSUMPTION BY SECTOR AND BY SOURCE IN 2011                                                                                       identify sources of energy savings,
                                                                                                                                         and develop an energy policy and master
                                                                                                                                         plan for short- and medium-term energy
                                                                                                                                         investment. Among the most signi cant
                                                                                                                                         initiatives are the recovery of energy from
                                                                                                                                         the Cuverie Bernon [fermenting room]
250,000                                                                                                                                  industrial chillers for an annual gain
                                                                                                                                         of 1 MWh, the installation of low-
                                                                                                                                         temperature, high-condensing boilers
                                                                                                                                         at the Crayères and Mercier sites,
                                                                                                                                         and the ongoing eco-lighting initiatives
                                                                                                                                         at the Moët & Chandon sites.



               Wines               Fashion              Perfumes              Watches               Selective          Other
              & Spirits        & Leather Goods         & Cosmetics            & Jewelry             Retailing         activities

  Electricity (estimates for the sales areas excluded from the scope of reporting)    Electricity       Natural gas     Heavy fuel oil
  Steam          Fuel oil       Butane propane        Renewable Energy

                                                                                                                                      LVMH 2011


                                                                                                          MARKET BASED INSTRUMENTS                                                                               the “POPE law”) of July 13, 2005 stipulating
                                                                                                  Introduced in France on January 1, 2006                                                                        France’s energy policy guidelines, the
                                                                                                as part of Law No. 2005-781 (also known as                                                                       energy savings certificate scheme entered
                                      BEST PRACTICES
                                                                                                                                                                                                                 its second phase on January 1, 2011 for the
                                                                                                                                                                                                                 period 2011 to 2013, when the pace of the
             • Belvedere, in Poland, has begun                                                                                                                                                                   program is expected to be stepped up and
                                                                                                CHANGE IN ENERGY CONSUMPTION
         a program to save energy and reduce                                                                                                                                                                     higher targets achieved.
                                                                                                (in MWh)

         the volume of CO2 emissions by 40%
    over ve years. The program is designed                                                              Estimated                                                                                                  As the LVMH group is no longer eligible

                                                                                                                                                                                                                 for the new system, it formed a partnership

               to optimize steam production
                 processes during distillation
                                                                                                 800,000                                                                                                         in August 2011 with a “required” stake-
        by re-using the heat produced by air                                                                                                                                                                     holder, Géo PLC, which will be responsible
  conditioning and heating, and by adapting                                                                                                                                                                      for facilitating the creation of energy sav-

                                                                                                                                                                                             195 307
  the boiler room to new sources of energy,                                                      600,000                                                                                                         ings certificates from lifetime cumulative
       such as natural gas. This is expected                                                                                                                                                                     savings (in kWh) achieved as a result of the
     to reduce energy consumption and CO2                                                        500,000                                                                                                         work undertaken by the Maisons in France.
     emissions by 5% and 20% respectively.                                                                                                                                                                       Since this date, LVMH has been recording
                                                                                                                                                                                                                 operations likely to be eligible in respect of
                • Following two energy audits                                                                                                                                                                    2011 and will ensure that for the period 2011
         conducted in 2010 at Cape Mentelle,                                                                                                                                                                     to 2013 energy saving measures meet the
        a new refrigeration and heat recovery                                                    200,000                                                                                                         technical eligibility criteria for operations.
         system was introduced that resulted
    in a 15% energy saving in 2011 compared
           with 2010, despite a slight increase                                                           0
               in the tonnage of fruit treated.                                                                2008                         2009                2010                        2011
                  For 2012, the goal is to save                                                 * Estimates of energy consumption for sales areas excluded from
                                                                                                the scope of reporting and audit (60% in 2011, 60% in 2010,
                            an additional 10%.                                                  50% in 2009 and 62% in2008) are shown separately: 315,972 MWh
                                                                                                in 2011, 289,913 in 2010, 180,638 MWh in 2009 and 214,163 MWh
                                                                                                in 2008. The increase in 2011 is mainly related to the opening
                                                                                                of new stores.                                                                                                                                        347,034*















                            Wines                                 Fashion                                                Perfumes                                             Watches                                           Selective                                 Other
                           & Spirits                          & Leather Goods                                           & Cosmetics                                           & Jewelry                                         Retailing                                activities
   2008 consumption                  including sales areas excluded from the scope of reporting                                                              2009 consumption                            including sales areas excluded from the scope of reporting
   2010 consumption                  including sales areas excluded from the scope of reporting                                                              2011 consumption                            including sales areas excluded from the scope of reporting
* Estimates of energy consumption for sales areas excluded from the scope of reporting and audit (60% in 2011, 60% in 2010, 50% in 2009 and 62% in2008) are shown separately

                                                                                                                                             LVMH 2011


                     WATER SAVINGS                                                               initiatives. Bodegas Chandon in Argentina
   Water is a critical resource for the LVMH                                                     measures its water consumption and has an
group’s operations, particularly in Wines &                                                      overall reduction target of 10% for 2012.
Spirits and Perfumes & Cosmetics. There
                                                                                                                                                                                                                                          BEST PRACTICES
are two very distinct water requirements:
one is for agricultural use and the other for
                                                                                                     CHANGE IN WATER CONSUMPTION
industrial use. This challenge has given rise                                                        (in cubic meters)                                                                                                                    • At its production site at
to a broad array of initiatives, including the                                                                                                                                                      Estimated

                                                                                                                                                                                                                                          La Chaux-de-Fonds, TAG Heuer nished
implementation of measurement protocols,

                                                                                                                                                                                                                                          installing what is one of the largest


improved consumption management and                                                                                                                                                                                                       photovoltaic installations in western
monitoring, storm water recovery and opti-                                                       3,000,000                                                                                                                                Switzerland. To reduce its carbon footprint,
mal irrigation methods for wine-growing                                                                                                                                                                                                   the Swiss brand signed an agreement
areas and green spaces. In 2011, the Group’s                                                                                                                                                                                              for the installation of solar panels on
Maisons used 6,618,614 m3 of water for agri-                                                                                                                                                                                              the roofs of its four buildings. It was after

cultural purposes, primarily vine irrigation                                                                                                                                                                                              a visit by Leonardo DiCaprio to the TAG
(6,521,146 m3 in 2010). In 2011, process                                                         2,000,000
                                                                                                                                                                                                                                          Heuer plant in March 2010 that Chairman
requirements accounted for 1,816,716 m3                                                                                                                                                                                                   and CEO Jean-Christophe Babin decided
(versus 1,734,339 m3 in 2010). It should be                                                       1,500,000                                                                                                                               to launch a feasibility study.
noted that 74% of sales areas (Selective
Retailing, Fashion and Leather Goods,                                                                                                                                                                                                     • With assistance from the French
                                                                                                  1 000 000
Perfumes & Cosmetics and Watches &                                                                                                                                                                                                        environment and energy management
Jewelry) are excluded from the reporting                                                                                                                                                                                                  agency ADEME, Hennessy introduced a
scope, but their water consumption is esti-                                                          500,000
                                                                                                                                                                                                                                          unique prototype developed by Pyraine®
mated at 932,298 m3. LVMH has partici-                                                                                                                                                                                                    that conserves energy in central heating
pated in the CDP Water Disclosure program                                                                  0                                                                                                                              boilers via a heat recovery system.
since its launch.                                                                                                   2008                                2009                2010                        2011

                                                                                                 * Estimates of water consumption for the sales areas excluded from
  The Wines & Spirits Maisons are particu-                                                       the scope of reporting and audit (74% in 2011, 83% in 2010, 72% in
                                                                                                 2009 and 62% in 2008) are shown separately: 932,298 m3 in 2011,
larly committed to water management                                                              1,053,469 m3 in 2010, 729,243 m3 in 2009 and 679,053 m3 in 2008.















                              Wines                                Fashion                                                 Perfumes                                                       Watches                                                    Selective                                  Other
                             & Spirits                         & Leather Goods                                            & Cosmetics                                                     & Jewelry                                                  Retailing                                 activities
   2008 consumption                          including sales areas excluded from the scope of reporting                                                               2009 consumption                                           including sales areas excluded from the scope of reporting
   2010 consumption                           including sales areas excluded from the scope of reporting                                                              2011 consumption                                           including sales areas excluded from the scope of reporting
* Estimates of water consumption for the sales areas excluded from the scope of reporting and audit (74% in 2011, 83% in 2010, 72% in 2009 and 62% in 2008) are shown separately.

                                                             LVMH 2011


                   BEST PRACTICES               Like the Wines & Spirits business line,         Fo r m a n y y e a r s t h e Pe r f u m e s &
                       ECODESIGN              other Group Maisons are also taking steps      Cosmetics Research and Development
                                              to reduce water consumption and recover        Department has focused on ethnobotany.
     • In addition to systematically taking   rain water. Parfums Christian Dior, for        The department identifies plant species
           into account the EPI indicators    example, set itself a water consumption        from around the world that could be used in
               for each new development,      reduction target that has resulted in a two-   cosmetics, and helps protect these species
       Guerlain has introduced ambitious      thirds reduction in consumed volume since      and develop local economies. Guerlain, for
   eco-design initiatives such as the trial   2005, while Louis Vuitton stepped up the       instance, is a partner in the Tianzi natural
  of Orchidée Impériale re lls at some of     management and monthly monitoring of           reserve in China as part of a 10-year “sus-
     its Paris stores. Thus, since the end    consumption at the Ducey site. It has also     tainable development” sponsorship agree-
 of September 2011, Guerlain has o ered       introduced various initiatives to diagnose     ment focusing on reforestation, orchid
  customers of this exceptional skin care     and measure leaks from its domestic water      planting, and a social program for local
         cream the possibility of re lling    facilities at Cergy 2 (50 m3 of water saved    populations. The Maison has also intro-
        their Orchidée Impériale jars at      per month) and Cergy 3.                        duced an initiative for responsible cultiva-
           the Sèvres and Passy stores.                                                      tion of vetiver on the Coimbatore high
 Customer feedback has been extremely                                                        plateaux in southern India.
                 positive and enthusiastic.     PRODUCTS THAT INCORPORATE
   The volume of the packaging has been        CREATIVITY AND RESPONSIBILITY                   In the Fashion & Leather Goods business
       reduced by 15% and more recycled                                                      group, Louis Vuitton always tries to select
    materials are used for the box portion           SAFEGUARDING STRATEGIC                  woods with FSC or PEFC labels for store
            and thermoformed inner trays.                RAW MATERIALS                       construction, window dressings, customer
A label on the back of the box is a further                                                  packaging and some of its exclusive prod-
                                                 The choice of components and raw
        way of informing customers about                                                     ucts. As a standard practice it carries out an
                                              materials used in product manufacture is
    Guerlain’s commitment to ecodesign.                                                      in-depth investigation of the source of
                                              also a principal force behind protecting
    One of the products launched in 2011                                                     exotic wood to make sure the wood comes
                                              the environment and precious resources.
     was Terracotta Inca, featuring a case                                                   from sustainably managed forests.
                                              The LHMH Group:
 made of FSC-certi ed European beech,
                                                 – has a specific strategy for sourcing and
                  nished with clear varnish                                                     Meanwhile, in the area of sustainable viti-
                                              safeguarding raw materials;
     and produced by a European supplier                                                     culture supported by all relevant Maisons
                                                 – applies the Convention on International
            using semi-artisan techniques.                                                   (see page 32 for more detail), Hennessy’s
                                              Trade in Endangered Species of Wild Fauna
                                              and Flora (CITES);                             wine-growing and wine-production subsidi-
                                                 – is also involved on an ongoing basis      ary Sodepa, based in Cognac, has a 12-hec-
                                              with Business for Social Responsibility        t a r e v i n e ya r d t h a t w a s s e l e c t e d i n
                                              (BSR) and the United Nations Conference        January 2011 to be part of the network of
                                              on Trade and Development (UNCTAD),             farms identified by the French government
                                              primarily as a member of working groups        under the 2018 Ecophyto plan as being a
                                              within these organizations, aimed at estab-    benchmark in environmental standards.
                                              lishing best practices in the sourcing of
                                              exotic leathers. In October 2011, LVMH
                                              acquired Heng Long, one of the world’s top
                                              five crocodile skin tanneries, based in
      In 2012, Guerlain will launch Noir G,
               the rst re llable mascara.
   Lastly, quarterly in-Maison “ecodesign
       breakfasts” have been introduced,
         bringing together the Marketing,
      Communications and Development
departments to assess the environmental
rating of Guerlain products and to review
   new ideas for environmentally friendly

                                                                                 LVMH 2011


                                                                 Eco-design includes reducing packaging
                                                                 weight and volume, choosing specific
                                                                 components and raw materials, employing
                                                                 more energy-e cient production processes       BEST PRACTICES
                                                                 and introducing initiatives to comply          ECODESIGN
                                                                 with REACH regulations. The Perfumes &
                                                                                                                • Louis Vuitton strives to improve
                                                                 Cosmetics Maisons created an Environmental
                                                                                                                its production methods by seeking
                                                                 Performance Index (EPI) that applies to
                                                                                                                ways to reduce the environmental
                                                                 packaging and is based on the following cri-
                                                                                                                impact of its products. Maison policy
                                                                 teria: separability of material, volume,
                                                                                                                includes a variety of technical projects
2012 Ecomaterial Handbook.                                       weight, use of refills, and environmentally
                                                                                                                representative of the challenges faced.
                                                                 friendly material. Since 2011, the EPI has
                PRE PLANNING TOOL                                                                               – The Maison continues its
                                                                 been extended to other Group Maisons
                                                                                                                comprehensive program to eliminate
   Designed as an operational tool, the Eco-                     such as Hennessy and the Champagne
                                                                                                                solvent-based adhesives in its workshops.
Material Handbook entitled “Materials to                         Maisons. For its part, Moët & Chandon has
                                                                                                                In the Issoudun workshops in France,
Consider” is distributed internally and iden-                    developed a new range of cases and sup-
                                                                                                                for example, the use of solvent-based
tifies about forty materials that offer the                      plied FSC-certified shipping crates to sup-
                                                                                                                adhesives was reduced on average by
kind of environmental performance                                pliers. As a result of this new working
                                                                                                                two-thirds in 2011 compared with 2010.
required for the Group’s products, with an                       method, Ruinart has developed a new eco-
                                                                                                                – Many initiatives have been undertaken
explanation of how each business can use                         designed presentation box.
                                                                                                                with regard to ecodesign and the optimal
them. The materials are categorized by
                                                                                                                use of resources. Transport packaging
application: wrapping, packaging, textiles                          Environmental labeling: LVMH and the
                                                                                                                continues to be optimized for many
and leathers, communications and store                           Group’s Maisons actively follow the work
                                                                                                                stock-keeping units (for example,
fit-out.                                                          being done in France, the rest of Europe and
                                                                                                                Neverfull, Speedy and Eva) and has
                                                                 around the world on environmental labeling,
                                                                                                                resulted in a reduction of more than
  Minimizing materials: The Maisons have                         particularly in the Perfumes & Cosmetics,
                                                                                                                100 metric tons of packaging material.
customized tools and training programs                           Fashion & Leather Goods and Wines &
                                                                                                                Supplies to stores in certain cities such
that allow them to incorporate environ-                          Spirits sectors. Sephora and Louis Vuitton,
                                                                                                                as Paris, New York and Tokyo are now
mental concerns into the design of their                         for example, are currently participating in
                                                                                                                shipped in reusable plastic cases.
products to the greatest extent possible.                        trials in France. Environmental indicators
                                                                                                                Managing the raw materials used
                                                                 that comply with the official standard are
                                                                                                                in product manufacture is also part of
                                                                 available on Sephora’s website for bath and
                                                                                                                the strategy. The Milo bag, for example,
PACKAGING VOLUME BY TYPE                                         shower gels and creams. For its part, Louis
                                                                                                                now comes with three leather panels
OF MATERIAL IN 2011 (in metric tons)                             Vuitton is monitoring the work being con-
                                                                                                                instead of two, in order to cut down
                                                                 ducted on fashion products and partici-
                                      151,621 Glass                                                             on the amount of wasted material.
                                                                 pated in quality testing carried out in 2011
                                                                                                                Similarly, canvas used in the manufacture
                                      29,626 Paper-cardboard     to create a “Shirt” standard.
                                                                                                                of belts has been reduced by 60%.

                                       7,922 Plastic
                                       2,164 Metal                                                              • Other Maisons are also active in
                                         294 Textile                                                            this area. As part of its packaging
                                       3,547 Other packaging                                                    management policy, Bodegas Chandon in
                                                                                                                Argentina made signi cant strides in 2011
                                                                                                                by reducing the amount of glass it uses
                                                                                                                by 1,199 metric tons, a year-on-year drop
CHANGE IN PACKAGING PLACED ON THE MARKET BY BUSINESS GROUP                                                      of 12%. LVMH Fragrance Brands sends
                                                                                                   Evolution    a newsletter on ecodesign (“La lettre
(in metric tons)                                       2011       2010        2009         2008    2011-2010
                                                                                                                de l’Éco-conception”) to all employees
Wines & Spirits                                    163,186      148,145    115,950     147,728         10       involved in product development, while
                                                                                                                La Grande Épicerie de Paris supplements
Perfumes & Cosmetics                                  6,100       5,711      4,764        23,887        7
                                                                                                                its collection of reusable bags with new,
Fashion & Leather Goods                             23,798       21,974     20,800         5,266        8       fair-trade small organic cotton bags,
Watches & Jewelry                                         527      440         386          421        20(1)    which can be folded into small pouches
                                                                                                                and slipped into any bag.
Selective Retailing                                   1,563       1,327      1,327         1,538       18(1)
TOTAL                                              195,174      177,597    143,227     178,840         10
(1) Change associated with increase in business.

                                                                LVMH 2011


                                                PRODUCT SAFETY AND CUSTOMER                           REGULATIONS ON COSMETIC
                                                          HEALTH                                                  PRODUCTS

                                                                                                  The LVMH group has a clear policy on
                                                   To ensure a high level of protection of
                                                                                               the sensitive issue of using animals to test
                                                human health and the environment from
                                                                                               the safety of finished products: the goal is to
                                                the potential risk of chemicals, LVMH
                                                                                               ensure the safety of our customers yet still
                                                anticipates and implements various regu-
                                                                                               take into account animal welfare. For this
                                                lations that apply both to the operation of
                                                                                               reason, since 1989 companies in the
                                                its sites and to the manufacture of its
                                                                                               Perfumes & Cosmetics segment have no
                                                                                               longer been conducting animal testing on
                                                                                               the products they place on the market. This
                                                          REACH REGULATION                     began well before the official ban in the
                                                   The REACH regulation streamlines and        European Union in 2004. Developing alter-
                                                improves the former legislative framework      natives to animal testing is a genuine scien-
                                                of the European Union governing chemical       tific challenge and the LVMH group is
                    BEST PRACTICES              products. The main aims of REACH are to        extremely active in this field.
                   FOR COMPLIANCE               ensure a high level of protection of human
                                                health and the environment from the risks         The EU regulatory framework for cos-
          • In 2011, Louis Vuitton continued                                                   metics products changed with the adoption
                                                that can be posed by chemicals, to promote
    its policy of implementing the REACH                                                       on November  30, 2009 of European
                                                alternative test methods, to ensure the free
              regulation, under the direction                                                  Regulation on cosmetic products. This legis-
                                                movement of substances on the internal
         of its internal REACH Committee.                                                      lation, which will take full e ect in July 2013,
                                                market, and to enhance competitiveness
         Speci cally, it produced a training                                                   will replace directive 76/768/EEC. The
                                                and innovation.
 module aimed at buyers and developers,                                                        Commission’s main goal with this new reg-
performed regular screening of materials,                                                      ulation is to raise the already high level of
                                                  All Maisons have incorporated REACH
         sent annual letters and monitored                                                     safety for cosmetics consumers by:
                                                regulatory requirements in their contrac-
           suppliers. It also helped partners                                                  – increasing manufacturer responsibility:
                                                tual documents so as to involve all suppli-
           replace non-compliant materials                                                       minimum requirements for assessing
                                                ers in this effort. They also carry out
             where necessary. In monitoring                                                      product safety must be clarified;
                                                laboratory tests to certify the absence of
         product compliance, Louis Vuitton                                                     – increasing the level of monitoring on the
                                                potentially harmful substances in con-
   takes particular account of changes in                                                        market: serious adverse effects must be
                                                sumer goods placed on the market. Experts
          local product regulations – Korea                                                      notified to the competent authorities.
                                                from the various Maisons meet regularly as
                    Certi cation (KC) Label,
                                                part of a REACH working group to antic-
     Prop 65, regulations in Taiwan, South                                                        The LVMH group has already been
                                                ipate future phase-outs and to share best
   Korea, and so on. Lastly, Louis Vuitton                                                     working for several months on establishing
                                                practices. The LVMH group also holds
        is a member of the LVMH project                                                        procedures so that it will be ready when the
                                                specific training courses on REACH
          committee designed to develop                                                        new regulation takes effect. These initia-
      an information tool on international                                                     tives are all the more critical since cosmetic
        standards that apply to products,                                                      regulations are spawning an increasing
                                                  The Group and its Maisons actively fol-
              particularly their materials                                                     amount of legislation around the world.
                                                low and implement changes in similar
                        and components.                                                           Other European regulations have
                                                types of legislation in other countries, for
                                                instance proposition 65 in California.         entered into force, some recently, and have
                                                                                               been incorporated into LVMH procedures.
                                                                                               These include:
                                                                                               – t h e G l o b a l l y Ha r m o n i z e d Sy s t e m
                                                                                                 Regulation designed to standardize the
                                                                                                 classification and labeling of chemicals;
                                                                                               – the REACH regulation.

                                                                                                            LVMH 2011


   The LVMH group is particularly vigilant                                                  the time they are placed on the market, but
in complying with regulations, opinions of                                                  also while they are being marketed. A cus-
scientific committees, and the recommen-                                                     tomer relations network has been set up so
dations of professional associations. It also                                               that we can review all complaints from our
abides by strict internal rules for the devel-                                              customers and carry out cosmetic vigilance
opment of new products – rules that are                                                     of our products. Any complaint, whether
also imposed on LVMH suppliers.                                                             an intolerance or a severe irritation, is
                                                                                            reviewed by a specialized team and
  The Group has held true to this commit-                                                   assessed by a professional, and may result
ment for several years and backs this policy                                                in the consumer being o ered a consulta-        BEST PRACTICES
with an approach designed to anticipate                                                     tion with a dermatologist. Lastly, by analyz-   FOR COMPLIANCE
changes in international regulations. This                                                  ing these complaints and exercising
anticipation is possible thanks to the e orts                                               cosmetic vigilance, we can explore new          • In conjunction with its raw material
of our experts who regularly participate in                                                 avenues of research and improve the qual-       suppliers, Loewe is implementing a REACH
the working groups of authorities in France                                                 ity of our products.                            program as a basis for its environmental
and the rest of Europe and are very active                                                                                                  strategy.
in professional organizations. The work                                                                                                     – Initially, a program to test supplier
done by our experts in monitoring all the                                                        EMISSION AND DISCHARGE                     compliance was established to categorize
new regulations and changes in scientific                                                              PREVENTION                           the chemical components most frequently
knowledge has led the LVMH group to ban                                                                                                     encountered in the composition of raw
the use of certain substances and to work                                                      The reduction in emissions and dis-          materials.
toward reformulating certain products.                                                      charges primarily comes from e orts made        – A laboratory study was then launched,
  This very stringent requirement guaran-                                                   to limit the resources used during opera-       taking account of suppliers and key
tees the safety of our cosmetics, not just at                                               tions at sites, workshops and stores, and in    materials. As a result, 127 samples of the
                                                                                            care taken in the design and management         main materials were tested (leather, exotic
                                                                                            of the product life cycle.                      leather, textiles, ready-to-wear textiles,
                                                                                                                                            metal hardware, silk, packaging, and so on).
GAS EMISSIONS                                                                                             ATMOSPHERIC
(in metric tons of CO2 equivalent)                                                                                                                                   Test       Suppliers


                                                                                                                                                                  number          audited
                                                                                               Greenhouse gas emissions: climate
                                                                                                                                            Leather                    36             85%
                                                                                            change considerations have long been part
                                                                                            of LVMH policy. In fact, the Group led the      Exotic leather             13            100%

                                                                                            way in this regard when the following           Textiles                   11            100%

                                                                                            Maisons completed their first Carbon            Ready-to-wear              20            100%
                                                                                            Footprints® in 2002: Louis Vuitton, Moët &      textiles
                                                                                            Chandon, Veuve Clicquot, Hennessy,              Metal hardware             30             75%
                                                                                            Parfums Christian Dior, Guerlain, Parfums       Silk                       13            100%
                                                                                            Kenzo, Parfums Givenchy, Givenchy
                                                                                                                                            Packaging                   4            100%
                                                                                            Couture, Make Up For Ever, DFS, Sephora
                                                                                                                                            TOTAL                     127
120,000                                                                                     and Le Bon Marché. Initiatives undertaken
                                                                                            by the Maisons after they completed their       In 2011, the Maison arranged for 278 tests
                                                                                            Carbon Footprints and energy diagnostics

                                                                                                                                            to be conducted by certi ed laboratories



60,000                                                                                      are described under “Resource-saving ini-       on samples of supplier raw materials.
                                                                                            tiatives.” Emissions generated by each site     The results were shared with the suppliers
                                                                                            are estimated in metric tons of CO2 (carbon     and when necessary led to plans
                                                                                            dioxide) equivalent (MtCO2e) and include        for corrective action.
            2008                  2009                2010                2011              direct emissions (on-site energy produc-
   Metric tons of direct CO2 equivalent                                                     tion) and indirect emissions (from o -site
   Metric tons of indirect CO2 equivalent                                                   production of electricity used by the sites).
   Metric tons of indirect CO2 equivalent estimated for the sales
   areas excluded from the scope of reporting                                               Greenhouse gas emissions represented a
                                                                                            volume of 155,362 MtCO2e in 2011 versus
* Estimates of greenhouse gas emissions for sales areas excluded
from the scope of reporting and audit (60% in 2011, 60% in 2010,                            150,256 MtCO2e in 2010. It should be noted
50% in 2009 and 62% in 2008) are shown separately. 158,074
tons of CO2 equivalent in 2011, 154,124 tons of CO2 equivalent                              that 60% of sales areas (Selective Retailing,
in 2010, 97,119 tons of CO2 equivalent in 2009 and 112,378 tons                             Fashion & Leather Goods, Perfumes &
of CO 2 equivalent in 2008. More detailed explanations are
provided in the graph on CO2 emissions by sector. The change in                             Cosmetics and Watches & Jewelry) are not
2011 is due to the increase in business volumes and the
integration of new sites.                                                                   included in the consolidated financial

                                                                                                                        LVMH 2011


statements; they generated greenhouse gas                                                 CO2 emissions are proportionately higher                                                            sites. Initially only the principal compo-
emissions estimated at 158,074 MtCO2e in                                                  than in France.                                                                                     nents (bottles, leather, flasks, etc.) were
2011, versus an estimated 154,524 MtCO2e                                                     Transportation is also a major source of                                                         included;
in 2010. The DFS and Sephora boutiques                                                    CO2 emissions. Although transportation is                                                         – downstream transport: finished products
contribute significantly to electricity con-                                               not carried out directly by the Group’s com-                                                        from manufacturing sites to distribution
sumption and even more to greenhouse gas                                                  panies, it is nevertheless subject to specific                                                       platforms.
emissions. This is because higher emission                                                measures, such as the preference for mar-                                                            Results are already available for the Group’s
factors are applied in the host countries of                                              itime transport. The Group has begun                                                              principal Maisons. The following Maisons
these stores (Australia, China, New Zealand                                               detailed reporting on transportation:                                                             were included in the reporting scope this
and the United States in particular).                                                     – upstream transport: components from sup-                                                        year: Moët & Chandon, Veuve Clicquot,
With equal electricity consumption,                                                         pliers’ sites to the Group’s manufacturing                                                      Hennessy, Belvedere, Glenmorangie, Cloudy

                                                           2011                                                          2010                                                          2009                                                           2008

                                              Metric tons             Metric tons                  Metric tons                      Metric tons                    Metric tons                 Metric tons                             Metric tons             Metric tons
                                             direct CO2 eq          indirect CO2 eq               direct CO2 eq                   indirect CO2 eq                 direct CO2 eq              indirect CO2 eq                          direct CO2 eq          indirect CO2 eq

Wines & Spirits                                      25,327                       14,089                     23,763                          13,617                         29,161                        17,065                            28,315                     20,772

Perfumes & Cosmetics                                  4,011                       97,060                         5,566                       96,719                          6,953                            5,658                          7,052                      6,055

Fashion & Leather Goods                               4,662                           7,135                      6,338                        7,106                          4,935                        69,163                             4,315                     63,557

Watches & Jewelry                                      791                        11,352                               582                    3,542                                   736                     2,469                             757                     2,013

Selective Retailing                                   5,224                  141,183                             5,752                      138,776                          6,838                        109,094                                                      99,165

Other activities                                       875                            1,727                      1,099                        1,922                                   100                     1,218                                   98                   578


( in metric tons of CO2 equivalent)












                           Wines                              Fashion                                        Perfumes                                    Watches                                          Selective                                     Other
                          & Spirits                       & Leather Goods                                   & Cosmetics                                  & Jewelry                                        Retailing                                    activities
  2008 emissions                   including sales areas excluded from the scope of reporting                                                2009 emissions                           including sales areas excluded from the scope of reporting
  2010 emissions                   including sales areas excluded from the scope of reporting                                                2011 emissions                           including sales areas excluded from the scope of reporting

* Estimates of greenhouse gas emissions for sales areas excluded from the scope of reporting and audit (60% in 2011, 60% in 2010, 50% in 2009 and 62% in 2008) are shown separately.

                                                                        LVMH 2011


Bay, Cape Mentelle, Chandon Australia,          UPSTREAM TRANSPORT 2011
Bodegas Chandon, Louis Vuitton, Céline,         CO2 eq emissions Total Wines                               Total Fashion               Total Perfumes              Total Watches
                                                in metric tons    & Spirits                               & Leather Goods               & Cosmetics                 & Jewelry
Parfums Christian Dior, Parfums Givenchy,
Parfums Kenzo, Guerlain, Make Up For Ever,      Road                                6,777                      2,031                        1,417                         –
Cortech, Les Ateliers Horlogers and TAG
                                                Rail                                    18                            9                           –                       –
Heuer. This reporting system will continue to
be improved in coming years.                    Plane                                 190                     57,551                      11,052                     1,357

  Hennessy gives priority to sustainable        Boat                                  139                           57                         490                        –
transport for its finished products.
                                                TOTAL                               7,124                     59,648                      12,959                     1,357
Products are mainly shipped by boat (more
than 92% in metric tons/km) followed by
road and rail-road transport. The Maison is
strongly committed to the latter form of        DOWNSTREAM TRANSPORT 2011
                                                CO2 eq emissions Total Wines  Total Fashion                                            Total Perfumes              Total Watches
transport and, accordingly, in 2011 almost      in metric tons    & Spirits  & Leather Goods                                            & Cosmetics                 & Jewelry
46% of its shipments from Cognac were
sent by rail. For Champagne, a logistics        Road                             38,282                        4,267                        4,485                         9

platform shared by all the Maisons opti-
                                                Rail                                  288                             8                           –                       –
mizes the e ciency of the transport phase
and makes maritime transport standard           Plane                            16,187                     139,428                       36,746                     1,563
practice as far as possible (more than 90%
in metric tons/km).                             Boat                                4,482                           66                         428                        –

                                                TOTAL                            59,239                     143,769                       41,659                     1,572
   Sephora continues to develop electric
transport to deliver goods to more than
80% of its 250 French stores. Louis Vuitton
                                                             DISCHARGES INTO SOIL                                         COD on a regular basis, and sometimes
also continues to favor inland waterway
                                                                       AND WATER                                          daily during periods of high-volume, con-
transport to the port of Le Havre.
                                                   The only significant relevant discharges                                centrated discharges, such as during the
                                                are those of organic substances released                                  grape harvest for the Wines & Spirits busi-
   VOC emissions: LVMH also actively                                                                                      ness group.
                                                into water and which contribute to
monitors VOC (volatile organic com-             eutrophication (excessive algae and water                                   Management of waste water and rain
pound) emissions, which concern the             plant growth). These substances are meas-                                 water: Bodegas Chandon has made further
Spirits Maisons because of alcohol evapo-       ured by chemical oxygen demand (COD),                                     improvements to its system for treating
ration during the barrel-aging process          calculated after the discharges have been                                 effluent, reducing the organic load of
and, to a lesser extent, the Perfumes &         treated at plants owned or shared by                                      discharged e uent by 70%. This has ena-
Cosmetics and Fashion & Leather Goods           the Group. “Treatment” refers to clean-up                                 bled the water to be re-used for irrigating
Maisons, which may need to use volatile         by local authorities, self-clean-up in aera-                              green areas. At Louis Vuitton, detergent-
substances (glues, solvents, and so on)         tion tanks, or land spreading operations.                                 based fountains are now systematically
in their manufacturing processes. Louis         COD is actively monitored at all sites of                                 placed in closed systems at all sites to avoid
Vuitton is going on its planned elimination     the Wines & Spirits and Perfumes &                                        any discharge of adhesives or dyes. And
of all solvent-based adhesives in its           Cosmetics Maisons. The Maisons measure                                    the Champagne Maisons have finished
   Noise, electromagnetic waves and air
quality: Checks and regular measurements
are carried out in and around production        COD AFTER TREATMENT
sites and logistics centers. For example,
                                                (in metric tons/year)                                   2011                    2010                    2009              2008
Louis Vuitton launched a program to meas-
ure the electromagnetic fields at the new       Wines & Spirits                                     2,227.3(1)                 2,107                3,291.2             1,395.9
warehouse for the Europe region. A similar
                                                Perfumes & Cosmetics                                     13.6(2)                 18.3                    14.2              16.1
operation was carried out at the Model and
Prototype workshop and Quality-Control          TOTAL                                                2,240.9                 2,125.3                3,305.4               1,412
Laboratory at Paris headquarters to meas-
                                                (1) Change related to the decline in operations at some of the Glenmorangie sites.
ure air quality.                                (2) Change related to the increase in operations and improved measurement of discharge at one Glenmorangie site.

                                                                                                     LVMH 2011


upgrading the tank used to treat pressing                                  disruption as a substitute for insecticides.                        end of the process when the vine is less
effluent through aerated storage at the                                    Hennessy also supports biodiversity pro-                            vulnerable to attack;
Romont site near Reims.                                                    tection and therefore supplemented these                          – customized dosages of phytosanitary
                                                                           initiatives with the planting of hedgerows                          products based on the height of the
  The challenge of sustainable viticulture:                                in partnership with local non-profit organ-
All relevant Wines & Spirits Maisons sup-                                  ization “Prom’haies.”                                             CHANGE IN WASTE PRODUCTION
port sustainable viticulture, which drasti-                                                                                                  (in metric tons)
cally reduces the need for phytosanitary                                      As part of their e orts to support biodi-

products that have a major impact on the                                   versity and sustainable viticulture, the
environment.                                                               Champagne Maisons are also conducting
  Deeply committed to sustainable viticul-                                 a variety of initiatives, such as the planting

ture for historic and strategic reasons, the                               of hedgerows to enhance wine-growing                              70,000

Wines & Spirits Maisons are introducing a                                  landscapes and promote biodiversity,

variety of initiatives based on responsible                                and the use of mating disruption methods                          60,000
or organic farming.                                                        to protect the vines from grape worms,

                                                                                                                                                                                                                     195 307
  Hennessy has embarked on a sustain-                                      which eliminates the need for insecticides                        50,000
able viticulture program aimed at reducing                                 on 90% of the vines. For Veuve Clicquot
the use of phytosanitary inputs. In 2011, its                              and Moët & Chandon, the battle against
wine-growing subsidiary, Sodepa, was cho-                                  fungal diseases is a major challenge that
sen to join a network of gold standard                                     is being addressed in numerous ways,
farms established by the French govern-                                    specifically:
ment under the 2018 Ecophyto Plan. A                                       – viticulture trials using organically certi-
series of initiatives were carried out at the                                fied inputs;                                                     20,000

vineyard, including the installation of                                    – introduction of a program known as the
weather stations to allow treatment dos-                                     “Third Way,” which combines the use of                          10,000
ages to be adjusted as appropriate. A more                                   synthetic products applied during the
intensive experiment was conducted on                                        critical flowering period, with organic                              0
certain portions of the land, using mating                                   products applied at the beginning and                                      2008                  2009                2010               2011
















                        Wines                          Fashion                              Perfumes                       Watches                      Selective                                  Other
                       & Spirits                   & Leather Goods                         & Cosmetics                     & Jewelry                    Retailing                                 activities

  2008 Waste production                                           2009 Waste production
  2010 Waste production                                           2011 Waste production

                                                                                                   LVMH 2011


  vegetation, which reduces the amount of                                    Cloudy Bay in New Zealand has invested                                 volume of herbicides used dropped by
  phytosanitary products used to fight mil-                                in under-row weeding equipment to reduce                                  more than 75%.
  dew by 15% to 20%;                                                      the use of herbicides. In the first year, the
– testing of spray equipment fitted with
  panels to recover phytosanitary products
                                                                          PERCENTAGE OF WASTE RECOVERED
  not in contact with vegetation, reducing
                                                                          95                                                                         94
  the quantity of inputs used by 20%.                                                                                                 93
                                                                                                                                                                        92          92

  With regard to soil maintenance, Moët &                                 90                                                                                                                  89
Chandon uses optical camera technology
for carefully targeted weed control. With                                                                                                                         88
the advent of the age of zero herbicides,                                 85
under-row mechanical weeding is being                                                       82
extended to all vineyards.
  Numanthia, in Spain, is also involved in                                80

responsible management of “legacy” vine-
yards whose ecosystem needs to be pre-
served through the use of organic products
and by reducing both the number of passes                                      74.2
through the vines and the use of phytosani-                               70
tary products.                                                                 2002        2003          2004          2005           2006         2007          2008   2009       2010        2011


(in metric tons)                                Hazardous waste 2011                       Hazardous waste 2010                        Hazardous waste 2009              Hazardous waste 2008

Wines & Spirits                                                178                                        196                                         146                             192

Fashion & Leather Goods                                        121                                          73                                          61                               64

Perfumes & Cosmetics (1)                                      896(1)                                      776                                         767                             738

Watches & Jewelry                                                29                                         17                                          14                               27

Selective Retailing                                              64                                         17                                          17                               12

Other activities                                                 79                                       111                                             -                               1

TOTAL                                                       1,367                                      1,190                                       1,005                            1,034

(1) Certain products removed from the production circuit are classified as hazardous waste and are treated in the “hazardous waste” sector to prevent any violation.

                                                              Percentage of waste recovered

Activities                                                 Reused                           Materials recycled                      Incinerated with energy                    % total recovered

Wines & Spirits                                                   5                                    81                                                 4                              90

Fashion & Leather Goods                                           3                                    47                                               18                               68

Perfumes & Cosmetics                                              5                                    68                                               24                               97

Watches & Jewelry                                                 -                                    64                                               30                               94

Selective Retailing                                               6                                    42                                               37                               85

Other activities                                                  -                                    97                                                 2                              99

TOTAL                                                             5                                    73                                               11                               89

                                                                  LVMH 2011


            WASTE REDUCTION                       promotes the recycling of obsolete per-          choreographers and sculptors, adding value
              AND RECOVERY                        fumes, skincare products and makeup, as          and creativity to the cultural sector. Fabric,
                                                  well as makeup accessories and small elec-       leather and clothing have also been donated
   The Group’s companies are continuing
                                                  tronic devices. And the Champagne Maisons        to fashion and leather design schools, such
their e ort in waste sorting and recovery. On
                                                  are heavily involved in energy recovery from     as Parson’s School of Design in New York,
average, 89% of waste was recovered in 2011
                                                  viticulture biomass, such as grubbed out         Saint Martin’s College in London, and the
versus 92% in 2010. The percentage change
                                                  vines – more than 452 metric tons in 2011 –      Paris Fashion Institute. Louis Vuitton has
is primarily related to better tracking of
                                                  which are now sent to the new biomass            also started recycling metal hardware with a
some of the Estates & Wines Maison waste.
                                                  boiler at the Goyard distillery.                 new contractor who can recover gold, among
At the same time, waste production in 2011
                                                                                                   other metals. The profits are used to support
increased by 13%. In 2011, the breakdown
                                                     Louis Vuitton is continuing its partnership   the workshops’ environmental initiatives.
of metric tonnage by sector was as follows:
                                                  with the non-profit organization “La Réserve      Louis Vuitton has deployed a vast array of
   Since 2010 Perfumes & Cosmetics,
                                                  des arts,” a platform for recovering and recy-   initiatives to raise awareness about waste
Sephora and, currently, Louis Vuitton have
                                                  cling commercial waste that can be passed        and provide training in waste sorting and
been using the CEDRE (Center for Docu-
                                                  on to designers. Material from the Asnière       recycling. For example, it has produced a
mentation, Research and Experimentation
                                                  workshop and Louis Vuitton Cultural Space        sorting guide, organized a sorting contest
on Accidental Water Pollution) platform
                                                  are thus given a second life by costume          and created a fun informational panel.
to sort, recycle and recover their waste.
                                                  designers, architects, young artists,
This recycling platform accepts several
types of waste: obsolete packaging, obsolete
alcoholic products, promotional materials,
testers used in stores, and empty packaging
returned to stores by customers. In 2011, the
platform processed some 1,300 metric tons
of waste, up 30% over 2010, when 1,000 met-
ric tons were processed. The platform was
also able to resell some of the materials, such
as glass, cardboard, wood, metal, plastic,
alcohol and cellophane, to a network of spe-
cialist recyclers. Other avenues are cur-
rently being explored so that other Group
Maisons could dispose of such items as
obsolete skincare products. In addition to
the CEDRE platform, Guerlain allows its
customers to return their empty products
to its Paris stores for sorting and recycling.
To facilitate this eco-initiative, the stores
have a designated counter and provide cus-
tomers with information on the service.
   Spotlighting different initiatives allows
alternative solutions to be sought. Le Bon
Marché is introducing a methane conversion
project for food waste at La Grande Épicerie.
Sephora North America is continued its sup-
port of the “g2 Revolution” program that

                                                              LVMH 2011


                                      PROGRAMS EXTENDED
                                        TO CIVIL SOCIETY

                                     PROGRAMS EXTENDED TO CIVIL SOCIETY

  A model of responsible                           The critical challenge                          Creating environmental value
  consumption                                      of preserving biodiversity                      for the bene t of society

         COMMUNICATING                       requirements of sustainable development                ENCOURAGING RESPONSIBLE
        OUR COMMITMENTS                      and corporate responsibility by promoting                     CONSUMPTION
           AND VALUES                        the intrinsic quality of people and products.       The Group’s Wines & Spirits Maisons are
                                             Thus the values reflected in the Maisons’         committed to responsible alcohol consump-
  The LVMH group advocates a model of        activities and strategies are most particularly   tion. In 2003, Moët Hennessy adopted a
responsible consumption and marketing,       excellence, exclusivity, know-how, innova-        Marketing and Communications Code of
particularly when it comes to its Wines &    tion, skills transfer and sustainability.         Conduct, which was updated in 2008. It
Spirits operations. The brands convey mes-                                                     provides clear consumption principles and
sages that incorporate the challenges and                                                      complies with the Moët Hennessy Charter

                                                                LVMH 2011


                                                on responsible alcohol consumption. All         environmental initiatives were also held at
                                                employees are familiar with this charter        many of the Louis Vuitton workshops and
                                                and adhere to its principles.                   were attended by 1,000 employees along
                                                  For instance, when new employees join         with their friends and families. The goal of
                                                Moët Hennessy, their welcome program            more targeted encounters is to improve
                                                includes a presentation by the Human            exchanges and dialogue between the
                                                Resources Department of the Maison’s            Maisons and their stakeholders. In France,
                                                responsible consumption policy. New             for example, sta from Louis Vuitton pro-
                                                employees are introduced to the principal       vided assistance to the Sustainable
                                                awareness-raising tools – a Charter, a          Development Advisory Committee of the
                                                Marketing Code and educational literature       Greater Cergy-Pontoise District Council on
                                                – aimed at employees and visitors alike.        eco business parks. For the renovation of
                                                  In 2010, the Wines & Spirits Maisons          La Samaritaine (see page 21), various infor-
                                                began placing a responsible consumption         mational meetings were held before and
                                                message on bottle labels. As the labels are     during the clearing and asbestos removal
                                                renewed, so the message becomes more            work, as well as during the project’s devel-
                                                widespread. Where possible, the message         opment phase. A “model Maison” contain-
                         SHOWCASING             includes a reference to a website in the lan-   ing all the appropriate presentation media
                             UNIQUE             guage of the country in question, offering      was opened to the public and provided
                           MATERIALS            clear and specific information about con-       information about the site’s history and spe-
                                                sumption thresholds, occasions to avoid         cific features of the project’s architecture.
     • Guerlain has introduced responsible
                                                drinking alcohol, how to arrange rides for      Local residents and the town hall of the 1st
vetiver cultivation in the high plains above
                                                party guests, and so on. A similar responsi-    arrondissement were fully involved in the
the town of Coimbatore in southern India.
                                                ble-consumption labeling program is also        information and consulting process, partic-
      The vetiver sustainable development
                                                being developed for Moët Hennessy brands        ularly with regard to how the project would
         project came about during a visit
                                                around the world.                               impact the Rue Baillet, which is adjacent to
               by Guerlain perfume maker,
                                                                                                the La Samaritaine building.
 Thierry Wasser. Vetiver cultivation would
                                                    PUBLIC AWARENESS CAMPAIGNS
       o er local people a new responsible
                                                     AND CUSTOMER INFORMATION                     To improve consumer information and
     farming activity that would safeguard
                                                                                                awareness, LVMH and Sephora are partic-
  the environment while giving Guerlain a         The Group’s Maisons form flagship
                                                                                                ipating in a project started in 2011 by the
          new and unique raw material for       partnerships whose primary goal is to
                                                                                                French government to test environmental
                its vetiver-based perfumes.     support the environmental messages
                                                                                                information labeling. And last but not least,
       The entire vetiver plant can be used     carried by the brands. Louis Vuitton, for
                                                                                                many of the Group’s Maisons, such as
 in three ways: the grass makes excellent       example, has an ongoing involvement with
                                                                                                Guerlain and Louis Vuitton, now have
   fodder for livestock, the base provides      Climate Project, the non-profit organiza-
                                                                                                pages on their websites dedicated to the
       new cuttings, and undistilled roots      tion launched by Al Gore to educate the
     can be made into mats and baskets.         general public about the e ects of climate
        The harvesting and use of vetiver       change, and Green Cross International,
                                                                                                   CONTRIBUTING TO PROFESSIONAL
            is therefore a perennial source     the Foundation created by former Russian
   of additional revenue for local farmers.     president Mikhaïl Gorbachev. TAG Heuer,
   Furthermore, vetiver requires very little    meanwhile, continues the partnership it            The Group and its Maisons are involved
  labor and maintenance and grows easily        formed in 2009 with Leonardo DiCaprio           in a number of technical projects, according
        with little water and no pesticides.    to raise funds to benefit the Natural           to their sector and specific local, national
             Its roots limit soil erosion and   Resources Defense Council and Green             and international challenges.
       improve the soil’s moisture content      Cross International.
            and fertility: thanks to vetiver,                                                     Aware of the advances that can be made
     the crop of other plants can increase         Drawing on their heritage and traditions,    through holding discussions and collaborat-
   by 30% to 50%. As part of the project,       the Group’s Maisons are helping to promote      ing with others, particularly in environ-
     solar panels will be installed to power    the know-how of their craftsmen and             mental matters, LVMH makes a point of
 the irrigation pumps and a study is under      employees both locally and nationally. On       forming key partnerships with national and
        way to limit the use of wood during     October 15 and 16, 2011, LVMH organized         international non-profit organizations, local
           distillation. Transporting vetiver   les Journées Particulières (“Special Days”)     communities and educational institutions.
       essence from India to Le Havre and       during which 25 exceptional sites in France     For example, the Group is a member of the
              on to the Parfums Guerlain        and other European countries were open to       non-profit organization Orée (which covers
             workshops in Orphin, France,       the public. In-Maison les Portes Ouvertes       businesses, regions and the environment)
                          will be by boat.      (“Open Days”) featuring a presentation on       and co-chairs the strategic committee of

                                                                               LVMH 2011


the Foundation for Research in Biodiversity                   International Year of the Forest. Hennessy,
(FRB). Other Maisons are also active in this                  for instance, organized a conference on
area, such as Bodegas Chandon, which is a                     April 6, 2011 on sustainable forest manage-
member of the Sustainable Development                         ment and certified woods, followed by a
Commission of “Argentina Wineries,” a                         demonstration of cooperage skills. Forests
trade association whose main goal is to                       have exceptionally rich ecosystems and are
define and set the parameters for the wine                     the planet’s lungs. They are home to 80% of
industry’s key sustainability indicators                      land-based biodiversity and a source of life
when it comes to water and energy con-                        and employment for 1.8 billion people.
sumption. Bodegas Chandon is also part of
the “clean production” program, supported                            ENCOURAGING AWARENESS
by the Mendoza Environment Secretary                                 OF OUR INTERDEPENDENCE
and the Inter-American Development Bank                                  ON BIODIVERSITY
(IADB). The program’s aim is to foster syn-
                                                                The LVMH group subscribes to France’s
ergies between the government and wine-
                                                              “2011-2020 National Biodiversity Plan,”
production businesses in order to train and
                                                              which was unveiled by the French govern-
educate suppliers, provide information to
                                                              ment on the eve of World Biodiversity Day
the general public and increase the per-
                                                              on May 22, 2011. The plan contains France’s
centage of material that is recovered and
                                                              share of the international commitments
                                                              endorsed in Nagoya in 2010 to curb biodi-
                                                              versity loss.
  In addition to its work with the Responsible
Jewellery Council, the group continues its                                                                       RESTORING
                                                                 When developing and managing their              THE ECOSYSTEM
involvement with Business for Social
                                                              sites, the Maisons pay close attention to
Responsibility (BSR). In particular, it belongs
                                                              safeguarding green areas and making sure           The Belvedere distillery in Zyrardów,
to a working group set up to establish best
                                                              the workshops are integrated into the              Poland was founded in 1910. It uses water
practices in the sourcing of exotic leathers.
                                                              environment. For example, at the Sainte-           puri ed by a special process that yields
                                                              Florence workshop in Vendée, Louis                 a unique-tasting vodka. Belvedere
   Finally, LVMH makes frequent presenta-
                                                              Vuitton is helping to enhance the landscape        established the “Foundation for the
tions to major business schools (ESSEC,
                                                              by creating a meadow and footpath.                 Protection of the Environment” in
HEC, etc.) and universities (Léonard-de-
                                                              Similarly, the height of the Louis Vuitton         partnership with the town of Zyrardów
V i n c i , S a i n t - Q u e n t i n - e n -Yv e l i n e s
                                                              Foundation for Creation Museum has been            and local farmers. The Foundation carries
and others) about the environmental chal-
                                                              designed to blend in with the tree line of         out a variety of projects, such as cleaning
lenges faced by its business groups and
                                                              the Jardin and Bois de Boulogne. The               the River Pisia and maintaining irrigation
                                                              Group is also deeply committed to sustain-         of the canals and surface waters.
                                                              able viticulture (see under “Emission and          In 2011, 13.5 metric tons of waste were
        THE CRUCIAL CHALLENGE                                 discharge prevention”), ethnobotany and            collected. The Foundation also supports
            OF BIODIVERSITY                                   sourcing of precious leathers (see under           the “Zyrardów – Garden City” project,
                                                              “Safeguarding strategic raw materials”).           an interschool waste-sorting challenge,
   Protecting biodiversity is the ultimate                    Lastly, in parallel with their activities and as   which in 2011 resulted in the collection
goal of all environmental e orts. The com-                    part of their commitment to the commu-             of 33.4 metric tons of waste,
petitiveness and social acceptability of                      nity, the Maisons support a number of              and a photographic and art competition
LVMH activities depend directly on their                      reforestation and plant species conserva-          on environmental issues.
ability to protect and let flourish the essen-                 tion projects.
tial resources that make up the living world.
In addition to the various initiatives already
undertaken to promote biological diversity
(site management and water conservation,
sourcing of materials, sustainable viticul-
ture, ethnobotany, and reducing the impact
of CO2 emissions on biodiversity), LVMH is
raising the awareness of its employees and
the general public of the challenges of bio-
diversity. Various Maisons introduced a
number of initiatives in 2011 as part of the
United Nations Organization (UNO)

                                                                          LVMH 2011


   T h ro u g h O rc h i d a r i u m , i t s o rc h i d          THE CRITICAL CHALLENGE                    leather cut-offs from the Asnières work-
research platform, Guerlain has partnered                          OF PROTECTING BEES                      shop collected under the “Réserve des Arts”
with the Tianzi natural reserve in China                     For many years the Maisons have been          recycling program. Employees were also
under a 10-year sponsorship agreement                     supporting initiatives to protect bees, which    offered eight beekeeping workshops and
which has four areas of focus: restitution of             are the sentinels of a healthy ecosystem.        the chance to take part in a Bee Quiz. The
the original tropical forest, the introduction            Bee mortality continues to increase as a         event was organized to coincide with the
and cultivation of local orchid species, pro-             result of a number of factors, including pes-    2011 “As Sweet as Honey” spring window
tection of all local biodiversity and particu-            ticides, GMOs and a rise in the number of        displays.
larly the region’s threatened flora and                   hornets.
fauna, and lastly, a social component con-                   Two Maisons which have a historical
sisting of support of economic and social                 association with bees are Chaumet, which                         CREATING
development for the local population.                     has supported the “Terre d’Abeilles” (Land                 ENVIRONMENTAL VALUE
Specifically, Bulang workers receive train-                of Bees) association since 2002, and
ing in orchid cultivation and environmental               Guerlain, which has entered into an envi-           Today, addressing the challenge of safe-
protection, are paid salaries that are higher             ronmental sponsorship agreement with the         guarding the environment and, more
than the national average and are given                   Ouessant Black Bee Conservatory. Like            broadly, fulfilling corporate responsibility
permanent employment contracts. In addi-                  Guerlain, Louis Vuitton has set up hives at      are unquestionably factors that strengthen
tion to sponsoring China’s Tianzi natural                 some of its sites (its corporate headquarters    the brands’ value and reputation vis-à-vis
reserve, the Guerlain Orchidarium also sup-               at Pont Neuf in Paris, the Cergy Pointoise       society and stakeholders. These factors are
ports two other ventures: the Experimental                logistics sites, and its Hong Kong warehouse)    specifically taken into account by extra-
Garden in Switzerland and the Basic                       and in 2011 signed a three-year study and        financial ratings agencies, which review
Research Laboratory in Strasbourg.                        research partnership agreement with the          how LVMH manages and anticipates risks
   As part of the “Louis Vuitton Forest” pro-             French National Center for Scientific            and opportunities from the perspective of
ject, Louis Vuitton has financed the pur-                 Research, the CNRS. To help preserve the         CO2 emissions, how it addresses biodiver-
chase of a forest located in Japan’s Nagano               black bee, the CNRS Honeybee Evolution           sity, conservation of raw materials and the
region. In 2011, the project’s third year,                and Behavior Team (EVOLBEE) has                  supply of strategic resources, and how it
felled wood was given to the architect                    devised a project entitled “Comparative          incorporates customer health and safety
Shigeru Ban to be used to make shelters                   Activity of Bees in the Black Bee Conser-        considerations into product design and use.
and furniture for Japan’s disaster victims.               vatory in the Urban and Agricultural Zones
The project was also supported by profits                 of Île-de-France.” The goal is to analyze and
donated from the design and sale of 150 edi-              compare the di erences observed between
tions of the “Louis Vuitton Forest Box”.                  urban colonies of black bees and colonies at
   Following the earthquake and tsunami in                the Ile-de-France Black Bee Conservatory
Japan on March 11, 2011, and independently                (CANIF), located in the Haute Vallée de
of donations made to the Japanese Red                     Chevreuse natural regional park, by cross-
Cross to help disaster victims, Louis Vuitton             referencing data collected within and out-
is supporting the “Forests Are Lovers of the              side the park (temperature, rainfall, lighting
Sea” project, devised by an oyster farmer                 times, and so on).
from the Miyagi Prefecture, Shigeatsu                        During Sustainable Development Week
Hatakeyama, to help rebuild the oyster                    from April 1 to 7, 2011, Louis Vuitton’s cor-
fields destroyed by the tsunami. Since 1989,               porate headquarters organized an event
Shigeatsu Hatakeyama and his non-profit                   on the theme of the honeybee. It included
organization have been helping to improve                 an exhibition of photography by Éric
river water and treat the sea water used for              Tourneret entitled “Bees and Men” on bee-
oyster farming by planting deciduous trees.               keeping around the world, and a work by
                                                          artist Paule Kingleur called “Luxury Hotel
                                                          for Endangered Bees,” produced from

                                                                                                           Hives at the Louis Vuitton logistic Center.

                                                                  LVMH 2011


     SUSTAINED ENVIRONMENTAL                    Department nevertheless tracks and pro-
               INVESTMENT                       motes the many internal best practices
   The seriousness with which the LVMH          which represent value created from site
group takes account of its environmental        operations and product design and manu-
challenges is reflected in the investments      facturing processes.
made by the Maisons. In 2011, expenditure
directly related to environmental protec-
tion totaled €15.6 million: €7.7 million for    VALUE RECOGNIZED BY EXTRA FINANCIAL
operating expenses (versus €6.9 million in      RATINGS AGENCIES AND STAKEHOLDERS
2010) and €7.9 million for investment (ver-
sus €6 million in 2010). Provisions for envi-     In 2011, the LVMH group was recognized by the following key indices on the basis of
ronmental risk at December 31, 2011 stood       responsible investment criteria:
at €12.9 million.
                                                                                                                           ESI (Ethibel Sustainability
                                                              DJSI                      FTSE4Good            ASPI
                                                                                                                          Index): “Ethibel Excellence”
   This total amount of environmental                 (”Europe” and “World”)            Global 100         Eurozone
                                                                                                                             and “Ethibel Pioneer”
expenditure does not include all the other
expenses that underpin the Group’s com-
mitment to the environment, such as addi-
tional costs related to high environmental
quality standards for buildings, in-Maison
technical training and support, environ-          LVMH was also recognized in the
                                                 “Clothing, Accessories & Footwear”
mental sponsorship initiatives, and external     category in 2012 SAM Sustainability
partnerships.                                       Yearbook, as a member of the
                                                         “SAM Bronze Class.”

   The environmental expense items were
recognized in accordance with the recom-          Other assessments and classifications include:
mendations made by the French National
Accounting Board (CNC). Operating
                                                        A score of 64/100                A rating of 64.7/100 for 2010 awarded          LVMH has also
expenses and investments were carried for-          in the “Carbon Disclosure              by the French Center for Company               participated
ward for each of the following items:             Project 2011” (November 2011)             Information (CFIE) as part of the         in the CDP Water
– protection of the ambient air and                                                           “2011 Annual Study on Social                 Disclosure
                                                                                       and Environmental Information in Corporate   and Forest Footprint
  climate;                                                                                 Annual Reports” (November 2011).         Disclosure programs
– waste water management;                                                                                                           since their inception.
                                                                                                                                         LVMH is also
– waste management;                                                                                                                       member of
– protection and clean-up of the soil, under-                                                                                              the Global
  ground water and surface water;                                                                                                          Compact.

– protection against noise and vibrations;
– protection of biodiversity and the land-
– protection against radiation;
                                                  Locally, the Maisons are involved in a vari-         cluster, the first global center of perfume and
– research and development;
                                                ety of initiatives and their commitment is             cosmetic resources. Under the charter,
– other environmental protection activities.
                                                well recognized by stakeholders. For exam-             awards are given in the form of up to four
                                                ple, in September 2011 Parfums Christian               peonies, depending on the importance of the
                CREATING                        Dior and its site at Saint-Jean-de-Braye in            eco-responsible initiatives undertaken by
             TANGIBLE VALUE                     France were awarded two peony awards for               the cluster’s 45 members.
  All of the Group’s environmental ini-         their environmentally friendly initiatives in
tiatives generate savings in the short,         energy, water, waste management, transport/
medium and long term. The sum of the            mobility, introduction of standards, responsi-
savings generated, costs avoided and gains      ble purchasing, community relations and
made, which are not monetized today as          organizational management. This award is
positive externalities for the 60 or so         part of the “Eco-Responsible Cosmetic
Group brands are not subject to internal        Valley” charter, introduced in October 2009
consolidation. The Environmental                by the Cosmetic Valley competitiveness

                                                                     LVMH 2011



                                 The tables below indicate the objectives assigned to a given Group Maison.

                                       ACHIEVEMENTS COMPARED WITH 2011 OBJECTIVES


Strategy                          Business group                   Objective assigned to the Company in 2011                                  Deadline

Strictly comply                      Holding company               Systematically verify environmental compliance during internal nancial     Ongoing
with environmental                                                 site audits
                                     Holding company               Maintain the French and international environmental regulatory watch       Ongoing

Reduce environmental                 Wines & Spirits               Develop rail transport for a target of 25% of products shipped             Achieved
impact at industrial
and administrative sites             Wines & Spirits               Obtain carbon neutrality for one Maison                                    Ongoing
and shipping hubs: water,
energy, waste, transport, etc.       Wines & Spirits               Begin construction of a new High Environmental Quality building            Achieved
                                                                   at a Champagne Maison

                                     Wines & Spirits               Implement an energy recovery system for a cooling unit to save 1000 kWh    Achieved

                                     Selective Retailing           Reduce the energy consumption of one Maison by 20%                         Ongoing

                                     Perfumes & Cosmetics          Continue to reduce water consumption at one production site                Achieved
                                                                   (by at least 50%)

                                     Watches & Jewelry             Finalize the installation of 750 m2 of photovoltaic panels                 Achieved

                                     Wines & Spirits               Reduce the greenhouse gas emissions of one Champagne Maison by 20%         Ongoing
                                                                   within 10 years

Strategy                          Business group                   Objective assigned to the Company in 2011                                  Deadline

Involve                              Holding company               Develop a new environmental reporting tool                                 Achieved
all employeess
                                     Holding company and Maisons   Educate all Group employees during Sustainable Development Week            Achieved

                                     Wines & Spirits               Include an environment module in the training given to all grape-harvest   Ongoing
                                                                   seasonal workers (presses)

Distribute the results to            Holding company               Make the 2010 environmental results available to all employees             Achieved
all levels of management                                           on the LVMH environmental intranet

                                                                    LVMH 2011



Strategy                              Business group              Objective assigned to the Company in 2011                                    Deadline

Have an e ective management             Wines & Spirits           Obtain renewal of the ISO 22000 certi cation                                 Achieved
system, audited at least once every
three years                             Perfumes & Cosmetics      Obtain ISO 14001 certi cation for 3 industrial sites                         Achieved

                                        Fashion & Leather Goods   Obtain ISO 14001 certi cation for all workshops of one Maison                Ongoing (2012)

Detect, prevent and                     All                       Train a second ISO 14001 internal audit team                                 Achieved
reduce all environmental risks
                                        Wines & Spirits           Conduct an environmental audit with 220 grape suppliers                      Ongoing

Strategy                              Business group              Objective assigned to the Company in 2011                                    Deadline

Include environmental                   Holding company           Distribute to marketing, purchasing and development managers                 Achieved
considerations in the design            and Maisons               a seventh version of the “Materials to Consider: Eco-material Handbook”
of Group products, internally                                     and maintain the watch on environmentally friendly materials,
and when dealing with suppliers                                   processes and products
and subcontractors
                                        Perfumes & Cosmetics      Make the use of the CEDRE internal recycling platform standard practice      Achieved

                                        Wines & Spirits           Implement reusable crates for the delivery of certain packaging components   Achieved
                                                                  Continue the launch of the lighter bottle

                                        Holding company and       Participate in the French trial of including environmental information       Achieved
                                        Selective Retailing       on product labeling                                                          (LVMH and

Strategy                              Business group              Objective assigned to the Company in 2011                                    Deadline

Be involved with                        Holding company           Continue the work with ORÉE, the BSR, the Responsible Jewellery              Ongoing
stakeholderss                                                     Council, the Federation for Research on Biodiversity and 11 other partner
                                                                  organizations and associations.

                                        Wines & Spirits           Open sites to the public during Heritage Days                                Ongoing

                                        Fashion & Leather Goods   Develop partnerships with environmental NGOs such as Green Cross,            Achieved
                                        Watches & Jewelry         The Climate Project and Terre d’Abeilles
                                        Perfumes & Cosmetics

                                        Holding company           Continue sharing best practices with small and medium-sized companies        Achieved
                                                                  in the Paris region in conjunction with the Île-de-France Sustainable
                                                                  Development Club

                                                           LVMH 2011


                                  OBJECTIVES FOR 2012 AND BEYOND NOT EXHAUSTIVE


Strategy                         Business group          Objective assigned to the Company in 2011                                  Deadline

Strictly comply with               Holding company       Systematically verify environmental compliance during internal nancial     Ongoing
environmental regulations                                audits of sites

                                   Holding company       Maintain the French and international environmental regulatory watch       Ongoing

Reduce environmental               Holding company       De ne best practices for store lighting and air conditioning               2012
impact at industrial               and Maisons
and administrative sites
and shipping hubs: water,          Holding company       Introduce systems that measure energy consumption by item                  2013
energy, waste, transport, etc.     and Maisons           into pilot stores

                                   Wines & Spirits       Obtain carbon neutrality for one Maison                                    Ongoing

                                   Wines & Spirits       Continue construction of a new High Environmental Quality building         2012
                                                         at one Champagne Maison

                                   Selective Retailing   Reduce the energy consumption of one Maison by 20%                         Ongoing

                                   Wines & Spirits       Discontinue the use of fuel oil for natural gas and reduce CO2 emissions   2013
                                                         by 20%

                                   Wines & Spirits       Increase herbicide-free farming areas                                      2012 and

Strategy                         Business group          Objective assigned to the Company in 2011                                  Deadline

Involve all employees              Holding company       Enhance the new web-based environmental reporting tool with new            2012
                                   and Maisons           indicators for products, biodiversity and CO2 emissions (Scope 3)

                                   Holding company       Raise awareness of all Group employees during Sustainable Development      2012
                                   and Maisons           Week and European Green Week

                                   Wines & Spirits       Include the environment in the training for all grape-harvest (presses)    Ongoing
                                                         seasonal workers

Distribute the results             Holding company       Deploy the Group’s environmental KPIs at eight pilot Maisons               2012
to all levels of management        and Maisons

                                                                LVMH 2011



Strategy                          Business group              Objective assigned to the Company in 2011                                    Deadline

Have an e ective management         Perfumes & Cosmetics      Obtain environmental certi cation at one production site                     2012
system, audited at least once
every three years                   Fashion & Leather Goods   Obtain ISO 14001 certi cation for the supply chain of one Maison             2013

                                    Fashion & Leather Goods   Obtain ISO 14001 certi cation for all workshops of one Maison                Ongoing (2012)

Detect, prevent and reduce          Holding company           Develop a tool for international regulatory watch for products               2013
all environmental risks             and Maisons

                                    Holding company           Develop a tool to assist with the environmental audit of suppliers           2012
                                    and Maisons

Strategy                          Business group              Objective assigned to the Company in 2011                                    Deadline

Include environmental               Holding company           Distribute to marketing, purchasing and development managers an eighth       2012
considerations in the design        and Maisons               version of the “Materials to Consider: Eco-material Handbook” and maintain
of Group products, internally                                 the watch on environmentally friendly materials, processes and products
and when dealing with suppliers
and subcontractors                  Perfumes & Cosmetics,     Deploy a web tool to calculate the Environmental Performance Index (EPI)     2012
                                    Wines & Spirits           of packaging

                                    Fashion & Leather Goods   Establish a working group on product reparability                            2012

                                    Holding company           Continue to take part in trials in France of providing environmental         2012
                                    and Maisons               information on product labels and participate in the development
                                                              of new labeling standards

Strategy                          Business group              Objective assigned to the Company in 2011                                    Deadline

Be involved with stakeholders       Holding company           Continue the work with ORÉE, the BSR, the Responsible Jewellery              Ongoing
                                                              Council, the Federation for Research on Biodiversity and 11 other partner
                                                              organizations and associations

                                    Wines & Spirits           Open sites to the public during Heritage Days                                Ongoing
                                    Perfumes & Cosmetics

                                    Fashion & Leather Goods   Continue partnerships with environmental NGOs such as Green Cross,           2012
                                    Watches & Jewelry         The Climate Project and Terre d’Abeilles
                                    Perfumes & Cosmetics

                                    Fashion & Leather Goods   Build on the partnership with the non-pro t recycling platform La Réserve    2012
                                                              des Arts, which recovers corporate waste for the cultural sector

                                    Holding company           Continue sharing best practices with small and medium-sized companies        2012
                                                              in the Paris region in conjunction with the Île-de-France Sustainable
                                                              Development Club

                                                                  LVMH 2011



The LVMH group has been consolidating         Louis Vuitton (28% of Louis Vuitton sales                     compiling data specific to industrial sites:
environmental indicators since 1999,          area, versus 14% in 2010), Le Bon Marché                      water and energy consumption, waste
which have been published since 2001.         in Paris, the DFS stores around the world,                    production (quantity and type of waste),
They have been verified by one of the          three Fendi stores in Italy, the Spanish                      waste treatment, etc.
Auditor’s specialized teams since 2002.       stores of Loewe, and Sephora’s French                         In all, some fifty types of information are
These indicators are published in             stores plus some of its US and Canadian                     collected from each Maison. The data is
the Group’s Registration Document and         stores. The reporting scope does not                        then checked and automatically consol-
Environmental Report.                         include the franchise stores operated by the                idated in a central file, which has numerous
                                              Fashion & Leather Goods, Perfumes &                         control and alert mechanisms (for abnor-
                                              Cosmetics and Watches & Jewelry business                    mal data, unit problems, etc.).
             PROTOCOL                         groups. Lastly, depending on the environ-
                                              mental indicators, the scope of reporting
  All the consolidation and calculation       can vary significantly:                                        INTERNAL AND EXTERNAL
rules are defi ned in the LVMH environ-        – energy consumption and greenhouse                               ASSESSMENTS
mental reporting protocol, which is              gases: 63% of the sales areas of Sephora’s
updated annually and available for public        US and Canadian stores are covered;                         Consistency controls are conducted by
consultation from the Environmental           – water consumption: 27% of the sales areas                 the sites (data is compared against the pre-
Department. Any request to read the              of Sephora’s French stores and 59% of its                vious year) and again when the data is
document may be made by writing to:              US stores are covered;                                   being consolidated by the LVMH Environ-                        – waste production: reporting does not                      mental Department (abnormalities, previ-
                                                 cover the Céline and Fendi stores, the                   ous year comparison, etc.).
                                                 Loewe stores in Spain, the French stores                    Some environmental indicators are also
    SCOPE OF REPORTING                           of Sephora and Louis Vuitton stores (with                verified externally by one of the Group’s
                                                 the exception of some Japanese stores).                  Auditors whose conclusions are presented
The reporting on environmental indicators         No other environmental indicators are                   in their reasonable assurance report on cer-
in 2011 covered the following:                used for stores.                                            tain environmental indicators.
   Production sites, warehouses and               In 2011, the store reporting scope cov-
administrative sites: 181 of the 208 sites    ered 40% of the sales areas for energy con-
owned and/or operated by the companies        sumption and 26% for water consumption.                     CHOICE AND RELEVANCE OF
controlled by the Group were covered. The     The environmental indicators for stores                         THE INDICATORS
29 sites not covered were primarily the       that are not covered are deducted by
Wen Jun Distillery production site, four      extrapolation, using actual average ratios                    The purpose of the published environ-
recently opened Louis Vuitton workshops,      per unit of sales area. The integration                     mental indicators is to report to stakehold-
and the administrative sites of Benefit,      of Bulgari and the Ile de Beauté stores                     ers on the Group’s annual environmental
Berluti, Donna Karan, Pucci, Fresh, Marc      in Russia account for the main changes                      results. Pursuant to decree 2002-221 of
Jacobs and Thomas Pink. The change in         i n re p o r t i n g s c o p e a f f e c t e d by t h i s   February 20, 2002, known as the “NRE
the reporting scope over 2010 is due to the   extrapolation.                                              decree” (New Economic Regulations
incorporation of Hublot. For Rossimoda,                                                                   decree), only the nature and magnitude of
Chandon Do Brasil and some of the holding                                                                 impacts deemed relevant and significant
company sites, 2010 data were carried over.         REPORTING TOOL AND                                    with regard to operations are reported.
The production sites of Bulgari and the                METHODOLOGY
Heng Long tannery, acquired in 2011, are
not included in the 2011 environment             The system used for environmental
reporting scope. They will, however, be       reporting is an in-Maison tool consisting of
included in 2012.                             two types of questionnaire:
   Stores: reporting covers the French        – one questionnaire for compiling corpo-
stores of Céline and Guerlain, the French       rate data: training, packaging, etc;
stores and some international stores of       – one (or more) questionnaires(s) for

                                                                  LVMH 2011


        WATER CONSUMPTION                           Spirits business group, bottles are sold on
                                                    to a third party);
   Water consumption is expressed in cubic        – Material recovery which includes:
meters. This indicator assesses the quanti-         • recycling: waste is reintroduced into the
ties of water consumed, based on the fol-           production cycle from which it came to
lowing two needs:                                   partially or completely replace a virgin
– agricultural need: measurement of quanti-         raw material, such as paperboard and cer-
  ties of water used for irrigation (banned in      tain plastics,
  France) and sprinkling the vines (to fight        • organic recovery: composting, con-           The information set out in this document
  frost, etc.). The water volumes used are          trolled spreading of organic waste to          also re ects all the guidelines
  either measured directly or, more com-            fertilize soil, etc.                           in version 3.0 of the Global Reporting
  monly, estimated;                               – energy recovery: incineration with energy      Initiative (GRI). The information and
– process need: measurement of all non-agri-        from combustion recovered in the form          environmental indicators of the GRI
  cultural needs (industrial and sanitary proc-     of electricity or heat.                        presented in this report are as follows:
  esses, cleaning, spraying green areas, etc.).
  This water consumption is almost always
  measured.                                              ENERGY CONSUMPTION                        1.1      p. 5 and 6
                                                                                                   1.2      p. 14
                                                    Energy consumed is expressed in MWh
          WATER POLLUTION                         and represents all types of energy used by       Pro le of the organization
                                                  the sites (electricity, natural gas, fuel oil,   This information is available in the LVMH
   Water pollution is expressed in metric         heavy oil, steam and butane/propane) and         2011 Annual Report.
tons of COD (Chemical Oxygen Demand).             company vehicles.
This indicator reflects the total annual flow
                                                                                                   Reporting parameters
discharged by the sites into the natural
                                                                                                   3.1 à 3.12 p. 44 à 46
environment, after treatment at or down-             GREENHOUSE GAS EMISSIONS
stream of the site.
                                                                                                   Governance and commitments
   The only sectors concerned with this              This indicator is expressed in metric tons    4.12     p. 15 and 17
parameter are Wines & Spirits and Perfumes        of CO2 equivalent and corresponds to green-      4.13       p. 36 and 37
& Cosmetics, for which discharges of              house gas emissions related to the energy
organic matter and other pollution from           consumed at the sites. It covers direct and      Management and Indicators
e uents are significant and directly related       indirect greenhouse gas emissions.               EN1        p. 27
to operations.
                                                                                                   EN3        p. 23 and 24
                                                                                                   EN4        p. 23 and 24
                                                    UPSTREAM AND DOWNSTREAM                        EN8        p. 25
         WASTE PRODUCTION                                  TRANSPORT                               EN16       p. 29, 30 and 31
                                                                                                   EN21       p. 31
   All waste produced is assessed in metric          This indicator is expressed in metric
                                                                                                   EN22       p. 32 and 33
tons. The waste taken into account is haz-        tons/kilometer and metric tons of CO 2
                                                                                                   EN26       p. 26 and 27
ardous and non-hazardous waste produced           equivalent. A distinction is made between
by sites during the reporting period. The         upstream transport and downstream
method for treating each type of waste is         transport:
also identified in order to evaluate the recy-        Upstream transport: this is the number
cling rate.                                       of kilometers traveled by the raw materials
   The various methods used to recycle            and components from the last site of a sup-
waste are:                                        plier to the first receiving site. The evalua-
– Reuse: using the waste for the same pur-        tion is made at the very least on the main
  pose as the one for which the product was       components and main products:
  initially intended (e.g. in the Wines &

                                                                  LVMH 2011


– Wines & Spirits: bottles, boxes, corks, etc;   – general education/training in environ-                  EXPENSES INCURRED
– Perfumes & Cosmetics: bottles, boxes, etc;       mental issues (key areas: greenhouse                   TO PREVENT AN ACTIVITY
– Fashion & Leather Goods: leathers, metal         gases, biodiversity, education of harvest                 FROM IMPACTING
  parts, packaging, ready-to-wear, etc;            workers, etc.) or environmental manage-                  THE ENVIRONMENT
– Watches & Jewelry: boxes, cases, etc;            ment systems (ISO 14001, etc.);
– Selective Retailing: store bags, envelopes,    – training given by the holding company               This indicator is expressed in thousands
  boxes, etc.                                      (orientation seminar for new managers,           of euros. It includes the following expend-
  Downstream transport: this is the num-           presence on the Environmental Committee,         itures and investments made to prevent an
ber of kilometers traveled by all finished         involvement of the LVMH Environmental            activity from impacting the environment:
products from the manufacturing site to the        Department in executive committees or            – expenses to protect air and climate;
wholesale customer’s first platform or to          other meetings, etc.);                           – expenses to manage waste water;
stores (for selective retailing business         – hours devoted by in-Maison environmen-           – expenses to manage waste;
groups and brands that have stores).               tal trainers (Sustainable Development            – expenses to fight noise and vibrations
                                                   Week, World Water Day, health, safety              (excluding the protection of the
                                                   and environment officer who conducts               workplace);
          PACKAGING PLACED                         training/awareness sessions, etc.).              – expenses to protect biodiversity and the
           ON THE MARKET                                                                            landscape;
                                                                                                    – expenses for research and development;
   This indicator is expressed in metric tons                                                       – expenses for other environmental protec-
                                                        PERCENTAGE OF SITES
of material. It includes primary and second-                                                        tion activities.
                                                       THAT HAVE UNDERGONE
ary packaging placed on the market by all
                                                      AN ENVIRONMENTAL AUDIT
Group Maisons. The packaging used for
shipments during transportation is                  This indicator represents the number of
excluded from this indicator.                    sites that have been subject to an environ-
                                                 mental audit (internal or external) during
                                                 the year, out of the total number of sites.
     TRAINING AND AWARENESS                         The audits included in this indicator
            SESSIONS                             must cover:
                                                 – environmental performance (waste;
   This indicator is expressed in hours. It        atmospheric, water and soil discharges;
includes all training and awareness sessions       energy and water consumption; noise,
completely or partly dedicated to the envi-        etc.);
ronment, specifically:                            – an assessment of environmental risk (flod,
– the training of employees to reduce their      fire, etc.);
  impact on the environment (energy con-         – the business’s regulatory compliance;
  sumption, handling of hazardous products,      – an evaluation of the environmental man-
  training in environmental regulations,           agement system (inspection audit, inter-
  training for health, safety and environment      nal audit, certification audit, etc.) and/or
  o cers, training in environmental audits,        the performance of the environmental
  water management, waste management,              management system.
  sustainable viticulture, etc.);                   These audits are validated by a written
                                                 audit report which sets out recommendations.
                                                    The sites included in the scope of this indi-
                                                 cator are the production sites, warehouses
                                                 and administrative sites held and/or oper-
                                                 ated by companies controlled by the Group.
                                                 These audits do not cover stores.

                                                                                                            LVMH 2011


                           REPORT OF ONE OF THE AUDITORS

      To the Shareholders,                                                               NATURE AND SCOPE OF THE                                                 application of the Standards by the sites, we
As requested, and in our capacity as Auditor                                                    CONTROLS                                                         believe that our controls provide a reasona-
of LVMH Moët Hennessy – Louis Vuitton,                                                                                                                           ble basis for the opinion expressed below.
                                                                                To allow us to express an opinion, we con-
we conducted controls to allow us to
                                                                                ducted the following controls:
express reasonable assurance that certain
                                                                                We assessed the Standards’ accuracy, clarity,                                     INFORMATION ON THE STANDARDS
environmental indicators(1) for the fiscal
                                                                                objectivity, completeness and relevance
year 2011 (the “Indicators”) were estab-                                                                                                                         We have the following comments to make on
                                                                                with regard to the Group’s activities and the
lished, in all material aspects, in accordance                                                                                                                   the Standards:
                                                                                sector’s reporting practices.
with the LVMH environmental reporting
                                                                                At Group level, we:                                                              For the retail sales businesses, LVMH distin-
protocol, version No. 8 dated October 4,
                                                                                – conducted interviews with those respon-                                        guishes between the data coming directly
2011 (the “Standards”).
                                                                                  sible for reporting the Indicators;                                            from the Indicator feed-in process and the
The Indicators are presented in the
                                                                                – conducted an analysis of the risks of                                          data estimated by extrapolation. The propor-
Registration Document, paragraph 1,
                                                                                  anomalies and material relevance;                                              tion of estimated data decreased this year but
“LVMH and the environment” section,
                                                                                – assessed the application of the Standards,                                     remains significant.
Board of Directors’ Management Report.
It is the responsibility of the LVMH                                              implemented analytical procedures and
                                                                                                                                                                 Deployment of the internal controls on the
Environmental Department to establish the                                         consistency tests, and verified on a test
                                                                                                                                                                 Indicator feed-in process, which has been
Indicators and the Standards and to ensure                                        basis the consolidation of the Indicators.
                                                                                We selected a sampling of Maisons that                                           conducted for several years, is generally satis-
they are made available.
                                                                                were representative of the businesses and                                        factory, but presents significant differences
It is our responsibility, on the basis of our
                                                                                geographic locations, based on their contri-                                     among the Maisons: it must be systematized
controls, to express an opinion on these
Indicators. Our audits were conducted in                                        bution to the Indicators and the risks of                                        and strengthened, in particular for the
accordance with ISAE 3000 (International                                        anomaly previously identified:                                                    Maisons where variances have been found
Standard on Assurance Engagements) of                                           – the entities selected represent on average                                     that contribute significantly to the Group’s
the IFAC (International Federation of                                             65% of the total value of the Indicators                                       Indicators.
Accountants) of December 2003, in compli-                                         published by LVMH(2);                                                          Concerning the “Percentage of waste recov-
ance with the rules of independence                                             – at this level, we verified the understand-
                                                                                                                                                                 ery” indicator, LVMH made significant pro-
defined by laws and regulations and the                                           ing and application of the Standards and
                                                                                                                                                                 gress with regard to an explanation of waste
professional code of ethics.                                                      conducted detailed checks on a test basis,
                                                                                                                                                                 treatment methods. Efforts undertaken
The opinion expressed below concerns only                                         which consisted of verifying the calcula-
                                                                                  tion formulas and reconciling the data                                         should be continued but increased, particu-
these Indicators and not all the environ-
                                                                                  with the supporting documents.                                                 larly by the Maisons which do not systemati-
mental indicators contained in the
Registration Document, paragraph 1,                                             We reviewed the presentation of the                                              cally explain these methods.
“LVMH and the environment” section,                                             Indicators in the Registration Document,
Board of Directors’ Management Report.                                          paragraph 1, “LVMH and the environment”
This opinion does not cover the data from                                       section, Board of Directors’ Management
retail sales operations that have not been                                      Report.                                                                          In our opinion, the Indicators have been
directly integrated into the scope of envi-                                     To assist us in carrying out this work, we                                       established, in all material respects, in accord-
ronmental indicator reporting; these are                                        called upon our teams specializing in sus-                                       ance with the Standards developed by LVMH.
estimated by extrapolation.                                                     tainable development, which report to Éric
                                                                                Duvaud.                                                                                 Paris-La Défense, February 16, 2012
                                                                                Based on the controls performed over the
                                                                                                                                                                                      One of the Auditors
                                                                                last nine years on the Group’s significant
                                                                                entities and the actions conducted by                                                           Ernst & Young and others
                                                                                LVMH to improve the understanding and                                                    Olivier Breillot                      Gilles Cohen

(1) Percentage of sites subject to environmental audits (%); total water consumption for process needs (m3); total COD after treatment (metric tons/year); total waste produced (metric tons); total hazardous waste produced (metric tons);
percentage of waste recovery (%); total energy consumption (MWh); total CO2 emissions (metric tons CO2 equivalent); total packaging placed in market (metric tons).
(2) The contributions by indicator are as follows: percentage of sites subject to environmental audits: 49%; total water consumption for process needs: 62%; total COD after treatment: 96%; total waste produced: 69%; total hazardous waste
produced: 59%: percentage of waste recovered: 71%; total energy consumption: 53%; total CO2 emissions: 46%; total packaging placed on the market: 80%.


 The new HQE certified Louis Vuitton workshop “les ateliers de la Drôme” in southern of France.

  Jean-François Campos, Louis Vuitton / Bruno Aveillan, Karl Lagerfeld, LVMH / Mazen Saggar,
Louis Vuitton / Éric Tourneret, Louis Vuitton / Picture libraries of LVMH and Group’s Maisons.
                                                                                                 Design and production:

                        LVMH – 22, avenue Montaigne – 75008 Paris – France
                Tel.: 33 (0)1 44 13 22 22 – Fax: 33 (0)1 44 13 22 23 –


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