Milestones and new green goals for the French luxury giant. LVMH took stock of its green progress to date and launched a new supplier-focused environmental impact reduction programme. Bernard and Antoine Arnault presented the group’s plan of action at a special event entitled “Life 360 Summit”, organised at the Paris headquarters of UNESCO on 14 December 2023 (pictured). The occasion served to underline the group’s desire to focus increasingly on the impact caused upstream and downstream of the supply chain. The new programme, among other points illustrated, includes a partnership with Chanel and potentially other groups with which LVMH shares suppliers, in order to work together to simplify audits.
LVMH’s green goals
LVMH has placed great emphasis on the supply chain. This is why it has defined “Life 360 Business Partners” (this is the name of the new plan) as “the group’s new compass to support its suppliers, particularly in the areas of raw materials and transport”, the holding company explained in an official note. “So, we will reduce with them not only Scope 3 emissions, which represent 95% of the group’s carbon footprint, but also the impact on water and biodiversity”. Starting in 2024, LVMH will organise special days to listen to suppliers’ needs and expectations in terms of environmental ambitions. For this purpose, it will create a portal to share solutions, expertise, regulatory monitoring, knowledge and environmental training programmes.
Financial and co-investment aid
“We will try to help our suppliers and partners to be more active on this topic by training them and investing with them in their transition”, said Antoine Arnault, acknowledging that supplier companies often face major financial challenges to renew their businesses. Indeed, the new partnership programme will include financial support and co-investment, as well as training and other initiatives “to engage suppliers as partners, in the hope of making any mandatory changes positive rather than penalising”, the manager explained.
The collaboration with Chanel
One way to optimise supplier performance will be through alliances with other luxury groups. LVMH wants to work together with them to define best practices and shared standards for its suppliers. First among them, LVMH will collaborate with Chanel, with whom it shares “the same vision of luxury”, as stated by Antoine Arnault. Working together is seen as a necessity “to move faster”.
Aware of regulatory and antitrust constraints, the groups will coordinate as much as possible on aspects such as sourcing and supplier control. Although the agreement is in its infancy, they have several ideas on the table. “These are collective challenges as all luxury brands are supplied with leather, cotton, silk and cashmere”, commented Bruno Pavlovsky, President of Chanel. “Only defined alliances will allow us to help the transformation upstream. Companies and brands will continue to work within their own creative ecosystems”.
Simplifying audits
The two groups hope to create a collective audit system, so that suppliers do not have to repeat their work several times. This partnership fully involves the leather supply chain. The announced objective is precisely to simplify audits and harmonise corporate and social responsibility reporting, as well as to reduce the Scope 3 impact. In its official press release, LVMH announces this initiative as “Stronger Together”, a way of joining forces (also with competitors) to achieve a further reduction in emissions.
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