History

Although the history of the LVMH Group began in 1987 with the merger of Moët Hennessy and Louis Vuitton, the roots of the Group actually stretch back much further, to eighteenth-century Champagne, when a man named Claude Moët decided to build on the work of Dom Pérignon, a contemporary of Louis XIV; and to nineteenth-century Paris, famous for its imperial celebrations, where Louis Vuitton, a craftsman trunk-maker, invented modern luggage. Today, the LVMH Group is the world’s leading luxury goods company, the result of successive alliances among companies that, from generation to generation, have successfully combined traditions of excellence and creative passion with a cosmopolitan flair and a spirit of conquest. These companies now form a powerful, global Group in which the historic companies share their expertise with the newer brands, and continue to cultivate the art of growing while transcending time, without losing their soul or their image of distinction.

From the 14th century to the present

FINANCIAL HIGHLIGHTS

EXECUTIVE AND SUPERVISORY BODIES; STATUTORY AUDITORS (FROM FEBRUARY 1, 2025)

SIMPLIFIED ORGANIZATIONAL CHART OF THE GROUP AS OF DECEMBER 31, 2024

The organizational chart below is “simplified” insofar as its objective is to present the direct and/or indirect control structure of brands and trade names by the Group’s main holding companies, rather than a complete presentation of all Group shareholdings.

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1.     Wines and Spirits

In 2024, revenue for the Wines and Spirits business group represented 7% of the LVMH Group’s total revenue. Champagne and wines made up 54% of this revenue, while cognac and spirits accounted for 46%.

1.1         Wines and Spirits brands

Moët & Chandon, Dom Pérignon, Ruinart, Krug, Veuve Clicquot, Hennessy, Château d’Yquem, Glenmorangie, Clos des Lambrays… The origins of all these world-famous estates are inextricably linked to the appellations and terroirs of the world’s most prestigious wines and spirits. Whether they are in Champagne, Bordeaux, or other famed wine regions, these Maisons, many of which date back more than a century, all share a powerful culture of excellence.

1.2         Competitive position

1.2.1       Champagne

In 2024, shipments of LVMH champagne brands were down 10.2% from 2023, while shipments from the Champagne region decreased by 9.2% (source: CIVC). LVMH’s market share thus amounted to 22.6% of total shipments, compared to 22.9% in 2023.

Champagne shipments, for the whole Champagne region, break down as follows:

(Source: Comité Interprofessionnel du Vin de Champagne – CIVC).

1.2.2       Cognac

In 2024, the volumes shipped from the Cognac region were down slightly (0.4%) from 2023 (source: BNIC), while volumes of Hennessy shipped rose by 9.8%. Hennessy’s market share of volumes shipped from the Cognac region improved by 5.0 points to 54% in 2024 from 49% in 2023. The Company is the world leader in cognac and premium international spirits, with particularly strong positions in the United States, China and other important markets for cognac (South Africa, Nigeria, the United Kingdom, etc.).

Cognac shipments, in number of bottles, excluding bulk, both for the industry and for LVMH, are as follows:

(Source: Bureau National Interprofessionnel du Cognac – BNIC).

1.3         Primary production methods, supply sources and subcontracting

1.3.1       Champagne

The Champagne appellation covers a defined geographic area classified A.O.C. (Appellation d’Origine Contrôlée), which covers the 34,000 hectares that can be legally used for production. There are essentially three main types of grape varietals used in the production of champagne: Chardonnay, Pinot Noir and Meunier.

The Group owns 1,665 hectares under production, which provide 21% of its annual needs. In addition, the Group’s Maisons purchase grapes and wines from winegrowers and cooperatives on the basis of multi-year agreements; the largest supplier of grapes and wines represents less than 10% of total supplies for the Group’s Maisons. LVMH’s champagne houses, along with their partner grape suppliers, are steadily building up their use of sustainable winegrowing practices for Viticulture Durable en Champagne certification.

In addition to its effervescence, the primary characteristic of champagne is that it is the result of blending wines from different years and/or different varieties and land plots. The best brands are distinguished by their masterful blend and consistent quality, achieved thanks to the talent of their wine experts.

Weather conditions significantly influence the grape harvest from one year to the next. The production of champagne also requires aging in cellars for two years or more for premium, vintage and/or prestige cuvées. To protect themselves against crop variations and manage fluctuations in demand, but also to ensure consistent quality year after year, LVMH’s champagne houses regularly adjust the quantities available for sale and keep reserve wines in stock, mainly in storage tanks. As maturation times vary, the Group constantly maintains champagne inventories in its cellars for future sales.

The making of champagne involves extremely rigorous processes in order to ensure absolute consistency in quality from year to year. Moët & Chandon fully operates its Mont Aigu site, with its vat room, bottling line, cellars, disgorging area and packaging workshop supplementing the production capacity of Moët & Chandon’s historic facilities in Épernay, which are undergoing renovation work. The historic production sites of Veuve Clicquot, Ruinart and Krug are in Reims. Veuve Clicquot continued construction of its new Comète production facility located in Saint-Léonard, near Reims, while Krug inaugurated a new winemaking site in Ambonnay.

Dry materials (bottles, corks, etc.) and all other components of containers and packaging are purchased from non-Group suppliers. In 2024, the champagne houses also used subcontractors for about 44 million euros of services, notably pressing, co-packing, handling and storing bottles.

In order to drive innovation and develop expertise in its production processes, the Group inaugurated its research and development facility in Oiry in 2021, which is open to all its Maisons.

1.3.2       Cognac

The Cognac region is located around the Charente basin. The vineyard, which currently extends over more than 83,000 hectares, consists almost exclusively of the Ugni Blanc varietal which yields a wine that produces the best eaux-de-vie. This region is divided into six vineyards, each of which has its own qualities: Grande Champagne, Petite Champagne, Borderies, Fins Bois, Bons Bois and Bois Ordinaires. Hennessy selects its eaux-de-vie essentially from the first four vineyards, where the quality of the wines is more suitable for the preparation of its cognacs.

Charentaise distillation is unique because it takes place in two stages: a first distillation (première chauffe) and a second distillation (seconde chauffe). The eaux-de-vie obtained are aged in oak barrels. Cognac results from the gradual blending of eaux-de-vie selected on the basis of vintage, origin and age.

Hennessy – which carries out all of its production in Cognac – inaugurated a state-of-the-art bottling and packaging plant named Pont Neuf in 2017. With the inauguration of a second production line at the Pont Neuf plant in 2021, the Maison’s production capacity has been raised to 10 million cases per year. The design of this 26,000-square-meter facility reduces its environmental footprint and optimizes working conditions to an extent never achieved previously.

Most of the cognac eaux-de-vie that Hennessy needs for its production are purchased from a network of approximately 1,600 independent producers, a collaboration which enables the Company to ensure that exceptional quality is preserved as part of an ambitious sustainable winegrowing policy. Hennessy directly operates about 180 hectares, providing for less than 1% of its eaux-de-vie needs.

With an optimized inventory of eaux-de-vie, the Maison can manage the impact of price changes by adjusting its purchases from year to year under the contracts with its partners. Hennessy continues to control its purchase commitments and diversify its partnerships to prepare for its future growth across the various quality grades.

Like the Champagne and Wine businesses, Hennessy obtains its dry materials (bottles, corks and other packaging) from non-Group suppliers. The barrels and casks used to age the cognac are also obtained from non-Group suppliers. Hennessy makes only very limited use of subcontractors for its core business: aging, blending and bottling eaux-de-vie.

1.3.3       Other wines and spirits

Outside of champagne and Cognac, the Group owns a range of rare brands of spirits and still and sparkling wines whose quality and uniqueness relies on careful production and/or selection of raw materials, as well as longstanding expertise in complex development and aging processes that combine excellence, innovation and tradition.

1.4         Distribution

Moët Hennessy has a powerful and agile global distribution network, thanks to which the Wines and Spirits business group continues to expand the presence of its portfolio of brands in a balanced manner across all geographies. Part of this network consists of joint ventures with the Diageo spirits group⁽¹⁾, governed by agreements that have been in place since 1987, which help strengthen the positions of the two groups, improve distribution control, enhance customer service and increase profitability by sharing distribution costs. In 2024, 23% of champagne and cognac sales were made through this channel.

1.5         Highlights of 2024 and outlook for 2025

Highlights

After three exceptional years, the normalization of demand that began in 2023 continued in 2024 amid a slowdown in consumption and a difficult market environment in China. LVMH’s Wines and Spirits Maisons drew on the strength of their retail networks and on proactive sales strategies to win market share and consolidate their leadership in cognac, champagne and Provence rosé wines. Moët Hennessy continued with its mission of “Crafting Experiences”, aimed at enhancing the customer experience, by developing visitor and reception sites at its Maisons and other iconic points of sale.

LVMH’s champagne houses maintained their market share of more than 22% of all Champagne-appellation shipments despite volumes being down. Inclement weather at the beginning of the summer resulted in an especially poor harvest in the Champagne region, weighing on the division’s performance. As well as rolling out its Collection Impériale Création No. 1 prestige cuvée internationally, Moët & Chandon unveiled a limited-edition “France” version of its Moët Impérial cuvée for the 2024 Paris Olympics. The Maison demonstrated its firm commitment to biodiversity with the inauguration of “Essentia”, a conservatory of regional grape varieties. Dom Pérignon launched Vintage 2015 and Vintage 2006 Plénitude 2, as well as an ultra-exclusive edition designed in collaboration with artist Mathias Bengtsson and a limited edition in tribute to Jean-Michel Basquiat. Veuve Clicquot introduced exciting new experiences such as “Solaire Journeys” aboard the Venice Simplon-Orient-Express and launched its Sun Club outdoor pop-up locations to coincide with the relaunch of its Rich cuvée. The Maison also continued its support for women entrepreneurs through its Bold program. Krug unveiled Krug Grande Cuvée 172^e Édition, Krug Rosé 28^e Édition and Krug 2011, and celebrated the 10th anniversary of its Single Ingredient program with a focus on flowers. Ruinart unveiled its iconic Reims site, now beautifully transformed, officially opening the Nicolas Ruinart pavilion, a contemporary building designed by architect Sou Fujimoto.

Chandon performed well in the United States and benefited from the renewed appeal of its completely renovated winery in Napa Valley. Still wines produced by Moët Hennessy Wine Estates grew steadily. In Provence rosé wines, Château d’Esclans confirmed its global leadership thanks to strong growth in its main markets, while Minuty delivered a promising performance, notably in the United States. Château Galoupet received excellent reviews and stepped up its sustainability initiatives. Cloudy Bay continued to stand out as a benchmark in Sauvignon Blanc wines. Terrazas de los Andes received excellent ratings from critics for the quality of its wines, confirming the relevance of its upmarket strategy. Joseph Phelps ramped up its expansion outside the United States. Ao Yun strengthened its position as the best red wine produced in China with the launch of its 2020 vintage.

Hennessy cognac revenue was held back by weak local demand in China and a challenging market environment in the United States. The Maison elevated its desirability with the success of the LeBron James limited edition, designed in collaboration with the basketball star, and its new “Made for More” campaign in the United States, which reaffirmed its place in cocktails. Hennessy continued its international development, driven by markets including South Africa, the Asia-Pacific region and Europe. The Maison stepped up its commitment to sustainability through a new sustainable winegrowing model, “Living Landscapes”. The program is the first ever to bring together the wine trading Maisons in a joint effort to revitalize the winegrowing landscape in the Cognac region.

Recognized for the excellence of their products, single malt whiskies Glenmorangie and Ardbeg continued to innovate. Glenmorangie’s new Triple Cask Reserve and A Tale of Ice Cream whiskies both won awards at the San Francisco World Spirits Competition. Ardbeg once again won the award for the Best Scotch Islay Single Malt for Ardbeg 25 Years Old and unveiled Ardbeg The Abyss in the ultra-premium segment. Belvedere benefited from the ongoing success of its Belvedere 10 luxury vodka, backed by a campaign featuring rapper Future. Reflecting its commitment to sustainability, it became the first of LVMH’s Maisons to secure ISO 46001 certification for its water management. Eminente rum enjoyed strong growth in Europe.

The business group continued to diversify its portfolio and innovate, launching new whisky brand SirDavis through a joint venture with Beyoncé Knowles-Carter and announcing a partnership with alcohol-free sparkling wine brand French Bloom.

Steadfast in its commitment to protecting soil, the second edition of the World Living Soils Forum was held in Arles, bringing together winegrowing, agriculture and soil specialists from around the world and reaffirming the vital importance of soil health for the planet and for all humankind.

Outlook

The Wines and Spirits business group is approaching 2025 with vigilance and pragmatism, with the environment still clouded by uncertainty hanging over a number of markets. While continuing to strictly manage costs, the Group’s Maisons will maintain their target of growing their market share through a proactive policy aimed at crafting unique experiences for consumers. Moët & Chandon will activate its partnership with Formula 1 entered into in 2024. Mindful of their rich natural heritage and environmental responsibility, all of the Maisons will continue to follow their roadmaps to act sustainably by protecting biodiversity and reducing their carbon footprint. Excellence, authenticity and sustainability will remain their guiding principles, in keeping with Moët Hennessy’s vision of consolidating its position as the leader in luxury wines and spirits.

2.     Fashion and Leather Goods

In 2024, the Fashion and Leather Goods business group represented 48% of the total revenue of LVMH.

2.1         Fashion and Leather Goods brands

In the luxury fashion and leather goods sector, LVMH holds a group of brands that are primarily French, but also include Italian, Spanish, British, German and American companies.

The Fashion and Leather Goods business group comprises Louis Vuitton, Christian Dior, Celine, Loewe, Kenzo, Givenchy, Fendi, Emilio Pucci, Marc Jacobs, Berluti, Loro Piana, Rimowa and Patou. While respecting the identity and autonomous management of these brands, LVMH supports their growth by providing them with shared resources.

Parfums Christian Dior, Perfumes Loewe, Parfums Kenzo and Parfums Givenchy are included in the Perfumes and Cosmetics business group.

2.2         Competitive position

In the Fashion and Leather Goods sector, the luxury market is highly fragmented, consisting of a handful of major international groups plus an array of smaller independent brands. LVMH’s brands are present all around the world, and it has established itself as one of the most international groups. All these groups compete in various product categories and geographic areas.

2.3         Design

Working with the best designers, while respecting the spirit of each brand, is a strategic priority: the creative directors promote the Maisons’ identities, and are the artisans of their creative excellence and their ability to reinvent themselves. As a means to continually renew this precious resource, LVMH has always been committed to supporting young designers and nurturing tomorrow’s talent, in particular through the LVMH Prize for Young Fashion Designers, which each year honors the work of an up-and-coming designer displaying exceptional talent and outstanding creativity.

LVMH believes that one of its essential assets is its ability to attract a large number of internationally recognized designers to its Maisons.

2.4         Supply sources, manufacturing and subcontracting

As of 2024, Louis Vuitton has twenty-nine leather goods workshops – eighteen in France, four in Spain, four in the United States and three in Italy – which manufacture most of the Maison’s leather goods. In addition to manufacturing and model-making for leather goods, Louis Vuitton’s workshops in Italy handle all development and manufacturing processes for all types of footwear, as well as development for certain accessories (textiles, jewelry and eyewear). In addition to leather goods manufacturing, Louis Vuitton’s workshops in Spain also handle all leather goods accessories (belts and straps). Louis Vuitton uses external manufacturers only to supplement its manufacturing.

Louis Vuitton purchases its materials from suppliers located around the world, with whom the Maison has established long-term partnership relationships. The supplier strategy implemented over the last few years has enabled the Maison to meet its requirements in terms of volume, quality and innovation while engaging its suppliers in a CSR approach. This strategy is the result of a policy of focusing on and supporting the best suppliers while limiting Louis Vuitton’s reliance on them. Accordingly, the leading supplier in the leather market accounts for around 21% of Louis Vuitton’s leather supplies; the leading supplier in the metal parts market accounts for slightly less than 20% of its metal parts supplies.

Christian Dior’s production capacity and use of outsourcing vary very widely depending on the product. In leather goods, Christian Dior works with companies outside the Group to increase its production capacity and provide greater flexibility in its manufacturing processes. In ready-to-wear and jewelry, it purchases supplies primarily from non-Group businesses.

Most of the other Maisons in the Fashion and Leather Goods business group have workshops in their countries of origin or in Italy, which cover only a portion of their production needs. Furthermore, the LVMH Métiers d’Art segment protects and partly develops the Maisons’ access to raw materials and world-class expertise in leather goods and hardware.

Generally, the subcontracting used by the business group is diversified in terms of the number of subcontractors and is located primarily in the brand’s country of origin, France, Italy and Spain.

Lastly, fabric suppliers for the different Maisons are often Italian, but on a non-exclusive basis. The designers and style departments of each Maison ensure that manufacturing does not generally depend on patents or exclusive expertise owned by third parties.

2.5         Distribution

Controlling the distribution of its products is a core strategic priority for LVMH, particularly in luxury Fashion and Leather Goods. This control allows the Group to retain retail margins, and guarantees strict control of the brand image, sales reception and environment that the brands require. It also gives the Group closer contacts with its customers so that it can better anticipate their expectations, thereby offering them unique shopping experiences.

In order to meet these objectives, LVMH has the premier international network of exclusive boutiques under the banner of its Fashion and Leather Goods brands. This network included more than 2,300 stores as of December 31, 2024.

2.6         Highlights of 2024 and outlook for 2025

Highlights

The Fashion and Leather Goods business group showed strong resilience in an uncertain environment in 2024. Driven by a desire to offer their customers exceptional products and experiences, LVMH’s Maisons continued to pursue creativity, very high quality, masterful craftsmanship and retail excellence.

Louis Vuitton was once again driven by its boundless capacity for innovation in the world of travel. Nicolas Ghesquière’s Fall/Winter fashion show celebrated ten years of his designs at the Maison. Following the Voyager show in Shanghai, the 2025 Cruise collection was presented in Barcelona’s Park Güell. For his second fashion show, Pharrell Williams drew inspiration from the American West and his 2025 Spring/Summer collection, “The World is Yours”, was unveiled at UNESCO’s headquarters in Paris, celebrating the Maison’s spirit of travel. Many new designs were launched in leather goods, including the Speedy P9 bag in fresh colors, the Low Key line and the Neverfull Inside Out, a reversible version of one of the Maison’s icons. In jewelry, its LV Diamonds collection introduced a cut in the shape of the Monogram flower and extended the Maison’s commitment to sustainable practices by ensuring that every diamond is fully traceable. For its tenth anniversary, the Escale watch released its first three-hand model. In 2024 more than ever before, carrying on a well-established tradition, victory traveled in Louis Vuitton: bespoke trunks, handcrafted in its historic Asnières workshops, held the torches and medals of the Paris 2024 Olympic and Paralympic Games. As Title Partner of the 37th America’s Cup in Barcelona, the Maison also unveiled two trunks carrying the trophy for the Louis Vuitton Cup qualifiers and the iconic Auld Mug presented to the winner of the America’s Cup. In New York, with Louis Vuitton’s Fifth Avenue flagship store set to undergo a multi-year renovation, the Louis Vuitton 57th Street store, opened at the end of the year, was a major success. This new flagship – the Maison’s largest in the United States – offers an immersive experience at the crossroads of luxury, culture and fine dining.

Christian Dior maintained its creative momentum, fusing heritage and modernity. Maria Grazia Chiuri revisited the origins of Dior ready-to-wear with a tribute to the 1967 Miss Dior collection and drew inspiration from Mary, Queen of Scots for her Cruise show at Drummond Castle in Scotland, as well as from Amazon warrior women for her Spring/Summer 2025 collection at the Musée Rodin in Paris. The Maison continued to develop its collections, in particular the Dioriviera collection. Kim Jones brought the signature looks of Dior couture to menswear and launched a capsule collection with Lewis Hamilton. Victoire de Castellane unveiled her Diorama & Diorigami high jewelry designs and celebrated the Maison’s tradition of jewelry-making with the My Dior collection, which echoes the texture of its iconic cannage stitching. The Maison enjoyed high levels of visibility both during the Paris 2024 Olympic and Paralympic Games, thanks to its athlete ambassadors, and at the opening ceremony, with Lady Gaga and Céline Dion both wearing Dior. Beijing hosted the L’Or de Dior exhibition in September, while the Christian Dior: Designer of Dreams exhibition arrived in Riyadh in November. At the end of the year, an exhibition opened at La Galerie Dior in Paris featuring photographs by Peter Lindbergh for the Maison. Lastly, key highlights in retail included the opening of an exceptional store in Geneva, designed by Christian de Portzamparc, and Dior’s spectacular façades and enchanting window displays to celebrate the end-of-year holiday season around the world, in particular at its 30 Montaigne store in Paris and at the new Dior Gold House in Bangkok.

Loro Piana, which continued to enhance its desirability, turned in a remarkable performance. The year marked the Maison’s centenary, which it celebrated by showcasing its signature blend of heritage and modernity. The Fall/Winter collection was highly successful and leather goods saw strong growth driven by the launch of its latest handbag, the Loom. For the end-of-year holiday season, culminating its centenary celebrations, Loro Piana transformed the window displays and façades of Harrods, inviting visitors on a delightful, enchanting voyage. Another highlight was the publication of Master of Fibres, a book exploring one hundred years of the Maison’s history through its archives and interviews with the Loro Piana family.

Celine expanded its Triomphe leather goods line and achieved further success in its Plein Soleil collection with its new Raphia bags. It also successfully launched a new fragrance, Zouzou, and Le Rouge Celine lipstick. Three flagship stores were opened in Osaka, Seoul and Paris.

Fendi focused on its iconic bags, launching Peekaboo Soft and unveiling Mamma Baguette at its Milan fashion show. A collection of seven exclusive fragrances evoking the history of the Fendi family was launched in June. The Maison opened a number of flagship stores, including in Miami and Madrid.

Loewe held its first major exhibition in Shanghai, celebrating its heritage and commitment to craftsmanship. The success of the Flamenco bag in nappa lambskin reflected the shift further upmarket of its range of products. Jonathan Anderson developed an innovative, creative collection with Japanese studio Suna Fujita. Several major store openings took place, including a new Casa Loewe store in Seoul.

Marc Jacobs celebrated its 40th anniversary by revisiting its most emblematic designs and looks, and launched The Mini Bag, a new leather goods line.

In September, Givenchy announced the appointment of Sarah Burton as Creative Director for all its men’s and women’s collections.

Kenzo reaffirmed the “West meets East” stylistic positioning of its looks, with highlights including fashion shows at the gardens of the Palais-Royal and the National Library of France in Paris.

Berluti’s growth was driven by the success of its collections, in particular the iconic Fast Track, which masterfully blends the remarkable style of a formal shoe with the unique comfort of a sneaker. The unveiling of Team France’s uniforms for the opening ceremonies of the Paris 2024 Olympic and Paralympic Games enjoyed a very positive reception and major media coverage. The store network expanded, including a store in Tokyo’s new Azabudai Hills district.

Rimowa continued to deliver growth, fueled by innovation, a number of new store openings and taking direct control over distribution in Thailand and Belgium. Highlights included the launch of the Original Bag, designed with the Maison’s signature expertise, and the revival of its historic Hammerschlag line in hammered aluminum. Maintaining its commitment to sustainability, repair and recycling for its suitcases, the Maison rolled out its Re-Crafted program in the United States and South Korea.

Pucci presented its Very Vivara collection in April, paying tribute to the Maison’s heritage through its iconic Vivara print.

Outlook

In 2025, amid a global environment characterized by wide-ranging geopolitical and economic uncertainty, the Group will focus on growing its market share by further elevating the quality, sustainability and desirability of its Maisons’ products and enhancing the customer experience. Louis Vuitton will pursue a number of development projects over the coming months, focused on its capacity for innovation and its quest for perfection in all its areas of expertise, including the new collaboration starting in 2025 with renowned Japanese artist Takashi Murakami, who will add a colorful touch to the Maison’s signature designs, as well as the future opening of its new 103 Champs-Élysées location, where work is ongoing. Louis Vuitton will activate its partnership with Formula 1 entered into in 2024. The Maison will continue to highlight its commitment to corporate social responsibility, notably through its five-year partnership with nonprofit People For Wildlife to conserve natural resources and through the 2025-2026 Louis Vuitton Watch Prize for Independent Creatives, the second edition of a competition aimed at recognizing and supporting emerging creative talent in watchmaking. Christian Dior will continue to selectively invest in its desirability, which means focusing on product quality and creativity as well as high-impact communications and events around the world. The Cruise show – one of the year’s most highly awaited events – will take place in Rome in May 2025. Loro Piana will continue its pursuit of excellence and hold its first exhibition at Museum of Art Pudong in Shanghai in March. At Celine, new Creative Director Michael Rider will unveil his first collections in June. A new flagship store will be opened on Via Monte Napoleone in Milan. Fendi will be celebrating its centenary throughout the year, starting in February with a men’s and women’s fashion show directed by Silvia Fendi at its new “Spazio Solari” location in Milan. Loewe will launch the Madrid bag and celebrate the tenth anniversary of its Puzzle bag. Alongside the selective expansion of the store network, the Loewe Crafted World exhibition will open in Tokyo and the iconic Craft Prize will return to Madrid. Givenchy will unveil its first collections designed by Sarah Burton in March in Paris. Berluti will continue to renovate and expand its store network, particularly in Japan and the Middle East.

3.     Perfumes and Cosmetics

In 2024, the Perfumes and Cosmetics business group posted revenue of 8,418 million euros, representing 10% of LVMH’s total revenue.

3.1         Perfumes and Cosmetics brands

LVMH is a key player in the perfume, makeup and skincare sector, with a portfolio of world-famous French brands, including Parfums Christian Dior, Guerlain, Parfums Givenchy and Kenzo Parfums. The Group also owns other beauty brands, including Benefit, Fresh, Acqua di Parma, Loewe Perfumes, Make Up For Ever, Maison Francis Kurkdjian, Fenty Beauty by Rihanna and Officine Universelle Buly.

3.2         Competitive position

The LVMH Beauty division has maintained its global competitive position thanks to the success of its perfumes, particularly in Europe and the United States, and the recovery in makeup in the United States, despite the ongoing impact on the skincare market of the economic situation in China.

3.3         Research

Established in 1981, LVMH Recherche is a research and innovation center for the LVMH Group’s Perfumes and Cosmetics brands.

LVMH Recherche aims to shape the future of sustainable digital beauty. Innovation is central to the Group’s commitment to offering unrivaled product performance, unprecedented sensory experiences and new uses by investing in key new areas for the future while taking into account social and environmental impacts.

Spread across five sites around the world (Hélios in Saint-Jean-de-Braye, Kosmo in Paris, and Asian innovation centers in Tokyo, Shanghai and Seoul), LVMH Recherche’s 670 employees (including researchers, chemists, biologists, toxicologists and pharmacists) deliver over a thousand exceptional products in the skincare, makeup and fragrance categories every year. These very high-quality products are developed with the greatest respect for the environment and in keeping with each Maison’s sensory signature and unique identity.

Innovation and openness to the world are pillars of the strategy pursued by LVMH Recherche (400 patent families), which works with a number of public bodies (including universities, the French National Scientific Research Center [CNRS] and the French National Institute of Health and Medical Research [INSERM]) and private-sector organizations (notably startups, SMEs and mid-tier enterprises) in France and abroad. LVMH Recherche has gradually created a powerful innovation ecosystem whose aim is to identify the most promising technological advances and accelerate their development by building strategic partnerships in new scientific fields as varied as sustainable farming, biotechnology, cellular biology, advanced materials, new processes, big data, artificial intelligence and more.

3.4         Supply sources, production and subcontracting

The six French production centers operated by Parfums Christian Dior, Guerlain and LVMH Fragrance Brands meet almost all the manufacturing needs of the four major French Maisons. The other Maisons have some of their products manufactured by the Group’s other brands, with the remainder subcontracted externally.

Dry materials, such as bottles, stoppers and any other items that form the containers or packaging, are acquired from suppliers outside the Group, as are the raw materials used to create the finished products. In certain cases, these materials are available only from a limited number of French or foreign suppliers.

Most product formulas are developed at the LVMH Recherche laboratories in Saint-Jean-de-Braye (France), but the Group may also acquire or develop formulas from specialized companies.

3.5         Distribution and communication

The presence of a broad spectrum of brands within the business group generates synergies and represents a market force. The volume effect means that advertising space can be purchased at competitive rates, and better locations can be negotiated in department stores. The use of shared services by subsidiaries increases the effectiveness of support functions for worldwide distribution and facilitates the expansion of the newest brands and their access to new markets. These economies of scale permit larger investments in design and advertising, two key factors for success in the Perfumes and Cosmetics business group.

The Group’s Perfumes and Cosmetics brand products are sold worldwide, mainly through “selective retailing” channels (as opposed to mass-market retailers and drugstores), although certain brands also sell their products in their own stores and on their own e-commerce sites. Excellence in retailing is key to the Group’s Perfumes and Cosmetics Maisons. It requires expertise and attentiveness from beauty consultants, as well as innovation at points of sale. At December 31, 2024, the network of directly operated Perfumes and Cosmetics stores consisted of over 700 stores.

To meet the expectations of younger generations, who are looking for originality, as well as demand for a connected in-store and online experience, all brands are accelerating the implementation of their online sales platforms, particularly on their own sites, and stepping up their digital content initiatives. Our brands are actively incorporating digital tools to enhance the customer experience and attract new consumers.

3.6         Highlights of 2024 and outlook for 2025

Highlights

Growth in the Perfumes and Cosmetics business group was driven by powerful innovative momentum combined with a firmly selective retail strategy, in a highly competitive market environment.

Parfums Christian Dior turned in a very solid performance thanks to its proactive growth strategy and the strength of its product categories. Men’s fragrance Sauvage continued to dominate the global market, boosted by the launch of Sauvage Eau Forte. Iconic women’s fragrances also delivered remarkable performances. J’adore was boosted by a new marketing campaign featuring Rihanna as its new face, as was Miss Dior by the launch of its new Miss Dior Parfum edition. La Collection Privée Christian Dior continued to elevate the Maison’s positioning in high perfumery with the very promising launch of the highly concentrated Esprits de Parfum. Makeup was buoyed by the success of its latest innovations in the Forever range (Glow Maximizer, Glow Star Filter and Skin Perfect). Skincare continued to gain momentum in the premium segment with its Prestige line, particularly in Asia. Amid an overall market slowdown, Parfums Christian Dior consolidated its leading position in key markets by maintaining a resolutely selective distribution strategy, investing in rolling out a new identity for its points of sale and developing an omnichannel strategy. The Maison reaffirmed its commitment based on and guided by its purpose: “Making the world a happier, more beautiful place”. Specific actions were taken to support women’s empowerment and biodiversity protection, such as implementing regenerative agriculture techniques for the flowers and plants grown to produce its fragrances, and launching projects to restore natural habitats in partnership with WWF.

Guerlain continued its rapid growth in fragrances. The L’Art & La Matière premium fragrance collection was expanded with the successful launch of two new fragrances: Néroli Plein Sud, inspired by the travels of Antoine de Saint-Exupéry, and Patchouli Paris, evoking the excitement of a night out in Paris. To celebrate the end-of-year festive season, the Maison released a limited-edition Imagine Guerlain bottle designed by artist Shourouk Rhaiem. The Aqua Allegoria collection was expanded with the successful new Florabloom fragrance. Makeup was boosted by the relaunch of the iconic Rouge G lipstick and from growth in Terracotta and KissKiss, which was buoyed by the success of its Bee Glow Oil version. Skincare was backed by innovation in the Orchidée Impériale and Abeille Royale ranges. Honoring its commitment to biodiversity and its close relationship with the art world, Guerlain joined forces with Lee Ufan Arles for the Art & Environment Prize and continued to favor the use of natural materials and refillable product formats.

Parfums Givenchy continued to gain ground in fragrances, buoyed by its iconic scent L’Interdit, whose desirability was further elevated by the successful launch of L’Interdit Absolu. The new Irresistible Very Floral and Gentleman Society Extrême fragrances also added to its momentum. The Maison proved resilient in makeup, benefiting from the relaunch of Prisme Libre powder, which helped it win market share, particularly in Europe. Benefit delivered growth driven by its innovation in both products and services, as well as strong performance by the brand’s bestsellers. New product launches in the Precisely, My Brow line confirmed the Maison’s leadership in brow beauty. Cult product Benetint and the interactive Benemart experience in the run-up to the year-end received a warm welcome. Fresh continued to showcase its expertise in using natural ingredients to create beauty products that perform with experiences that transform. The Maison focused on its iconic Kombucha Essence, Soy Facial Cleanser, Crème Ancienne and Black Tea products. Make Up For Ever launched its new Hydra Glow foundation in the HD Skin franchise. Its Artist Color Pencil and its makeup palettes performed well in the United States and Europe. Kenzo Parfums benefited from the success of the Ikebana Mimosa and La Récolte Parisienne additions to its Flower by Kenzo line. Maison Francis Kurkdjian opened a new showcase store on Rue François 1^er in Paris. The year also saw the launch of the Maison’s eau de parfum APOM (A Part of Me) alongside initiatives to promote its flagship fragrances including Baccarat Rouge 540. The Maison continued its corporate giving initiatives with the Palace of Versailles, establishing a “Biodiversity Observatory”. Acqua di Parma had an eventful year, launching the limited-edition Mandarino Millesimato and entering into collaborations with Dorothée Meilichzon and India Mahdavi. Loewe Perfumes saw strong growth thanks to expansion in its Asian markets, a region where the Maison enjoys high levels of desirability, with the rollout of a unique customer experience. Fenty Beauty established a presence in China and launched a new range of haircare products, Fenty Hair. Officine Universelle Buly launched its La Maison Parfumée collection and celebrated the art of travel with new beauty essentials, offered in particular to passengers on the legendary Venice Simplon-Orient-Express.

Outlook

While remaining vigilant, as called for by the ongoing uncertainty of the current environment, LVMH’s Maisons will continue to invest in their strengths: product excellence, innovation, brand image and a selective approach to retail networks. Parfums Christian Dior will continue with its development strategy through selective investments to boost its desirability and leadership. The Maison will draw on sustained, dynamic innovation across its entire portfolio, its unique expertise and a refreshed brand image developed in collaboration with Dior Couture. Guerlain will benefit from the relaunch of its Abeille Royale watery oil serum featuring an innovative new formula, as well as additions to the L’Art & La Matière and Aqua Allegoria ranges. One of the highlights of the year will be the centenary of the legendary Shalimar scent. Parfums Givenchy will further develop its range of fragrances, adding new scents to L’Interdit, Gentleman Society and Irresistible. Several major launches will take place in makeup. Kenzo Parfums will continue to promote its iconic Flower by Kenzo fragrance and will relaunch one of its emblematic franchises. Maison Francis Kurkdjian will continue with its international expansion and unveil a new fragrance with a strong personal connection to its creator. Loewe Perfumes will bring fresh innovation to its fragrance and home scents collection. Benefit will strengthen its positioning with a new store layout and innovative initiatives in brow beauty, eye makeup and foundation. Fresh will further expand its flagship Kombucha, Crème Ancienne and Black Tea lines. Make Up For Ever will unveil new foundation products and celebrate color. Acqua di Parma will expand its collections celebrating the Italian art of living. Officine Universelle Buly will open a new store in the spring on the right bank of the Seine in Paris.

4.     Watches and Jewelry

In 2024, the Watches and Jewelry business group represented 12% of the total revenue of LVMH.

4.1         Watches and Jewelry brands

The LVMH Watches and Jewelry Maisons are some of the most emblematic brands in the industry. They operate in jewelry and watches with Tiffany & Co., Bulgari, Chaumet, Fred, TAG Heuer, Hublot, Zenith, Repossi and L’Epée 1839. These Maisons are guided by a daily quest for excellence, creativity and innovation.

4.2         Competitive position

The jewelry market is highly fragmented, consisting of a handful of major international groups plus an array of smaller independent brands and companies from many different countries.

The watchmaking market consists of major international players and is divided into a number of segments including traditional watches and smartwatches. The luxury watch market consists of a handful of major international groups as well as smaller independent brands.

LVMH’s brands are present all around the world, and it has established itself as one of the international leaders.

4.3         Design, supply sources, manufacturing and subcontracting

The Watches and Jewelry group designs most of its models in its own studios, but may also sometimes use third parties.

At its Swiss workshops and manufacturing centers, the Group assembles a substantial proportion of the watches and chronographs sold under the TAG Heuer, Hublot, Zenith, Tiffany, Bulgari and Chaumet brands; it also designs and manufactures mechanical movements such as El Primero and Elite by Zenith, Heuer 02 by TAG Heuer, UNICO by Hublot and Solotempo by Bulgari; and it manufactures some critical components such as dials, cases and straps.

The Group’s jewelry businesses mainly rely on multibrand or monobrand production sites in France, Italy and the United States. Furthermore, Tiffany is also involved in the upstream diamond processing chain, particularly in Belgium, Cambodia and Vietnam.

The subcontracting used by the business group is diversified in terms of the number of subcontractors and is located primarily in the brand’s country of origin, the United States, Italy, France and Switzerland.

4.4         Distribution

The business group, which enjoys a strong international presence, has reaped the benefits of its excellent coordination and pooling of administrative, sales and marketing teams. A worldwide network of after-sale multi-brand services has been gradually put in place to improve customer satisfaction. LVMH Watches and Jewelry has a territorial organization that covers all markets.

This business group is focusing on the quality and productivity of its retail networks and is also developing its online sales. It selects multi-brand retailers very carefully and builds partnerships so that retailers become genuine brand ambassadors when interacting with end-customers. In an equally selective approach, the Maisons also continue to refurbish and open their own directly operated stores in buoyant markets in key cities.

The Watches and Jewelry brands’ directly operated store network comprised 958 stores as of year-end 2024 at prestigious locations in the world’s largest cities.

4.5         Highlights of 2024 and outlook for 2025

Highlights

The Watches and Jewelry business group proved resilient in the face of mixed trends across different markets, once again backed by the expert craftsmanship of the watchmaking Maisons and the bold innovation strategy of the jewelry Maisons. Business was also buoyed by the selective expansion of their retail networks, promotional events and partnerships with artists and athletes.

Tiffany & Co. showcased its iconic Tiffany T, Lock, HardWear and Knot lines in its global “With Love, Since 1837” campaign. Inspired by the celebration of love – the thread running through its collections – the campaign received a very positive response. In 2024, the new store concept was rolled out to nearly 50 stores, with nearly one-quarter of the store network having been renovated since the Maison joined LVMH. This ongoing transformation – including new store openings and renovations in Monaco, Madrid and Bal Harbour, Florida – set the stage for growth in the Maison’s iconic high jewelry collections. The Landmark – the Maison’s iconic flagship on New York’s Fifth Avenue, and the first to be renovated – achieved record-breaking revenue in 2024. Céleste – the 2024 Blue Book high jewelry collection, unveiled in Beverly Hills, followed by Madrid and Beijing – drew inspiration from the boundless imagination of Jean Schlumberger, the Maison’s first designer. The Tiffany Wonder exhibition held in Tokyo featured hundreds of masterpieces, retracing nearly 200 years of expert craftsmanship and modernity. The new Tiffany Titan by Pharrell Williams collection was exceptionally well received. For the 50th anniversary of the first pieces designed by Elsa Peretti, the Maison showcased another facet of her work, exemplified by the Bone Cuff bangle and its ring version.

Bulgari achieved record-breaking revenue in high jewelry and luxury watches as well as market share gains. The Maison celebrated its 140th anniversary with a new brand campaign entitled “Eternally Reborn”. In Rome, the Baths of Diocletian were the backdrop for the unveiling of the Aeterna high jewelry collection, which also tied in with this celebration. Bulgari pushed the boundaries of jewelry-making to craft the exceptional pieces featured in the collection. The 140-carat Aeterna necklace – the most expensive high jewelry piece sold in the past decade – highlighted the Maison’s singular expertise in working with diamonds and colored gemstones alike. Bulgari launched the new Tubogas jewelry collection, a contemporary take on its iconic 1950s line, and unveiled Octo Finissimo Ultra COSC, which set a new record for the world’s thinnest watch. Flagship stores were opened in Costa Mesa (California), Dubai, Riyadh, Bangkok and Paris. A documentary film titled An Emperor’s Jewel, featuring the Maison’s ambassador Priyanka Chopra Jonas, drew back the curtains on the making of the Bulgari Hotel in Rome and paid tribute to the excellence of Italian craftsmanship.

TAG Heuer confirmed its status as an avant-garde watchmaker by launching the Monaco Split-Seconds Chronograph with its split-seconds complication and strengthened its ties with the world of sports, in particular as part of the 10-year partnership announced between LVMH and Formula 1. The TAG Heuer Formula 1 x Kith limited editions were a success, reviving an iconic 1980s line, and the Aquaracer and Carrera lines were expanded. The Maison returned to eyewear with Thélios, unveiling its first collection at LVMH Watch Week. Thirteen new stores were opened in 2024.

Hublot continued to showcase its expertise, launching unique pieces such as the new MP-10 Tourbillon Weight Energy System and the visionary Arsham Droplet pocket watch, designed in collaboration with artist Daniel Arsham. A Big Bang model made from recycled materials was designed in collaboration with Novak Djokovic. As well as being the Official Timekeeper of UEFA Euro 2024, the Maison teamed up with sailor Alan Roura for the 2024 Vendée Globe yacht race.

Zenith rounded out its Defy collection, adding a chronograph version to the Defy Skyline line and introducing the Defy Extreme Diver, a diver’s watch inspired by the first 1960s models. The Chronomaster Triple Calendar added a new complication to the Chronomaster line.

L’Epée 1839, a prestigious high-end Swiss clockmaker known for its exceptional mechanisms and complications, joined LVMH.

Chaumet, which achieved further growth, enjoyed major media coverage thanks to its design of the medals for the Paris 2024 Olympic and Paralympic Games. In Venice, an event showcasing its latest high jewelry collection, Chaumet en Scène, was a major commercial and promotional success. Chaumet & Nature, the first large-scale high jewelry exhibition to be held in Qatar, opened in November. The Maison continued to expand its Bee My Love collection, which maintained its excellent momentum, and opened its first stores in Italy (Rome) and Thailand (Bangkok).

Fred generated robust revenue through sales of its high jewelry pieces. Highlights of the year included the rollout of the “Fred: The Sunshine Jeweler” campaign, the unveiling of the new Monsieur Fred Ideal Light high jewelry collection, the launch of the Pretty Woman Sunlight Message necklace collection and a new creative collaboration with the French Open.

Repossi celebrated the 10th anniversary of its Serti Sur Vide high jewelry collection and entered into a unique partnership with the Centre Pompidou to pay tribute to the works of sculptor Constantin Brancusi.

Outlook

The Watches and Jewelry business group will continue to pursue its target of gaining market share. In a still uncertain economic and geopolitical environment, the Maisons will continue to strictly manage costs and remain selective in their investments. The priority is on pursuing innovation and enhancing the desirability of collections as well as continuing the quality-driven development of directly operated stores. Production capacity will continue to be ramped up, with the expansion of the Bulgari manufacturing facility in Valenza and the Hublot facility in Nyon. Tiffany & Co. will continue to enrich its iconic lines with the launch of new models, notably in its Bird on the Rock and Jean Schlumberger collections, while continuing to renovate its store network. The opening of new flagship stores in Tokyo (Ginza Tower) and Milan (Monte Napoleone) will be among the highlights of the year. Bulgari will take the opportunity in 2025 – the Year of the Snake according to the Chinese zodiac – to roll out a program of events promoting its iconic Serpenti line, beginning with an exhibition in Shanghai starting in January. TAG Heuer will scale up its partnership with Formula 1 entered into in 2024. The Maison will add to its iconic lines and launch a next-generation smartwatch. Exceptional new watch models featuring innovative technologies will also be unveiled. Hublot will celebrate the 20th anniversary of its Big Bang line with limited editions and an immersive experience at the Watches & Wonders trade show. Zenith will celebrate its 160th anniversary. Chaumet will step up communications around its Bee My Love collection and take part in the World Expo in Osaka. Fred will continue to develop its iconic collections, with two major launches planned for Force 10 and Chance Infinie. Repossi will continue the rollout of its new store concept worldwide.

5.     Selective Retailing

In 2024, the Selective Retailing business group represented 22% of the total revenue of LVMH.

The Selective Retailing business group comprises Sephora, the world’s leading selective beauty retailer; Le Bon Marché, a Paris department store with a unique atmosphere; and travel retailer Duty Free Shoppers (DFS), which caters specifically to international travelers.

5.1         Competitive position

Distribution in the beauty sector is highly fragmented, served by major specialist retail chains, department stores, websites and independent perfume retailers.

5.2         Distribution and digitalization

Sephora markets beauty products. Its stores are organized around dedicated spaces for perfume, makeup, skincare and haircare, and services. Customers are free to try products out and beauty advisers are on hand to provide personalized recommendations. The quality of this concept has enabled Sephora to gain the confidence of perfume and cosmetics brands.

With its distribution network of 2,175 stores present in 34 countries as of December 31, 2024, its websites, mobile apps and strong social media presence, the Maison creates an omnichannel beauty experience that is increasingly innovative and personalized and offers customers an interactive, flexible, seamless shopping journey.

DFS has developed its business through partnerships with international tour operators and major luxury brands. Through its airport concessions and its city-center Galleria stores, which currently account for about two-thirds of its revenue, DFS is particularly present in the United States and at tourist destinations in the Asia-Pacific region.

5.3         Highlights of 2024 and outlook for 2025

Highlights

The Selective Retailing business group’s growth was driven by momentum and continued growth at Sephora. DFS experienced mixed trends between different regions.

Sephora achieved another remarkable year, with double-digit growth in both revenue and profit, continuing to gain market share. The Maison consolidated its leadership in North America – its largest market – and delivered an exceptional performance in France, other European countries and the Middle East, as well as in emerging markets such as Brazil, Mexico, Turkey and Thailand. The United Kingdom, where Sephora began to develop its operations in 2021, had a particularly buoyant year in 2024, with sustained growth and five new store openings, including an iconic store in Birmingham. In China, the differentiation strategy proved its relevance in a challenging environment, as demonstrated by the successful launch of Fenty Beauty in the spring.

While makeup remained the leading product category in terms of revenue, growth was robust in fragrances, buoyed by a number of innovations. Haircare and skincare also saw strong growth. Sephora launched its global “Clean at Sephora” and “Planet Aware at Sephora” programs, which offer a selection of brands based on very strict criteria in terms of product formulation and environmental impact.

Growth was driven by the store network thanks to ambitious renovations and a flurry of innovations to further enhance the customer experience, including new AI-powered diagnostic tools to help sales associates make better recommendations to customers, promotional events with partner brands and the continued rollout of the omnichannel strategy. More than 120 directly operated stores were opened in 2024, including a number of flagship stores, most notably in Florence, Italy. Sephora continued its successful partnership with Kohl’s in the United States, with major benefits for both companies. Meanwhile, online sales accounted for nearly one-quarter of its revenue, with specific investment in the web app. Sephora continued to innovate to inspire its community of 70 million loyal customers – the largest in the beauty sector worldwide. The global rollout of the Sephoria event continued.

The Maison renewed its involvement with the Rare Beauty brand to coincide with World Mental Health Day and published its first impact report setting out its environmental and social commitments around the world. Lastly, as part of LVMH’s partnership with the Paris Olympic and Paralympic Games, 2024 was an exceptional year for Sephora as a partner of the Torch Relay and the official makeup partner for the Champions Park and Club France.

DFS saw business activity remain below its 2019 pre-Covid level, with marked differences between its various destinations. Strong growth in Japan and at US airports was not enough to make up for declining sales at key destinations such as Hong Kong and Macao, affected by the impact of China’s economic slowdown on Chinese customers’ buying behavior. DFS undertook a series of structural initiatives to boost its competitiveness, streamlining operations and reallocating resources to the most profitable regions to secure its long-term growth potential. Highlights of the year included the official opening of the Lombok Airport store in Indonesia and the launch of the Galleria project at Yalong Bay on the island of Hainan. In Paris, La Samaritaine was transformed into an enchanting winter garden for the end-of-year holiday season.

Buoyed by its loyal Parisian clientele and an increasing number of domestic and international customers, revenue at Le Bon Marché continued to grow, driven by the department store’s differentiation strategy, with its exclusive, innovative concepts and continuously renewed selection of products and services. Business was spurred by a rich array of cultural events. Act 1 of the Aux Beaux Carrés: Travaux in situ exhibition by French artist Daniel Buren was a beginning-of-the-year highlight, followed by Act 2 held during the Olympic Games. Just before the summer, for the Tous Fadas sur la Rive Gauche exhibition, Le Bon Marché and La Grande Épicerie de Paris charted a course for Marseille and southern France to celebrate the historic port city’s tradition of craftsmanship and the Provençal way of life. Starting in September, Le Bon Marché hosted the Paris Paris exhibition, showcasing the work of Paris-based designers; after nightfall, the store became the stage for Entre Chiens et Louves, an exclusive show blending theater, dance and circus performance, which returned after a highly successful run in 2023.

Outlook

Sephora will continue to implement its strategy focused on an exacting selection of brands and products; an enhanced customer experience, both online and in-store; closer ties with its community of loyal customers; and ongoing employee training and engagement initiatives, in particular for the 40,000 customer-facing employees at its stores. The Maison is maintaining its target of growing its market share in existing regions while continuing to develop its recently launched markets, in particular the United Kingdom. It will continue to invest in digital and other technology to offer customers the best omnichannel experience in prestige beauty, including artificial intelligence pilot projects promoting excellence in the workforce and customer relations. Sephora will also uphold its firm commitment to diversity, equity and inclusion, which are at the heart of its corporate purpose and its core values, with initiatives focused on both its employees and its communities. In the absence of a strong upturn in its market in the near term, DFS will continue to streamline operations to drive a significant uplift in profitability. It has been announced that the Galleria in Venice will cease operations in 2025. Investments will be focused on the Yalong Bay project, expansion at flagship destinations in Asia and the ongoing elevation of the customer experience. Beyond its exclusive selection and customer experience, Le Bon Marché will continue to assert its singularity by cultivating its unique cultural dimension, which makes the department store a compelling destination in its own right. In January 2025, the tenth edition of the store’s Carte Blanche art series will feature the Le La Serpent exhibition by Brazilian artist Ernesto Neto.

6.     Other activities

“Other activities” include, in particular, the Les Echos group, which comprises leading French business and cultural news publications; Royal Van Lent, the builder of high-end yachts marketed under the brand name Feadship; and Cheval Blanc and Belmond, which operate a collection of exceptional hotels and hospitality activities.

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1.     Risk factors

The risk factors to which the LVMH Group is exposed, and the occurrence of which could jeopardize the Group’s ability to carry on its normal business activities and to execute its strategy, are presented under the following three headings:

●   operational and business risks;

●   risks related to the external environment;

●   financial risks.

Only major risks, classified as such based on their probability of occurrence and their adverse impact on the Group are presented below. Risk magnitude was assessed after taking into account the preventive measures and risk management procedures put in place by the Group. The severity of the risks has been rated on a scale from 3 (moderate risk) to 1 (critical risk).

(a)  1: Critical; 2: Major; 3: Moderate.

Moreover, the impacts, risks and opportunities arising from the Group’s business model are set out in the Sustainability Report (see “Sustainability Report and Vigilance Plan – General information”, §3.3.3).

1.1         Operational and business risks

1.1.1       Risks related to products or communication at odds with the Maisons’ image

1.1.2       Risks related to access to and pricing of raw materials

1.1.3       Risks related to cybersecurity

1.1.4       Risks related to talent management and the loss of strategic competencies

1.2         Risks related to the external environment

1.2.1       Risks related to the geopolitical and economic environment

1.2.2       Risks related to climate change

1.2.3       Risks related to business interruptions

1.2.4       Risks related to counterfeiting and parallel retail networks

1.2.5       Risks related to legal and regulatory compliance

1.3         Financial risks

1.3.1       Risks related to foreign exchange, liquidity and interest rate fluctuations

The Group applies a foreign exchange and interest rate risk management strategy mainly aimed at reducing the negative impact of any foreign currency or interest rate fluctuations related to its business, financing and investments. This management is centralized for the most part, whether at the level of the parent company or the subsidiary responsible for the Group’s cash pooling arrangement. The Group has implemented a stringent policy and rigorous management guidelines to measure, manage and monitor these market risks. These activities are organized based on a segregation of duties between risk measurement, hedging (middle and front office), administration (back office), and financial control. The backbone of this organization is an integrated information system that allows transactions to be checked very quickly.

The Group’s hedging strategy is presented to the Performance Audit Committee.

Hedging decisions are made according to a clearly established process and are covered in regular presentations to the Group’s Executive Committee, along with detailed documentation.

Foreign exchange risks

Risks related to liquidity and interest rate fluctuations

1.3.2       Risks related to tax policy

2.     Insurance policy

The Group has a dynamic global risk management policy based primarily on the following:

●   systematic identification and documentation of risks;

●   risk prevention and mitigation procedures for both human risk and industrial assets;

●   implementation of international business continuity and contingency plans;

●   a comprehensive risk financing program to limit the consequences of major events on the Group’s financial position;

●   optimization and coordination of global “master” insurance programs.

The Group’s overall approach is primarily based on transferring its risks to the insurance markets at reasonable financial terms, and under conditions available in those markets both in terms of scope of coverage and limits. The extent of insurance coverage is directly related either to a quantification of the maximum possible loss, or to the constraints of the insurance market.

Compared with the Group’s financial capacity, its level of self-insurance is not significant. The deductibles payable by Group companies in the event of a claim reflect an optimal balance between coverage and the total cost of risk. Insurance costs borne by Group companies are around 0.15% of consolidated revenue.

Insurance rates continued to stabilize in 2024, with the result that budgeted insurance costs increased by only 2%.

The financial ratings of the Group’s main insurance partners are reviewed on a regular basis, and if necessary one insurer may be replaced by another.

The main insurance programs coordinated by the Group are designed to cover losses due to property damage, business interruption, terrorism, political violence, cybercrime, fraud, construction, transportation, credit and third-party liability.

2.1         Property and business interruption insurance

Most of the Group’s manufacturing operations are covered under a consolidated international insurance program for property damage and associated operating losses. For economic reasons, Belmond and Tiffany continue to have their own programs.

Property damage insurance limits are in line with the values of assets insured. Business interruption insurance limits reflect gross margin exposures of the Group companies for a period of indemnity extending from 6 to 24 months based on actual risk exposures. The coverage limit of this program is 1.2 billion euros per claim, an amount determined based on an analysis of the Group’s maximum possible losses.

Coverage for “natural events” provided under the Group’s international property insurance program now totals between 20 and 150 million euros per claim and per year (depending on geographic area and types of event).

Alongside this cover, a dedicated parametric insurance program has also been put in place to cover certain very expensive risks or for which limited cover is available in the traditional insurance market. The risks covered by this program are earthquakes in Japan and California and storms in the United States and the Caribbean. Cover is limited to 260 million US dollars per year.

These coverage levels are in line with Group companies’ exposure to such risks.

2.2         Transportation insurance

The Group’s operating entities are covered by an international cargo and transportation (goods in transit) insurance contract. The coverage limit of this program is 100 million euros per claim.

2.3         Third-party liability

The LVMH Group has established a third-party liability insurance program for all its subsidiaries throughout the world. This program is designed to provide the most comprehensive coverage for the Group’s risks, given the insurance capacity and coverage available internationally. Coverage levels are in line with those of companies with comparable business operations.

Accidental and gradual environmental damage (Directive 2004/35/EC) is covered under this program.

Specific insurance policies have been implemented for countries where work-related accidents are not covered by social security systems, such as the United States. Coverage levels are in line with the various legal requirements imposed by the different states. Subject to certain conditions and limitations, the Group covers its senior executives and employees either directly or via an insurance policy for any individually or jointly incurred personal liability to third parties in the event of professional misconduct committed in the course of their duties.

2.4         Coverage for special risks

Insurance coverage for political risks, company officers’ liability, fraud and malicious intent, trade credit risk, acts of terrorism and political violence, loss or corruption of computer data and, more broadly, all cyber risks, real estate construction project risks and environmental risks is obtained through specific worldwide or local policies.

3.     Assessment and control procedures in place

3.1         Organization

3.1.1       Organization of the risk management and internal control system

LVMH comprises five main business groups: Wines and Spirits, Fashion and Leather Goods, Perfumes and Cosmetics, Watches and Jewelry, and Selective Retailing. “Other activities” mainly consists of the media division, luxury yacht building and marketing, hospitality activities, real estate operations and holding companies. These business groups consist of entities of various sizes that own prestigious brands, established on every continent. The autonomy of the brands, decentralization, and the responsibilities of senior executives are among the fundamental principles underlying the Group’s organization.

The risk management and internal control policies applied across the Group are based on the following organizational principles:

●   Group companies (including the parent company, LVMH SE) are responsible for their own risk management and internal control systems. LVMH SE also helps lead and coordinate the entire Group in this area by providing standardized guidelines, methods and a risk assessment and internal control application platform. In addition, initiatives to raise awareness of internal control-related matters are held throughout the year.

●   Each Maison’s President is responsible for risk management and internal control at all subsidiaries that contribute to brand development worldwide; each subsidiary’s President is similarly responsible for that subsidiary’s own operations.

3.1.2       System stakeholders

Stakeholders are presented according to the three lines of defense model explained below, whereby the control and supervision of systems is provided by governing bodies.

Group governing bodies

The Performance Audit Committee ensures in particular that the Group’s accounting policies comply with the standards in force, reviews the parent company and consolidated financial statements, and monitors effective implementation of the Group’s internal control and risk management procedures.

The Board of Directors contributes to the general control environment through its members’ expertise and oversight, its help in clarifying issues and its transparent decision-making process. The Board is kept informed on a regular basis of the maturity of the internal control system, and oversees the effective management of major risks, which are disclosed in its Management Report.

The Board and its Performance Audit Committee are regularly informed of the results of the operation of these systems, any breaches and the action plans drawn up to address them.

The Sustainability & Governance Committee – made up of Independent Directors – monitors observance of the individual and collective values on which the Group’s actions are based, with the principal duties of assisting the Board of Directors in defining the Group’s broad strategic direction in terms of social, ethical, environmental and climate-related issues, helping to define rules of conduct to inspire the behavior of senior executives and employees, ensuring observance of these rules, and ensuring that the implemented procedures are followed.

The Executive Committee, which consists of the Group’s operational and functional executives, lays down strategic objectives within the framework of the direction set by the Board of Directors, coordinates their implementation, ensures that the organization adapts to changes in the business environment, defines senior executives’ responsibilities and delegated authority, and ensures that the latter are properly applied.

First line of defense

All Group employees help enhance and maintain the internal control system.

Operational management: A key aspect of the internal control system applied to business processes is ownership of internal control within each entity by operational managers, who implement appropriate controls on a day-to-day basis for those processes for which they are responsible and pass on appropriate information to the second line of defense.

The Management Committees of the Maisons and subsidiaries are responsible for implementing and ensuring the smooth running of internal control systems across all operations within their scope. The Management Committees of the Maisons are also in charge of the system for managing major risks; they review the risk mapping each year and assess the level of control as well as the progress of risk coverage strategies and the associated action plans.

Second line of defense

The Ethics & Compliance Department steers and coordinates LVMH’s procedures with regard to anti-corruption, anti-money laundering and respecting international sanctions (see “Sustainability Report and Vigilance Plan – Governance”, §1). It is part of the Group’s General Administration & Legal Affairs Department, which reports directly to the Chairman and Chief Executive Officer, and is represented on the Executive Committee.

The Ethics & Compliance Department takes part in the updating of the internal control framework for ethics and compliance issues, to make sure that its requirements are met by all entities. It also administers the Group’s centralized whistleblowing system and contributes to the identification and assessment of the main risks. The department is supported by representatives from departments across the Group to help it coordinate Group-wide projects for which it is responsible, as well as by a network of 111 Ethics & Compliance Officers and 80 employees who are part of the E&C networks within the Group’s Maisons.

The Ethics & Compliance Department reports to the Sustainability & Governance Committee several times a year on the implementation of its policy.

The Duty of Vigilance Department coordinates the Group’s vigilance policy, through which LVMH aims to identify, prevent and mitigate risks to human rights and fundamental freedoms, human health and safety, as well as the environment, at every stage in the value chains of Group business activities. This policy is presented in the Vigilance Plan (see “Sustainability Report and Vigilance Plan – Vigilance Plan”).

Duty of vigilance coordinators have been appointed within each Maison. These coordinators are in direct contact with LVMH’s Duty of Vigilance Department and are responsible for rolling out Group initiatives within their Maisons, in coordination with all functions represented on their Duty of Vigilance Committees, of which they are also members.

The Duty of Vigilance Director provides regular updates about the actions of their department to the Sustainability & Governance Committee.

The Group Legal Department helps with the legal aspects of the Group’s activities and development. It conducts negotiations relating to acquisitions, disposals and partnerships. It determines the Group’s legal strategy for major disputes in which the Group’s companies are involved. It helps to define and implement multi-disciplinary projects concerning the Group as a whole. Through its Intellectual Property team, it helps protect trademarks and patents, which are among the Group’s key assets. It handles stock market law and corporate law-related matters. It promotes Group-wide compliance with the laws and regulations applicable to its activities.

In addition, the Group Legal Department prepares tools for the Maisons to help them comply with various regulations, including in particular the European Union’s General Data Protection Regulation (GDPR). It steers and coordinates LVMH’s procedures with regard to personal data protection It takes part in the updating of the ERICA internal control framework for personal data protection issues. It leads the Legal & Privacy community to ensure that best practice is shared within the Group. This community has over 170 members (legal specialists, Privacy Leaders and Maison Data Protection Officers [DPOs]).

The Legal Department reports to the Sustainability & Governance Committee on the implementation of its policy.

The role of the Corporate Affairs Department is to protect and promote the business model of the Group and its Maisons. With teams based in Paris, Brussels and New York, the department keeps a watchful eye on developments and, where applicable, plays an active role in discussions on any topics that may have an impact on the Group’s business priorities and its reputation. To this end, the department analyzes relevant policies and laws, considers the strategic issues at stake, coordinates actions in support of the Group’s external positioning, and participates, in conjunction with the Maisons and LVMH’s regional divisions, in the decision-making processes of authorities in Europe, the Americas and Asia, directly and/or in collaboration with representative associations. Key fields for its businesses include brand protection, sales policy, distribution and competition, corporate governance, sustainability, as well as the promotion and protection of high-end cultural and creative industries.

The Environmental Development Department helps the Group and its Maisons work to achieve excellent environmental performance aligned with the new targets laid down in the LIFE 360 environmental program communicated since 2021, which cover 4 strategic pillars: circular design, traceability and transparency, climate, and biodiversity. The department’s structure and actions, and how these are reflected within the Maisons, can be found in the “Sustainability Report and Vigilance Plan – Environment” section.

The Group Risk Management and Insurance Department, alongside operational managers responsible for risks inherent in their businesses, is particularly involved at Group level in cataloguing risks, preventing losses, and determining the risk coverage and financing strategy.

The other functional departments, presented in the “Financial and accounting information: Organization and parties involved” section below, help manage risks related specifically to financial and accounting information.

The Internal Control Department, which reports to the Audit & Internal Control Director, coordinates the implementation of internal control and risk management systems. It monitors and anticipates regulatory changes in order to adapt mechanisms. It coordinates a network of internal controllers responsible, within the Maisons and under the responsibility of their Management Committees, for ensuring compliance with the Group’s internal control procedures and preparing controls tailored to their businesses. They also take part in various projects related to the internal control and risk management systems, thereby promoting the dissemination and application of guidelines. The Group’s Internal Control Department set up the LVMH Internal Control Academy, the aim of which is to coordinate and develop the entire international network of controllers and internal auditors. Lastly, a briefing and discussion meeting on internal control issues was held in Paris for the audit and internal control teams of the Group's Maisons.

The Anti-Counterfeiting Department determines and implements anti-counterfeiting and anti-gray-market policy on behalf of 28 of the Group’s Maisons for both offline and online markets. Its worldwide efforts aim to dismantle criminal networks that breach intellectual property rights and damage the reputation of our brands. Efforts to protect these 28 Maisons are continuously coordinated with each Maison’s legal department.

Equivalent departments at brand or business group level: The organizational structure described above at Group level is mirrored at the main business groups and brands.

Third line of defense

The Audit & Internal Control Department covers the entire Group and operates according to an audit plan that is updated annually. The audit plan is used to monitor and reinforce the understanding and correct application of expected control activities. It is prepared on the basis of an analysis of potential risks, either existing or emerging, by type of business (such as size, contribution to profits, geographical location, quality of local management, etc.) and on the basis of meetings held with the operational managers concerned; The audit plan can thus be adjusted in the course of the year in response to changes in the economic and political environment or internal strategy.

The audit teams conduct internal control assessments covering various operational and financial processes and can also work on assignments covering cross-cutting topics within the same business group. They also conduct audits on the implementation of the Group’s ethics and compliance program. Regular follow-ups are run on the internal control recommendations resulting from past audits at subsidiaries with the most significant internal control issues.

The findings of the internal audit work are reported to the management of the entity concerned by way of an audit report detailing its assessment, presenting its recommendations and setting out management’s commitment to apply them within a reasonable period of time. A summary of this report is then sent to Group management and the Maison’s management.

In addition, Internal Audit periodically meets with the Statutory Auditors to share audit findings and discuss internal control issues. The main features of the audit plan, the primary conclusions of the current year, and the follow-up of the principal recommendations of previous assignments are presented to the Performance Audit Committee.

External stakeholders

The external auditors and the various certifying bodies (RJC, ISO 14001, etc.) help to reinforce the current system through their work and recommendations.

Financial and accounting information: Organization and parties involved

Risk management and internal controls of accounting and financial information are the responsibility of the following departments, which are all part of the Group’s Finance Department: Accounting & Consolidation, Management Control, Corporate Finance and Treasury, Tax, and Financial Communication. Accounting and financial reporting procedures rely on information systems overseen by the Group’s Executive Management, who take part in ensuring that the risk inherent in this function is managed appropriately.

Accounting & Consolidation is responsible for preparing and producing the individual company accounts of LVMH SE and the holding companies that control the Group’s equity holdings, the consolidated financial statements, and quarterly, interim and annual results publications, in particular the Interim Financial Report and the Universal Registration Document. To this end, the Accounting Standards & Practices team defines and disseminates the Group’s accounting policies, monitors and enforces their application and organizes any necessary training. The Consolidation Department also coordinates the Group’s Statutory Auditors.

Management Control is responsible for coordinating the budget process, updating budget estimates during the year and the five-year strategic plan, as well as impairment testing of fixed assets. Management Control produces the monthly operating report and all reviews required by Executive Management; it also tracks capital expenditures and cash flow, as well as producing statistics and specific operational indicators. By virtue of its responsibilities and the structure of the reports it produces, Management Control plays a key role in internal control and financial risk management.

Corporate Finance & Treasury is responsible for implementing the Group’s financial policy, which includes balance sheet optimization, financing strategy, management of finance costs, investment of cash surpluses, and the management of liquidity risk, market risk (interest rate and foreign exchange risk) and counterparty risk (see the “Business and financial review for the fiscal year – The Group”, §4, “Financial policy”, and §1.3.1, “Risks related to foreign exchange, liquidity and interest rate fluctuations” above). In particular, this department coordinates the pooling of the Group’s surplus cash and meets subsidiaries’ short- and medium-term liquidity and financing requirements. It is also responsible for applying a centralized foreign exchange risk management strategy. A specific organization and procedures have been put in place to measure, manage, consolidate and monitor these market risks. Accordingly, the separation of front office, back office and middle office activities, combined with an independent control team reporting to the Group’s Controlling, Reporting & Consolidation Director, help ensure proper segregation of duties. The backbone of this organization is an integrated information system that allows hedging transactions to be monitored efficiently. The Group’s hedging strategy is presented regularly to the Executive Committee and the Performance Audit Committee.

The Tax Department ensures compliance with applicable laws and regulations, assists the Group’s various business groups and companies, and proposes tax solutions appropriate to their sales transactions and business activity. It organizes relevant training to adapt to major changes in tax law and ensures uniform reporting of tax data.

The Financial Communications Department is responsible for coordinating and disseminating the Group’s financial information. In particular, it maintains the Group’s relationships with the financial community (financial and ESG analysts, institutional and individual investors), with the aim of providing it with a clear, transparent and accurate understanding of the Group’s performance and outlook. It works closely with Executive Management and the business groups to define key messages, and harmonizes and coordinates the dissemination of those messages through various channels (publications such as the annual and interim reports, financial presentations, meetings with shareholders and analysts, the website, Shareholders’ Club, etc.). It also provides Executive Management and the Audit Committee with the perspectives of the financial community on the Group’s strategy and its positioning within its competitive environment.

The Information Systems Department designs and implements information systems needed by the Group’s central functions. It disseminates the Group’s technical standards, which are indispensable given the decentralized structure of the Group’s equipment, applications, networks, etc., and identifies any potential synergies between businesses, while respecting brand independence. It develops, operates and maintains global telecommunications networks and systems, IT hosting platforms, and cross-functional applications shared by all entities in the Group. In cooperation with the subsidiaries, it supervises the creation of three-year plans for all information systems by business group and by entity. It defines strategic orientations in the area of cybersecurity, draws up and circulates internal security policies and shared action plans, sets out documented security requirements for all new projects (security “by design”), coordinates awareness campaigns, operates shared cyber defense services by means of security platforms as well as trace processing and security alert detection systems, incident response and crisis management procedures, and audit operations (audits to assess compliance with security policies and penetration testing, for example).

Each of these departments is responsible for ensuring the quality of internal control in its own area of activity via the finance departments and the Information Systems Departments of business groups, Maisons and subsidiaries, which are in turn responsible for similar functions within their respective entities. In this way, each of the central departments runs its control mechanism through its functional chain of command.

Internal standards and procedures

The Ethics & Compliance Department ensures that compliance rules and policies are available to all Group employees. It shares a range of documents (summary reports, examples of best practice, awareness videos, guides, etc.) with its network of Ethics & Compliance Officers via a dedicated Ethics & Compliance intranet.

All rules and procedures concerning accounting and financial information, applicable to all subsidiaries, can be accessed on the Group's dedicated financial reporting intranet: notably a manual on accounting standards, instructions and procedures applying to consolidation, taxation, management control (investments, budget reporting and strategic plans), cash management and financing (cash pooling, foreign exchange and interest rate hedging, etc.); these procedures also specify the format, content and frequency of financial reporting.

Internal control principles and best practice are also shared via IC Base, a core internal control base of 68 controls. IC Base is reviewed and updated annually to include new standards and new regulatory requirements.

The “Internal Control” and “Major Risks” section of the Finance intranet brings together all of the rules, procedures and tools for assessing internal control and preventing and protecting against major risks.

3.2         Information and communication systems

Strategic plans for developing the Group’s information and communication systems are coordinated by the Information Systems Department, which ensures that solutions are implemented consistently across the Group and do not disrupt operations. Aspects of internal control (segregation of duties, access rights, etc.) are integrated when implementing new information systems and then regularly reviewed.

Information and telecommunications systems and their associated risks (physical, technical, internal and external security, etc.) are covered by special procedures: a “Business Continuity Plan” methodology toolkit has been disseminated within the Group to define, for each significant entity, the broad outline of a Business Continuity Plan as well as a Disaster Recovery Plan. A Business Continuity Plan and a Disaster Recovery Plan have been developed and tested at the level of the French holding companies.

Each major entity has a cybersecurity team in place, led by a Chief Information Security Officer (CISO). The Group CISO supervises the policy, monitors projects and shared services, and coordinates the network of CISOs at entities across the Group. The Group CISO also provides cybersecurity support to smaller entities that lack their own cybersecurity teams. CISOs across the Group are responsible for the management of cyber risks. They put procedures in place to provide protection against these risks, based on various approaches to prevention, detection, response and reconstruction, depending on the type of risk, its likelihood and its potential impact.

Audit campaigns, penetration testing and vulnerability audits are performed by entities and by the Group’s Information Systems Department. In addition, LVMH has a cyber defense operations center (SOC/CERT/cybersecurity solutions) that serves the Group’s Maisons and provides operational functions for monitoring, detection, and security incident response.

3.3         Internal and external accounting control procedures

3.3.1       Accounting and management policies

Subsidiaries apply the accounting and management policies communicated by the Group for the purposes of the published consolidated financial statements and internal reporting; they all use the same framework (the LVMH chart of accounts and manual of accounting policies) and the accounting and management reporting system administered by the Group, thus ensuring consistency between internal and published data.

3.3.2       Consolidation process

The account consolidation process is covered by regular detailed instructions; a specially adapted data submission system facilitates consistent, comprehensive and reliable data processing within the appropriate timeframes. The Chairman and CFO of each company undertake to ensure the quality and completeness of financial information sent to the Group – including off-balance sheet items – in a signed letter of representation which gives added weight to the quality of their financial information.

This letter also includes dedicated sections on non-financial data (notably social and environmental data) to support the quality of data used in the Sustainability Report.

Sub-consolidations are carried out at the level of each Maison and business group, which act as primary control filters and help ensure consistency.

At Group level, the teams in charge of consolidation are organized by type of business and are in permanent contact with the business groups and companies concerned, thereby enabling them to better understand and validate the reported financial data and anticipate the treatment of complex transactions.

The quality of financial information, and its compliance with standards, are also guaranteed through ongoing exchanges with the Statutory Auditors whenever circumstances are complex and open to interpretation.

3.3.3       Management reporting

Each year, all of the Group’s consolidated entities produce a strategic plan, a full budget and annual forecasts. Detailed instructions are sent to the companies for each process.

These key steps represent opportunities to perform detailed analyses of actual data compared with budget and prior year data, and to foster ongoing communication between subsidiaries and the Group – an essential feature of the financial internal control mechanism.

A team of controllers at Group level, specialized by business, is in permanent contact with the business groups and companies concerned, thus ensuring better knowledge of performance and management decisions, as well as appropriate controls.

Specific meetings to close out the interim and annual financial statements are attended by the Finance Department teams concerned; during those meetings the Statutory Auditors present their conclusions with regard to the quality of financial and accounting information and the internal control environment of the different companies of the Group.

3.4         Formalization and monitoring of risk management and internal control systems

3.4.1       The Enterprise Risk and Internal Control Assessment (ERICA) approach

In line with EU directives, the Group has implemented an approach known as ERICA (Enterprise Risk and Internal Control Assessment), a comprehensive process for improving and integrating systems for managing major risks and internal control related to its day-to-day activities.

This approach has been rolled out across all of the Group’s Maisons. It includes annual mapping of the major risks carried out by each Maison and assessment of certain key controls taken from the internal control framework.

The internal control assessment as of June 30, 2024 covering all Group entities generating over 20 million euros in revenue focused on evaluating the design and effectiveness of 28 controls: ten key back office controls (LVMH 10 IC Essentials), seven operational controls covering inventories and sales, and eleven Ethics & Compliance controls.

The results of the ERICA campaign are shared with the Group’s entire network of internal control staff, chief financial officers and Ethics & Compliance Officers.

Recently acquired entities are allowed two years to implement this approach once the integration process has been completed.

The Maisons and business groups acknowledge their responsibility in relation to this process each year by signing two letters of representation:

●   an ERICA letter of representation concerning risk management and internal control systems, signed on June 30. By signing this letter, the President, CFO and/or members of the Management Committee at each entity confirm their responsibility for these systems, and give their assessment of them, identifying major weaknesses and the corresponding remediation plans. This letter also includes a dedicated section on cybersecurity and fraud incidents. They are presented by each Maison to the Group’s Audit & Internal Control Department.

●   the annual letter of representation on financial reporting, which includes a paragraph devoted to internal control.

Depending on the circumstances, Presidents of Maisons are required to present the Performance Audit Committee with an update on achievements, action plans in progress, and the outlook for their area of responsibility in terms of internal control and risk management.

3.4.2       Monitoring of major risks and internal control

Major risks relating to the Group’s brands and businesses are managed at the level of the Maisons.

Once an acceptable risk level has been determined and validated, risks are handled via preventive and protective measures; the latter include, for example, business continuity plans (BCPs) and crisis management plans in order to organize the best response to risks once they have occurred. Lastly, depending on the types of risk to which a particular brand or entity is exposed and the amount of residual risk, the entity may decide, in collaboration with the Group, to use the insurance market to transfer part or all of the residual risk and/or assume this risk.

Ongoing monitoring of the internal control system and periodic reviews of its functioning take place on a number of levels:

●   managers and operational staff at the Maisons, with support from internal control staff, are given responsibility for assessing the level of internal control on the basis of key controls, identifying weaknesses, and taking corrective action. Exception reports allow for the enhancement of detective controls in addition to preventive measures;

●   a formal annual assessment process, based on a list of key controls taken from the internal control framework, integrated into the ERICA system;

●   the Statutory Auditors are kept informed of this approach, as is the Performance Audit Committee, by means of regular briefings;

●   reviews are carried out by Group Internal Audit and the Statutory Auditors, the findings and recommendations of which are passed on to entities’ management and Group Executive Management;

●   a review of the ERICA system and the quality of assessments is an integral part of the work of the Internal Audit team at all audited entities.

3.5         Fraud prevention and detection

Over the past few years, fraud risk has dramatically transformed, particularly as digitalization has advanced, with an upsurge in fraud through identity theft and an increase in attacks using social engineering to gain access and steal data, as well as the use of tactics such as deepfakes and voice cloning.

The Group and its Maisons have stepped up their vigilance, adapting internal procedures, awareness campaigns and training programs to the changing scenarios encountered or that might reasonably be predicted.

Given the large number of controls intended to prevent and detect this risk, the internal control framework is the backbone of the Group’s fraud prevention mechanism.

Another essential component of this system is the obligation for each entity to report any instances of actual or attempted fraud to the Audit & Internal Control Director: as well as supervising actions and decisions in response to each reported case, the Director endeavors to draw lessons from incidents so as to relay them, once anonymized, to the chief financial officers of all the Maisons.

The Audit & Internal Control Department has therefore introduced a program to raise awareness of the risk of fraud through periodic newsletters identifying scenarios of actual and attempted fraud within the Group. A prevention plan is presented for each scenario. The Maisons and subsidiaries are responsible for verifying whether or not these scenarios apply to their operations. These communiqués are widely circulated within the Group to ensure heightened awareness among staff most exposed to this risk.

Throughout 2024, campaigns were conducted to raise awareness of fraud risk through the continued rollout to the Group's Maisons of a dedicated fraud e-learning module and awareness-raising initiatives.

In addition, the LVMH Internal Control Academy training course entitled “The Fundamentals” includes a specific module on fraud.

1.     General framework for preparation of the sustainability REPORT

1.1         Basis for preparation of the Sustainability Report

The Sustainability Report for fiscal year 2024 has been drawn up in accordance with Directive (EU) 2022/2464 as regards corporate sustainability reporting (CSRD), as transposed into French law in Order No. 2023-1143 of December 6, 2023.

Annual sustainability disclosures present information for the consolidated Group as of December 31, 2024 in accordance with European Sustainability Reporting Standards (hereinafter ESRS), Article L. 233-28-4 of the French Commercial Code and the Taxonomy Regulation.

First period of application

The Sustainability Report is based on the Group’s understanding of the ESRS and various ESMA and EFRAG recommendations as of the date of preparing the statement. These disclosures have been prepared within the context of first-time application of the ESRS, subject to uncertainties as to how the standards should be interpreted, use of estimates, lack of established practices and an established framework for the double materiality assessment in particular, as well as changing internal control procedures.

In particular, some information is sensitive to methodological choices, assumptions and/or estimates used in their preparation and to the quality of the external data used. This concerns primarily disclosures relating to the value chain and the Climate impact (Scope 3) and Water impact associated with the Group’s activities. Such assumptions, estimates or other forms of judgment made on the basis of the information available or the situation prevailing at the date at which the Sustainability Report is prepared may subsequently prove different from actual events. As a result, the targets, objectives, means of action and results set out in the sections relating to the topical ESRSs are based on indicators that depend on assumptions and estimates associated with changes in methodology and the level of scientific knowledge.

Other disclosures cannot be estimated due to the complex nature of EU regulations, the level of scientific understanding and limited access to reliable data from a number of internal and external sources. This is the case for qualitative disclosures concerning substances of concern and releases of pollutants.

As explained below, the scope of consolidation for the sustainability statement is the same as for the Group’s consolidated financial statements, with the exception of the fiscal year’s acquisitions. The Group is working on expanding this scope to include activities under operational control, as specified in ESRS E1, E2 and E4 (e.g. GHG emissions, quantities of pollutants and sites associated with material biodiversity matters), pending application guidelines from standards-setting bodies and market practices.

Scope of consolidation

The LVMH Group’s operations covered by this Sustainability Report correspond to the activities of the parent company and fully consolidated subsidiaries, apart from acquisitions carried out in the course of the year, which can take up to 12 months to include in the Group’s consolidated sustainability reporting. Acquisitions during the period are presented in the Group’s consolidated financial statements (see “Financial statements – Consolidated financial statements”, Note 2). The effect of these acquisitions on the Group’s 2024 data, calculated on a pro rata basis as of the date of acquisition, is deemed insignificant. Jointly controlled companies and companies where the Group has significant influence but no controlling interest and those accounted for using the equity method are considered part of the Group’s value chain.

Certain sections of the Sustainability Report provide more specific details on sustainability information related to the Group’s value chains, both upstream (Group suppliers in particular) and downstream with customers (see §4 below, “Method for identifying impacts, risks and opportunities”).

In preparing the Sustainability Report, the Group did not use the options provided by ESRS 2 BP-1 §5 d and e.

Group companies that meet the criteria to be required to provide a statement of non-financial performance in 2024 but that do not yet fall within the scope of application of the CSRD are exempt from providing a statement of non-financial performance as they are included in the LVMH Group’s Sustainability Report.

1.2         Disclosures in relation to specific circumstances

As part of the process of drawing up the Sustainability Report, certain information requires the use of time horizons, assumptions, estimates or other forms of judgment.

Time horizons

In accordance with ESRS 1, the Group applies the following time horizons:

●   one year (short-term), in line with the Group’s financial statements;

●   two to five years (medium-term);

●   more than five years (long-term).

Use of transitional provisions

For the initial application of EU sustainability standards, the Group has chosen to adopt the following measures provided for by ESRS 1 in its transitional provisions:

●   value chain: The Group has made partial use of the phase-in provisions permitted concerning quantitative and qualitative information about its value chain. However, this sustainability statement may use estimates for information reported concerning the Group’s upstream or downstream value chain. These estimates are detailed in the ESRS topic-specific sections with their definition, calculation method, scope, level of accuracy and, where applicable, how they could be improved;

●   phased-in disclosure requirements: The Group has adopted all the phase-in provisions linked to the anticipated financial effects from risks and opportunities related to the five ESRS environmental standards (as presented in the table below) as well as those under ESRS S1. Workforce of the undertaking, solely for non-employees and only the information relating to the percentage of employees taking part in career reviews, for all employees (as presented in the table below).

Changes in preparation or presentation of sustainability information

As this is the Group’s first Sustainability Report, indicators are provided for fiscal year 2024 and the baseline year, where applicable. This information is provided in each topic-specific section concerned, where applicable.

Disclosures stemming from other legislation or generally accepted sustainability reporting pronouncements

Where applicable, this sustainability statement sets out the recommendations followed under the TCFD (Taskforce on Climate-Related Financial Disclosures) and TNFD (Taskforce on Nature-Related Financial Disclosures) frameworks.

2.     Governance

2.1         Role of the administrative, management and supervisory bodies

The Board of Directors is the strategic body of the LVMH SE. It is primarily responsible for driving its long-term value creation and protecting its corporate interests, focusing in particular on the social, environmental and climate issues facing its business. The members of the Board of Directors and their skills and experience are presented in the “Board of Directors’ report on corporate governance” section, §1.1.1 and 1.1.2.

Its main assignments are as follows:

●   set the Company’s and the Group’s broad strategic direction and ensure that it is put into practice, in particular, on the recommendation of Executive Management, as regards environmental and social responsibility, taking into account the climate issues faced by their businesses;

●   promote a policy of economic development consistent with a corporate social responsibility approach based, in particular, on respect for human rights and protection of the environment in which the Group operates;

●   monitor developments in markets, the competitive environment and the key strategic priorities facing the Group;

●   ensure that the major risks to which the LVMH SE is exposed with regard to its structure and targets are taken into account by management;

●   ensure that procedures to prevent corruption, particularly influence-peddling risks, are implemented;

●   ensure that a non-discrimination and diversity policy is in place;

●   disseminate the shared values that guide the Company and its employees, and govern relationships with consumers as well as with partners and suppliers of the Company and the Group;

●   ensure that the Group adapts to changes in the business environment, defines senior executives’ responsibilities and delegated authority.

2.2         Information provided to and sustainability matters addressed by the Group’s administrative, management and supervisory bodies

The Board of Directors has set up several committees, each specializing in a topic of importance: a committee in charge of performance audit, a committee in charge of compensation of company officers, and a committee in charge of sustainability and governance.

Each of the Board’s committees is involved in the process of drawing up and monitoring the Company’s and the Group’s non-financial strategy with regard to the topics within their fields of expertise.

The involvement of the administrative and management bodies and their work in relation to these matters are presented in the “Board of Directors’ report on corporate governance” section, §1.2.2.5.

These three committees may work together on matters concerning corporate social and environmental responsibility.

The committees’ main assignments are as follows:

Performance Audit Committee

●   monitor the process of preparing and checking sustainability information as well as the process implemented to determine which information to report pursuant to regulations;

●   present the Board of Directors with the minutes drafted by the firm tasked with certifying sustainability reporting;

●   monitor and ensure the existence, pertinence and application of internal control, risk management (including social and environmental risks) and internal audit procedures, make recommendations to Executive Management on the priorities and general direction of Internal Audit, and analyze the Company’s and the Group’s exposure to risks, including social and environmental risks;

●   verify the independence of the firm tasked with certifying sustainability reporting and monitor the performance of its assignment.

Compensation Committee

●   issue recommendations regarding the qualitative and quantifiable criteria applied to the variable portion of compensation for senior executive officers, which will take account of various aspects of the undertaking’s environmental and social responsibility. At least one of these criteria shall be directly related to the Company’s climate objectives;

●   periodically assess whether these criteria are met: these assessments will then be used to determine to variable portion of compensation paid to senior executives and define the conditions to be met for them to exercise their options to buy shares and vest the bonus shares awarded to them.

Sustainability & Governance Committee

Sustainability

●   assist the Board of Directors in defining the Company’s and the Group’s broad strategic direction with regard to ethical, workforce-related, environmental and climate-related matters, and ensure that it is put into practice;

●   assist in defining and ensuring compliance with the rules and values laid down in the LVMH Code of Conduct, which must be followed by senior executives and employees, as well as other codes and charters resulting from that Code;

●   review the performance of systems related to (i) the privacy of customers and employees, and (ii) ethics and compliance;

●   monitor the functioning of whistleblowing systems put in place within the Group and ensure the implementation and monitoring of systems related to duty of vigilance and respect for human rights;

●   review the environmental, workforce-related and social information contained in the Management Report of the Board of Directors and submit its opinion on this information to the Board.

Governance

●   identify, as part of the procedure for selecting Directors and in accordance with its diversity policy, the skills and expertise, particularly financial and non-financial, expected of potential Directors and considered key priorities for the Company;

●   give its opinion on the diversity policy applicable to members of the Board of Directors, the gender equality policy applicable to the Group’s governing bodies, the description of the goals of those policies, the terms of their implementation and the results obtained over the fiscal year covered to prepare the Board of Directors’ report on corporate governance;

●   discuss all matters related to corporate governance, and issue an opinion on the general policy for the allocation of options and bonus shares within the Group, and on its policy for employee savings and share ownership.

2.3         Integration of sustainability-related performance in incentive schemes

Senior executive officers

Compensation paid to senior executive officers includes, in addition to fixed compensation, a variable annual component based on the achievement of financial (quantifiable), strategic (qualitative) and ESG-related (quantifiable and qualitative) targets.

On the recommendation of the Compensation Committee, LVMH’s Board of Directors sets the terms for allocating annual variable compensation for senior executive officers.

For fiscal year 2024 which closed on December 31, 2024, the financial (quantifiable) criteria relate to growth in the Group’s revenue, operating profit and cash flow relative to budget for the year in question, with each of these three components accounting for one third of the total determination and making up 50% of total variable compensation for the Chairman and Chief Executive Officer, and 65% for the Group Managing Director whose term ended April 18, 2024.

ESG-related (quantifiable and qualitative) criteria make up 10% of total variable compensation for the Chairman and Chief Executive Officer, and 15% of total variable compensation for the Group Managing Director.

In 2024, these criteria focused on the following:

●   Continuing and accelerating implementation of each of the four priorities of the LIFE 360 program (see the “Environment” section, §1.2.2) accounting for 50% and on supporting general ethics-related communications for the other 50% for the Chairman and CEO.

●   Continuing and accelerating implementation of each of the four priorities of the LIFE 360 program preparing the Group for the implementation of CSRD requirements and developing a human rights policy (implementation of a Group-level vigilance policy) for the Group Managing Director.

The method used for assessing performance was reviewed by the Compensation Committee and the Board of Directors. Based on this assessment, the Board of Directors considered that the targets had been met.

The targets are set each year by the Compensation Committee, which is made up entirely of independent members including a Director representing the employees and published when this compensation is allocated.

In addition, senior executive officers of the Company are eligible for bonus share plans put in place by the Board of Directors for employees of the Company and/or employees and senior executive officers of affiliated companies and are subject to the same rules governing such plans, with the proviso that (i) they may only be awarded bonus shares subject to performance conditions (ii) the total number of bonus shares awarded to senior executive officers of the Company over the course of a fiscal year may not exceed 15% of the number of shares granted by the Board of Directors over that fiscal year. Performance criteria for bonus share plans for employees of the Company and/or employees and senior executive officers of affiliated companies are fixed by the Board of Directors and concern the Group as a whole. For the plans in place starting in 2022, these criteria are (i) 85% financial criteria and (ii) 15% non-financial criteria, related to the achievement of the LIFE 360 program adopted by the Group in 2021, which contains specific targets for protecting biodiversity, combating climate change, promoting circular economy practices and ensuring product traceability, to be achieved by 2030, with intermediate milestones to be reached before then (2023, 2026 and 2030) and annual monitoring. For the plan set up on October 28, 2021, which vested on 28 October 2024, the achievement of conditions relating to the LVMH Group’s performance adjusted to (i) 90% the provisional allocations for financial criteria and (ii) 10% for non-financial criteria.

An ad hoc committee consisting of the chairmen of each of the Board of Directors’ three committees meets to assess the Group’s specific trajectory and progress toward meeting the targets and, consequently, to determine the percentage of shares to be vested on the basis of non-financial criteria.

2.4         Due diligence statement

2.5         Risk management and internal controls over the Sustainability Report

The main risks identified to date by the various departments involved in relation to sustainability information are the completeness and integrity of data, the accuracy of estimation results, and the availability of data on the upstream and/or downstream value chain.

To ensure the quality of non-financial data, reporting protocols are established by the departments involved. They are updated annually and communicated to the various contributors at the Maisons at the start of the data collection process. Moreover, the calculation methodology for the different indicators and consolidation rules are defined in advance, thereby ensuring that the reporting processes set by each department and their continuity are applied uniformly. The processing of estimates is also specified in the report. In addition, specific training may be organized for people involved in collecting and/or producing data.

Lastly, controls to detect and resolve any inconsistencies are carried out by each department involved (Environment, Human Resources, etc.) within the Maisons and at the Group level. These complement those directly integrated into the reporting tools.

Over the next few years, the Group Internal Control Department will be mobilized to analyze the maturity of the reporting processes and the associated controls at Group and Maison levels.

3.     Strategy

3.1         Strategy, presentation of the Group and its activities

This section sets out the Group’s business sectors, values and operating model to give a better understanding of how sustainability is incorporated into its strategy, as well as how it manages the associated impacts, risks and opportunities.

The LVMH Group was formed from the merger of Moët Hennessy and Louis Vuitton in 1987. Bernard Arnault became the leading shareholder and Chairman and Chief Executive Officer in 1989, with the ambition of making LVMH the world leader in luxury.

Today, the LVMH Group has built its leading position through a unique portfolio of 75 exceptional Maisons, operating in six business segments. Each of them creates products that combine high-level expertise with a strong heritage, drawing their momentum from a spirit of innovation and openness to the world.

The Group helps its Maisons grow over the long term, based on respect for their specific strengths and individuality, underpinned by common values and a shared business model. LVMH provides them with all of the resources they need to grow in terms of designing, manufacturing and selectively retailing their products and services.

Business group overview

The LVMH Group is the only group that operates simultaneously, through its Maisons, in all the major luxury sectors:

Wines and Spirits: Based in Champagne, Bordeaux, Cognac and other renowned wine-growing regions, the LVMH Group’s Maisons – some of which are hundreds of years old – all have their own unique character, backed by a shared culture of excellence. The activities of LVMH in Wines and Spirits are divided into Champagne, Wines and Spirits. This business group focuses on growth in high-end market segments through a powerful, agile international distribution network. LVMH is the world leader in cognac with Hennessy, and in champagne with an outstanding portfolio of brands and complementary product ranges. LVMH also produces high-end still and sparkling wines from around the world.

Fashion and Leather Goods: LVMH includes established Maisons with their own unique heritage and more recent brands. Whether they are part of Haute Couture or luxury fashion, LVMH’s Maisons have based their success on the quality, authenticity and originality of their designs, created by talented, renowned designers. All the Group’s Maisons are focused on the creativity of their collections, building on their iconic, timeless lines, achieving excellence in their retail networks and strengthening their online presence, while maintaining their identity.

Perfumes and Cosmetics: LVMH is a key player in the perfume, makeup and skincare sector, with a portfolio of world-famous established Maisons as well as younger brands with a promising future. Its Perfumes and Cosmetics business group boasts exceptional momentum, driven by growing and securing the long-term future of its flagship lines as well as boldly developing new products. The Maisons cultivate their individuality, a differentiating factor for their followers in a highly competitive global market. At the same time, they are all driven by the same values: the pursuit of excellence, creativity, innovation and complete control of their brand image.

Watches and Jewelry: The Maisons in Watches and Jewelry – LVMH’s youngest business group – operate in the high-end watchmaking, jewelry and high jewelry sectors. LVMH’s brands in this business group are positioned to complement each other’s strengths. These Maisons rely on their outstanding expertise, creativity and innovation to surprise their customers all over the world and respond to their aspirations.

Selective Retailing: The Group’s Selective Retailing brands all pursue a single objective: transforming shopping into a unique experience. From elegant interior design to a specialist selection of products and services, combined with personalized relationships, customers are the focus of their attention on a daily basis. Operating all over the world, the Maisons are active in two spheres: selective retail and travel retail (selling luxury goods to international travelers).

Other activities: The Maisons in this business group are all ambassadors for culture and an art de vivre that is emblematic of LVMH. They all prioritize a vertical integration approach in order to offer their customers a range of high-quality products and services. This approach ties in with the quest for excellence pursued by each of the business group's Maisons: from the Les Echos media group, which owns a number of leading business and cultural publications, to Royal Van Lent, which markets custom-designed yachts under the Feadship name, to Cheval Blanc and Belmond, which operate a collection of exceptional hotels.

Key figures (as of December 31, 2024)

Geographic presence (as of December 31, 2024)

The values of a deeply committed Group

Driven by the mission of LVMH and its Maisons to craft dreams, the Group puts heart and soul into everything it does. Its core identity is based on the fundamental values that run through it and are shared by all its people.

Being creative and innovative: The fundamental values of creativity and innovation are pursued in tandem by the Maisons as they focus on achieving the ideal balance between continually renewing their offer while resolutely looking to the future, developing within the Group while staying true to their roots and their unique heritage, in order to craft products that will stand the test of time. Throughout the years, the creativity and innovation that are part of the Group's DNA have been the keys to its Maisons’ success. They open up an infinite range of possibilities to be explored through new technology, one of the Group's major growth drivers.

Delivering excellence: Within the Group, quality can never be compromised. Because the Maisons embody everything that is most noble and accomplished in the world of fine craftsmanship, they pay extremely close attention to detail and strive for perfection: from products to services, it is in this quest for excellence that the Group differentiates itself.

Cultivating an entrepreneurial spirit: The Group’s agile, decentralized structure fosters efficiency and responsiveness. It encourages individuals to take initiative by giving everyone a significant level of responsibility. The entrepreneurial spirit promoted by the Group makes risk-taking easier and encourages perseverance. It requires a pragmatic approach and the ability to motivate staff to achieve ambitious goals.

Taking action to make a difference: Every action taken by the Group and its employees reflects its commitment to ethics, corporate social responsibility and respect for the environment. These commitments drive the Maisons’ performance and ensure their longevity. Firmly convinced that truly desirable products can only come from sustainable businesses, the Group is committed to ensuring that its products, and the way they are made, have a positive impact on its entire ecosystem and the places it operates, and that it is actively working to build a better future.

Operating model

LVMH has adopted a unique model to ensure the development and autonomy of each of its Maisons in keeping with their identity. The Group makes available to them all the resources required to create, manufacture and distribute products and services that exemplify excellent quality and uphold the highest ethical, social and environmental standards.

Decentralized organization: The structure and operating principles adopted by LVMH ensure that Maisons are both autonomous and responsive. As a result, they are able to build close relationships with their customers, make fast, effective and appropriate decisions, and motivate Group employees for the long term by encouraging them to take an entrepreneurial approach.

Internal growth: The LVMH Group prioritizes internal growth and is committed to developing its Maisons, and encouraging and protecting their creativity. Staff play a critical role in a model of this kind, so supporting them in their career and encouraging them to exceed their own expectations is essential.

Vertical integration: Designed to cultivate excellence both up- and downstream, vertical integration ensures control of every stage of the value chain, from sourcing to production facilities and selective retailing. It also guarantees strict control of each Maison’s brand image.

Creating synergies: Resources are pooled at Group level to create intelligent synergies while respecting each Maison’s independence and autonomy. The combined strength of the LVMH Group is leveraged to benefit each of its Maisons.

Securing expertise for the long term: The Maisons that make up the Group cultivate a long-term vision. To preserve their distinctive identities and excellence, the Group and its Maisons have developed a range of initiatives to pass down skills and expertise, and promote craft trades and design professions among younger generations.

Balance across business segments and geographies: The LVMH Group has the resources to sustain regular growth thanks to the balance across its business activities and a well-distributed geographic footprint. This balance means that the Group is well positioned to withstand the impact of shifting economic factors.

Innovation dedicated to excellence: LVMH owes its long-term success to its pursuit of excellence. In an ever changing world, innovation is a powerful tool for achieving this, making the Group’s products ever more appealing and the experiences it offers its customers ever more unforgettable. Driven by its employees, the Group’s innovation is based on several pillars: its in house R&D centers, its network of startups, its partnerships with the world of academia and numerous expert companies.

3.2         Involving stakeholders

Rethinking creation, preservation and the development of expertise, production, use and reuse, in order to bring about positive social and environmental impacts and reduce the Group’s negative impacts requires collective action and commitment. In this spirit, by working in synergy with its ecosystem, thanks to the input and buy-in of stakeholders, LVMH and its Maisons are taking action to build the luxury industry of tomorrow.

LVMH rallies and relies upon all of its stakeholders, inside and outside of the Group, first and foremost of whom are its employees. At every stage of its value chain, the Group cultivates a genuine spirit of partnership. It consults, supports and relies upon its stakeholders in order to implement its action programs, make progress and achieve its strategic objectives. In particular, the Group takes into consideration stakeholders’ opinions and feedback to fine-tune the implementation of its environmental and social responsibility programs. Guided by its commitments, LVMH seeks to create a virtuous circle that promotes a dynamic of shared progress and the mutual benefit that comes from each individual’s accomplishments, across all of the territories where it is present. That is why, beyond compliance with applicable laws and regulations, the Group promotes high ethical and compliance standards (Code of Conduct, Business Partner & Supplier Code of Conduct, Anti-Corruption Charter, Responsible Lobbying Charter, etc.) in order to maintain the confidence that it has earned from its clients, suppliers, institutions, local governments, international organizations, non-governmental organizations and all of its stakeholders.

LVMH also participates in multilateral discussions and initiatives throughout the year led by national and local governments and other institutions, as well as by various laboratories, universities, schools, foundations and other industry actors. Together, they develop initiatives and action programs centered on shared objectives.

In 2024, LVMH participated in several key international events, including NYC Climate Week, Future Fabrics Expo in London and COP15 focused on fighting desertification. The Group also spearheads coalitions such as the coalition for soil health implemented by Moët Hennessy in October 2024 under the aegis of the World Living Soils Forum. Following the LIFE 360 Summit held at the UNESCO headquarters in December 2023, the Group rolled out its new action program, LIFE 360 Business Partners, meeting with a sample of suppliers to design a customized program to support their environmental transition.

Responsible human resource management is structured around four key priorities identified through stakeholder consultation and a mapping of matters and risks:

●   developing diversity by respecting every individual’s dignity and uniqueness;

●   taking action for employee health, safety and well-being;

●   passing on skills and expertise that are an integral part of the world’s cultural heritage;

●   working to build a better society.

3.3         Impacts, risks and opportunities associated with the business model

3.3.1       Responsible, sustainable model for value creation

Driven by its goal of creating high-quality products and services, LVMH’s model draws on human, creative and financial capital, as well as natural materials to create exceptional items that stand the test of time, according to different stages of value creation:

Design: LVMH capitalizes on the creativity of its employees, whether creative directors, cellar managers (Wines and Spirits), fragrance designers (Perfumes and Cosmetics) or architects. These creative visionaries are the guardians of each Maison’s heritage. Each of them draws on this heritage to design products and spaces that renew the offer proposed by Maisons while also respecting their heritage, being firmly open to the world, and remaining committed to sustainability, innovation and the passing on of vital skills and knowledge.

Supply chain: LVMH cultivates excellence from the very beginning of its value chains by opting where possible to source raw materials that limit environmental impact and involve local communities. For certain supply chains, LVMH promotes adopting regenerative practices to create a positive impact, helping nature and local communities alike.

Production: LVMH’s long-term commitment is also reflected in its safeguarding of skills and expertise to preserve the identities and excellence of its Maisons. A range of initiatives have been developed to promote craft trades and pass on skills and expertise. LVMH and its Maisons prioritize energy efficient production methods, taking care to limit the consumption of natural resources without ever compromising the quality of products.

Transportation and logistics: The Group and its Maisons manufacture products which are produced mainly in France and Italy and then transported to 81 countries throughout the world. Optimizing logistics by geographic region is a constant consideration for LVMH Maisons in order to limit their environmental impact. By the same token, opting for local transportation methods that generate lower greenhouse gas emissions is another way the Group contributes to its continuous improvement approach.

Retail and customer experience: Controlling the distribution of its products is a core strategic priority for LVMH. The Group has a world-leading network of exclusive boutiques under the banner of its brands, with the aim of consistently delivering full satisfaction and excellence in the customer experience. For all its business sectors, LVMH strives to achieve optimal environmental management of its store network, which is also an essential component of its close ties with each customer base and allows it to offer unique shopping experiences.

Circularity: LVMH and its Maisons approach value creation from a circular economy perspective, which is reflected in both widespread adoption of sustainable design and repair, and in the development of synergies. Resources are pooled at Group level to create intelligent synergies while respecting each Maison’s autonomy and with the goal of enhancing the sustainability of products and their components. LVMH and its Maisons are also committed to ensuring their activities have a positive impact on local communities, working in collaboration with local stakeholders.

Business model – LVMH Group (75 Maisons, 81 countries) – Figures for 2024

Financial data can be found in the “Financial statements – Consolidated financial statements” section of this document.

3.3.2       Main impacts, risks and opportunities

The Group’s activities involve exposure to various risks that are the object of regular risk management and identification, notably within the context of regulatory reforms. Each year, they are included in the “Risk factors and management” section.

The business model may create impacts, risks and opportunities, which are identified and assessed using a specific methodology and time horizon (see also §4 below) which can be summarized as follows:

●   Impacts, risks and opportunities related to environmental issues:

-   contribution to climate change related to GHG emissions (ESRS E1);

-   risks associated with pressure on raw materials due to climate change and availability of water (ESRS E1);

-   environmental impacts in terms of water withdrawal, pollution and biodiversity focused on upstream mining and agricultural activities, particularly during the extraction of raw materials (ESRS E2, E3 and E4);

-   management of waste and unsold items (ESRS E5);

-   production of exceptional items that stand the test of time as part of a sustainable design approach resulting in the creation of new circular services (ESRS E5).

●   Impacts, risks and opportunities related to social issues:

-   impacts in terms of social integration and fulfillment through work (ESRS S1 and S2);

-   protecting and passing on expertise (increasing employability) (ESRS S1 and S2);

-   impacts on working conditions, in particular for the most vulnerable workers (physical risks and safety risks relating to specific activities, seasonal work, etc.) (ESRS S1 and S2);

-   reputational risk in terms of failure to uphold workers’ rights (ESRS S1 and S2);

-   risk of loss of expertise and rare skills in traditional crafts (ESRS S1 and S2);

-   opportunity for influence and growth (Group attractiveness) (ESRS S1);

-   contribution to equal opportunity through professional integration and boosting the local economy (creating jobs) (ESRS S3);

-   conflicts of use in upstream agricultural and mining activities (access/water and soil pollution) (ESRS S3);

-   impact in terms of use of elements/cultural codes belonging to communities (ESRS S3);

-   impact in terms of allowing as many people as possible to access culture (ESRS S4);

-   impact on health for Perfumes and Cosmetics and Wines and Spirits activities (ESRS S4);

-   impact by means of marketing and advertising practices (dissemination of stereotypes) (ESRS S4);

-   opportunities to develop products and services taking all singularities into consideration (ESRS S4).

●   Impacts, risks and opportunities related to governance issues:

-   contribution to protecting animal welfare;

-   risk of sanctions or reputational risk associated with failure to observe the ethical standards promoted by the Group.

3.3.3       Policies related to the management of impacts, risks and opportunities

To manage the impacts, risks and opportunities and increase resilience and competition, LVMH has drawn up specific action plans (LIFE 360, the CSR roadmap and the Convergence program), which are implemented by all the Maisons. A continuous improvement process is defined that aims to cover all its value chains.

Contribution of objectives of the LIFE 360 environmental strategy to material environmental IROs

Contribution of objectives of the corporate social responsibility strategy to material social IROs

These action plans contribute fully to the Group’s vigilance policy through which LVMH identifies, prevent and mitigates risks to human rights and fundamental freedoms, human health and safety, as well as the environment, at every stage in the value chains of Group business activities.

In 2024, LVMH tightened up oversight of its vigilance policy by putting in place a dedicated governance structure involving every level of the Group, from the Board of Directors right down to operational communities within the Maisons, and creating a new department focused solely on the duty of vigilance. This department will report on its activities regularly to the Sustainability & Governance Committee and Board of Directors.

The Group’s vigilance policy is described in the “Vigilance Plan” section of this document.

Additionally, concerning business conduct priorities, the Group is implementing compliance policies and systems to prevent the potential impact that the following practices could have on the Company and the Group’s stakeholders:

●   incidents of corruption;

●   money laundering;

●   incidents related to observing economic sanctions;

●   violations of whistleblower rights.

These policies and systems, which are part of the Group’s strategy and business model, also aim to address the material risks that the Group could be exposed to in the event of acts of corruption, anticompetitive practices, practices in breach of international sanctions with regard to financial penalties or practices that violate the Group’s image in the event of an unchecked abundance of counterfeit products in the market.

4.     Method for identifying impacts, risks and opportunities

4.1         Description of the processes to identify and assess material impacts, risks and opportunities

Dedicated governance arrangements have been put in place under the aegis of the Executive Committee to oversee and operationally implement the CSRD within the Group, including the creation of specific bodies: a dedicated Management Committee led by the Director of General Administration & Legal Affairs and the Chief Financial Officer who report back to Executive Management and a Steering Committee. These committees consist of representatives from the following departments: Purchasing; Ethics and Compliance; Group Controlling, Reporting & Consolidation; Environmental Development; Social Development; Duty of Vigilance; IT & Technology; Legal; Operations; CSR and Human Resources.

In keeping with the requirements of the Corporate Sustainability Reporting Directive (CSRD), the LVMH Group carried out a double materiality assessment for the first time in 2024, with the help of an external firm. This assessment was led in accordance with the expectations set out in the European Sustainability Reporting Standards (ESRS), a delegated act published in July 2023, and the recommendations laid down in the EFRAG Materiality Assessment Implementation Guidance, the final version of which was published in May 2024.

The purpose of the double materiality assessment – a cornerstone of the CSRD – is to identify sustainability topics reflecting the following:

●   existing or potential positive and negative material impacts on people and the environment connected with the business of the Company and its value chain (impact materiality – inside-out perspective);

●   material financial impacts – both positive (opportunities) and negative (risks) – connected with sustainability topics that affect or could affect the Group’s financial performance (financial materiality – outside-in perspective).

The Group plans to have the materiality assessment reviewed annually by the Steering Committee responsible for sustainability topics and updated every three years, or when a major change of scope occurs.

All the methodologies used are described in the following paragraphs and the results of the analysis confirmed by these bodies.

This process of identifying, assessing and managing impacts, risks and opportunities follows a specific procedure. It is not currently incorporated into the overall risk management process at Group level.

Sustainability risk is treated in the same way as other types of risk.

4.1.1       General approach

Scope, phasing and key assumptions

To cover all of the Group’s activities while taking into account their specific characteristics, the double materiality assessment has been undertaken across eleven value chains: “Wines and Spirits,” “Fashion,” “Leather Goods,” “Watches,” “Jewelry,” “Perfumes and Cosmetics,” “Selective Retailing,” “Media, Communications, Events and Shows,” “Hospitality, Luxury Tourism and Parks,” “Restaurants and Patisseries” and “Yacht Building.”

The value chain for each of the aforementioned activities has been mapped, creating a global vision for the Group and highlighting the business models, industry sectors, upstream and downstream value chain segments and stakeholders impacted. Impacts connected with the Group’s own operations and the value chain, including those connected with business relationships, have been considered across all geographies.

The process of identifying material impacts, risks and opportunities (IROs) was broken down into four key steps:

The first step consisted of identifying LVMH’s sustainability topics based on: (1) topics previously identified by the Group; (2) information specific to the Group’s various businesses; (3) the Group’s business model and value chain; and (4) ESG topics, sub-topics and sub-subtopics listed in the ESRS.

The identification and assessment of impacts, risks and opportunities is based on the following:

●   sources of sector information: studies, peer practices, benchmarks, etc. (e.g. SASB, rating agency questionnaires);

●   internal sources of information regarding analyses of the Group’s activities and products, including existing impact and risk analyses;

●   consolidation of the views and interests of external stakeholders (consumers, local communities, civil society, nature, etc.) through in-depth bibliographical analysis and interviews.

In accordance with the requirements of ESRS, the following choices were made when the list of IROs was drawn up:

●   impacts, risks and opportunities identified and assessed are considered at “gross” level, i.e. without taking into account any action plans put in place;

●   risks and opportunities often arise from impacts. This means that, for each impact, the “counterparty” in terms of risk or opportunity must be considered.

Lastly, in addition to integrating the results of regular discussions with stakeholders (see §3.2 above) in order to take stakeholders’ interests and perspectives into account in evaluating IROs, the Group ran a dedicated interview-based consultation with eight external stakeholders, including (i) representatives from non-governmental organizations (NGOs) with expertise in environmental, social and governance issues and (ii) investors. These stakeholders were identified and ranked on the basis of their expertise and understanding of the impacts of the activities of the Group and its value chain. This targeted consultation aimed to make the double materiality assessment more enforceable by means of qualitative and strategic analysis of the stakeholders/experts involved.

4.1.2       Assessment of IROs

Assessment of impacts

Impact materiality was assessed using four variables required by ESRS, ESRS 1 and ESRS 2: severity (scale, scope and irremediable character) and likelihood. In terms of the potential negative impacts on human rights, severity takes precedence over likelihood. Each severity and likelihood criterion was assessed on the basis of a score from 1 to 4. A number of time horizons were also taken into account: a short-term time horizon corresponding to the accounting reference period (i.e. one year), a medium-term time horizon corresponding to the period between the short-term horizon and five years, and a long-term time horizon corresponding to periods of more than five years. Consideration of the long-term impacts was incorporated by means of the coefficient principle to weight the valuation if the impact was increased in the long term (i.e. in terms of aggravation of a negative impact or reinforcement of a positive impact). These scores and coefficients were combined to give a final score ranging from 1 to 4, which was then used to prioritize impacts.

Assessment of risks and opportunities

Financial materiality was assessed using two variables required by ESRS, ESRS 1 and ESRS 2:

●   severity, i.e. potential scale of financial effects;

●   likelihood of occurrence.

Severity was assessed on the basis of a score from 1 to 5 and likelihood from 1 to 4. As with impacts, a number of different time horizons were also considered, notably by including a coefficient to reflect the long-term improvement or deterioration in a financial effect. Each variable was either allocated a score or used as a coefficient. These scores and coefficients were combined to give a final score ranging from 1 to 5, which was then used to prioritize risks and opportunities.

Setting and reviewing thresholds

Each score was reviewed and validated by members of the CSRD Steering Committee (see §4.1 above).

Materiality thresholds were determined based on the following criteria and signed off by the Steering Committee:

●   alignment and continuity with the Group’s strategy and previous impact, risk and opportunity assessments;

●   materiality of the information for affected stakeholders and users of sustainability information.

Once the final results had been consolidated, LVMH presented and explained the methodology used for the double materiality assessment to the Performance Audit Committee and the Sustainability & Governance Committee on November 26, 2024.

Positive and negative environmental, social and governance-related impacts, risks and opportunities

Environment

Social

Governance

4.2         Disclosure Requirements in ESRS covered by the undertaking’s sustainability statement

NM: Non-material.

PIP: Phase-in provisions.

N/A: Not applicable.

4.3         Datapoints required by other EU legislative acts

NM: Non-material.

PIP: Phase-in provisions.

N/A: Not applicable.

1.     General environmental policy

The LVMH Group environmental policy, which itself dates back to 1992, is designed to fulfil three purposes:

●   prevent and/or reduce environmental impacts by precisely measuring the impact of the Group’s activities on the climate, biodiversity (in soil and ecosystems) and water resources, covering Scopes 1, 2 and 3;

●   strengthen the intrinsic qualities of LVMH products (product sustainability and transmissibility), adopting the circular economy model;

●   promote positive impacts on the environment and society using creativity and innovation to change practices, while also encouraging other operators in the luxury sector.

It is based on a regularly updated analysis of the materiality of the environmental matters that it plans to address. In 2024, this analysis was completed using a double materiality assessment, in compliance with CSRD requirements.

Measurement of the Group’s Climate, Water and Biodiversity footprints fueled the creation of LIFE 360 (LVMH Initiatives For the Environment – 360), a specific and proactive program of actions. Launched in 2021, this program includes targets to be achieved by 2023, 2026 and 2030 that relate to the climate, biodiversity, circularity and traceability. The aim of this program is to create products that are in harmony with nature, with no negative impacts on resources and the climate. When the 2023 target achievement report was released, these aims were publicly restated at the LIFE 360 Summit at UNESCO on December 14, 2023: “We are introducing a new vision for luxury that combines performance and commitment, while respecting the environmental equilibrium, and continuing to inspire dreams,” explained Bernard Arnault, Chairman and Chief Executive Officer for the Group, in his closing speech.

1.1         Organization of the Group’s environmental approach

1.1.1       Governance related to environmental strategy

LVMH actions support the ten principles of the United Nations Global Compact, which the Group joined in 2003, and its Sustainable Development Goals.

The Board of Directors – the Company’s strategic body – is responsible for implementing the LIFE 360 environmental strategy, based on the opinions of the Sustainability & Governance Committee. The Board of Directors set up this committee, including within its role the provision of support in defining the broad strategic direction of the Company and the Group with regard to ethical, environmental and workforce-related matters, as described in the “General information” section , §2, “Governance”.

The Board of Directors, pursuant to the recommendations made by the Compensation Committee, set the conditions for the award of annual variable compensation to the Chairman and Chief Executive Officer and to the Group Managing Director (whose term ended April 18, 2024): the implementation of LIFE 360 commitments is included in the criteria.

The Environmental Development Department – which reports to Antoine Arnault, Head of Image & Environment and a member of LVMH’s Board of Directors – is responsible for implementing the LIFE 360 environmental strategy at a Group level and the environmental action plans included in the Sustainability Report. Since 2021, Antoine Arnault has delivered an annual report on the progress of the four LIFE 360 action plans at the annual Shareholders’ Meeting.

The Environmental Development Department also has these duties:

●   provide reporting on environmental data within a precisely defined scope and based on specific consolidation rules (see §1.4). The reporting system was implemented in 2001 and consists of four questionnaire types that were updated in 2024 to gather new information consistent with CSRD requirements;

●   use this reporting to provide updates on the Group’s environmental strategy, thus contributing to its non-financial performance. In 2024, the Group was included in the main indices based on responsible investment criteria: FTSE4Good Global 100, Moody’s ESG (X/100) and S&P Global ESG (X/100). LVMH was included on CDP’s 2024 A List;

●   identify world-class measurement tools and methodologies and carry out forward-looking analysis to help the Maisons safeguard against risks and seize opportunities in each main business group, and in hospitality activities;

●   train employees and raise environmental awareness at every level of the organization via the LIFE Academy in particular;

●   share LVMH’s environmental experience at international summits and build proactive partnerships, which may have an influence on other players in the luxury sector.

1.1.2       Implementation of the environmental strategy within the Maisons

The Environmental Development Department is responsible for implementing the four LIFE 360 program action plans within each of the Group Maisons, and for monitoring these plans using the following methods:

●   each Group Maison includes the LIFE 360 program in its strategic plan and reports on its progress within its Management Committee. Some of the Maisons have incorporated LIFE 360 into dedicated processes (with indicators that reflect the specific characteristics of their key issues), such as: “Our Committed Journey” for Louis Vuitton, “Living Soils, Living Together” for Moët Hennessy, “In the Name of Beauty” for Guerlain and “Horizon” for Zenith;

●   each Maison relies on the Sustainable Development Departments and internal environmental expertise when implementing their environmental program. The Maisons are responsible for collecting, monitoring and consolidating environmental data within their own scope of activity. By signing a letter of representation, they commit to the quality and completeness of the environmental data sent to the Group annually in preparation for this report;

●   the Maisons’ variable compensation policies may include performance targets based on sustainable development;

●   each year, the Environmental Development Department sends each Maison a table in which to report an overview of the progress made on the LIFE 360 program. This department also organizes a review of the LIFE 360 results based on a random selection of 75 Group Maisons providing a representative sample of its business groups, attended by the Maison President and its Head of Sustainability, as well as the LVMH Group’s Head of Image & Environment and Head of Environmental Development.

LVMH’s environmental experts (Group and Maisons) make up a network of nearly 200 people, known as the Environment Committee, which meets twice a year, in order to:

●   share the analysis of LIFE 360 results for each business group;

●   discuss best practices;

●   carry out a review of environmental innovations implemented within the Maisons, and identify possible synergies to broaden their scope.

1.2         The LIFE program

1.2.1       Origin of the approach

Signed in 2001 by the Group’s Chairman and Chief Executive Officer, the Environmental Charter (whose principles have now been integrated into the LVMH Code of Conduct) is the founding document for LVMH’s five key principles with regard to the environment:

●   striving for high environmental performance;

●   encouraging collective commitment;

●   managing environmental risks;

●   designing products that factor in innovation and environmental creativity;

●   making a commitment that goes beyond the Company.

Launched in 2011, the LIFE program puts these goals into practice. It was designed to step up environmental integration within the brands’ strategy and help develop new coordination tools. Roadmaps were used to implement the program, fixing quantifiable targets shared across the Maisons.

The LIFE 360 roadmap covers the period from 2021 to 2030. With the Maisons’ shared desire to further accelerate progress, it was developed in 2020 by assessing previous roadmaps, analyzing the Group’s environmental footprints, and completing other preparatory work, including:

●   priorities set jointly with the Maisons and via the various consultative bodies: the LVMH Science Committee; the Future of Luxury Commission (established in July 2020 and made up of leading outside figures from various disciplines); and work sessions with students and young employees;

●   analyzing the extent to which LVMH’s environmental policy has contributed to the achievement of the United Nations Sustainable Development Goals (SDGs), in particular SDG 3 (“Good health and well-being”), SDG 6 (“Clean water and sanitation”), SDG 9 (“Industry, innovation and infrastructure”), SDG 12 (“Responsible consumption and production”), SDG 15 (“Life on land”) and SDG 17 (“Partnerships for the goals”);

●   securing approval for the prioritization of objectives and their terms of implementation at presentations to members of the Executive Committee and the Sustainability & Governance Committee.

1.2.2       LIFE 360 objectives

This roadmap, the fruit of the work described above, was unveiled at the 2021 Shareholders’ Meeting. The results for fiscal year 2022 were presented at the Shareholders’ Meeting of April 20, 2023, and the results for fiscal year 2023 were presented at the Shareholders’ Meeting of April 18, 2024. The LIFE 360 program sets out 2023, 2026 and 2030 targets and charts a course for creating products that embody the Group’s environmental ambitions. It is structured around four strategic action plans:

●   Taking action for the climate: The materiality of the climate issue is twofold for the Group: Its activities emit greenhouse gases (GHGs), and it faces risks in terms of raw material availability and also cost due to increasing temperatures. To confront this risk, the Group has adopted a transition plan, whose carbon trajectory is in line with the Paris Agreement. These were approved by the SBTi (Science-Based Targets initiative) in December 2021. It aims to achieve a 50% reduction in the Group’s Scope 1 and 2 energy-related greenhouse gas emissions by 2026 (baseline: 2019) and a 55% reduction in Scope 3 emissions per unit of added value by 2030. Actions are concentrated on reducing Scope 1 and 2 emissions (energy conservation and energy efficiency) and making a positive impact by maximizing the proportion of renewable energy used in the Group’s energy mix (target: exclusive use of renewable or low-carbon energy by production sites, logistics centers, administrative sites and stores by 2026). Reduction of Scope 3 emissions (mainly linked to raw material purchases and transportation) involves a number of action plans relating to sustainable product design, regenerative agriculture, responsible marketing and supporting suppliers through their environmental transition (LIFE 360 Business Partners launched at year-end 2023). (ESRS 1).

●   Protecting biodiversity: As LVMH’s activities are intimately linked to nature, the Group regularly measures and assesses its impact and dependencies on natural resources. The targets laid down in this action plan are designed to avoid and reduce impacts (in terms of artificialization, withdrawals and/or pollution of soils, water resources, and ecosystems) and restore to the environment whatever is taken from it: zero deforestation and ecosystem conversion within its operations and supply chains by 2025; 100% of strategic supply chains to be subject to the most rigorous standards by 2026; a regenerative agriculture plan to restore 5 million hectares of flora and fauna habitats between now and 2030. The Group continues to roll out its Animal Welfare Charter published in 2019. The Biodiversity program was supplemented in 2023 by adding a dedicated water resource protection policy aimed at achieving a 30% reduction in the Group’s water withdrawal by 2030 (ESRS 2, 3 and 4).

●   Promoting circular design: Adopting the circular economy model in the production and management process is a way of reducing the consumption of natural resources and the climate impact. The goal of this action plan is to adopt circular economy principles in relation to the products, packaging and waste produced in operations and to contribute to the biodiversity and climate transition plans. In terms of the products, the target is both to implement sustainable design (reaching 100% of new products sustainably designed in 2030, with a reduced environmental footprint from extraction of materials to their processing) and circular services (repair and refills) for all Maisons. This target was achieved at year-end 2023, in line with LIFE 360 expectations. The specific characteristics of LVMH Maison products (intrinsic quality and transmissibility) support the implementation of reuse, repair and recycling processes and over time will enable the launch of new product and service ranges. Packaging strategy will follow this same circularity trajectory, with a target of zero fossil-based virgin plastics by 2026. As regards waste generated in operations, Maisons’ production sites are also subject to specific targets, for example to roll out certified environmental management systems across all production and logistics sites by 2026 (ESRS 5).

●   Ensuring traceability and transparency: The action plan aims to roll out dedicated traceability initiatives covering all strategic raw materials by 2030 and tools for sharing environmental and/or social information at product level. It supports the “Climate”, “Biodiversity” and “Circular Economy” action plans by reporting the environmental origin of products and their degree of sustainable design (ESRS 4).

These four action plans are accompanied by targets designed to mobilize stakeholders around the LIFE 360 priorities, in particular:

●   employees, with the aim of designing environmental training programs tailored to the specific characteristics of the Group’s businesses and providing training on sustainability matters to 100% of employees by 2026.

●   customers, with a target of all new products having a dedicated information system by 2026.

●   strategic suppliers, with CSR clauses to be included in 100% of contracts and subject to verification by 2030, while offering an action program to help them reduce their carbon, water and biodiversity footprints (LIFE 360 Business Partners).

●   researchers, with a commitment to designing a dedicated sustainable luxury research and innovation program; this commitment was upheld in 2023, with the creation of the scientific innovation and research center LVMH Gaïa. LVMH is also supported by two external scientific research committees that enrich and guide the environmental policy and action plans. The first committee handles the supply of animal-derived raw materials, and the second deals with regenerative agriculture.

1.2.3       LIFE 360 targets: 2024 results

Summary of LIFE 360 “Climate” targets

Summary of LIFE 360 “Biodiversity” targets (including water)

The 2024 results for certification of strategic raw materials are provided in §5, "Biodiversity and ecosystems (LIFE 360 – Biodiversity)".

Summary of LIFE 360 “Circular Design” targets

Summary of LIFE 360 “Traceability and Transparency” targets (as % of quantities purchased in 2024)

1.3         Training and LIFE Academy

LVMH’s ability to drive continuous improvement in its environmental performance is closely tied to the Group’s success at making sure that its more than 215,000 employees understand their role as active participants in achieving this goal. The Group and its Maisons are thus working to train and raise awareness among employees as well as members of the management bodies with regard to the conservation of natural resources, biodiversity and climate change, undertaking to provide training on sustainability matters to 100% of employees by 2026.

Employee training and skills development are essential to implementing LIFE 360 and managing impacts, risks and opportunities linked to environmental matters.

Since 2023, the Group has established an educational body, LIFE Academy, offering a catalog of environmental training designed with input from subject matter experts, with a focus on two key areas:

●   “Essentials”: Generalist training for all employees aimed at developing an overview of environmental matters (climate, biodiversity, resources, etc.).

●   “Expert”: Specialized training aimed at specific business lines to boost skills and reinvent professional practices.

In 2024, LVMH strengthened its “Essentials” training by launching a new “Environment Essentials” e-learning module for all Group employees. This training constitutes the core knowledge that all employees must possess and understand.

The “Expert” training program includes courses tailored to specific professions, such as sustainable product design and packaging for stylists, developers and those in marketing roles; responsible sourcing and animal welfare for buyers; managing chemicals for quality and compliance teams; and sustainable store construction for architects.

What is unique about the LIFE Academy approach is that it is not just about learning but about putting that learning into practice. This is reflected in the design of the training programs, in which thinking together about real-life cases, sharing best practice among peers and drawing up action plans all play an important role.

On October 1, 2024, the Group opened the first LIFE Academy training campus on the site of Association de la Vallée de la Millière, founded by Yann Arthus-Bertrand. In opening La Millière, a haven of biodiversity with an educational focus located close to Paris, LVMH stepped up its ambitions in the area of training. The La Millière site will also enable the Group to raise awareness among a broader audience, notably including schools, nonprofits and NGOs. In opening this site, LVMH is reaffirming its desire to share its knowledge and expertise more widely. This is an integral part of the Group’s “Joining forces” philosophy, which encourages open and inclusive collaboration with all stakeholders. Passing on environmental knowledge is key to amplifying the collective impact of the Group’s actions and building a sustainable future.

Employees having completed environmental training

(a)  Baseline: 2019. Indicator calculated on the basis of all Group employees. The reporting scope does not include employees who have been with the Group for less than one year and takes into account all apprenticeship formats.

1.4         2024 reporting scope and methodology

1.4.1       Reporting scope and rules

Data are collected either by Maison or by site (stores, administrative sites, production sites and logistics centers), according to the following rules:

●   Maisons: a Maison is included in environmental reporting if it is included in financial reporting. Following an acquisition, the acquired entity is included in environmental reporting one year after its inclusion in financial reporting;

●   sites: the Group’s new sites are added to the reporting scope in the year following their acquisition or their opening. Only sites under operational control are included in the environmental reporting. Operational control by the Group is defined as the total authority of at least one subsidiary over implementing operational policy at the site;

●   divested entities (Maisons and sites): entities disposed of during the fiscal year (between January 1 and December 31 of Year N) are excluded from the reporting scope for Year N.

The collected data are made up of at least ten months of actual data, with no more than two months of extrapolated data, using, for example, data for the previous year corrected by business activity.

In 2024, reporting for environmental indicators covers the following scope:

Maisons

In 2024, as the scopes of financial and environmental reporting were brought into closer alignment, Maisons covered by environmental reporting accounted for more than 99.5% of Group revenue.

Ace of Spade, Minuty, Joseph Phelps, Patou, Buly, Perfumes Loewe, 24S, Kendo, LVMH Hotel Management and Cova were included in environmental reporting.

Monetary and HR data extracted and used in the Scope 3 greenhouse gas emissions calculations for some GHG Protocol items cover the full scope of consolidation.

Production sites, logistics sites and administrative sites

In 2024, there was a considerable effort to include all sites, particularly in identifying offices and improving data granularity for production and logistics sites.

98% of production and logistical sites are covered.

The sites that are not covered by environmental reporting are essentially offices outside of France, excluded for operational reasons, and their environmental impact is not material.

(a)  Inclusion of sites for Maisons including Minuty, Joseph Phelps, Buly, Perfumes Loewe, 24S and LVMH Hotel Management…

(b)  Main components: certain regional administrative sites of Moët Hennessy, Louis Vuitton and Guerlain with fewer than 20 employees.

Total store floor space

In 2024, the total store floor space was included within the reporting. 90% of the store floor space covered in the reporting uses actual energy consumption data:

(a)  The reporting scope does not cover the stores operated under franchise by Fashion and Leather Goods, Perfumes and Cosmetics, and Watches and Jewelry.

Energy consumption, water withdrawal, waste management and calculation of Scope 1 and 2 greenhouse gas emissions for total floor space for stores without actual data are estimated to ensure the scope is exhaustive. For floor areas with no real data, the estimation method is based on coefficients calculated from real data, which is then used to estimate the relevant data for these areas.

1.4.2       Reporting methodology

In 2010, the Group implemented the environmental platform that collects the data required for the calculation of LVMH LIFE 360 environmental strategy performance measures.

The system used for environmental reporting is an SaaS platform made up of four types of questionnaire:

●   LIFE 360 questionnaire: Indicators used to monitor the LIFE 360 strategy;

●   questionnaire about upstream and downstream transportation;

●   questionnaire about raw materials;

●   site questionnaire covering site- and store-specific data: water and energy use, refrigerant leaks, waste production (quantity, type and treatment of waste), etc.

In total, 1,614 information types are collected by each Maison.

All of the calculation and consolidation rules and the checks are defined in the LVMH environmental reporting protocol.

To calculate the Group’s Scope 3 carbon footprint, the additional data required are sent by the Maisons through the reporting system for financial data (media service purchases, Fixed assets and Investments) and HR data (employee travel).

The collected data are checked, consolidated and validated by the Maisons and then the Group. The checks (units, vs. previous year, by activity, etc.) are enhanced every year to ensure data consistency.

The Maisons can access the dashboards that display the LIFE 360 indicators to make it easier to validate them ahead of Group consolidation.

2.     Climate change (LIFE 360 – Climate)

2.1         Addressing issues related to climate

2.1.1       Methodology for the analysis of impacts, risks and opportunities

As part of the process of analyzing impacts, risks and opportunities and assessing their materiality, the whole of LVMH’s value chain (upstream, own and downstream) and organizational scope (six business groups covering eleven businesses) was reviewed. The impacts of climate change are covered in the climate transition plan (CTP) (see §2.2 below), through locked-in emissions, identified key sources and the direction of business over the next few years. The risk and opportunity analysis is described below. This assessment is based on the most stringent standards relating to risk and opportunity analysis, such as TCFD.

The Group’s risk and opportunity analysis took into account all physical risks (both chronic and extreme), the four categories of transition risk (legal, market, technology and reputation) and four categories of opportunities (circularity, regenerative practices, renewable energy and responsible marketing).

The analysis, launched in 2022, is updated annually. A scoring methodology was used to determine the materiality of risks or opportunity. This involves assessing the materiality of a risk or opportunity based on a number of criteria, the key parameters of which are as follows:

●   severity: this parameter represents the degree of vulnerability to a given risk or opportunity, i.e. the impact it could have on revenue;

●   probability: this parameter assesses exposure to a given risk or opportunity and serves to determine the degree of certainty as to whether or not that risk or opportunity will materialize in the future;

●   aggravation: this parameter measures changes in a given risk or opportunity over time.

To assess each criteria, an analysis is completed by climate scenario, over the medium and long term. It is undertaken based on three main scenarios. These scenarios are underpinned by the work of the IPCC (Intergovernmental Panel on Climate Change) and key agencies such as the IEA (International Energy Agency):

●   SSP 5 - 8.5 (+4°C): Current growth trends continue and the political, economic and societal environments remain unchanged. Climate change accelerates, triggering conflicts over resource ownership as well as political and social instability;

●   SSP 1 - 1.9 (+1.5°C) – energy conservation: The Paris Agreement targets are met, mainly as a result of increased awareness about environmental issues. Respecting the planet’s limits becomes a core consideration guiding production value chains and consumer behavior;

●   SSP 1 - 1.9 (+1.5°C) – technology: Achievement of the Paris Agreement targets is mainly dependent on technological breakthroughs to remove carbon from production processes. Regulations and drastic tax measures are crucial to a successful outcome, fueling conflict over resources.

Financial effects were described both qualitatively and quantitatively by assessing the increase in costs over time based on the Group’s business projections. This analysis involved both specific geospatial data (covering individual sites) and averaged regional data (covering the source region for a given material). Also, there is a plan to include the financial effects of these scenarios in the Group’s short-, medium- and long-term financial forecasts.

Discussions were held with all stakeholders involved in the value chain, including representatives of non-governmental organizations (NGOs) with expertise in environmental, social and governance issues, and investors (see the “General information” section, §4.1.2), as well as various Group departments, in order to pre-select risks and opportunities to be analyzed in detail.

2.1.2       Results of the analysis of impacts, risks and opportunities

Risks

For risks on sites operated by LVMH, all chronic and extreme physical risks were analyzed via ECLR, a platform that uses highly accurate geospatial data to perform forward-looking environmental analysis. Each site has been scored based on its exposure to each risk category. The overall level of exposure of Group sites to each risk category is summarized in the table below:

Average exposure of Group sites by risk category

Each category of risk was assessed based on several different time horizons and climate scenarios. To support decisions concerning the Group’s investment strategy, the choice of time horizons was coherent with the lifespan of assets for financial purposes.

This analysis covers over 6,479 Group sites and stores, which is over 90% of the total scope, and will be updated regularly. It also meets the needs of the environmental taxonomy by contributing to the alignment assessment (identification and analysis of vulnerability to risks related to climate change).

For risks involving the value chain, and in particular key sources of greenhouse gas emissions (transportation and raw materials), the physical risks (chronic and extreme) and transition risks (legal, market, technology and reputation) included in the detailed analysis are presented below.

Physical and transition risks in the value chain

The following risks have been identified as material:

Opportunities

The study did not highlight any material opportunities.

2.1.3       Results of the analysis of impacts, risks and opportunities

The risk analysis highlighted a number of areas of uncertainty related to the impact of climate scenarios, notably concerning regulatory developments, raw material prices and the ability to adapt infrastructure to cope with extreme weather events. This uncertainty mainly affects assets in high-risk regions and some supply chains that are particularly sensitive to climate-related events. However, these assets are fully integrated into the Group’s overall strategy, which includes investment decisions aimed at boosting resilience to the identified risks. Adaptation actions are already in place and incorporated into the climate transition plan as well as at the most vulnerable sites.

In terms of adaptability, the Group is well equipped to adjust its strategy and business model in the short, medium and long term in response to climate-related risks. In the short term (i.e. between now and 2026), immediate steps are being taken to comply with new environmental regulations and reduce carbon emissions, thus ensuring continued access to reasonably priced funding. In the medium term (2030), the Group plans to gradually transition to more sustainable production models while investing in resilient technologies to ensure that its cost of capital remains competitive. Over the long term (2050), the strategy will be focused on renovating and optimizing existing assets, with the option of redeploying resources and dismantling infrastructure that is obsolete or has become too vulnerable. These adjustments will enable the Group to maintain a strong position in the face of the challenges posed by climate change while ensuring a sustainable return on investment.

2.2         Climate transition plan

The reporting scope is described in §1.4.1 above.

The LVMH Group is fully committed to achieving the greenhouse gas emissions reduction targets set out in the Paris Agreement and recognizes the fundamental importance of climate change mitigation, which is the main focus of its climate transition plan.

Climate change adaptation is also recognized as a key priority at Group level. The Group’s adaptation policy is described in §2.3.1 below.

The climate transition plan set out below covers the scope of emissions submitted to SBTi in connection with the Group’s 2026 and 2030 carbon reduction targets.

The climate transition plan is updated annually.

2.2.1       GHG emission reduction targets

In 2021, LVMH committed to an ambitious carbon reduction trajectory compatible with the Paris Agreement.

Methodology for calculating the carbon footprint and emissions trajectory

LVMH’s GHG emissions reduction target was submitted to and approved by the Science-Based Targets initiative (SBTi) in 2021. The baseline year is 2019, considered as representative of the Group’s business and sales.

The SBTi methodology for calculating carbon emissions reduction trajectories is aligned with science, ensuring that the approach chosen by LVMH is methodologically robust.

Every year, LVMH publishes its Scope 1, 2 and 3 carbon footprint in accordance with the methodology laid down in the GHG Protocol and updates the calculated footprint for its baseline year (2019) to reflect changes in both carbon accounting methodology and operational scope (resulting, for example, from the acquisition or disposal of entities or the opening or closing of sites or stores). By annually updating its baseline year carbon footprint, the Group is able to track its progress on carbon reduction relative to the target trajectory, in accordance with the GHG Protocol and SBTi rules. The carbon footprint is published both in absolute terms in year N and relative to the updated baseline year.

Thanks to its “Cascade” reporting platform, the Group has been collecting and centrally managing environmental data for over 20 years. The emissions factors used in calculating the Group’s carbon footprint are taken from recognized sources: The ADEME carbon footprint database, the IEA, Ecoinvent, DEFRA and specific life cycle analyses. These emissions factors are regularly updated as knowledge advances and databases are updated. Calculating a carbon footprint involves a degree of uncertainty associated with the relevance of the data gathered and the emissions factors used.

Out of a desire for continuous improvement, LVMH is taking the following steps to improve the understanding and accuracy of its carbon footprint and more accurately measure the impact of actions implemented:

●   rolling out a dedicated carbon platform to measure the carbon footprint and manage the action plan (rollout in progress);

●   regularly updating the calculation methodology;

●   observing a protocol aimed at collecting physical rather than monetary or estimated data;

●   building a database of emissions factors that also incorporates life cycle analyses carried out by suppliers and Maisons to model efforts undertaken across the value chain.

With effect from 2030, LVMH plans to update its baseline year and target year footprints every five years, in accordance with ESRS requirements.

Similarly, LVMH is committed to updating its commitments as new scientific recommendations emerge and reference agencies update their methodologies.

Short-term science-aligned carbon reduction targets

In 2021, LVMH submitted the following commitments to SBTi for approval:

●   50% reduction in energy-related GHG emissions (in absolute value) for the Group (Scopes 1 and 2) between 2019 and 2026. The Group submitted new goals to SBTi in July 2024 including a 2030 target covering Scopes 1 and 2;

●   100% of electricity from renewable sources or low-carbon sources by 2026 at production sites, logistics centers, administrative sites and stores;

●   55% reduction in Scope 3 GHG emissions (excluding fixed assets and investments) per unit of added value between 2019 and 2030.

These are gross targets, which means GHG removals, carbon credits and avoided emissions are not counted as means of achieving them. The GHG emissions targets used are expressed using the market-based methodology. Targets are aligned with the level of ambition the sector is expected to achieve under SBTi to limit global warming to 1.5°C.

Long-term carbon reduction targets: The path to net-zero

In July 2022, LVMH pledged to SBTi that it would strengthen its commitment by submitting a long-term net-zero carbon reduction target within the following 24 months. In July 2024, LVMH submitted these new goals to SBTi.

2.2.2       Decarbonization initiatives

To achieve its carbon reduction targets, the Group has worked closely with each of the Maisons to draw up a climate policy with different priorities that will influence emissions sources across the entire scope of the Group’s SBTi targets. This policy covers key products and businesses, suppliers, logistics sites and stores that form part of the Group’s upstream and downstream value chain:

Scopes 1 & 2:

1.     energy conservation;

2.     energy efficiency;

3.     renewable energy.

Scope 3:

4.     circularity and certified materials;

5.     sustainable transport;

6.     regenerative agriculture;

7.     responsible marketing and Green IT;

8.     LIFE 360 Business Partners.

The climate policy forms part of the Group’s broader “LIFE 360” environmental strategy, which covers all environmental matters over the period 2021-2030.

Calculating reductions in carbon emissions involves a degree of uncertainty because of the variability of data and assumptions used in calculations and economic forecasts. To mitigate these uncertainties, the Group has developed a detailed carbon accounting methodology aligned with the GHG Protocol. This methodology follows a continuous improvement approach under which values and methodologies are updated as and when new, more accurate information becomes available.

The action plan set out below covers the scope of emissions submitted to SBTi in connection with the Group’s carbon reduction targets.

Scopes 1 & 2

Scope 1 emissions are those generated mainly through the combustion of fuel oil and natural gas, as well as the leaking of refrigerant fluids. Scope 2 emissions are those generated indirectly from energy use, mainly electricity used in stores and at the Group’s production sites.

Actions to reduce Scope 1 and 2 emissions are concentrated in three main areas:

●   energy conservation, which means reducing consumption through awareness-raising and training for site and store managers, disseminating best practice among Group employees and putting in place smart monitoring systems;

●   energy efficiency and energy transition, in particular through improvements to the environmental profile of stores, the main source of energy consumption, and sites;

●   use and production of renewable energies at production and logistics sites, administrative sites and stores.

The waterfall chart below shows identified carbon reduction levers and actions and their contribution to achieving the 2026 SBTi targets.

2026 Scope 1 and 2 carbon reduction levers (base: 100)

Having achieved the target of reducing Scope 1 and 2 GHG emissions by 50% by 2026 in 2024, the Group is now aiming to reduce the proportion of renewable energies from renewable energy certificates and increase the proportion of renewable energy generated on site, and continuing with its actions in relation to energy conservation and energy efficiency.

The table below details planned actions to achieve the target.

Scope 3

Scope 3 covers emissions indirectly generated by the Group. These mainly arise from purchases of goods and services from suppliers (notably of raw materials), transportation, waste, and the use and end-of-life treatment of sold products.

The action plan for reducing Scope 3 emissions covers five key areas:

●   Circularity: Sustainable by nature, luxury goods step up their circularity approach to achieve environmental excellence: sustainable design, responsible and certified materials, and new circular services such as repairs and upcycling;

●   Sustainable transport: Modal shift, optimization of logistical flows and electrification all contribute to reducing the Group’s emissions from transporting goods;

●   Regenerative agriculture: A broad range of practices have been put in place with the Group’s suppliers to reduce the carbon footprint of agricultural commodities;

●   Responsible marketing and Green IT: Creating content that is energy-efficient and uses materials sparingly and prioritizing environmentally responsible formats when disseminating content;

●   LIFE 360 Business Partners: Comprehensive program engaging suppliers throughout the value chain to help them navigate the green transition. This program is described in the “Governance” section under §1.6, “Supplier assessment and support”.

Focusing on these areas will enable the Group to transform its portfolio of products and services and develop low-carbon products by using less carbon-intensive materials and developing circularity from the design phase onwards.

The waterfall chart below shows identified carbon reduction priorities and their contribution to achieving the 2030 SBTi targets. The following projections are based on growth and scope assumptions that may change over time.

2030 Scope 3 carbon reduction levers (base: 100)

The table below details planned actions to achieve the 2030 Scope 3 target:

Priorities for 2040 and 2050

Actions to be implemented over the medium term (2030-2040) and the long term (2040-2050) inevitably involve a high degree of uncertainty. Their contribution to achieving the Group’s long-term targets depends on a number of factors such as technological advances and the rollout of new technology (renewable energy, energy retrofits, energy conservation, electric modes of transport, availability of biofuels, recycling capability, etc.) and progress achieved by suppliers throughout the value chain on reducing carbon emissions. However, the Group endeavors to take a long-term view by mapping out a credible path towards a contribution to net-zero emissions. This quantified path is underpinned by the priorities laid down in the LIFE 360 program and includes estimates of expected contributions to achieve the target.

●   Circularity: From 2030, all Group products will be covered by a sustainable design approach, resulting in substantial reductions in CO₂ emissions. Responsible and innovative materials should be more widely available. The Maisons will roll out new circular services, while recovering unused materials (through reuse, upcycling and recycling) will become standard practice in the sector. Trials in progress within the Group are highlighting new opportunities. The CEDRE dismantling platform, created by the environmental depackaging and ecological recycling center, and startups Nona Source and Weturn help recycle and recover fabrics, while bio-sourced materials like polyethylene furanoate (PEF) could change the game in the medium term. The Group also supports research projects focused on developing sustainable solutions. One example is a project run by Eastman to develop packaging using molecular recycling technology. The Group continues to monitor developments in this area to ensure that its strategy remains up to date. For example, in its 2024 progress report on the circular economy, the European Environment Agency (EEA) describes both the challenges and the key factors involved in rolling out the circular economy on the scale needed to achieve the required level of carbon reduction. The Group’s medium- and long-term strategy is informed by these publications.

●   Sustainable transport: Technological advances in transport (electric vehicles, biofuels) are set to be rolled out on a larger scale from 2030, generating significant further reductions in emissions from freight transport. The Group is also exploring innovative sustainable modes of transportation such as cargo sailing ships, which Hennessy is trialing with Nantes-based shipping company Neoline. In drawing up its medium- and long-term action plan, the Group draws on leading scientific publications, including in particular the ICCT net-zero roadmap (Vision 2050, International Council on Clean Transportation, 2023 – https://theicct.org/vision-2050/).

●   Regenerative agriculture: Between now and 2040, the Group intends to promote regenerative farming practices among all its agricultural suppliers, generating further reductions in CO₂ emissions. Forecasts of the uptake of regenerative farming practices are informed by leading scientific publications, including in particular the FAO roadmap published in 2023 (“Achieving SDG 2 without breaching the 1.5°C threshold: A global roadmap”, FAO, 2023 – https://www.fao.org/interactive/sdg2-roadmap/en/).

●   LIFE 360 Business Partners: By 2040, the Group plans to commit all suppliers participating in the LIFE 360 Business Partners program to adopting a plan to reduce their carbon, water and biodiversity impact.

Despite these highly ambitious priorities, additional efforts will need to be identified if the Group is to achieve its 2050 targets. As part of a continuous improvement process, teams with responsibility for the Group’s environmental strategy are working to identify and anticipate the additional efforts required.

2.2.3       Investment and funding to implement the transition plan

The climate transition plan is designed to improve the Group’s resilience and business performance by reducing certain energy costs through energy conservation, energy efficiency gains and the transition to renewable energy. However, the plan also carries additional costs in the form of both operating and capital expenditure.

The processes in place to ensure the plan is funded and aligned with the Group’s financial planning are set out in §2.2.8, “Alignment with and embedding in the overall operating strategy and financial planning”. While implementation of the transition plan is not dependent on public funding or subsidies, it may be re-evaluated based on the performance of the market or the Group.

In 2024, as part of the LIFE 360 strategy, LVMH estimated part of the future cost of implementing the climate transition plan, in particular for short-term Scope 1 and 2 carbon reduction initiatives. The table below summarizes significant future amounts of additional operating expenses and capital expenditure (OpEx and CapEx) related to the climate transition plan over the life span of the relevant commitments, i.e. out to 2026. Operating expenses are cumulative for 2025 and 2026; capital expenditure is the planned total over the period.

For Scope 3, the LVMH Group is developing a methodology for quantifying investments based on collecting data from pilot Maisons, which will then be extrapolated to the entire Group. Given the complexity and diversity of this process of quantifying investments, the methodology will be continuously improved over time. The methodology for quantifying investments takes into account the following:

●   increase in predicted volumes;

●   changes in prices (e.g. of certified or recycled materials);

●   external factors (availability of industrial capacity, technological innovation, etc.);

●   each action’s contribution to the potential reduction.

Investments in the main Scope 3 carbon reduction initiatives are in the process of being quantified using this methodology. For example, one Maison has estimated expenditure related to the certification of cashmere used in accessories. The total cost of transitioning from conventional cashmere to 100% SFA-certified cashmere by 2030, taking into account assumptions relating to supply growth and changes in material prices, is around 400,000 euros a year between 2024 and 2030. This cost was measured on the basis of growth and price assumptions that may change over time.

2.2.4       Assessment of potential locked-in GHG emissions

Locked-in emissions correspond to potential future emissions from the operation of assets or the use of products sold by LVMH. LVMH has undertaken an initial analysis to estimate these emissions.

Locked-in emissions from assets are measured across the entire operating life span of existing and planned assets owned or controlled by LVMH that represent significant sources of emissions. When calculating locked-in emissions, LVMH includes energy consumption at its stores, production sites, logistics centers and office buildings. Locked-in emissions from sold products relate to products with a life span of over three years where emissions from use are significant.

The analysis shows that, thanks to planned carbon reduction actions, locked-in emissions from assets and sold products are unlikely to compromise the Group’s carbon reduction trajectory. For assets, energy efficiency improvements, process electrification at new production facilities, energy conservation and the transition to 100% renewably sourced electricity will help mitigate these emissions. Locked-in emissions from sold products are likely to be mitigated by improvements in the energy and electricity mix in countries where those products are used.

Furthermore, transition risks related to assets and products with locked-in emissions are considered limited. For assets, the risk of increases in production costs as a result of higher prices is mitigated by the energy conservation plan and energy efficiency improvements to real estate assets.

2.2.5       Environmental Taxonomy-alignment plan

In view of the activities concerned by the Taxonomy Regulation at this stage, only operating expenditures – in particular in relation to real estate – are analyzed for the purposes of the LVMH Group’s reporting (see §7, “Environmental taxonomy” below).

In 2024, 11.4% of the LVMH Group’s eligible CapEx was taxonomy-eligible, 2.6 percentage points higher than in 2023. The Group is working on setting an alignment target. The Group is pursuing a number of initiatives in connection with its energy conservation and efficiency goals through real estate purchases.

The transition funding plan includes spending to reduce carbon from buildings owned by LVMH (Scopes 1 and 2: renovation and energy efficiency improvements to buildings), which also contribute to alignment according to the Environment taxonomy.

2.2.6       Significant CapEx related to fossil fuels

LVMH has not made no significant investments in activities related to coal, oil or gas production and has no plans to make any such investments in the coming years.

2.2.7       Exclusion from Paris-aligned Benchmarks

The Group is included in responsible finance benchmarks, including in particular Paris-aligned Benchmarks (PABs). LVMH is not involved in any activities that meet the exclusion criteria set out in Articles 12.1 ⁽¹⁾ and 12.2 ⁽²⁾ of Commission Delegated Regulation (EU) 2020/1818 of July 17, 2020.

2.2.8       Alignment with and embedding in the overall operating strategy and financial planning

The climate transition plan is embedded in the operating and financial strategy as well as the Group’s operating processes.

At the LIFE 360 Summit in December 2023, the Group Chairman and Chief Executive Officer set out his vision of what a luxury goods company must become in light of the green transition: “While not relinquishing either our DNA – creative excellence – or the need to protect the planet, we are nurturing a new vision for luxury that combines performance and engagement. In this new vision, luxury will continue to inspire dreams while respecting the environmental equilibrium.”

From this perspective, business strategy and environmental strategy are two sides of the same coin. In the words of the Head of Environmental Development, the Group’s LIFE 360 environmental strategy is “fully embedded into our overall strategy and the strategies of all our Maisons, with this program at the heart of the Group’s creative approach, production and logistical systems.” The “Crafting a New Luxury” white paper sets out the Group’s vision and strategy for developing a business model that will enable it to achieve the most ambitious Paris-aligned carbon reduction objective: contributing to net-zero (see §2.2.1 above).

Embedding the transition plan into the operating strategy

Environmental issues are fully incorporated into the Group’s strategic plan. The latter is the product of strategic plans drawn up by the various Maisons, which include an environmental dimension. In their strategic plans, the Maisons set out objectives for business development objectives consistent with environmental and carbon reduction targets.

The Group’s environmental targets are directly shared by the Group’s Environmental Development Department with the relevant teams and departments, depending on the topic in question (operations, marketing, etc.).

Aligning the transition plan with financial strategy

The transition plan is aligned with the Group’s financial strategy in three ways.

●   Carbon Fund: This mechanism enables the Group to set Scope 1 and 2 carbon reduction expenditure targets for the Maisons in line with their Scope 1 and 2 emissions. Each Maison is required to spend a minimum amount on carbon reduction initiatives. This amount is equal to each Maison’s Scope 1 and 2 emissions multiplied by a unit price per metric ton of carbon (set in 2024 at 60 euros per metric ton of CO₂ equivalent [tCO₂e]). Since 2016, the Group has invested around 106 million euros in 866 projects. Over the course of 2024, LVMH invested around 25 million euros in 158 innovation projects avoiding 222,679 tCO₂e for an estimated theoretical expenditure of 18 million euros (2024 emissions x 60 euros per metric ton).

●   Budget process: In 2024, the Group’s Finance Department launched a new process for collecting budget requests associated with the Maisons’ climate plans, which will be adjusted in 2025 to establish a long-term process.

●   CapEx consultation: CapEx requests with a potential environmental impact are submitted by financial controllers to the Environment Department for an advisory opinion. This ensures that significant capital expenditure is consistent with the transition plan.

2.2.9       Governance and transition plan approval process

The Board of Directors is the strategic body of the Company. It is primarily responsible for driving long-term value creation and protecting its corporate interests, focusing in particular on the social, environmental and climate issues facing its business.

As part of this approach, the Board of Directors ensures that the Group’s transition plan is implemented and works with Executive Management to guide its development.

Approval process

The approval process is described in §1.1.1, “Governance related to environmental strategy” above.

Implementation of the Transition Plan

The processes to implement the transition plan are described in §1.1, “Organization of the Group’s environmental approach” above.

Skills and training in climate issues for members of the management team

The skills and training of management team members are described in the “General information” section, §2.1, “Role of the administrative, management and supervisory bodies”.

Climate-related compensation

The proportion of variable compensation paid to senior executive officers is based on achievement of targets related to corporate social responsibility and sustainability as shown in the “Board of Directors’ report on corporate governance” section, §1.1.1.1.

In addition to policies for company officers, the Maisons have their own policies on financial incentives, which increasingly incorporate issues related to corporate social responsibility and sustainability, and climate-related issues in particular. By way of illustration:

●   Hennessy: Incentives are calculated on the basis of four indicators – financial results, operational excellence, workplace safety and sustainability. The sustainability indicator includes two sub-targets, one being reducing total energy consumption (corrected for weather conditions). In addition, the incentive agreement includes an additional social bonus to support the Maison's efforts to reduce its carbon footprint, calculated on the basis of Scope 1 and 2 GHG emissions per standard case, including one quantitative target;

●   Sephora: The target of reducing greenhouse gas emissions by 7% between 2024 and 2026 has been set by the Chief Marketing Officer, a member of the Executive Committee;

●   a number of Maisons have also incorporated criteria related to environmental training (including climate-related issues) into their incentive agreements, such as Parfums Christian Dior, Berluti, Maison Francis Kurkdjian, Le Bon Marché and LVMH Fragrance Brands.

2.2.10          Description of progress made

The initiatives implemented by LVMH as part of its LIFE 360 program, as detailed in §1.2, have proved their effectiveness, yielding significant reductions in GHG emissions and notable progress toward achieving objectives in relation to energy, circularity and certified materials. In 2024, LVMH was on track with its carbon trajectory targets, as approved by the SBTi.

Results achieved in 2024 in connection with the Group’s carbon reduction targets are as follows:

(a)  The 2024 results are calculated on the basis of all Scope 3 emissions, including emissions from fixed assets and investments.

The change in the indicators associated with the main means of achieving these climate objectives is shown below.

Changes in the Group’s Scope 1, 2 and 3 emissions are audited.

2.3         Climate change mitigation and adaptation

2.3.1       Climate policy

Combating climate change is a major focus of LVMH’s environmental policy. It constitutes one of the four pillars of the LIFE 360 strategy described in §1.2, "The LIFE program". The Group’s “Climate Change Mitigation and Adaptation Policy” applies to all Group businesses and geographies and covers the entire value chain.

Mitigation policy

The mitigation policy corresponds to the climate transition plan (see §2.2 above).

The Group has often played a pioneering role in this area. In the early 2000s, for example, it took part in testing the carbon assessment method that would later become the Bilan Carbone®. In 2015 it was also the first luxury company to set up an internal carbon fund. The carbon fund helps the Group fund its Scope 1 & 2 emissions reduction policy, which includes energy conservation, energy efficiency and greater use of renewable energies at production and logistics sites, administrative sites and stores. Over the past two years, LVMH has helped develop the sector-specific “ACT Fashion” methodology, which was finalized in November 2024.

Based on its overall carbon footprint updated annually with the assistance of an outside firm, LVMH mapped out a carbon trajectory in line with the Paris Agreement. This carbon trajectory was approved in December 2021 by leading international third-party organization the Science-Based Targets initiative (SBTi), a coalition that brings together the Carbon Disclosure Project (CDP), the United Nations Global Compact (UNGC), the World Resources Institute (WRI) and the World Wildlife Fund (WWF). In July 2024, LVMH submitted its net-zero pathway for approval by the SBTi, as well as its targets in relation to the FLAG Guidance and the GHG Protocol’s Land Sector and Removals Guidance on forests, agriculture and ecosystems.

Over and above the Group’s overall commitment, seven of its Maisons – Louis Vuitton, Moët Hennessy, Parfums Christian Dior, Guerlain, Make Up For Ever, Tiffany & Co. and Stella McCartney – have now secured approval from the SBTi for their carbon trajectories across their own scopes, confirming their goals built into each Maison’s strategy: “Our Committed Journey” for Louis Vuitton, “Living Soils” for Moët Hennessy, “Beauty as a Legacy” for Parfums Christian Dior and “In the Name of Beauty” for Guerlain. For its part, Tiffany & Co. has pledged to reach net-zero by 2050, in particular by procuring 100% of electricity for its own operational requirements from renewable sources and removing commodity-driven deforestation from all its supply chains.

Adaptation policy

The Group’s adaptation policy is based on taking a practical and evolving view of the main climate-related risks across its value chain in order to define its priorities. In 2022, the Group carried out an overall analysis of climate-related risks to identify priorities across its value chain, from sourcing of raw materials through to product distribution. A total of 21 major physical and transition risks were identified, 10 of which have already been analyzed in depth based on Maisons’ material and asset flows, their location and the extent to which their financial implications have been taken into account, so as to draw up associated adaptation plans.

The adaptation policy is closely linked to the mitigation policy and uses the same segmented approach:

Real estate assets

Every year, the Group updates its analysis of physical risks linked to the geographical location of around 6,000 sites using the ECLR system. Based on this analysis, sites are classified by exposure and investments are allocated to improve their resilience.

Circularity and responsible sourcing

The sourcing policy (see §5.2.1 below) takes into account high-risk geographic regions identified through in-depth analysis with the aim of diversifying sourcing regions.

LVMH Circularity (see §6.2 below) is another key element of the Group’s adaptation policy, whereby materials are reincorporated into the production process via a closed-loop recycling approach to limit the use of natural resources.

Sustainable transport

As a result of measures to reduce the carbon impact of transportation described in the climate transition plan in §2.2.2, limiting reliance on fossil fuels and forms of transport with the highest emissions, the Group has become more resilient to the associated transition risk. In particular, a policy of managing the air/sea ratio has been put in place in the perfumes and cosmetics sector.

Regenerative agriculture

The regenerative agriculture practices the Group has implemented (see §5.2 below) help improve soil resilience, particularly as regards water retention in light of the risk of drought.

2.3.2       Actions and resources used

Implemented and planned actions and their impacts, costs and timelines are set out in the climate transition plan (see §2.2 above).

Mitigation

To achieve the require carbon reductions across Scopes 1, 2 and 3, LVMH has set up taskforces run by its business areas to address key sources of emissions. For example, the Energy and Sustainable Store Planning taskforces are focused on Scope 1 and 2 reductions, while the strategic materials (cotton, leather, wool, cashmere) taskforces and the Transportation, Media and Green IT taskforces are working to improve measurement and implement actions specific to their targets.

Scopes 1 & 2

Concerning Scopes 1 & 2, the Group’s actions to mitigate the impact of its activities on energy consumption are concentrated in three key areas as set out in the climate transition plan:

●   energy conservation;

●   energy efficiency and energy transition;

●   use and production of renewable energy.

In 2024, the Sustainable Store Planning (SSP) team also strengthened the approach to change management by rolling out a policy underpinned by five pillars:

●   managing the network of buyers, including in particular by holding two coordination events (in Florence in March and the Stores Awards in December);

●   training: A total of 1,000 hours of training were delivered in 2024 and a new program was developed for “Partners”;

●   managing the network of partners by rolling out framework agreements and recognizing Labeled Partners;

●   managing Maisons’ Store Planning Purchases data;

●   innovation: In collaboration with LVMH Gaïa.

To reduce the carbon footprint of its operations, and particularly its stores, LVMH continues to enter into partnerships with leading international shopping mall operators. Following an initial partnership between LVMH and an owner of top-tier shopping malls in China, Hang Lung Properties, the Group entered into a new partnership with Swire Properties on November 6, 2024, during the China International Import Expo (CIIE). The consortium created in December 2023 during the COP28 summit, called “Unity for Change”, brings together Chalhoub Group, EMAAR Malls Management (LLC), Majid Al Futtaim Properties LLC and Aldar Properties PJSC.

The fifth Stores Awards were held on 12 December 2024. Held every two years, the LIFE 360 Stores Awards are an intra-Group competition open to the Group’s Maisons to recognize their most exemplary stores in terms of environmental excellence. The various in-store projects and initiatives are assessed on the basis of around 50 specific criteria by an independent external auditor, TERAO.

To mark this occasion, the “LIFE in Architecture” guide dedicated to sustainable building construction and operation is now available as an open source document on the lvmh.com website. The guide, which has been continuously updated since 2015, serves as the basis for developing and assessing real estate projects. By making this guide accessible to all, including those outside the Group, LVMH has adopted an approach of sharing best practices, with the aim of inspiring and uniting the industry as a whole, including its competitors, to create sustainably designed buildings and stores. This initiative fits in with the “Joining Forces” strategy.

Scope 3

The Group’s efforts to reduce Scope 3 emissions are structured around five key areas, as described in §2.2.2, “Decarbonization initiatives” above:

●   circularity (see §6.2, "Management of resource outflows" below);

●   regenerative agriculture (see §5, “Biodiversity and ecosystems (LIFE 360 – Biodiversity)” below);

●   sustainable transport;

●   responsible marketing and Green IT;

●   LIFE 360 Business Partners (see “Governance” section, §1.6, “Supplier assessment and support”).

In addition to the actions described above, the Transportation taskforce was launched in October 2024 during a one-day seminar attended by 92 people including the Group Operations Director and the Group Environment Development Director. This taskforce involves the Environment and Supply Chain departments of 20 Maisons, with the aim of mobilizing and supporting the Maisons in their efforts to reduce their carbon footprint. It will focus in particular on identifying and managing ways of reducing GHG emissions, as well as issues related to governance, data and involvement of external partners (carriers), in addition to raising awareness and fostering a company-wide culture concerning sustainable transport.

This taskforce also aspires to encourage the sharing of experience within the Group, with a number of initiatives already in place within the Maisons. In 2024, these included:

●   Hennessy: In 2024, Hennessy rolled out actions concerning each form of transport, continuing with the wind-powered shipping project with Neoline, maximizing use of rail transport to deliver to the shipping terminals of Le Havre and Fos-sur-Mer, increased use of biofuels for road transport, and rigorous management of use of air transport, with the aim of limiting use of this means of transport (which accounted for just 0.37% of the Maison’s t.km in 2024).

●   Christian Dior Couture: In 2024, electric vehicles were used for 100% of the Maison’s last-mile distribution in China and a number of cities in its other markets, including eight cities in Europe, three in Japan and three in the United States). The Maison also added a clause to its contracts with its carriers in 2024, defining the applicable environmental requirements, in particular the type of road vehicles that can be used (no diesel vehicles to be used in Europe from 2026), prioritizing aircraft with the lowest emissions and using only cargo ships powered by liquefied natural gas (LNG), as well as requirements in terms of packaging and environmental certification (ISO 14001).

To reduce the carbon footprint of marketing-related activities, the Group took action in 2024 by organizing two key events on strategic positioning, communications and the media:

●   the “Sustainable Communication for Desirable Brands in Positioning, Creative Content & Production, and Media” global conference in March, which highlighted the role of the Maisons in their strategic positioning, creating positive stereotypes in relation to the green transition, and implementing measures to reduce the carbon footprint of their advertising campaigns in terms of both production and distribution, without compromising on creativity, effectiveness or efficiency. The conference was followed by concrete measures to support the Group’s Maisons and its external partners with the transition:

-   publication of the Sustainable Production Guidelines, to identify potential ways of reducing the carbon footprint during audiovisual production,

-   publication of a Group Partners Book – Production, Postproduction & Production Consulting, to identify partners developing sustainability best practices,

-   creation and development of a proprietary solution: “MIKE” – Media Investments Key Emissions, with the aim of calculating the carbon footprint of all advertising campaigns of the LVMH Group’s Maisons;

●   a second conference entitled “Working together for a sustainable planet” was held in May, with the aim of raising awareness and involving all the LVMH Group’s key media partners in its strategy of reducing the carbon footprint of its media campaigns, enabling LVMH Group to act as an innovator and pioneer for the most influential market operators.

Due to their position in the Group’s value chain, some of the actions to reduce Scope 3 emissions are not under the direct control of the Group but depend on third parties such as direct and indirect suppliers. In addition to existing methods such as codes of conduct and training, helping these third parties to reduce their carbon emissions is the very object of the LIFE 360 Business Partners program.

Adaptation

In 2022, LVMH began carrying out a double materiality assessment of climate-related impacts, risks and opportunities for the Group so as to refine the identification of key environmental matters (see §2.2.1 above):

Thanks to its analysis of climate-related risks and its work on the environmental taxonomy, the Group is able to identify exposed sites and draw up adaptation plans. More generally, the Group is also conducting an analysis of the various issues involved in adapting to climate change. Winegrowing activities are notably included in the review. In the medium term, changing winegrowing practices is the main component of the Group’s adaptation strategy.

Several solutions are available for European vineyards depending on the climate scenario, from altering harvest dates to developing different methods of vineyard management (such as widening rows, increasing the size of grapevine stocks and employing irrigation in certain countries) and testing new grape varieties. For vineyards in Argentina and California, the main issue is the availability of water (see §4 below).

More broadly, innovation – a key component of the Group’s mitigation policy – also plays a part in LVMH’s adaptation policy: new regenerative farming practices (see §5.2 below), the switch to new materials derived from biotechnologies and the use of biomimetics provide opportunities for reducing greenhouse gas emissions while simultaneously diversifying procurement sources and reducing the Group’s exposure to climate change. The Matières à Penser (Food for Thought) materials library and the Maison/0 partnership with Central Saint Martins dedicated to innovation and sustainable creativity will help drive new solutions at the Group’s Maisons.

LVMH does not make use of carbon offsetting (i.e. buying carbon credits linked to projects to avoid or sequester emissions to offset those emissions still produced by the Group). However, the goal of achieving global net-zero emissions by 2050 raises the question of the role of carbon credits, which the SBTi Net Zero standard proposes should be used once reduction targets have been met. Against this backdrop, the Maisons are trialing various types of offsetting.

2.3.3       Associated targets

Climate change mitigation targets

The climate change mitigation targets are described in the climate transition plan (see §2.2.1, “GHG emission reduction targets”). These are summarized below:

(a)  The target to reduce Scope 3 GHG emissions by 55% (in terms of economic intensity) by 2030, validated by the SBTi, is reflected in a 23% reduction in GHG emissions (in absolute value) in tCO₂e.

(b)  The baseline year is representative of LVMH’s current business. Every year, LVMH updates the calculated footprint for its baseline year (2019) to reflect changes in both carbon accounting methodology and operational scope (see the description of the methodology for calculating the carbon footprint in the climate transition plan, §2.2.1).

Climate change adaptation targets

Because of regulatory uncertainty and technological challenges that need to be overcome, the Group’s climate adaptation strategy does not yet include measurable targets focused on specific outcomes. However, these targets are expected to be set within a year to provide a more structured approach aligned with the Group’s long-term commitments.

Pending the establishment of these measurable targets, the Group is proactively monitoring the effectiveness of its policies and initiatives with regard to impacts, risks and opportunities related to the climate and the environment more generally. A process has been put in place to regularly monitor greenhouse gas emissions reduction initiatives and energy efficiency across the Group’s operations. This process includes carrying out annual audits, analyzing energy consumption and reviewing identified climate-related risks within the various business groups of LVMH. For example, the Group aims to improve energy efficiency in its stores in anticipation of rising energy costs, particularly for electricity. The target is to halve consumption to 300 kWh/m² by 2030 (relative to a 2021 baseline).

2.3.4       Indicators and results

Indicators

The indicators associated with each objective are defined as follows:

GHG emissions – Scopes 1 and 2

Scope 1 emissions are those generated mainly through the combustion of fuel oil and natural gas, as well as the leaking of refrigerant fluids. Scope 2 emissions are those generated indirectly from energy use, mainly electricity used in stores and at the Group’s production sites.

Change in GHG emissions (Scopes 1 and 2) between 2019 and 2024 (market-based)

Change in GHG emissions (Scopes 1 and 2) between 2019 and 2024 (location-based)

Change in GHG emissions (Scopes 1 and 2) between 2019 and 2024 by business group

With LIFE 360, the target reduction in greenhouse gas emissions of operations (Scopes 1 & 2) is measured relative to the baseline year 2019. The baseline value is recalculated as necessary to take account of changes in the carbon accounting methodology and changes in the operating scope (see §2.2.1 above).

Between 2019 and 2024, Scope 1 and 2 emissions declined by 55.1% and the proportion of renewable energies rose from 36% to 71%. The reduction in greenhouse gas emissions was mainly the result of an energy conservation plan (applied at all production sites, logistics centers, administrative sites and stores), the stores’ energy efficiency and increased share of renewable energy.

Energy efficiency at the Group’s stores has been steadily improving since 2013 thanks to a specific lighting policy, audits of the least energy-efficient stores and a sustainable design policy. To perpetuate strong performance, the LIFE 360 program has endeavored to set more ambitious targets, such as having LED lighting make up 100% of lighting for the Group’s retail floor space.

Scope 3 GHG emissions

Change in GHG emissions (Scope 3) between 2019 and 2024

GHG emissions (Scope 3) – Absolute value and per unit of added value (carbon intensity)

(a)  Reported revenue adjusted for changes in the operational scope (acquisitions, disposals) between 2019 and 2024.

Reduction in GHG emissions (Scope 3) per unit of added value in 2023 and 2024

Breakdown of Scope 3 GHG emissions in 2024 by business group

The table below shows the detailed 2024 results by upstream transportation category (transport of raw materials and components toward production sites; only the main components and raw materials are taken into account), downstream transportation and distribution (transport of finished products from production sites to distribution centers and points of sale):

GHG emissions from upstream and downstream transportation by mode of transport in 2024

(a)  Eliminations represent GHG emissions associated with transportation flows between the Maisons. For transportation in particular, eliminations relate to transportation between the Maisons of different business groups and Selective Retailing (Sephora, DFS).

Exclusions: Buly, Repossi, Patou and Colgin Cellars are excluded from the 2024 carbon footprint calculation for the upstream and downstream transportation categories.

Overview of GHG emissions

Total change in GHG emissions (Scopes 1, 2 and 3) – Absolute value and economic intensity

LIFE 360 targets

2.4         Energy

2.4.1       Energy policy

The energy policy falls under the climate policy and is presented in §2.3.1 above.

2.4.2       Actions and resources used

Energy-related actions and resources fall under the climate policy and are presented in §2.3.2 above.

2.4.3       Associated targets

Energy-related objectives are summarized in the table below.

(a)  The baseline year is representative of LVMH’s current business. Every year, LVMH updates the calculated footprint for its baseline year (2019) to reflect changes in both carbon accounting methodology and operational scope (see CTP methodology).

2.4.4       Indicators and results

Indicators

The indicators associated with each objective are defined as follows:

Results

Consumption and proportion of fossil, nuclear and renewable energies

Energy consumption by business group in 2023 and 2024

(a)  Value and change at constant scope.

(b)  Data for "Other activities" in 2023 has been adjusted to reflect actual consumption.

Energy consumption by business group and by energy source in 2024

Proportion of renewable energy and renewable electricity by business group in 2024

LVMH does not have any activities in high climate impact sectors. As such, it does not publish energy intensity data.

Energy consumption in 2024 was estimated at 146,357 MWh, or 8% of the Group’s total energy consumption.

Energy efficiency for stores in 2024

2.5         Supporting the principles of the Task Force on Climate-Related Financial Disclosures (TCFD)

In June 2017, the Financial Stability Board, established by the G20, published recommendations issued by the Task Force on Climate-Related Financial Disclosures (TCFD) aimed at providing a clear, comparable and consistent framework for the assessment and disclosure of climate-related information while enabling companies to disclose more information to stakeholders. Understanding that inadequate information can lead to assets and capital allocation being incorrectly assessed, financial decision-makers are increasingly asking companies to (i) manage their exposure to climate-related risks and (ii) reduce their contribution to climate change.

In 2019, as part of its previous LIFE 2020 program, LVMH commissioned a survey to establish how closely the Group’s practices were aligned with the TCFD recommendations. This survey highlighted both the robustness of the targets that had been set and how much progress remained to be made on incorporating climate-related issues into governance, corporate strategy and risk management. These conclusions were taken into account when the LIFE 360 action plan was drawn up.

At the end of 2020, LVMH committed to support the TCFD principles and embarked on a process of continuous improvement to implement its recommendations. In 2022, LVMH updated its analysis of physical and transition risks relating to climate change by applying the scenario analysis method and studying the related financial consequences. The disclosures resulting from this update are provided in this report, in the public response to the CDP Climate Change 2023 questionnaire, for which LVMH earned an A score (https://www.cdp.net/en/responses), and in the Group’s most recent CSR report, available on LVMH’s website.

A breakdown of the corresponding information is set out in the following table:

3.     Pollution

3.1         Addressing issues related to pollution

LVMH is implementing a strategy to fight water and soil pollution, created in collaboration with the Kunming-Montreal Global Biodiversity Framework, the European Union action plan “Moving towards zero pollution in Europe”, the REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) regulations and the cosmetic products directive. LVMH has also followed the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD). The environmental impacts and risks linked to water and soil pollutants and to the use of substances of concern and of very high concern are assessed using:

●   water and biodiversity footprints, which include an ecotoxicology indicator;

●   indicators of water pollution: organic, nitrogen and phosphorus;

●   continuous monitoring of the substances used to manufacture products.

This information covers LVMH operations and certain of its supply chains and is consolidated annually.

As part of the double materiality assessment, two material risks of the Group’s activities have been recognized:

●   reputational risk in the event of a controversy linked to chemical pollution from substances of concern within its own operations or those of its value chain;

●   sanctions and penalties in the event of non-compliance with regulations relating to substances of concern.

The Group is working on reducing or prohibiting the use of the substances that present the highest risks to human health, as well as to water and soil pollution, within its operations and value chain, and reducing as far as possible organic and inorganic sources of pollution. The Group is specifically targeting the following potential impacts:

●   Soil pollution:

-   own operations: Pollution arising from the use of inputs in the production and processing of raw winegrowing materials (vineyards in the Wines and Spirits business group);

-   supply chain: Pollution arising from the use of inputs in the production and processing of agricultural, winegrowing or livestock farming commodities (raw materials from the Wines and Spirits and Fashion and Leather Goods business groups).

●   Water pollution:

-   own operations: Pollution arising from the use of inputs in the production and processing of raw winegrowing and livestock farming materials (vineyards, direct distillation and winemaking operations for the Wines and Spirits business group, and tanneries, textile manufacturing and finishing and crocodilian farms for the Fashion and Leather Goods business group);

-   Supply chain:

-   pollution arising from the use of inputs in the production and processing of agricultural, winegrowing and livestock farming commodities (raw materials for the Wines and Spirits and Fashion and Leather Goods business groups),

-   water pollution associated with the extraction and processing of mineral raw materials (raw materials for the Watches and Jewelry business group).

●   Substances of concern and very high concern: Ecosystem pollution risk arising from the use or end-of-life management of substances of concern or very high concern (Fashion and Leather Goods, Perfumes and Cosmetics).

3.2         Preventing soil pollution

3.2.1       Policy related to potential soil pollution

As part of the Group’s operations, the following activities are considered material to soil pollution:

●   own operations: Production of grapes for the Wines and Spirits business group with the use of fertilizers and plant protection products;

●   supply chain: Production of raw materials for the Wines and Spirits (grapes, barley, etc.) and Fashion and Leather Goods (cotton, wool, etc.) business groups with use of fertilizers and plant protection products.

For over twenty years, Moët Hennessy has been committed to a policy of reducing and optimizing the use of chemicals at its vineyards (pesticides, herbicides and fertilizers), in conjunction with its vineyard certification program and now supported by its “Living Soils, Living Together” program. LVMH, Moët Hennessy and the Maisons are working together to manage these topics: implementing the best technologies to reduce usage, selecting the least harmful substances, monitoring and consolidating the quantities in use, and setting objectives.

●   Herbicides: Moët Hennessy is rolling out a policy that aims to totally eradicate the use of herbicides in its vineyards.

●   Pesticides: Moët Hennessy is implementing a policy to reduce the use of other pesticides (insecticides and fungicides), in particular by using biocontrol agents, which stimulate plants’ natural defense mechanisms through microorganisms, chemical mediators (including pheromones) or natural substances.

●   Fertilizers: Moët Hennessy prioritizes the use of organic rather than synthetic fertilizers, as doing so offers benefits for soil structure as well as water quality.

Moët Hennessy has rolled out consultation processes with local residents, which are presented in the "Social" section, §3.2, “Rights of local communities”.

Pollution linked to the production and processing of raw materials in the supply chain for the Wines and Spirits and Fashion and Leather Goods business groups is also covered by a specific action plan for certification and implementation of regenerative agriculture practices, presented in §5, "Biodiversity and ecosystems (LIFE 360 – Biodiversity)", ensuring that the use of plant protection products is reduced.

In compliance with regulatory requirements, plant protection products and fertilizers are stored in such a way that any accidental leaks are contained. Emergency procedures are defined within the environmental management systems implemented at LVMH sites and suppliers for the Group.

3.2.2       Actions and resources used

In 2024, Moët Hennessy has continued to implement the environmental certification for vineyards to guarantee the reduction or elimination of chemical inputs. In 2024, 96% of LVMH vineyards had already been certified. The 78-hectare Chandon China vineyard received European and Chinese organic certification in August 2024. Château Galoupet started moving toward organic status in 2020, receiving official certification in both 2023 and 2024. Consequently, its vineyards have already been free of chemical inputs for four years.

The Wines and Spirits business group also keeps a detailed inventory of plant protection products that are still in use. Each substance is assessed based on the following metrics:

●   TOA: Acute toxicity (acute health risk indicator);

●   TOC: Chronic toxicity (chronic health risk indicator);

●   TERRA: Impact on biodiversity;

●   AQUA: Impact on water.

The substances are then ranked using the overall score, which identifies those to prioritize for eradication. A pilot project has been launched with the vineyards in Argentina to further analyze the inputs used in the Group’s vineyards, each of which has been assessed in terms of its impact on human health, biodiversity and water quality.

The Maisons monitor progress calculating the Treatment Frequency Indicator for both conventional products and biocontrol agents which simulate plants’ natural defense mechanisms. There are also opportunities to make progress by improving plant protection treatment equipment. For example, confined sprayers with recovery panels can reduce the amount of product used by 30-40% while allowing for much more targeted treatment.

Concerning fertilizers, the number of units of nitrogen used at the Maison’s vineyards is also monitored. Nitrogen is applied taking into account weather conditions so as to minimize runoff into the soil and the water table. Measures to promote the use of organic rather than synthetic fertilizers have been put in place, as doing so offers benefits for soil structure as well as water quality.

The human resources allocated to these actions are equivalent to 20 full-time equivalent staff members. In 2024, the financial resources dedicated to funding this transition in vineyards totaled 33 million euros.

The Fashion and Leather Goods Maisons are rolling out programs for raw material certification and for the transition to regenerative agriculture, particularly for cotton, which is well-known for its consumption of plant protection products. The results are presented in §5.2.4, “Related metrics”.

3.2.3       Associated targets

The Group has set the following voluntary targets regarding soil pollution:

Potential soil pollution related to the Wines and Spirits businesses

The sustainable winegrowing certification targets, which include the topic of soil pollution, also cover grape suppliers and are presented in §5.2.4, “Related metrics”.

Potential soil pollution related to the Fashion and Leather Goods businesses

The contribution to reducing soil pollution for the Fashion and Leather Goods businesses stems from the certified raw materials purchasing program and the transition to regenerative agriculture presented in §5.2, “Management of the impact on ecosystems, soil, and plant and animal species”.

3.2.4       Indicators and results

Management of metrics related to soil pollution

None of the pollutants listed in Annex II of Regulation (EC) No. 166/2006 of the European Parliament and of the Council emitted to soil are used above the thresholds set with the exception of copper for the following Maisons (total of 9.1 metric tons of copper): Hennessy, Château d’Yquem, the champagne houses, Chandon Argentina, Chandon do Brasil, Domaine Chandon Australia, Domaine Chandon Ningxia China, Château d’Esclans, Château Galoupet, Joseph Phelps and Clos des Lambrays. Copper is used as a plant protection agent as part of the green transition and the gradual reduction of synthetic pesticides.

In 2024, the results were as follows:

Wines and Spirits

(a)  Exceptional use due to heavy rainfall in Champagne in 2024.

Fashion and Leather Goods

See the table entitled “Certification of strategic supply chains: Results in 2024” in the “Governance” section, §1.7, “Animal welfare”.

3.3         Preventing water pollution

3.3.1       Policy related to water pollution

LVMH has rolled out an overall strategy for water pollution prevention. It includes the following topics, which are considered material:

●   LVMH Group operations: Discharge of effluent containing organic pollutants from winemaking and distillation processes, and crocodilian farms (risk of eutrophication); discharge of effluent containing organic and mineral pollutants from tanneries;

●   supply chain: Extraction and processing of mineral raw materials for the Watches and Jewelry business group; discharge of effluent containing organic pollutants (risk of eutrophication) and mineral pollutants during processing (tanneries, textile manufacturing and finishing, metalwork, etc.).

The Group’s other activities do not have a material impact on water pollution.

Eutrophication is the excessive buildup of algae and aquatic plants caused by excess nutrients in the water (particularly phosphorus), which reduces water oxygenation and adversely affects the environment. The parameter used is the Chemical Oxygen Demand (COD) calculated after treatment of effluents from the Group’s own plants or external plants with which the Group has agreements, as well as indicators of nitrogen and phosphorus pollution. The following operations are considered treatment: city and county wastewater collection and treatment, independent collection and treatment (aeration basin), and land application. All of LVMH’s operations that generate the highest COD are equipped with facilities for treating and minimizing organic pollution. LVMH also ensures that the relevant industrial plants treat their organic nitrogen and phosphorus loading.

LVMH is a member of the ZDHC (Zero Discharge of Hazardous Chemicals) trade association, which aims to promote best practices concerning the use of dangerous substances and the quality of discharged wastewater at textile and leather manufacturing sites, in particular for dyes. LVMH has drawn up a detailed roadmap that encompasses LVMH’s production sites as well as key suppliers of Maisons in the Fashion and Leather Goods business group. All concerned production sites (tanneries and Loro Piana production sites) must test the quality of their wastewater discharge and share a “ClearStream” report in order to monitor their performance. If a production site is non-compliant, it must share a corrective action plan, including a specific timeline.

The Maisons in the Wines and Spirits business group implement the policy described in the previous section to manage the risks of soil and water pollution with regard to winegrowing. In addition, the Maisons also implement an effluent treatment policy for all facilities concerned, in particular the distilleries, with the exception of the Ardbeg distillery, which discharges its effluent untreated in accordance with local regulations. The aim is to reduce the load of organic pollution as far as possible.

The Watches and Jewelry Maisons work in partnership with their suppliers to reduce water pollution, both from mines and metalworking activities, notably by implementing RJC certification, which incorporates several criteria on water management and the use of polluting substances.

Lastly, in compliance with regulatory requirements, hazardous products are stored in such a way that any accidental leaks are contained. Emergency procedures are defined within the environmental management systems implemented at LVMH sites and suppliers for the Group.

3.3.2       Actions and resources used

The Loro Piana production site at Quarona is a textile production and finishing facility that is strategic at a Group level in terms of water pollution management. The site has longstanding practices for treating polluted effluents, and in 2024 it installed new technologies to further improve effluent treatment and to recycle part of its effluent. A wastewater treatment plant was constructed in 1987, and an ozonation system was set up in 2008 to remove dye residue from wastewater and reduce pollutants, like phenols, halogens and COD. In 2019, a membrane bioreactor was installed at this plant, which has reduced organic pollution by 98%. Lastly, by introducing two reverse osmosis systems – one in 2020 and the other in 2024 – the wastewater is purified to a very high degree. This enables around 25% of the water to be recycled through reintroduction into the production cycle.

The Cypress Creek crocodilian farm, already equipped with an effluent treatment unit since 2010, installed a belt press in 2024, enabling the residues to be reused agriculturally as soil fertilizer in partnership with local farmers. This new facility required an investment of 320,000 euros. In addition, optimized effluent treatment has made it possible to test water recycling in the farm’s facilities.

Lastly, coverage for environmental risks amounted to 3 million euros as of December 31, 2024. This amount corresponds to the financial guarantees required by law for Seveso upper-tier establishments.

3.3.3       Associated targets

LVMH has set a number of voluntary targets as part of its strategy to reduce water pollution.

(a)  The following are included in the scope: Tanneries Roux, Heng Long for leather and Loro Piana for textile.

The ZDHC program’s Manufacturing Restricted Substances List (MRSL) is more restrictive than EU regulations. The substances covered are as follows:

The contribution to reducing water pollution related to plant protection products in the vineyards for the Wines and Spirits businesses is linked to the contribution to reducing soil pollution presented in the previous section.

3.3.4       Indicators and results

Management of metrics related to the use of substances of concern

The following Maisons reject some of the substances listed in Annex II of Regulation (EC) No. 166/2006 of the European Parliament and of the Council above the thresholds set:

●   COD (Chemical Oxygen Demand, a parameter representative of organic pollution) totaling 2,177 metric tons: Domaine Chandon California, Domaine Chandon Argentina, Glenmorangie (Tain distilleries), Ardbeg, Château Cheval Blanc, Château Quinault L’Enclos, Château d’Esclans, Minuty, Joseph Phelps;

●   Total P (total phosphorus), 15.8 metric tons: Glenmorangie (Tain distilleries) and Ardbeg;

●   Phenols for a total of 0.1 metric tons: Loro Piana (Quarona production site).

In 2024, the Fashion and Leather Goods Maisons continued the voluntarily roll out the ZDHC program, including with their suppliers, in particular as regards monitoring wastewater quality in operations using wet processes (tanneries, textile manufacturing and finishing). Five of the seven targets set for 2026 were achieved by 2024, with the following results:

(a)  The following are included in the scope: Tanneries Roux, Heng Long for leather and Loro Piana for textile.

In 2024, the Watches and Jewelry Maisons rolled out RJC certification to their gold supply chain; the results are presented in the table entitled “Certification of strategic supply chains: Results in 2024” in the “Governance” section, §1.7, “Animal welfare”.

Tables summarizing organic pollution in effluent for LVMH operations in 2024:

(a)  Value and change at constant scope.

3.4         Avoiding substances of concern and substances of very high concern

3.4.1       Policy related to substances of concern and very high concern

At the Group level, substances of concern and very high concern are considered material with regard to potential ecosystem pollution (product use and end-of-life treatment for the Perfumes and Cosmetics and Fashion and Leather Goods business groups) and their potential impact on consumer health in cosmetic products. LVMH is motivated by a constant desire to protect the health and safety of its stakeholders as well as to preserve ecosystems by avoiding or reducing the use of chemicals of concern and of very high concern. To achieve this, the Group pursues a proactive policy and is continuously looking to offer products of the highest quality, through research and innovation and high standards, in the selection of materials and through the implementation of expertise in its activities.

The Perfumes and Cosmetics business group and its suppliers comply with international regulations in terms of safety and ecotoxicology, in particular Regulation (EC) No. 1223/2009, relating to cosmetic products, and Regulation (EC) No. 1907/2006 (REACH). These regulations must be applied before using any raw material in a cosmetic product. The Maisons’ products must meet rigorous internal requirements covering development, quality, traceability and safety for consumers.

By adopting a proactive risk prevention process, the Perfumes and Cosmetics business group remains ready for changes in international regulations that maintain consumer safety and protect the environment. This process relies on opinions issued by international scientific committees and industry group recommendations. Industry developments are monitored on an ongoing basis to ensure that LVMH’s charters (for ingredients used in cosmetics and perfume making) are kept up to date, listing substances that are banned or subject to restrictions in the formulation of cosmetic products and fragrances.

The Group’s holistic, rigorous approach to ensuring that ingredients are safe, healthy and sustainable also extends to its packaging, taking into account the circular economy and end-of-life treatment of its products. This approach aims to eliminate the use of packaging containing substances that are hazardous, controversial or of concern through a dedicated LVMH packaging charter covering the entire life cycle of perfume and cosmetics packaging.

The Perfumes and Cosmetics business group’s Maisons may be concerned by the following substances of very high concern, which are monitored in-house for their harmful effects on the environment on the basis of a classification as PBT (persistent, bioaccumulative and toxic) or vPvB (very persistent and very bioaccumulative):

3.4.1.1              Cyclic silicones

●   D5: Decamethylcyclopentasiloxane PBT (Article 57d)/vPvB (Article 57^e) of the REACH regulation;

●   D6: Dodecamethylcyclohexasiloxane PBT (Article 57d)/vPvB (Article 57^e) of the REACH regulation.

These substances were banned in the LVMH cosmetic ingredients sourcing charter in January 2019. Reformulation of existing products for all types of applications (leave-on and rinse-off) is in progress.

The LVMH Group’s position enabled anticipation of the ban on D5 in rinse-off products in January 2020. Similarly, the EU regulation published on May 17, 2024 will ban the use of D5 and D6 silicones in leave-on products as of June 2027.

3.4.1.2              PFAS

Due to their toxic effects on human health and the environment, halogenated products – which include PFAS – have been banned in formulations since 2009 under the LVMH cosmetic ingredients and packaging sourcing charters.

Maisons in the Fashion and Leather Goods and Watches and Jewelry business groups abide by in-house standards that prohibit or restrict the use of certain substances in products placed on the market, as well as their use by suppliers. These documents are shared with all suppliers and subcontractors in the form of a letter of undertaking. They are committed to their implementation:

●   LVMH Product Restricted Substances List: this standard, which applies to all raw materials used by the Maisons, goes beyond global regulatory requirements (such as those of the EU’s REACH regulation, including the list of substances classified as carcinogenic, mutagenic or reprotoxic, Category 1A or 1B – Annex XVII). It is regularly updated in response to ongoing monitoring of scientific developments;

●   Manufacturer Restricted Substances List (MRSL): Compiled and updated by ZDHC, this list aims to ensure upstream compliance of chemicals purchased. In 2019, LVMH joined the ZDHC (Zero Discharge of Hazardous Chemicals) trade association, which aims to promote best practices concerning the use of dangerous substances and the quality of discharged wastewater at textile and leather manufacturing sites, in particular at tanneries and facilities that use wet processing for textile production.

In accordance with these documents and the associated protocols, textile and leather manufacturers undertake to:

●   implement sustainable management of chemicals with the aim of gradually reducing and eventually eliminating the use of the riskiest substances;

●   optimize production processes to reduce the risks associated with the use of chemicals;

●   check the efficacy of management and procedures in place by means of routine analysis of hazardous substances in discharges.

In collaboration with other luxury goods brands, LVMH is working to develop a method for verifying the sustainable management of chemicals in galvanizing processes involved in the production of metal parts for leather goods and jewelry products.

3.4.2       Actions and resources used

In 2024, LVMH Perfumes and Cosmetics’ research team introduced an IT tool for managing reformulations as part of plans to stop using certain substances of very high concern. The disengagement plan therefore significantly reduced the quantities of cyclic silicones (D5 and D6) used in 2024.

In 2024, the LVMH Perfumes and Cosmetics research team also introduced the IPC (Interaction Packaging Contenu) certification system, which allows for systematic checks to be performed on the basis of supplier documentation and certificates as well as tests by in-house labs on substances contained in packaging materials that are in permanent contact with the cosmetic product (such as SVHCs under the REACH framework, the Proposition 65 list, heavy metals, CMR chemicals, endocrine disruptors and PFAS). If the packaging materials used pose no risk to consumer safety, this is recorded by a toxicologist in the in-house systems by granting an IPC certificate.

The Group operations concerned, including the tanneries and suppliers of the Fashion and Leather Goods Maisons, continue to roll out the ZDHC program. LVMH supports its partners by offering training and by covering the costs of the first year of certification, which came to 40,000 euros in 2024.

3.4.3       Associated targets

LVMH has set the following voluntary targets as part of its policy to control use of substances of concern and of very high concern:

Overview of targets related to the use of substances of concern

(a)  The following are included in the scope: Tanneries Roux, Heng Long for leather and Loro Piana for textile.

As part of the policy for controlling the use of substances of very high concern (SVHCs), the Perfumes and Cosmetics business group has set the target of including these substances in its cosmetic ingredients and packaging sourcing charters once they are added to the candidate list. This also enables the Maisons to comply with REACH requirements and prepare for and anticipate future inclusions of substances in the authorization list by no longer using them in their products.

3.4.4       Indicators and results

In accordance with Article 57 of Regulation (EC) No 1907/2006 of the European Parliament and of the Council (REACH) and with Appendix VI, Part 3 of Regulation (EC) No 1272/2008 of the European Parliament and of the Council, the Perfumes and Cosmetics Maisons only use D5 and D6 cyclic silicones.

In 2024, the Fashion and Leather Goods Maisons continued to proactively roll out the ZDHC program, in particular as regards monitoring substances used in wet processes (tanneries, textile manufacturing and finishing) with the following results:

(a)  The following are included in the scope: Tanneries Roux, Heng Long for leather and Loro Piana for textile.

(b)  Decrease linked to the change in business activity of a certified site.

4.     Water and marine resources (LIFE 360 – Water)

4.1         Addressing issues related to water

Under pressure from both population growth and the consequences of global warming, water is a resource in high demand. Restrictions on its use mean specific action plans are needed. It is an essential component of the Group’s activities. This makes it a strategic resource that contributes directly to the quality of products developed by LVMH, and the Group has a responsibility to take action to preserve it. In 2024, LVMH updated its water footprint using specific, recognized pressure and sensitivity indicators such as the EF 3.0.2 and IMPACT 2002+ databases and the Aqueduct, WWF Water Risk Filter, Plasteax (Mismanaged Waste Index) and AWARE methodologies. The input data used for the most recent footprint covers the year 2023 for both raw materials (including quantities of raw materials, origin and potential certification) and LVMH operations. By calculating its water footprint in this way, the Group is able to identify which sites and raw materials are associated with the highest impact and highest risk, and/or are located in areas of high water stress, both within LVMH’s operations and across the Group’s value chain. Discussions with local communities and administrations are systematic at all of these sites.

The following risks and impacts are considered material:

●   Own activities: Contribution to the depletion of water resources arising from water withdrawal by the Group’s operations, particularly in areas at water risk (Wines and Spirits, mainly vineyard irrigation in LVMH owned vineyards, especially in Argentina and California).

●   Sourcing raw material: Contribution to the depletion of water resources arising from water withdrawal by the Group’s operations and supply chain, particularly in areas at water risk (Wines and Spirits and Fashion and Leather Goods).

●   Risk of decline in agricultural yields affecting supplies of raw materials needed to manufacture the Group’s products in the event of a reduction in water resources or restrictions on use (all business groups).

Areas of high water stress are identified using the WWF’s Water Risk Filter. Water consumption at these sites is presented in §4.2.1.

LVMH is always working to improve measurement of water consumption across the Group’s value chain using constantly refined pressure indicators and increasingly accurate location methods to plan its operations and supply chains.

4.2         Management of issues related to water

4.2.1       Policy related to water

With respect to material impacts and risks and the Group’s LIFE 360 environmental strategy, LVMH implements a policy and action plans to reduce specific water withdrawals for the most water-intensive activities within its operations (irrigation of the Group’s vineyards, hospitality sites, tanneries, etc.) and in the upstream value chain (production and processing of raw materials), particularly in areas of high water stress. The downstream value chain does not contribute significantly to the Group’s water footprint.

LVMH Group operations

The Group’s environmental policy, which aims to reduce water withdrawals, covers the following topics:

●   Reducing irrigation requirements by rolling out best practices and technologies, particularly in Argentina and California vineyards, and continuing to roll out the regenerative agriculture program, launched in 2021, across the Group’s vineyards, with the aim of improving the quality of soil and thereby its ability to capture and retain water.

●   Reducing water withdrawal, particularly at sites located in areas of high water stress, by implementing more efficient technologies and practices at the Group’s hospitality sites (water savers, water efficient washing equipment, etc.). LVMH is also working on reducing water withdrawal by its operations located in areas of lower water stress, such as by rolling out water recycling systems at distilleries and Loro Piana workshops, as well as more efficient technologies at tanneries and farms.

Supply chains

In addition, the Group’s value chain, which accounts for 95% of its water footprint, is also covered by a policy and action plans aimed at the following:

●   helping to deploy more efficient technologies to reuse treated wastewater and recover rainwater within the value chain.

●   continuing with the Group’s raw materials certification and regenerative agriculture program, launched in 2021, across the cotton, wool, leather and beet supply chains.

●   raising awareness among customers through environmental labeling, which is in the process of being rolled out across the Group’s products.

Lastly, LVMH joined the CEO Water Mandate in 2023, a United Nations organization aimed at sharing and implementing best practice in water management. As it did for biodiversity, LVMH took part in official testing of the SBTN approach, which includes defining specific targets for some watersheds, in particular for grape production in the Cognac region and cashmere production in Mongolia.

The risk of decline in agricultural yields affecting supplies of raw materials needed to manufacture the Group’s products in the event of a reduction in water resources or restrictions on use is managed by regularly evaluating the stress level using the Water Risk Filter for each supply region and identifying the most exposed regions.

4.2.2       Actions and resources used

Chandon Argentina, which accounts for more than 46% of the Group’s water withdrawal, carried out a study with the WWF in 2024 to look into new ways of reducing water withdrawal related to irrigation requirements. Vineyard irrigation requires authorization and is regulated in California and Argentina due to the climate. Such irrigation is necessary for winegrowing. Nevertheless, the Group has taken the following measures to limit water withdrawal: harvesting rainwater; implementing protocols to measure and specify water requirements; standardizing drip irrigation practices; using weather forecasts to optimize irrigation; and adopting the “regulated deficit irrigation” technique, which reduces water consumption and improves grape quality and grapevine size, yielding an enhanced concentration of aroma and color.

Hennessy, which has finalized its water footprint, is working on making data more reliable as well as reducing water withdrawal. In 2024, the Maison introduced a tool for collecting water withdrawal data from its distillery and packaging manufacturer partners, which are the two main sources of its Scope 3 water consumption. The Maison, which has already reduced its water withdrawal by 43% since 2003 and represents about 1% of the Group’s water withdrawal process, continued in 2024 with the rollout of leading technologies, such as recycling certain types of cleaning water and water from osmosis processes.

Belvedere, which reduced its water withdrawal by 4% since 2019, rolled out a new purification process in 2024 to recycle wastewater and residual water from rectification processes. It represents an investment of 60,000 euros.

4.2.3       Associated targets

The voluntary targets set by the Group are directly linked to the policy of reducing water withdrawals and material impacts, in particular by integrating the Wines and Spirits and Fashion and Leather Goods business activities and supply chains.

4.2.4       Indicators and results

Management of metrics related to water use

Metrics and targets related to water withdrawal and consumption:

(a)  Value and change at constant scope.

(b)  The increase in 2024 is mainly due to the integration of estimated values of 29% (2,143,550 m³) for certain stores and administrative sites.

(c)   Volumes of recycled or reused water are not included.

(d)  Increase linked to insufficient rainfall at vineyards in Argentina.

Water withdrawal for process requirements broken down as follows by business group:

(a)  The 2024 values include estimates of 29% (2,143,550 m³) for certain stores and administrative sites.

(b)  Value and change at constant scope.

5.     Biodiversity and ecosystems (LIFE 360 – Biodiversity)

5.1         Addressing issues related to biodiversity

5.1.1       Transition plan and consideration of biodiversity and ecosystems in strategy and business model

Protecting natural ecosystems is of vital importance to LVMH, whose business is heavily dependent on natural raw materials (such as flowers, grapes, cotton, leather and gems). LVMH has implemented a biodiversity strategy and a corresponding biodiversity transition plan drawn up in accordance with the Kunming-Montreal Global Biodiversity Framework and the EU Biodiversity Strategy for 2030. LVMH has also followed the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD). LVMH is an active member of the TNFD forum, which developed a specific risk management framework to be used by its members to better map positive and negative actions relating to nature to help guide their strategic planning and asset allocation decisions. As a member of the TNFD Forum, LVMH takes part in the development of standards, including in particular the one for the “Consumer Goods” category, with a focus on textiles. LVMH has undertaken to have its disclosures in respect of fiscal year 2024, for the first time, aligned with TNFD recommendations. LVMH also draws on the Science-Based Targets for Nature process, which provides standards to set science-based targets that are measurable, actionable and time-bound.

The Group’s biodiversity strategy is aligned with material impacts presented in the next section and is based on three core principles:

●   Measuring and assessing the impact and dependencies on nature: Measuring impacts can serve as a powerful lever for identifying priorities, targets and actions; measuring impacts on biodiversity remains a complex issue. LVMH updates its indicators used to track progress annually and uses specific, recognized pressure and sensitivity indicators such as the EF 3.0.2 and IMPACT 2002+ databases (surface area used and/or converted) and tools provided by Trase and Global Forest Watch (surface area deforested), IBAT (exposure of businesses related to protected areas, rich in biodiversity and endangered species of fauna and flora) and ENCORE (identification of businesses’ dependencies on nature). The input data used for the most recent footprint covers the year 2023 for both raw materials (including quantities of raw materials, origin and potential certification) and LVMH operations. This step to identify and assess nature-related risks and impacts is based on the TNFD’s LEAP approach (Locate, Evaluate, Assess and Prepare), as well as Steps 1 (Screening and Value Chain Assessment) and 2 (Prioritization) of the SBTN framework. The results of this first step have fed into the Group’s double materiality assessment and validation of the material impacts and risks set out in §5.1.2, “Interaction between biodiversity impacts and the Group’s strategy and business model”.

●   Avoiding and reducing impacts on biodiversity: After measurement, impact avoidance and reduction constitute the second step of the Group’s biodiversity strategy. This strategy is based on two main objectives: obtaining environmental certification and reducing the intensity of deforestation and conversion of natural ecosystems for the Group’s operations and supply chains. The program to obtain environmental certification for operations and raw materials (FSC for wood and wood derivatives or RSPO for palm oil derivatives) helps reduce the environmental impact on ecosystems, particularly in terms of pollution, water consumption, effluent discharges and waste production. The following certification programs have been rolled out:

-   Operations:

-   production and hospitality sites: LVMH uses certified environmental management systems, such as ISO 14001 certification, for the Group’s production and logistics sites and EarthCheck certification for hospitality sites;

-   vineyards: All Group vineyards are undergoing environmental certification according to the standards detailed in §5.1.2, “Interaction between biodiversity impacts and the Group’s strategy and business model”.

-   Supply chains:

-   supplier industrial sites: LVMH has rolled out certification programs for the production sites of certain suppliers, such as tanners and fabric makers, which have to have LWG or ZDHC certification;

-   production and/or extraction of raw materials: LVMH has rolled out a raw materials certification program, presented in §5.2.1.1, “Policy related to impact on ecosystems and soil”.

Concerning reducing the intensity of deforestation and conversion of natural ecosystems for the Group’s operations and supply chains, LVMH has set itself the target of zero deforestation and conversion of natural ecosystems within operations and supply chains by the end of 2025. In particular, LVMH and its Maisons have banned certain regions for the supply of leather (South America), wood and wood derivatives.

●   Regenerating and preserving ecosystems: The Group is committed to restoring, protecting or regenerating the equivalent of five million hectares of flora and fauna habitat by 2030, either within its supply chains by rolling out regenerative agriculture programs for strategic agricultural commodities like grapes, cotton, wool and leather, or by contributing to collective efforts to regenerate and preserve ecosystems and protect particularly endangered plants and animals.

In addition to these three strategic priorities, LVMH has begun setting nature-related targets based on the international Science-Based Targets for Nature for specific natural environments, in connection with some of the Group’s material impacts and risks: the LVMH vineyards in a French winegrowing region and production of cashmere in Mongolia. The Group is currently analyzing the possibility of extending this approach to other ecosystems.

In addition, the dependency on nature of LVMH’s activities was assessed using the ENCORE tool, which identifies potential high dependencies on nature for each Group activity:

●   dependency on nature-related cultural services for hospitality activities;

●   dependency on soil quality to ensure the production of the plant and animal fibers needed by the Fashion and Leather Goods Maisons (supply chain), and the production of grapes needed by the Wines and Spirits Maisons;

●   dependency on pollination services for certain ingredients used by Perfumes and Cosmetics Maisons;

●   dependency on the capacity of ecosystems to purify surface and ground water to ensure the production of the plant and animal fibers needed by the Fashion and Leather Goods Maisons (supply chain), the production of grapes needed by the Wines and Spirits Maisons and the hospitality activities.

The Group’s activities exposed to high water stress and the adaptation measures taken are set out in §4.2.1 and §4.2.4.

Lastly, LVMH Recherche has introduced comprehensive processes to actively monitor changes in the international and national legislation arising from the Nagoya Protocol on Access and Benefit Sharing in relation to genetic resources. Its focus has been on the production and utilization of certain perfume ingredients and cosmetics. LVMH assesses their applicability to its operations and rolls out action plans to achieve full compliance. This framework calls for systematic assessments when new raw materials are utilized, encompassing both raw materials developed internally and those offered by suppliers, as well as patent applications and commercial claims. LVMH takes any remedial action required to avoid non-compliance incidents. It may, for example, request information from national authorities or ask suppliers to evaluate whether they can obtain permits for or halt the sourcing of non-compliant raw materials.

Local and indigenous communities are also consulted through the processes described in the “Social” section, §3, “Affected communities”. The consultations address land use and certain practices such as the use of plant protection products.

5.1.2       Interaction between biodiversity impacts and the Group’s strategy and business model

The processes used to identify and assess impacts and risks and opportunities outlined in the previous section have highlighted the activities shown in the following table as being the most crucial for biodiversity purposes.

Material impacts on biodiversity

In addition, LVMH assessed its operations’ exposure to protected natural sites, to biodiversity areas of strategic importance and to fauna and flora on the IUCN Red List of Threatened Species. All in all, 218 protected areas, 48 biodiversity areas of strategic importance and 2,936 species of fauna and flora, including 397 classified as CR (critically endangered), 1,011 as EN (endangered) and 1,529 as VU (vulnerable) on the IUCN Red List, lie within a radius of 1 km of Group sites. The LVMH sites located less than 1km from a protected area span 2,897 hectares. The five sites with the greatest exposure to sensitive ecosystems (number of protected sites, biodiversity areas of strategic importance, and number of endangered fauna and flora species within a 1 km radius) are shown in the table below.

Table showing the exposure of LVMH’s own operations to sensitive ecosystems

5.2         Management of the impact on ecosystems, soils, and plant and animal species

5.2.1       Policy related to impact on ecosystems and soil

As part of its LIFE 360 environmental strategy, LVMH implements a biodiversity policy and action plans directly linked to material impacts such as the contribution to soil degradation, the degradation of sensitive ecosystems, the direct and indirect impacts of restoration work on the state of ecosystems, as well as deforestation and the fragmentation, degradation and loss of terrestrial habitats.

Contribution to soil degradation

1)   Certification of strategic raw materials

The LVMH Group has put in place a strategy for responsible sourcing, covered by LIFE 360 targets. These targets commit the Maisons to ensuring that, by 2026, 100% of the strategic raw materials they purchase and produce are certified as complying with the environmental standards held by the Group and presented in the 2024 results table, covering both the materials themselves and production sites. These standards guarantee that ecosystems, including soil, are properly protected by limiting the use of plant protection products. The list of strategic raw materials comprises the following:

●   grapes, rye and barley;

●   sheep and cow leathers, raw lamb and calf skins, exotic leathers and furs;

●   cotton;

●   wool;

●   down and feathers;

●   viscose;

●   silk;

●   wood, paper and cardboard;

●   gems and precious metals;

●   palm oil and its derivatives;

●   soya and its derivatives for cosmetic use;

●   alcohol;

●   iconic ingredients used by Maisons in the Perfumes and Cosmetics business group.

The other raw materials used by the Group (which represent about 33% of total raw materials) are monitored individually and sourced using responsible procurement practices, without any certification being targeted.

The certification standards recommended by the LVMH Group must cover all the points stated below:

●   separation of material flows across the supply chain;

●   deployment of robust, neutral quality assurance and verification systems, through wholesale introduction of audits across the supply chain focused on social and environmental issues, such as reducing the use of plant protection products, which have a direct impact on biodiversity conservation.

Where a certification provides insufficient assurance, the Group backs up its approach with specialized audits or seeks additional certification. Lastly, LVMH proactively supports certification programs not only by purchasing certified materials but also by sitting on expert committees, in partnership with other stakeholders.

Governance of the responsible sourcing policy relies on the implementation of sourcing committees with experts from the related Maisons overseeing the following raw materials: leather, exotic leather, fur, wool and cashmere, textiles (cotton, silk, viscose and other textiles), metals, wood and wood derivatives, cosmetic ingredients, diamonds, gold and colored gemstones (ruby, sapphire and emerald). These committees meet twice a year, review the list of standards adopted by LVMH, provide oversight and pursue targets with the active collaboration of the Maisons. They are also a body enabling the various LVMH Group departments to relay key messages to operational teams in the Maisons, such as the update to the Business Partner & Supplier Code of Conduct.

Supply chain traceability

A purpose-built action plan is drafted for supply chain traceability and mapping – a strategic dimension of the responsible sourcing policy with its own LIFE 360 target. By making it easier to trace supply chains back to the field or the mine, this action plan enables more effective targeting of land conservation initiatives. The Group’s commitment to transparent raw material supply chains is organized into several implementation stages, such as identifying the country of origin for strategic raw materials and implementing sector-specific supplier mapping tools reflecting the degree of maturity of the relevant segments.

2)   Introduction of regenerative agriculture

To achieve its goal of restoring, protecting or regenerating the equivalent of five million hectares of flora and fauna habitat by 2030, the Group is rolling out regenerative agriculture programs for strategic agricultural commodities. Regenerative agriculture aims to revitalize soil health, restore ecosystem functions (biodiversity/water cycle) and ensure socioeconomic stability for those involved (farmers and communities), while yielding high-quality raw materials. LVMH’s commitment is reflected in specific actions (no-till farming, soil cover, crop rotation, use of organic fertilizers, etc.) and the rollout of regenerative agriculture programs in the supply chains for strategic raw materials. These include grapes for Wines and Spirits, cotton, wool and leather for Fashion and Leather Goods, and palm, beet and iconic ingredients for Perfumes and Cosmetics.

Since 2022, LVMH has been a member of One Planet Business for Biodiversity (OP2B), a business coalition focused on scaling up regenerative agriculture and protecting high-value ecosystems. LVMH has developed practical guides on how to put regenerative agriculture into practice and surrounded itself with a network of experts such as Biosphères, Earthworm, Circular Bioeconomy Alliance, Pour une Agriculture du Vivant and Hectar. The overall approach and individual projects are signed off by a Science Committee, made up of independent outside experts, which meets annually. Practice and performance indicators have been put in place for each raw material. Soil health is monitored to track progress made, including through analyses and satellite images. Lastly, suppliers are beginning to roll out certifications such as RegenAgri and ROC.

Deforestation and fragmentation, degradation, loss of terrestrial habitat

The Group has set itself the target of zero deforestation and conversion of natural ecosystems within operations and supply chains by 2025. Among the raw materials considered at risk in terms of deforestation, LVMH makes use of wood and wood derivatives (paper, cardboard and viscose), palm oil derivatives and leather. These materials were identified using environmental footprint measurements of LVMH’s value chain. LVMH quantified the potential deforestation intensity of its supply chains for these three materials in relation to their countries of origin and production methods: the result was 200 hectares per year (including animal feed). This intensity is calculated on the basis of raw materials data for 2023 (quantity, origin and certification). This analysis helps the Group prioritize remedial actions and measure the progress it makes.

In addition, LVMH is continuing to roll out the following policy:

●   LVMH is working to achieve full traceability in its supply chains. Doing so makes it possible to accurately assess the intensity of potential deforestation for each plot of land (see the “Business conduct” section, §1.6.2);

●   LVMH has implemented a number of partnerships;

●   in spring 2021, the Group entered into a partnership with Canopy, an NGO whose program aims to avoid deforestation in the wood, cardboard and viscose sectors;

●   like many of the Group’s Maisons, LVMH is a member of FSC France, whose strategy is aimed at certifying sustainably managed forests, transforming markets and acting as a catalyst for change;

●   LVMH and its Maisons ask their partner tanneries not to accept any hides sourced from the Amazon basin;

●   LVMH is pursuing agroforestry programs in high-risk regions. As an example, the Group pursued its agroforestry projects in the Indonesian palm oil sector with other industrial partners. Over 400,000 hectares of forest are protected.

Damage to sensitive ecosystems

To minimize the impact of its operations most exposed to protected biodiversity zones, such as its hospitality activities, to biodiversity areas of strategic importance and to endangered species of fauna and flora (see table in §5.1.2), the Group has put the following policy in place:

●   use of environmental management systems at hospitality, production and logistics sites in line with recognized international standards, such as ISO 14001 certification for the Group’s production and logistics sites and EarthCheck certification for hospitality sites. The standards include criteria reflecting local biodiversity and the site’s impact on ecosystems into consideration. LVMH also systematically seeks to obtain certification to recognized standards, such as HQE, BREEAM and LEED, for new buildings and renovation projects. These standards incorporate criteria such as landscape integration and conservation of local ecosystems;

●   program to conserve ecosystems within and close to LVMH’s operations, such as planting shrubs within vineyards.

Direct and indirect impacts of restoration work on the state of ecosystems

A policy and associated action plan for the Group’s restoration work will be presented in 2025.

Furthermore, the Maisons have implemented procedures to ensure that all of their products comply with CITES, a convention on international trade in endangered species. Through a system of import-export permits, this convention was set up to prevent overexploitation of certain species of endangered fauna and flora.

Ecosystem conservation programs

The Group is committed to restoring, protecting or regenerating the equivalent of five million hectares of flora and fauna habitat by 2030, either within its supply chains by rolling out the regenerative agriculture programs set out in §5.2.1, “Policy related to impact on ecosystems and soil” and in connection with its material matters, or by contributing to collective efforts to regenerate and preserve ecosystems and protect particularly endangered plants and animals outside the Group’s value chains.

5.2.2       Related actions and resources

In 2024, LVMH rolled out action plans encompassing the Group’s LIFE 360 strategic priorities and the framework of measures to mitigate biodiversity impacts:

●   measuring and assessing the impact and dependencies on nature: update of the biodiversity footprint and assessment of biodiversity risks;

●   avoiding and mitigating biodiversity impacts: production and purchases of certified raw materials, training of purchasing teams in how to combat deforestation, supply chain tracking;

●   regenerating and conserving ecosystems: production and purchases of raw materials sourced from regenerative agriculture, plans to restore ecosystems located close to the operations of the Group’s Maisons.

These action plans relate to the Group’s material impacts and risks, and will help it to achieve the targets presented in §4.3.3. LVMH does not use any biodiversity offsets, but is monitoring the ongoing work by the International Advisory Panel on Biodiversity Credits (IAPB) in this field.

Raw materials traceability and supply chain mapping play an essential role in the deployment of all biodiversity action plans. In the face of the constant changes to the legislation on human rights, environmental protection and the due diligence obligations of contracting companies, the Group launched a project during 2020 to enhance the traceability of strategic raw materials in these supply chains. The Map & Trace project that took shape in 2022 is pursuing an approach tailored to the Group’s sector of activity: Fashion and Leather Goods, Perfumes and Cosmetics, Watches and Jewelry. In 2024, the measures taken by LVMH include the following:

●   for Perfumes and Cosmetics materials, the Traceability Alliance for Sustainable Cosmetics (TRASCE) consortium aims to improve the traceability of key components used in cosmetic formulas and packaging. The French federation of beauty firms, FEBEA (Fédération des Entreprises de la Beauté), is also supporting the project. The founding members have committed to work together to map their supply chains using a shared digital platform, Transparency-One. Ultimately, the consortium aims to come up with a shared approach to analyzing associated corporate social responsibility risks so as to draw up shared improvement plans;

●   for Fashion and Leather Goods materials, software companies are currently conducting tests ahead of the rollout to the LVMH Group’s Maisons of a tool that enables their supply chains to be mapped out in a more automated, systematic way.

As part of its target of restoring, protecting or regenerating 5 million hectares, LVMH is implementing action plans in its three business groups affected: Fashion and Leather Goods, Perfumes and Cosmetics, and Wines and Spirits. The surface area affected continued to grow in 2024 to reach 3.8 million hectares (including 38,000 hectares of regenerative agriculture within LVMH supply chains). It has established partnerships with industry players and suppliers to speed up the agricultural transition:

●   Perfumes and Cosmetics: In 2024, Parfums Christian Dior, Givenchy and Kenzo launched a joint program aimed at reducing the environmental impact of the beet crops in France that are used to produce alcohol for perfume-making. The three Maisons are supporting the transition to regenerative farming of 380 hectares of crops in France’s Grand Est region, to produce the equivalent of 45% of their requirements in alcohol. The initiative has taken the form of a partnership with Cristal Union, a farming cooperative consisting of over 11,000 beet industry professionals, ranging from those involved in upstream production to downstream participants marketing beet as sugar, alcohol or bioethanol. This project draws on the Regeneration Index, a tool developed and verified by Pour une Agriculture du Vivant, a nonprofit organization that can assess the agroecological score of farms and support farmers with their improvement drive. In addition, LVMH is funding a five-year research and development program with Cristal Union at 12 farms to trial new agronomic practices, specifically aimed at:

-   reducing the nitrogen content of beet crops by optimizing the plant cover;

-   restricting the mineral fertilizer content through greater use of organic materials.

As part of this testing, the three Maisons are working with Genesis, a company selected by the LVMH Maison des Startups that won a prize at VivaTech for its soil health and quality measurement system. Genesis will handle the regular collection of accurate, geolocalized soil data to assess the impact of farming practices on soil health and the contribution that soil quality makes to the ecosystem’s performance.

●   Fashion and Leather Goods: Projects have been set up in Turkey and Chad to promote responsible cotton sourcing: A partner of the Circular Bioeconomy Alliance, established in 2020 by His Majesty King Charles III when he was Prince of Wales, LVMH supports a regenerative agroforestry and cotton production program around Lake Chad. The project, launched in late 2022, made significant progress in 2024, training over 500 farmers in two regions of Lake Chad and setting up a 12-hectare nursery to supply farmers with the plants they need to restore 300 hectares. In the United States, a new project is expanding Maisons’ access to cotton from biological and certified-regenerative agriculture. LVMH is also rolling out regenerative farming programs with its wool suppliers in Australia, with 100,000 euros each year put toward helping local farmers adapt their production practices (reducing fertilizers, optimizing water use, etc.).

●   Wines and Spirits: All Moët Hennessy vineyards have launched regenerative agriculture programs to expand the practice of cover cropping, for example. Having partnered with the non-profit organization Pour une Agriculture du Vivant, some wines Maisons are testing its regeneration indicator, designed to measure soil regeneration and biodiversity and guide the development of actions. Domaine Chandon Australia is leading on a project to restore a wetland ecosystem rich in plant and animal biodiversity located alongside the Maison’s vineyards. Under the Greening Australia initiative in partnership with the City of Melbourne, the Maison is restoring the ponds and habitats of endangered species. In 2024, one million trees (local species) were planted, 64 hectares restored and 300,000 euros invested. The project will run until 2029, with an annual investment of around 500,000 euros.

As responsible corporate citizens, LVMH and its Maisons are committed to funding projects that help preserve or restore ecosystems that fall outside their supply chains. In this context, LVMH and UNESCO have launched a program with 5 million euros of funding over five years to combat causes of deforestation in the Amazon. The program aims to attack the root causes of deforestation and water pollution in the Amazon basin by working with eight biosphere reserves in Bolivia (Pilón-Lajas and Beni), Ecuador (Yasuní, Sumaco and Podocarpus-El Cóndor), Brazil (Central Amazon) and Peru (Manu and Oxapampa-Asháninka-Yanesha). LVMH has also rolled out another project in the Amazon basin with the Foundation for Amazon Sustainability (FAS), which works to combat deforestation in the Amazon. LVMH committed 1 million euros over two years to the FAS partnership to help protect the environment while also pursuing sustainable development and respecting the local cultural context. The project has three key priorities: to conserve biodiversity and the ecosystem; to educate and build capacity; and to build sustainable supply chains across the region.

In 2024, LVMH joined the WWF’s program to conserve forest areas in the Congo Basin. The project aims to implement innovative steps to support sustainable agroforestry practices. That includes forestry and agroforestry certification projects. In Africa, LVMH is also a member of the “Corridors of Biodiversity in Africa” International Coalition led by Climate Chance.

Moët Hennessy upheld its partnership with Reforest’Action to launch reforestation programs in Kenya, China, the United States and South Africa as well as on its own vineyards. Louis Vuitton contributed to protecting natural resources by entering into a five-year partnership with nonprofit People For Wildlife as well as local communities to maintain and regenerate biodiversity in a 400,000-hectare natural area of Australia.

5.2.3       Associated targets

The Group has set the following voluntary targets regarding biodiversity conservation:

Details on raw materials certification targets by business group

Wines and Spirits

The Wines and Spirits business group is actively committed to sustainable, organic and/or regenerative winegrowing, which are helping to considerably reduce its environmental impact, in particular by limiting the use of plant protection products and, consequently, soil degradation and impact on ecosystems.

Stepping up the roll-out of sustainable, organic and/or regenerative winegrowing at the Maisons’ vineyards and among independent grape suppliers has thus been adopted as a LIFE 360 target. Various certification systems have been established across winegrowing regions: Viticulture Durable en Champagne for champagne houses, environmental certification for cognac (Haute Valeur Environnementale), organic farming for certain vineyards, Napa Green in California, etc. LIFE 360 targets are as follows:

●   for vineyards owned by the Group: 100% of grapes to be from sustainable, organic or regenerative winegrowing by 2026;

●   for partner/supplier vineyards (champagne, cognac, wines): 50% of grapes to be from sustainable, organic or regenerative winegrowing by 2026.

Fashion and Leather Goods

The Fashion and Leather Goods business group has adopted nine major targets for 2026:

●   90% by volume of supplies of cow, sheep and exotic leathers to be purchased from Tier 1 LWG-certified tanneries, with 50% to be purchased from Tier 2 and above LWG- or ISO 14001-certified tanneries. LWG certification is a standard created by the Leather Working Group to improve the environmental performance of tanneries (energy, water, waste, traceability) and reduce their impact on ecosystems;

●   supplies of exotic leather to be purchased from abattoirs and/or farms certified in accordance with standards covering animal and human welfare and care for the environment, such as the LVMH Standard for Responsible Crocodilian Production, the International Crocodilian Farmers Association (ICFA), the South African Business Chamber of Ostriches (SAOBC) and the forthcoming standard to be issued by the South East Asian Reptile Conservation Alliance (SARCA). The Group is also seeking SRCP certification for all crocodile farms supplying the Group’s tannery;

●   100% of supplies of pelts to be purchased from certified fur farms, notably by rolling out certifications recognized under the FurMark program;

●   100% of supplies of cotton to be purchased from sustainable sources. Organic, regenerative and recycled cottons are preferred. These options help reduce land use and soil degradation;

●   100% of supplies of wool to be purchased from sustainable sources. Sustainable wool is either recycled or sourced from farms certified as complying with animal welfare and environmental protection standards such as the Responsible Wool Standard (RWS), the Responsible Mohair Standard (RMS), the Code of Practice of the Sustainable Fibre Alliance (SFA) and the Global Recycled Standard (GRS). These options help reduce land use and soil degradation;

●   100% of supplies of viscose to be sustainable, whether recycled or purchased from suppliers with a Canopy “green shirt” rating. These options help address deforestation in particular;

●   100% of supplies of silk to be purchased from sustainable sources (certified GOTS or a mix of GOTS and GRS);

●   100% of supplies of feathers and down to be either recycled or purchased from suppliers certified in accordance with the Responsible Down Standard (RDS);

●   Animal-Based Raw Materials Sourcing Charter to be incorporated into supplier relationships.

Perfumes and Cosmetics

The Perfumes and Cosmetics business group has set itself three key LIFE 360 targets in relation to its supply chain to be achieved by 2026:

●   100% of supplies of palm oil to be purchased from sustainable sources, including RSPO-certified palm oil and palm oil from regenerative agriculture. This certification supports efforts to address deforestation;

●   100% of supplies of alcohol to be purchased from sustainable sources, including organic beet and regenerative agriculture as well as alternative and innovative solutions;

●   100% of iconic ingredients used by the Maisons to be UEBT-certified. This certification, which includes environmental criteria, helps reduce environmental impacts on ecosystems.

The business group also takes part in specific initiatives related to the sourcing of mica (RMI). The Group’s Research & Development Department and Maisons have been carrying out ethnobotanical studies for a number of years. They seek to identify plant species with a particular interest as components of cosmetic products while contributing to the preservation of these species and to local economic development. This partnership can take a variety of forms such as financial support, technical or scientific assistance, or skills sponsorship, sharing the expertise of LVMH’s staff with its partners.

Watches and Jewelry

The Watches and Jewelry business group has set itself three key LIFE 360 targets in relation to its supply chain to be achieved by 2026:

●   100% of supplies of gold to be purchased from sustainable sources, including Responsible Jewellery Council (RJC) certification for suppliers (RJC Code of Practices at minimum) and refiners (RJC Chain of Custody) for all gold used by the Maisons. The Group is currently working to recognize other standards for future adoption, particularly those covering mining activities, such as the World Gold Council’s Responsible Mining principles, the Initiative for Responsible Mining Assurance (IRMA), Fairmined, Fairtrade and the CRAFT and Swiss Better Gold Association (SBGA) initiatives.

●   100% of supplies of diamonds to be purchased from RJC CoP-certified suppliers.

●   100% of supplies of colored gemstones to be purchased from suppliers certified RJC CoP or equivalent or verified via the Gemstones and Jewellery Community Platform (GJCP). All of the Watches and Jewelry Maisons have received certification under the Responsible Jewellery Council’s Code of Practices standard, known as RJC CoP. As part of the LIFE 360 targets, and in line with this certification, which applies to their gold and diamond supply chains, they expanded their responsible sourcing efforts. Bulgari is particularly committed and has prioritized rolling out RJC CoC certification to all its jewelry and refining partners. The Group and its Maisons are also involved in the Coloured Gemstones Working Group (CGWG) with other sector stakeholders. The CGWG aims to roll out environmental and social best practice across the colored gemstone sector by making all tools developed by the initiative available to the industry on an open-source basis and allowing industry players to assess the maturity of their practices.

5.2.4       Related metrics

Management of metrics related to biodiversity

Biodiversity indicators: Results in 2024

(a)  Sites eligible for ISO 14001 certification are production and logistics sites larger than 1,000 m².

(b)  Data includes hospitality sites operated by Belmond and LVMH Hotel Management.

(c)   In 2023, the result did not take into account EarthCheck certification.

Certification of strategic supply chains: Results in 2024

Traceability: Results in 2024

(a)  Data declared by suppliers.

6.     Resource use and circular economy (LIFE 360 – Circular design)

LVMH’s Maisons work to limit the impact of their products and services on the natural environment by considering each one’s entire life cycle. The Group’s strategy was developed in line with the recommendations and requirements of the European Union’s Circular Economy Action Plan and Waste Framework Directive.

Based on the double materiality assessment, the following impacts and opportunities are considered material:

●   impact connected with the consumption of raw materials across all value chains, including packaging (all business groups);

●   impact connected with waste production, packaging and point-of-sale advertising throughout the product life cycle, including the production, sale and use stages (all business groups);

●   impact connected with pressures on rare materials used to create exclusive products (Fashion and Leather Goods and Watches and Jewelry);

●   impact connected with the potential destruction of unsold/obsolete products (Fashion and Leather Goods and Perfumes and Cosmetics);

●   impact connected with optimizing use of resources by ensuring product longevity (quality, long life cycle, repairability, refill capability, etc.) for products from the Fashion and Leather Goods and Watches and Jewelry business groups;

●   opportunity to develop new sustainably designed ranges of products/services and use of more sustainable materials (all business groups);

●   opportunity to develop new business models based on reuse, recharging, recovery and resale of products (all business groups).

The responsible sourcing policy is presented in §5, “Biodiversity and ecosystems (LIFE 360 – Biodiversity)”.

6.1         Management of resource inflows

6.1.1       Policy related to sustainable design

As part of its LIFE 360 strategy, LVMH follows a sustainable design policy to anticipate and limit the environmental impacts linked both to the consumption of raw materials on all incoming chains and to the production of products, waste, packaging and point-of-sale advertising, as well as to reduce tension regarding the rare materials used to create exclusive products.

This is underpinned by the four convictions of the LVMH circular design policy:

●   inventiveness: Selecting innovative new materials such as those that are recycled, bio-sourced, certified and/or sourced from regenerative agriculture;

●   energy conservation: Selecting the most exacting transformation and manufacturing processes at Maisons’ and suppliers’ sites to reduce environmental impacts;

●   eternity: Guaranteeing long product life and ensuring high quality thanks to expertise in areas like repairs and the art of patina, new technologies such as product recharges, refills and refurbishment, and the promotion of new services;

●   rebirth: Helping give materials and products a new lease of life through reuse, repurposing, recycling and upcycling.

The Group and its Maisons have worked together to draw up specific sustainable design criteria for each business sector. These criteria cover at least the following topics:

●   use of raw materials that are certified, recycled or sourced from regenerative agriculture;

●   traceability: knowing the supplier and the country of origin for each primary raw material;

●   product life span and end-of-life treatment.

Each business group has tailored these sustainable design criteria to its own specific environmental priorities; tools are currently being rolled out to monitor performance against these criteria and assess the environmental footprint of each product and its packaging.

LVMH also aims to have stopped using fossil-based virgin plastic in customer packaging by 2026. To achieve this target, the Maisons are working on an action plan that aims to:

●   use recycled plastics;

●   use bio-sourced plastics;

●   replace plastics with other materials.

With regard to the recycled plastics market, this target requires continual adjustments to the action plan (collaboration and partnership with suppliers, training teams, etc.). LVMH has also set the following targets for 2030: 70% of packaging materials used by the Maisons (in customer packaging) is to be recycled, and all customer packaging is to be recyclable, compostable or reusable. This action plan applies to all Maisons, but it is particularly strategic for the Perfumes and Cosmetics Maisons, which are the primary users of plastic in customer packaging.

Regarding the risk of pressure on rare materials used to create exclusive products in the Fashion and Leather Goods and Watches and Jewelry business groups, LVMH is rolling out:

●   a Research and Development policy led by LVMH Gaïa, driver of the Group’s scientific research and innovation, and dedicated to environmental issues and technological innovation in the luxury industry. Moët Hennessy’s Robert-Jean de Vogüé research center and the LVMH Perfumes and Cosmetics Hélios research center also participate in these efforts. Projects are already underway to develop synthetic proteins and gemstones;

●   sustainable design approaches that include indicators on the origin and certification of the materials used.

6.1.2       Actions and resources used

LVMH and the Group’s Maisons employ the following tools, representing annual expenditure of around 500,000 euros, to manage sustainable design initiatives and targets, and to reduce the use of resource inflows:

●   Perfumes and Cosmetics: The Maisons have implemented the EFI (Eco-Formulation Index) and the EPI (Environmental Performance Index for packaging). The EFI score spans seven dimensions: natural origin, assessed in accordance with an internationally recognized method (ISO 16128); traceability, knowledge of the ingredient value chain; Clean Beauty, taking consumer expectations into account and anticipating potential regulatory restrictions; smart formulation, a calculation methodology for minimizing the number of ingredients used in a formula; environment score, categorizing impacts using the European PEF (Product Environmental Footprint) methodology; social score, assessing the social impact of operations using a methodology developed by the United Nations Environment Programme; environmental impact, assessment of the biodegradability and ecotoxicity of ingredients at the end of their lifetime using a methodology based on the European Ecolabel and REACH regulation. The EPI score takes into account a number of criteria including packaging weight and volume, recycled and bio-sourced raw material content, recyclability and refill capability. The EPI calculation methodology has been updated to bring it into line with the LIFE 360 targets and various regulations.

●   Fashion and Leather Goods: Maisons in this business group are required to follow sustainable design criteria structured around three pillars: raw materials, traceability and end of life. The first pillar requires that a minimum of 50% of raw materials used must be certified, recycled or sourced from regenerative agriculture. The second pillar, traceability, aims to ensure that all suppliers in the value chain are identified. Tier 1 and 2 suppliers must be known for a product’s main ingredient and the country of origin must be known for plant- and animal-based materials. Lastly, the third pillar, end of life, is about verifying and monitoring services offered by Maisons to customers designed to lengthen their products’ life spans (including a repairability index). A dedicated tool for monitoring these indicators and criteria has been developed in conjunction with an expert partner. It also ensures compliance with the requirements of France’s new anti-waste law for a circular economy, known as the AGEC law, and specifically its Article 13 relating to the sharing of environmental and traceability information at the time of purchase, as well as calculating the environmental impact of a product for environmental labeling in France (Climate and Resilience law) and in Europe (Product Environmental Footprint).

●   Wines and Spirits and Watches and Jewelry: After being defined, sustainable design criteria are tested by the Maisons. The Wines and Spirits business group updated its method for calculating its EPI in 2023 and is testing a tool to assess the environmental footprint of packaging.

These tools are used to measure and reduce the impact of products and services right from the design stage, and to promote and manage the development of new sustainably designed product and service ranges. With its zero-waste strategy, Louis Vuitton is making every effort to reduce as far as possible the volume of material waste, right from the design phase and throughout the whole manufacturing process. This approach applies to all leather goods collections, and is gradually being extended to other categories such as footwear and ready-to-wear. The Zippy Wallet, made entirely of supple Monogram Empreinte leather, is a good illustration of this strategy in 2024. Offcuts from the cutting process are used to strengthen the product. This recycling approach, which also prioritizes the use of a single material for the product’s design, helps to improve the product’s environmental profile. More generally, the Louis Vuitton Maison is committed to a sustainable product design approach, including the use of certified materials such as leather certified by the Leather Working Group (LWG). Louis Vuitton also trains its teams in sustainable design, from design to production to marketing, thereby encouraging innovative, cross-functional creative loops. Today, as part of the LVMH Group’s sustainable design target, 15% of Louis Vuitton ready-to-wear products have already been assessed as compliant and over 80% of product categories are covered by a life-cycle assessment, the foundation for continuous improvement in sustainable design. The Perfumes and Cosmetics Maisons are working to reduce packaging weight and volume, for example in 2024, Bulgari reduced the weight of its Le Gemme fragrance by 20% and incorporated 25% recycled glass. The share of recycled materials used in packaging for the Bulgari Man fragrance also rose in 2024, going from 5% in 2019 to 16% in 2024.

6.1.3       Associated targets

LVMH has set the following voluntary targets as part of its sustainable design policy:

6.1.4       Indicators and results

Management of metrics related to sustainable design and resources inflows

Inflows of biological and technical resources used by LVMH in 2024, of which recycled and certified resources

(a)  The values do not include the raw materials used for Wines and Spirits (grapes, etc.) and Perfumes and Cosmetics (beet, flowers, etc.) products, which cannot be of recycled origin, i.e. 84% of the total value of organic materials and 59% of the total value of organic and technical materials.

Main materials used to make packaging (resource inflows)

The weight of customer packaging changed as follows between 2023 and 2024:

(a)  Value and change at constant scope.

(b)  Change related to business activity and sustainable design initiatives.

The total weight of customer packaging, by type of material, broke down as follows in 2024:

(e)  Other packaging materials notably include ceramic and leather.

Overview of sustainable design targets

(a)  Integration of Kendo, Maison Francis Kurkdjian, Perfumes Loewe, Sephora North America, Sephora North Asia and DFS.

(b)  Value and change at constant scope.

Perfumes and Cosmetics and Wines and Spirits business groups – EPI scores

(a)  Maisons included: Guerlain, Parfums Christian Dior and LVMH Fragrance Brands.

6.2         Management of resource outflows

6.2.1       Policy related to extending product longevity

The LVMH Group implements a circular design policy through its LIFE 360 environmental strategy. This helps limit the impact of the products and services of the Group’s Maisons on the natural environment by taking each one’s entire life cycle into account. The policy applies to all of the Group’s Maisons in the Fashion and Leather Goods, Perfumes and Cosmetics, Watches and Jewelry, Selective Retailing, and Hospitality and Other activities business groups.

Optimizing resources via product and material longevity is a goal shared by LVMH and its Maisons through two convictions of the “Circular Design” strategic priority (among the four cited in §6.1.1) of the LIFE 360 strategy:

●   eternity: Guaranteeing long product life and ensuring high quality thanks to expertise in areas like repairs and restoration, new technologies such as product recharges and makeovers, and the promotion of new services (repairs, restoration, recharges, reuse).

●   rebirth: Helping give materials and products a new lease of life through reuse, repurposing, recycling and upcycling. This principle aligns with the LVMH Circularity approach, announced during the LIFE 360 Summit held at the UNESCO headquarters in December 2023. It supports the development of special expertise to find new uses for unsold and defective products and their components in order to bring them back into the different value chains.

These convictions underpin the development of new business models:

●   Rimowa has launched “Re-Crafted”, a unique service for taking back customers’ suitcases, restoring them to their former glory and selling them;

●   Nona Source, the platform developed by the Group to facilitate the resale of unused textiles by its Maisons, confirmed its status as a circularity accelerator in the fashion industry and as an effective means to support young designers by reselling over 290,230 linear meters of high-quality fabrics at very competitive prices;

●   by reusing and recycling the Group’s unsold products and strategic materials, LVMH Circularity is able to recreate the materials used in a closed loop in several of the Maisons, such as Christian Dior Couture, which in 2024 launched a Denim piece made from the closed-loop recycling of its unused materials, in partnership with Weturn.

Unsold products are all products that have not been sold during the Maisons’ sales cycle. They are managed in accordance with the Group’s circular design policy, with the aim of identifying and implementing donation, reuse or recycling solutions for each of the business groups concerned in the countries where the Group operates.

In accordance with the Group’s sustainable design policy, the Maisons are working to determine the repairability and recyclability of their products and packaging. Each business group is working to define indicators that will enable it to assess all of its products and packaging right from the design phase. The LVMH Group is working on a consolidated methodology in order to develop a joint strategy with its Maisons to improve reparability and recyclability:

●   In terms of reparability, the Fashion and Leather Goods, Watches and Jewelry and Selective Retailing Maisons are working to introduce reparability criteria for their products and packaging. Louis Vuitton has defined reparability criteria for all of its leather goods in its sustainable design policy. 100% of its leather goods are assessed as reparable. Right from the design phase, the evaluation criteria make it possible to define three distinct levels of repair complexity for these products: A (easy), B (intermediate) and C (difficult).

●   In terms of recyclability, the Wines and Spirits and Perfumes and Cosmetics Maisons use recyclable glass packaging for their products. The cardboard cases and bags are also recyclable in all business groups. Recycling ready-to-wear products from the Group’s Maisons is somewhat complex due to the variety of materials, components, treatments and finishes used to create the products. These criteria also apply to the Watches and Jewelry products.

The Fashion and Leather Goods and Watches and Jewelry Maisons are equipped with advanced repair services, able to restore old products or to adapt their form to ensure their transmissibility.

6.2.2       Actions and resources used

The LVMH Group and its Maisons are working to implement a range of action plans for extending product longevity. These actions revolve around providing new circular services for sustainability, reuse and recycling, and involve 100% of the Maisons. Actions related to sourcing sustainably designed materials to enhance the quality and longevity of the Group’s products are described in §6.1, “Management of resource inflows”.

1)   Extended product longevity solutions

First, product longevity is bolstered by services for product repair and care, refills and the collection of end-of-life products offered by the Fashion and Leather Goods, Watches and Jewelry, Perfumes and Cosmetics and Selective Retailing Maisons.

The Group and its Maisons provide the following services:

a)   Product repair, care and restoration workshops: In stores, at dedicated workshops and regional centers, or at Maison- or Group-level centers.

Fashion and Leather Goods, Watches and Jewelry, Selective Retailing:

The Fashion and Leather Goods and Watches and Jewelry Maisons have their own repair and care centers to bolster the product longevity promise to customers. Providing these new services requires developing new infrastructure, hiring and training staff with unique skills, communicating and marketing to inform customers and build loyalty, and implementing an assessment and continuous improvement process. In 2024, the creation of 14 repair centers around the world for a Maison in the Fashion and Leather Goods business group required an investment and operating expenses of 107.7 million euros. In 2025, based on the growth forecasts, these expenses are estimated to be an additional 114 million euros.

In Selective Retailing, Le Bon Marché launched its alterations workshop in 2023, which immediately received Refashion certification. The workshop makes it easier for customers to mend their textile products and benefit from a rebate program established by the French government in November 2023 to reduce the costs of repairs. In 2024, the workshop made more than 400 repairs, all eligible for the official rebate.

To support the Maisons in continuously improving and assessing of their practices, the Group also set up a Repair and Care working group. Its goal is to support ten Fashion and Leather Goods Maisons, seven Watches and Jewelry Maisons, and one Selective Retailing Maison, and bring them together twice a year as they roll out their repair and care workshops and set standards for the services they provide.

b)  Services to collect end-of-life products:

Fashion and Leather Goods:

Increasing product longevity also takes place through takeback services where customers can dispose of obsolete or damaged products. Rimowa offers its customers a lifetime guarantee on its products as well as a product takeback program, Re-Crafted, available internationally (Japan, Germany, United States and South Korea).

Perfumes and Cosmetics, Selective Retailing:

For products such as perfumes and cosmetics, the Maisons in the Perfumes and Cosmetics and Selective Retailing business groups offer customers takeback programs.

Since 2009, a Maison from Selective Retailing has run a program in Europe and the United States that has led to more than six million perfume bottles being collected. In 2024, expenses linked to managing these collection services and to studying their roll out in new international markets were in the region of 520,000 euros. In 2025, these expenses are estimated at 150,000 euros.

2)   Reuse and recycling solutions

LVMH Circularity gives all unsold and defective products and the materials used in these products a second life through the Group’s value chain.

LVMH Circularity amplifies the desire of the Group and its Maisons to develop new expertise in reuse and recycling and to give a second life to products (unsold or defective) and product components from the various business groups. This enables it to link the reuse and recycling of materials and products with sustainable design.

In the Fashion and Leather Goods businesses, the closed-loop approach focuses on developing new materials and yarns from recycled natural fibers, made from unused items. The partnership with Weturn, a startup honored with the LVMH Innovation Award, enabled these 100% traceable, European recycled materials to be developed with two of the Group’s Maisons in 2024. In 2024, estimated spending and investment for the Fashion and Leather Goods Maisons to develop closed-loop activities was 200,000 euros. This is planned to increase to 300,000 euros in 2025.

LVMH Circularity is extending the closed loop to the reuse of components for the fashion industry. Thanks to Nona Source, an in-house Group startup, 290,230 linear meters of fabric and 4,500 square meters of leather have been reused, a new offer launched in May 2024. It makes quality materials from the production of the Maisons’ ready-to-wear collections available to communities of young designers and brands committed to circular fashion. In 2024, Monoprix joined forces with Nona Source for the sourcing of its first Atelier line. The 11 pieces were made entirely from rolls supplied by Nona Source.

The closed loop also applies to the Perfumes and Cosmetics and Selective Retailing businesses. Two Maisons and the LVMH Group invested 100,000 euros to develop automated machines for dismantling unsold products. This innovation helps organize product and component reuse and recycling processes and facilitate the reintroduction of recycled materials into production processes so as to reduce the Group’s environmental impact. This is the case for glass, which can be more easily redirected to material recycling facilities and recycled to produce new products.

6.2.3       Associated targets

The LIFE 360 circular design policy includes a number of management targets for handling unsold items, one of which is to ensure that 100% of unsold items are donated, reused or recycled by 2030 in the countries in which the Group operates. The tracking indicators associated with this target will be consolidated over the coming months.

Efforts are underway to set targets and associated indicators for the recyclability and repairability of products and packaging for all of the Maisons.

6.2.4       Indicators and results

The target for implementing new circular services was achieved in 2023. The Group is now focusing on tracking the circular services it has implemented.

Management of metrics related to extending product longevity

Monitoring of the development of circular services related to product longevity

In line with the achieved target of implementing new circular services, LVMH and the Group’s Maisons are working to develop and track these services as part of a continuous improvement process. The business groups under consideration are the Fashion and Leather Goods, Watches and Jewelry, Selective Retailing, Perfumes and Cosmetics and Wines and Spirits Maisons. Three circular services related to product longevity include the following:

●   managing reparability and the number of products repaired;

●   product refill services;

●   takeback services to collect end-of-life products.

The results for circular services, which ensure product longevity across the Group, are as follows:

6.3         Waste management

6.3.1       Policy related to waste management

The Group’s waste management policy is an integral part of the “Circular Design” pillar of the LIFE 360 environmental strategy.

LVMH’s waste management policy supports:

●   waste reduction at source;

●   optimized collection services;

●   ISO 14001 certification and audits of operational waste management at production sites and logistics centers;

●   the implementation of sophisticated sorting systems to maximize the recovery of its materials and products;

●   improving the reuse and recycling methods used (advanced recycling practices and reuse in new resources);

●   waste management training with the LIFE Academy.

LVMH and its Maisons have set a target for reusing and recycling operational waste by 2030. This target draws on the LVMH Circularity ecosystem, described in §6.2.1, “Policy related to extending product longevity”, to develop and improve the Group’s waste management sorting systems and reuse and recycling methods. In addition, it accelerates the transition to advanced recycling and repurposing practices and allows the Group’s Maisons to collaborate with specialized partners in order to transform waste into new resources.

The waste management program is currently being updated in collaboration with all of the Group’s Maisons, in order to further structure the approach and, in particular, to set new targets for reducing production waste.

The Group’s waste management policy covers production and household waste from production, logistics and administrative sites and stores. Unsold items are not included within waste. A specific section dedicated to their second life can be found in §6.2, “Management of resource outflows”.

6.3.2       Actions and resources used

The LVMH Group and its Maisons are working to implement a range of action plans to reduce, reuse and recycle their waste.

In terms of waste management, LVMH Circularity serves as a catalyst for the various types of expertise used to reuse and recycle waste from the Group’s production processes (non-hazardous and hazardous). It also facilitates its reintegration into production lines to maximize the environmental impact reduction. An ecosystem for managing waste was created and made available to all of the Maisons in the Fashion and Leather Goods, Perfumes and Cosmetics, Wines and Spirits, Watches and Jewelry, Selective Retailing, Hospitality and Other activities business groups.

In France, the CEDRE sorting and dismantling platform is one of the services used by the Maisons. It handles all the materials and products generated by the manufacturing, packaging, distribution and sale of Group products:

●   manufacturing materials such as textiles and leather from the sites of the Fashion and Leather Goods Maisons;

●   manufacturing materials such as glass, alcohol and plastic from the sites of the Perfumes and Cosmetics Maisons;

●   obsolete packaging, point-of-sale advertising materials, and packaging returned to stores by customers for Fashion and Leather Goods, Selective Retailing, Perfumes and Cosmetics and Watches and Jewelry Maisons.

Maisons from the Perfumes and Cosmetics and Selective Retailing business groups use this platform to recover products to reduce their environmental impact. The existing sorting and dismantling expertise enables the Maisons’ waste to be directed to the most appropriate recycling facilities. The various materials (glass, cardboard, wood, metal, plastic, alcohol and cellophane) are sorted and sent to a network of specialized recyclers. This process enabled a Selective Retailing Maison to launch a closed-loop recycling program for its visual merchandising elements in stores. This program was first tested in 2022 in 37 stores, before being rolled out to all stores in France in 2023. This circular solution is directly in line with the policy of recycling 100% of waste collected from point-of-sale advertising materials (i.e. recycling product display modules and store advertising modules). The investments to install new collection and sorting containers for visual merchandising elements amounted to around 240,000 euros in 2024. The program’s goal is to expand across Europe in 2025.

The Fashion and Leather Goods Maisons also use the CEDRE platform for reuse and recycling of their textiles, leather, and components sourced from production. The platform is the epicenter of the partnerships established by LVMH and redirects the Maisons to the various closed- or open-loop recycling facilities. For textiles, by partnering with L’Agence du Don en Nature and taking on and training people from companies specifically employing people with disabilities in the couture sector, the Maisons have been able to gradually add donation, repurposing and recycling services, in line with developments in technology, as well as new partners to handle larger volumes of material and to be able to use the upcycled and recycled materials to create new products. In Europe, the costs from collection, sorting and processing services for production waste for a Maison from Fashion and Leather Goods are estimated at 1.5 million euros for 2024. This expenditure is estimated at 1.6 million euros for 2025, given the Maison’s growth estimates.

The Fashion and Leather Goods and Perfumes and Cosmetics sectors have a variety of products and materials, enabling the Watches and Jewelry, Selective Retailing and Hospitality Maisons, as well as Other activities, to benefit from the same reuse and recycling ecosystem.

LVMH has set up a new logistics platform in Italy: Circular’ITALIE, in partnership with Lindbergh, an MRO company (maintenance, repair and operations). It is dedicated to the reuse and recycling of the Maisons’ waste, as part of the Group’s commitment to the circular economy in Italy. The policy also applies to all business groups operating in Italy such as Maisons from Fashion and Leather Goods, Perfumes and Cosmetics, Watches and Jewelry, Selective Retailing, and Other activities.

For the implementation of environmental management systems, expenses from Group production sites, logistics centers and administrative sites were recognized in accordance with the recommendations of the Autorité des Normes Comptables, France’s accounting standards authority. Operating expenses and capital expenditure are recognized against each of the following items:

●   air and climate protection;

●   wastewater management;

●   waste management;

●   soil protection and purification;

●   noise and vibration reduction;

●   conservation of biodiversity and other environmental protection measures;

●   research and development.

In 2024, expenses related to environmental protection broke down as follows:

●   operating expenses: 55 million euros;

●   capital expenditure: 28 million euros.

6.3.3       Associated targets

These are voluntary means-based targets.

Some Maisons have waste reduction targets, such as Louis Vuitton, whose zero-waste strategy has fixed a three-year waste reduction target of 25% for its leather workshops.

To date, the waste reduction targets have not been consolidated at Group level, but the Group is currently conducting an analysis with the Maisons from the various business groups to establish a consolidated target for the coming year.

6.3.4       Indicators and results

Management of metrics related to waste management

With respect to its waste management policy, LVMH Group and its Maisons collect data on all waste produced at the sites they operate. In 2024, operational waste reporting was extensively overhauled to cover the entire scope of the sites and stores operated. The Maisons have considerably improved the scope and the granularity of the data reported. The Group has also implemented an extrapolation method to include all sites not covered. The 2024 reporting therefore includes 100% of sites, encompassing not only administrative, production and logistics sites, but also stores. In 2023, administrative, production and logistics sites were only included if they reported actual data. The data is therefore significantly larger due to these changes in absolute value.

Non-hazardous waste includes biological waste, empty packaging, product components, sludge and liquids, and mixed solid waste. The main materials are wood, metals, paper, cardboard, plastic and glass. Hazardous waste includes soiled empty packaging, electrical and electronic waste, batteries, sludge and various liquids used in production.

Quantity of waste produced in operations in 2024

(a)  2024 figures include all data – actual and simulated – from production, logistics and administrative sites as well as stores.

(b)  Value and change at constant scope.

(c)   2023 figures include actual data from production, logistics and administrative sites.

In line with ESRS, non-eliminated waste is waste that is being prepared for reuse or recycling.

Reuse and recycling of non-hazardous waste produced in operations in 2024

In accordance with European regulations, hazardous waste refers to waste with hazardous properties as defined in the Waste Framework Directive 2008/98/EC. Each Maison complies with these requirements when processing, reusing and recycling its hazardous operational waste.

Reuse and recycling of hazardous waste produced in operations in 2024

The Maisons are working to reduce, reuse and recycle production waste at all of their sites and stores. In 2024, 76% of waste was recovered (reused or recycled).

To illustrate the action plan to develop the LVMH Circularity ecosystem, LVMH and its Maisons collect and publish data on the CEDRE sorting and dismantling platform, which is located in France. In 2024, around 3,799 metric tons of materials and products were reused or recycled (3,751 metric tons in 2023) by CEDRE.

Quantities of waste and materials reused or recycled via the CEDRE platform in France in 2024

In 2024, the Group continued to roll out certified environmental management systems across its production sites and logistics centers. These certifications contribute to the control of waste management at audited sites.

The certification performance of production sites and logistics centers has been measured in terms of their deployment of ISO 14001 certification and EarthCheck for hospitality sites.

Presence of certified environmental management systems in 2024

(a)  Sites eligible for ISO 14001 certification are production and logistics sites larger than 1,000 m².

(b)  Data includes hospitality sites operated by Belmond and LVMH Hotel Management.

(c)   In 2023, the result did not take into account EarthCheck certification.

7.     Environmental taxonomy

In accordance with green Taxonomy regulations which determine whether an economic activity qualifies as environmentally sustainable (“the Regulation”), LVMH has:

(i)     identified those of its activities that qualify under the six environmental objectives (the “Environmental Objectives”/ “Objectives”);

(ii)    analyzed the contribution made by eligible activities to the Environmental Objectives, while ensuring that this contribution does not cause significant harm to any of the other Objectives (“DNSH”) and that the activity complies with the minimum safeguards outlined below, thus permitting the validation of the activity’s “alignment”.

Activities considered as eligible in relation to the Environmental Objectives established by the Regulation are in particular those having the greatest impact on climate change, thus offering the greatest potential for reducing greenhouse gas emissions. Given the activities targeted at present in relation to these objectives, only LVMH’s operating investments in the real estate sector have been analyzed for the purposes of this reporting as of December 31, 2024. In accordance with the Regulation, they correspond to the total of:

●   acquisitions of property, plant and equipment and intangible assets;

●   capitalized fixed lease payments; and

●   property, plant and equipment and intangible assets as well as capitalized fixed lease payments relating to changes in the scope of consolidation (excluding goodwill).

The Regulation calls for the disclosure of two key performance indicators (KPIs) determined in relation to financial items and defined as follows:

●   KPI 1: CapEx relating to eligible activities (“Eligible CapEx” or “Real estate CapEx”);

●   KPI 2: Eligible CapEx meeting the criteria for substantial contribution to an Environmental Objective without causing significant harm to any other Objectives and while complying with the minimum safeguards (“Aligned CapEx”).

Climate change mitigation is the main environmental objective on which the Group has focused when analyzing the eligibility and alignment of its operational objectives. For activities covered by more than one objective, the Group has also carried out its analysis from the perspective of the “Climate change adaptation” and “Transition to a circular economy” objectives (see §1.1.2 below).

Eligible CapEx and aligned CapEx are presented below, as amounts and percentages of total CapEx and, for aligned CapEx, as a percentage of eligible CapEx.

LVMH’s environmental actions are only reflected to a limited extent in the Group’s business activities and the indicators to be disclosed at this stage under the Regulation, which are presented below (further information on LVMH’s actions to promote biodiversity and the circularity of its products is presented in §5, “Biodiversity and ecosystems (LIFE 360 – Biodiversity)” and §6, “Resource use and circular economy (LIFE 360 – Circular Design)”, respectively).

7.1         KPIs relating to operating investments (CapEx)

In completing the exercise required by the Regulation, LVMH adopted a cautious approach so as to abide by both the spirit and the stipulations of the text as closely as possible.

Real estate CapEx amounts were determined and alignment analyzed at the level of each individual item of eligible capital expenditure. The alignment analysis consisted of systematically reviewing compliance with the substantial contribution criteria and the DNSH criteria. No conclusions reached for a given item of capital expenditure were extrapolated to any other item of real estate CapEx.

7.1.1       Overview of the analysis with the respect to the climate change mitigation objective

In accordance with the criteria set out in the Regulation, the contribution to climate change mitigation of activities corresponding to real estate CapEx was evaluated on the basis of the energy efficiency of buildings involved in purchases, leases and renovation projects during the fiscal year. For buildings whose building permits were issued prior to December 31, 2020, only the premises purchased, leased or built whose energy efficiency is at least equivalent to that of 15% of the most energy-efficient buildings in the countries where they are located and those with proof of a top energy efficiency assessment score for premises in France are included in KPI 2. For buildings where the building permit was issued on or after January 1, 2021, only buildings with “Net Zero Buildings – 10%” certification are included in KPI 2. For renovations, the criteria is considered to be met for all projects which fulfill the definition of a renovation according to local regulations, or if a 30% improvement in energy consumption is demonstrated. The thresholds applicable in France were used to evaluate the energy efficiency of buildings located in countries that lack data relating to the energy efficiency of their buildings as a whole.

The figures presented below in the “Real estate CapEx deemed energy-efficient” columns correspond to aligned capex, i.e. meeting all of the criteria. In the absence of documentary evidence demonstrating that the technical criteria (“substantial contribution” or “DNSH”) have been met, the item of real estate CapEx is considered non-aligned.

KPI 1 and KPI 2 relating to real estate CapEx break down as follows for fiscal year 2024:

(a)  Since a breakdown of acquisitions of property, plant and equipment in respect of Taxonomy-eligible activities is not available within the Group’s financial reporting, this information has only been collected for those Maisons contributing significantly to purchases during the period; these Maisons accounted for 88% of the Group’s “Total CapEx” in 2024, in line with the coverage rate in 2023 and 2022. Maisons not included in the Taxonomy are reviewed centrally to ensure that all material building purchases are considered eligible. No extrapolations were performed for the other Maisons, whose acquired fixed assets were considered “ineligible” for the requirements of this reporting.

(b)  The analysis of “Real estate CapEx” taken into account for KPI 2 confirmed that, in addition to compliance with an energy consumption threshold, the corresponding activities:

-  meet the DNSH criteria applicable to each eligible activity;

-  comply with the minimum safeguards stipulated in the Regulation in the areas of human rights (including labor and consumer rights), bribery and corruption, fair competition and taxation. The measures implemented within the Group to assess the associated risks, to prevent and detect any situation likely to constitute a breach of the commitments made, or to remedy any proven breach, are described in the “Social” section, §2, “Value chain workers”, and the “Governance – Business conduct” section of this Sustainability Report; the tax policy is in line with the guiding principles described in its Code of Conduct.

(c)   The analysis of the energy efficiency of leased premises for the fiscal year was only carried out for the Maisons contributing significantly to capitalized fixed lease payments, corresponding to 91% of the Group’s capitalized fixed lease payments in 2024 (compared with 91% in 2023). The capitalized fixed lease payments of the remaining Maisons were deemed as eligible and not aligned for the purposes of this reporting.

(d)  When a building is acquired, the land is considered ineligible. Its acquisition cost is included in “Total CapEx”.

(e)  See Notes 3, 6 and 7 to the consolidated financial statements.

Most of LVMH’s purchases or leases involve its network of stores, which are generally situated in buildings in historic city centers. However, the building standards in force when they were constructed made little or no mention of energy efficiency and they have for the most part not recently undergone thermal renovation work, which results in a low rate of compliance with the energy efficiency levels stipulated by the Regulation. For this reason, KPI 2 for purchases and leases of buildings respectively stood at 0% and 0.6% of “Total CapEx” (compared with 0.5% and 1.7% in 2023), and 0.1% and 1.6% of “Real estate CapEx” (compared with 1.3% and 4.4% in 2023).

Nevertheless, whenever buildings with inadequate energy efficiency are purchased or leased, LVMH aims to include energy efficiency improvement as part of the renovation projects for these buildings to the extent possible. This applies in particular to production sites, recent out-of-town offices and, in a few rare cases, completely renovated city-center complexes. These efforts should be reflected in the improvement in KPI 2 relating to building renovation and construction. In 2024, construction and renovation projects complying with the thresholds for energy efficiency set out in the Regulation together accounted for 3.8% of “Total CapEx” and 9.7% of “Eligible CapEx” (compared with 1.2% and 3.1%, respectively, in 2023).

7.1.2       Details on the analysis carried out for the other environmental objectives

Climate change adaptation objective

To carry out the multi-objective analysis required by the Regulation, LVMH considered the following as being eligible: operational investments housed in buildings whose building permits were issued after December 31, 2020 (including acquisitions, new buildings and leases), major renovations in the European Union and energy efficiency equipment. Other investments were considered “ineligible” for the requirements of this reporting.

For each item of “Real estate CapEx”, analysis of alignment for the purposes of the climate change adaptation objective begins with an analysis of physical climate-related risks and the means implemented to reduce its vulnerability, followed by an energy efficiency analysis. Analysis of other DNSH criteria is similar to that set out above for the climate change mitigation objective.

Circular economy objective

Operational investments in renovation considered eligible for the climate change mitigation objective were also considered eligible for analysis in respect of the “Transition to a circular economy” objective.

The alignment analysis of a Renovation under this Objective, mandatory for the first time from 2024, aims to ensure that each technical criterion imposed by the Regulation is met. Checks on compliance with other DNSH criteria include an analysis of exposure to climate-related risks similar to that detailed above for the Climate Objectives, on limited water flow and the absence of hazardous substances.

7.2         Indicators relating to turnover and maintenance, R&D and rental expenses (OpEx)

Since LVMH’s main activities are not at this stage covered in the Regulation in relation to the achievement of the Environmental Objectives, the turnover indicators are presented as nil for LVMH in respect of fiscal years 2024 and 2023.

Maintenance of real estate assets, R&D and rental expenses (in respect of short-term leases) represent a non-material proportion of the Group’s total operating expenditure. That being the case, LVMH has applied the materiality exemption to OpEx.

The tables required by the Regulation are set out in the Appendices below.