A PURCHASING POLICY THAT LIVES UP TO OUR COMMITMENTS

The premium quality of the raw materials it sources is one of the keys underpinning the desirability of LVMH’s products and its responsibility framework. Since Scope 3 emissions account for 96% of the Group’s carbon footprint, the Purchasing Department and the Environmental Development Department are looking to build new, more sustainable supply chains. Specific actions are undertaken as part of the social program. The Group endeavors to ensure its suppliers and their service providers uphold human rights and help them apply the best possible employment, health and safety conditions.

OVERSIGHT OF THE PURCHASING POLICY

The Group Purchasing Department and the Maisons’ purchasing teams have ultimate responsibility for quality, cost management and sourcing lead times. Their responsibility also extends to compliance across all the Group’s value chains with the Supplier and Business Partner Code of Conduct. This Code lays down the ethical and social and environmental responsibility requirements that LVMH sets for its partners, its suppliers and their subcontractors. One of the tasks of the Responsible Purchasing Committee, which is made up of Maisons’ purchasing managers and key strategic supply chain managers, is to monitor compliance with the Group’s environmental and human rights commitments.

IDENTIFYING RISKS AND MAKING PROGRESS TOGETHER

For some considerable time, LVMH has implemented an integrated supplier evaluation and support program fostering the common pursuit of excellence. Given the diversity of its activities and its global footprint, the Group adapts its approach to the individual situations it encounters. Its vigilance framework is based on the maps drawn up by the Maisons and an overall map. They are frequently updated, especially to take account of new solutions becoming available to trace raw materials, achieving a more granular assessment of the risks across the value chain. The Group’s policies and commitments made with respect to human rights, environmental protection and the fight against corruption are structured to respond to the risks identified. The idea is that this process of assessing and responding to known risks enables the Group to prioritize the action it takes and support suppliers in making continuous improvements to their practices.

DRIVING PROGRESS ACROSS OUR VALUE CHAINS

LVMH has also made training for employees and its suppliers the linchpin of its responsible purchasing program. The program’s environmental scope was expanded in December 2023, with the announcement of the LIFE 360 Business Partners plan. In addition, the Group actively participates in sector initiatives for high-risk supply chains, such as the Colored Gemstones Working Group, the Diamond Source Warranty Protocol, and the Action for Sustainable Derivatives. At the same time, the “Joining Forces” initiative brings together several links across the value chain to collectively trial traceability solutions.

Geographical breakdown of our suppliers

(1) The data reported in this table are from 2021. A new supplier mapping assessment based on 2023 data is currently underway.

EUROPENORTH AMERICAASIARoW
Breakdown of suppliers based on purchasing volume (%)
64
18
17
1
Breakdown by number of suppliers (%)
78
10
10
2
Breakdown of audits (%)
66
3
30
2

A PURCHASING PROCESS BASED ON THREE COMPLEMENTARY STAGES

With its Convergence program, LVMH aims to maintain tight control over its non-financial risks linked to its suppliers. It is based on a global map prepared in conjunction with Verisk Maplecroft. Suppliers are rated according to how critical they are. Those classified in the high-risk category on account of being mission-critical are assessed using the EcoVadis platform. The program also includes on-site audits.

Under this extensive analytical process with its three complementary stages, action plans are implemented with remedial measures when compliance breaches are identified. The goal is to support suppliers so they can make progress by adopting an approach aligned with their specific operational requirements.

To guarantee a harmonized approach Group-wide, the Maisons apply standardized audit frameworks. Certain Maisons also solicit anonymous or confidential feedback on working conditions from their suppliers’ employees so they can detect any breaches of employees’ fundamental rights.

To learn more, please refer to the Management Report section of the

“In 2023, LVMH launched its LIFE 360 Business Partners program. It had one simple goal: involve our suppliers and our partners more closely in achieving LIFE 360’s ambitious environmental commitments. It’s a top priority because our Scope 3 accounts for 96% of our carbon footprint. Since it depends on our upstream and downstream value chains, it’s much harder to control. That’s why we can’t go it alone. LIFE 360 Business Partners will enable the Group and its suppliers to adopt a more sophisticated approach to sustainability. Program initiatives will be formulated and assembled gradually, in tandem with the Environmental Development Department."

Mohamed Marfouk,

LVMH’s Operations Director

LIFE 360 Business Partners & the responsible purchasing policy

The Group launched the LIFE 360 Business Partners plan to address the importance of cooperating with its ecosystem to reduce carbon emissions. The program, which is based on the existing transition plans of certain Maisons, will evolve according to the needs expressed by suppliers during the 2024 Sustainability Business Partners Days. In 2024, the first sector-specific working groups were set up to expand these plans to take account of emerging social and environmental issues. The program will also be enriched by in-depth work on the risk map, assessment of practices on the ground and collaboration with the most exposed channels to develop solutions.

Continuing training our employees in responsible purchasing

Since 2022, the Group has provided training in responsible purchasing designed in conjunction with the consultancy firm Des Enjeux et des Hommes. The rationale for this is to fully involve everyone directly monitoring the strategic supply chains in achieving LVMH’s ethical, social and environmental targets. Nine in-person training sessions have been held in Europe, North America and Asia. At the same time, over 73,000 hours of environmental training and awareness raising initiatives were rolled out in 2024 across the Group, including the purchasing and CSR teams.

Guiding strategic suppliers in their drive to upskill

LVMH has introduced a special training framework for its strategic suppliers. In 2023, further training sessions focused on the specific needs of certain countries were held – for the fifth year in a row in China and for the third time in Italy. In 2024, the Group continued to extend the program, conducting 4,066 audits on 3,690 suppliers and subcontractors. Certain Maisons deployed modules specially geared to the operational challenges they face, for example relating to traceability, sustainable design and social compliance. Tiffany & Co., Loro Piana and Guerlain put in place specific programs within their sensitive supply chains.

Guaranteeing a living wage across supply chains

Since 2021, LVMH has pursued a structured policy to guarantee wage equality and a living wage, based on the principles of the Fair Wage Network. In 2024, these efforts were supported through audits in several pilot Maisons, covering nearly one quarter of the Group’s entire workforce. Every employee, no matter where in the world they work, now receives compensation that is rated at least at an adequate level based on the local situation. This principle also applies to the Group’s strategic suppliers through formal commitments in the updated Code of Conduct, targeted social audits and shared assessment tools. This is how LVMH continues to work toward its ambition to align the social practices across its ecosystem with the highest standards, with particular focus on textile, jewelry and perfume suppliers. Furthermore, the Group plays an active role in industry initiatives. Since 2018, LVMH has been involved in UTTHAN, an initiative led by major luxury industry buyers in the embroidery sector in Mumbai. The aim is to increase recognition of artisan partners working with our Maisons and help guarantee all karigari craftspeople receive a living wage and access to healthcare.

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RESSOURCES

  • 2024 Social and environmental responsibility report

    April 2025

    Keyword

    • Reports
    • ESG

    pdf - 15178 KO

  • LVMH Code of Conduct

    April 2024

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    • Other publications
    • Other topics

    pdf - 3505 KO

  • Supplier and Business Partner Code of Conduct

    September 2024

    Keyword

    • Other publications
    • ESG

    pdf - 280 KO

  • The Responsible Lobbying Charter LVMH

    Keyword

      pdf - 278 KO

    • The LVMH Anti-Corruption Charter

      Keyword

        pdf - 576 KO

      See all publications

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