A PURCHASING POLICY THAT LIVES UP
TO OUR COMMITMENTS

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.

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 Universal Registration Document