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2015 Social Responsibility Report This 2015 Social Responsibility Report describes the LVMH group s corporate social responsibility (CSR) policy. For additional information on the LVMH group s social responsibility
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2015 Social Responsibility Report This 2015 Social Responsibility Report describes the LVMH group s corporate social responsibility (CSR) policy. For additional information on the LVMH group s social responsibility data, please refer to the cross-reference table on pages 50 and 51. This document is a free translation into English of the original French Rapport Responsabilité sociale 2015, hereafter referred to as the 2015 Social Responsibility Report. It is not a binding document. In the event of a conflict in interpretation, reference should be made to the French version, which is the authentic text. 2 ONE FUNDAMENTAL VALUE: FOUR AREAS OF APPLICATION... 5 FOUNDATIONS OF THE GROUP S SOCIAL RESPONSIBILITY POLICY... 6 The four priorities of social responsibility... 7 Main social responsibility issues... 8 LVMH s international commitments... 9 Corporate social responsibility (CSR) management... 9 Relationships with stakeholders Non-financial ratings DEVELOPING TALENT AND SKILLS Recruitment a key moment Building a digital presence Employer brand recognition Employee professional development Strategic review Awareness and training programs Enabling everyone to get to know the Group better Supporting digital transformation Retail-specific challenges Internal mobility Linking compensation packages with ESG performance Knowledge preservation MANAGING QUALITY OF LIFE AT WORK Health and safety issues Group company programs and initiatives for well-being at work Work-life balance and flexible working time arrangements Labor relations Group company satisfaction surveys PREVENTING DISCRIMINATION AND RESPECTING INDIVIDUALITY Develop appropriate Group-wide processes Promoting gender equality in the workplace Fostering the employment of people with disabilities Providing career support for older workers SUPPORTING LOCAL COMMUNITIES AND REGIONAL DEVELOPMENT Jobs and regional development Supporting suppliers, solidarity and social entrepreneurship Jobs for those with difficulties finding and retaining employment Supporting vulnerable populations Main reporting methodologies LVMH is active in six business groups: WINES & SPIRITS The LVMH Wines & Spirits business group focuses its growth on the high-end segments of the market. The world leader in champagne, LVMH also produces still and sparkling wines from the world s most famous wine-growing regions. The Group is also the world leader in cognac with Hennessy and is expanding its presence in the luxury spirits segment in addition to this historical business. The portfolio of brands is served by a powerful international distribution network. FASHION & LEATHER GOODS Louis Vuitton, Fendi, Donna Karan, Loewe, Marc Jacobs, Céline, Kenzo, Givenchy, Thomas Pink, Pucci, Berluti, Rossimoda and Edun are the brands that form the Fashion & Leather Goods business group. This outstanding group of brands from both sides of the Atlantic has 1,566 stores throughout the world. While respecting the identity and creative positioning of each of its brands, LVMH supports their development by providing shared resources. In 2013, the business group welcomed Loro Piana, a paragon of excellence, renowned for its devotion to quality and the finest materials. PERFUMES & COSMETICS LVMH, a major player in the perfumes, make-up and skincare sector, relies primarily on a portfolio of brands comprised of French companies with an international presence: Christian Dior, Guerlain, Givenchy and Kenzo. The Group also supports the development of high-potential brands: Benefit and Fresh, two rapidly-growing American brands; Acqua di Parma, whose fragrances symbolize Italian elegance; Parfums Loewe, one of the leaders in the Spanish market; and Make Up For Ever, a firm favorite of professional make-up artists which has recorded outstanding growth by marketing its products to the general public. WATCHES & JEWELRY Counted among the most dynamic brands on the market, LVMH s Watches & Jewelry companies operate in two segments: high-quality watchmaking on the one hand and jewelry and fine jewelry on the other. A quest for excellence, creativity and innovation guide them in this area every day. The watchmaking side capitalizes on the complementary positioning of its brands: TAG Heuer s international stature, Hublot s strong dynamic of innovation, Zenith s age-old expertise and Dior s creativity. In jewelry and fine jewelry, Bvlgari, Chaumet, Fred and De Beers employ their bold creativity and perfectly mastered skills to constantly surprise their customers and offer them the objects of their desire. SELECTIVE RETAILING LVMH s Selective Retailing companies operate in Europe, America, Asia and the Middle East. Their operations are conducted in two segments: retailing designed for customers who are international travelers (travel retail), with DFS and Starboard Cruise Services, major players in their markets; and the selective retailing concepts represented by Sephora, the most innovative company in the beauty segment, and Le Bon Marché Rive Gauche, a department store with a unique atmosphere located in Paris. OTHER ACTIVITIES These companies are all about being ambassadors for culture and a certain art de vivre. That approach is part of the quest for excellence pursued by each of these Group companies: from Groupe Les Echos, which includes key business and cultural press titles, to Royal Van Lent, which markets custom-designed yachts under the Feadship name, and Cheval Blanc, which is developing a collection of exceptional hotels. 4 ONE FUNDAMENTAL VALUE: FOUR AREAS OF APPLICATION LVMH s corporate social responsibility policy is adapted by individual Group companies to incorporate their own action plans according to their specific priorities and identity. Social responsibility is managed at Group level by means of guidelines (LVMH Code of Conduct, Recruitment Code of Conduct, etc.) and annual reporting based on quantitative and qualitative data. It is coordinated by a network of Group company corporate social responsibility (CSR) correspondents. Since fiscal year 2011, LVMH has documented its social responsibility actions in a dedicated report. 5 FOUNDATIONS OF THE GROUP S SOCIAL RESPONSIBILITY POLICY Forged over generations by alliances between Group companies weaving together their traditions of excellence and creative passion LVMH has built its leading position on a unique portfolio of iconic brands. These Group companies derive their energy from their exceptional heritage, innovative mindset, and receptive outlook. The Group supports their development in a spirit of entrepreneurship, long-term vision, and respect for the sources of their strength and uniqueness. As ambassadors of an authentic art de vivre, it is our responsibility to set the right example in every aspect of our business, from product design to the experience that customers have throughout their relationships with our brands; from investment choices to social and environmental initiatives. Because what we do requires a diverse range of talent, we are committed to training teams that embody excellence. Because passing on skills is an integral part of our culture, we want to use that to promote social inclusion and employment. Because our crafts make the most of nature at its purest and most beautiful, we see preserving the environment as a strategic imperative. The values and actions encompassed by our sustainable development attitude emerge from a tradition that dates back to the origins of our Group companies and forms an integral part of our heritage. Our long-term success depends not only on the Group s solid business model and profitable growth strategy, but also on our unwavering commitment to creativity, excellence and sustainability in all of our development and corporate citizenship goals. PEOPLE: To encourage all our employees to reach their full career potential and achieve their aspirations, to develop diversity and the wealth of human resources at our companies in all the countries where we operate, and encourage initiatives in these areas. Outside our own company, to contribute to the knowledge and preservation of our crafts and our expertise as artisans and designers. ECONOMIC PERFORMANCE: To combine economic growth, sustainability and commitments to creativity and excellence. To apply our creative passion to the art de vivre to which our customers aspire. To strengthen our position as a global leader, and to set the standard for managing and developing high-quality brands. ENVIRONMENT: To work together to preserve the planet s resources, to design and develop products that are compatible with environmental concerns, to report on our policies and projects and the progress achieved in meeting our objectives. To contribute to environmental protection above and beyond the factors directly related to our operations, by entering into active partnerships with cooperating business groups, local authorities and associations. CORPORATE CITIZENSHIP: To implement a patronage program for the widest possible public benefit, the components of which reflect and transmit our fundamental values. To provide active support for major causes, humanitarian projects and public health programs, and develop initiatives in support of art and young people. 6 Each of LVMH s six business groups is unique, but they are all united by a shared view of their social responsibility, for which key priorities have been drawn up and tested over the past few years through dialogue between the Group and its stakeholders. The Group s social responsibility is focused on four priorities for all its companies, which it aims to apply throughout the world: developing talent and skills, constant attention to working conditions, preventing all forms of discrimination, and corporate involvement in regional solidarity actions to help local populations. The four priorities of social responsibility Constant focus on working conditions Preventing discrimination and respecting individuality Developing talent and skills Supporting local communities and regional development These four priorities are the four most fundamental values shared by the Group s companies, which operate very independently of one another. Outside the scope of any overarching initiatives, Group companies are entirely free to identify other issues specific to their businesses and their environment. They implement their approach and draw up action plans according to their business and their own specific considerations. As part of its 2015 annual reporting, the LVMH group sent all its Group companies a qualitative questionnaire that included the following question: What are your CSR priorities? All the Group companies with a significant impact on Group reporting responded, totaling more than 40 entities, showing that the four social responsibility priorities defined by the Group were indeed taken into account. Lastly, dialogue and collaboration between business groups and among Group companies is vital. It has made it possible to identify the key human resource management issues, which are often shared and interconnected. 7 Main social responsibility issues Trends and developments in social and labor issues Internal social responsibility issues Business groups particularly affected Longer working life and managing interpersonal relationships Increased competition for rare skills in a globalized market Recruiting and retaining talent Safeguarding and passing on expertise and strategic skills Innovation management Fashion & Leather Goods Watches & Jewelry All business groups Need for inclusion and social cohesion Connecting businesses with organizations that promote employment and socially engaged/responsible entrepreneurship All business groups Stricter regulations and standards Risk management Employee health and safety Workplace ergonomics Stress management Wines & Spirits Perfumes & Cosmetics All business groups Fighting discrimination and promoting diversity Expectations in terms of work/life balance Preventing discrimination Parenting and needs for new services Well-being at work All business groups Tourism and highly mobile customers Emotional appeal of products and acute need for in-store customer experience Work time organization and flexibility Managing the impacts of seasonality (boutiques, grape harvests, etc.) Supporting employee engagement Selective Retailing Wines & Spirits Boutiques in other business groups 8 LVMH s international commitments The international charters and commitments signed by LVMH provide the framework for the Group and its companies actions and responsibilities. Since 2003, the LVMH group has shown its support for universal values as a signatory of the United Nations Global Compact, reflecting its commitment to corporate social responsibility. It is committed to aligning its operations and strategy with the UN Global Compact s ten principles related to human rights, working standards, respect for the environment and the fight against corruption. LVMH also supports the Universal Declaration of Human Rights, OECD guidelines, the International Labor Organization s Fundamental Conventions, the United Nations Millennium Development Goals and Women s Empowerment Principles, and the French Diversity Charter. These commitments are included in the LVMH Code of Conduct and transposed into principles that are disseminated throughout all Group companies. Taking each individual and his or her freedom and dignity, personal growth and health into consideration in each decision forms the core of LVMH s social responsibility approach, to which all Group companies adhere. Accordingly, all Group companies have policies and practices for preventing discrimination and ensuring equal opportunity and treatment irrespective of gender, race, religion and political opinion, etc. as defined in the conventions of the International Labor Organization. This culture and these practices also generate respect for freedom of association, respect for people, and the prohibition of child labor and forced labor. Supplier Code of Conduct LVMH Code of Conduct Recruitment Code of Conduct United Nations Global Compact Apprenticeship Charter Millennium Goals Diversity Charter Business Charter for Equal Opportunity in Education LVMH s Internal Charters and Codes The Watches & Jewelry business group becomes a member of RJC (Responsible Jewellery Council) Charter for the Employment of People with Disabilities Signing of the United Nations Women s Empowerment Principles Declaration of commitment to a European initiative to increase the number of women board members Public undertakings by LVMH Corporate social responsibility (CSR) management In keeping with its history, its size as a major international corporation, and the very different characteristics of its business lines, LVMH s organization is both unified and decentralized. While the Group s development is consolidated around its common social responsibility principles, methods and action plans, the risks and opportunities resulting from the incorporation of social issues need to be managed by each Group company and at a local level. As such, within Group companies and their subsidiaries, managing the social responsibility policy falls under the remit of the Director of Human Resources, assisted by a local CSR correspondent in charge of liaising with LVMH, checking that the Group company s actions are in line with the Group-wide approach and carrying out CSR reporting, the objective being to ensure that individual company measures are relevant and consistent with the broad areas for action set out by the Group. 9 At Group level, strategic priorities and overall policy consistency are pursued through ongoing dialogue between the Social Development Department and CSR correspondents at each Group company who are connected through the CSR network. They meet twice a year to review the preceding year, set shared priorities for the current year, look for ways to collaborate and share their best practices. In 2015, the CSR network met on February 19 and October 29, in Paris. CSR management is guided by international reporting that covers Group companies with more than 50 employees. This reporting enables an annual inventory to be produced of the social responsibility measures taken over the previous twelve months. It covers the four main subject areas of the Group s CSR policy. Each reporting topic explicitly references the conventions and recommendations of the International Labor Organization. LVMH reports on its social responsibility approach in its Annual Report, its Reference Document and since fiscal year 2011 the Social Responsibility Report. In parallel, since 2013 particularly as a result of the specific French regulations resulting from the Grenelle II Act some Group companies have developed their own social responsibility reports, including Loewe, Parfums Christian Dior, Guerlain, LVMH Fragrance Brands and Le Bon Marché. Multi-level management Aim Social responsibility strategy coordination Materials, resources and networks LVMH Social Development Department CSR Committee composed of 40 social responsibility correspondents Special support for persons with disabilities The Mission Handicap initiative and a network of 30 disability correspondents Special monitoring of the position of women within the company Collaborative working and information sharing EllesVMH: a community with more than 900 members worldwide (women and men), a discussion platform and intranet for sharing information and best practices Voices: an intranet dedicated to the entire human resources community LVMH Mind: an intranet dedicated to CSR, available to all staff Social Responsibility Newsletter Reference Document Annual Report Social Responsibility Report Relationships with stakeholders Throughout the year, LVMH fosters dialogue and relationships with its stakeholders. The Group answers their questions and provides them with a range of information, particularly concerning the social impact of its activities. This dialogue is structured in very different ways depending on the circumstances. Special attention is paid to providing information to and raising awareness among Group company employees. This takes place through the Group s Voices intranet and a semi-annual CSR newsletter. Integration seminars for the Group s new hires help raise their awareness of its culture, values, key management principles and knowledge of its brands. These seminars include an introduction to social responsibility issues. As regards other stakeholders, the table below provides a simplified overview of the main types of relationship forged by LVMH. They differ depending on the issues pertaining to the Group as a whole, the business groups, Group companies, and each geographical area. In parallel with the types of relationships maintained with stakeholders, the Group s corporate partnerships are shown separately. Showing such formal partnerships separately reflects their specific features given the resulting commitments for all parties concerned. 11 The LVMH group s main partnerships CSR (Corporate Social Responsibility) Non-discrimination LVMH is a member of ORSE (Observatoire sur la Responsabilité Sociétale des Entreprises, a French CSR think tank) LVMH has been a member of AFMD (Association Française des Managers de la Diversité, a French organization promoting diversity in managerial practices) since 2013, on its board of directors since 2014 and on its executive board since See Preventing discrimination and respecting individuality Disability Agreement with AGEFIPH (a French organization that promotes private-sector employment of people with disabilities): LVMH, Parfums Christian Dior, Veuve Clicquot. Group companies are involved in the LVMH EXCELLhanCE program: LVMH, Parfums Christian Dior, Veuve Clicquot, Benefit Cosmetics, Le Bon Marché, Berluti, Louis Vuitton, Make Up For Ever and Chaumet. LVMH co-founded ARPEJEH (which h
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