CLIMATE STRATEGYMISSION 1.5°

OUR JOURNEY TOWARDSA LOW-CARBON FUTURE

WE ARE
TAKING ACTION
It is an ambitious journey, but we build
on a solid understanding of the challenges
we are facing and on the concrete resultsthat we have already achieved in thecompany. In addition to our reduction
efforts, we are also committed tomitigating the consequences of climatechange by compensating our residual
emissions. CHANEL reached carbon
neutrality in 2019.

Climate change is one of the greatest
challenges of our time. As a leader in
our industry, with a unique position andfocused on long-term development, weplan to address this critical issue withfocused dedication.

CHANEL is a private company and a world leader in creating,developing, manufacturing and distributing luxury products.
Founded by Gabrielle Chanel at the beginning of the lastcentury, CHANEL offers a broad range of high-end creations,
including Haute Couture, Ready-to-Wear, Leather Goods,
Fashion Accessories, Eyewear, Fragrances, Makeup, Skincare,
Jewellery and Watches. CHANEL is dedicated to ultimate
luxury and to the highest level of craftsmanship and has
acquired a large number of specialised suppliers, collectively
known as the Métiers d’Art. It is a brand whose core values
remain historically grounded on exceptional creation. As such,
CHANEL promotes culture, art, creativity and “savoir-faire”
throughout the world, and invests significantly in people,
R&D and innovation. At the end of 2019, CHANEL
employed more than 27,700 people worldwide.

At CHANEL, as a creation-driven
company, we aim at designing highly
desirable products and experiences forour clients while generating a positive
impact on the environment and society.
As such, sustainability is a strategic
priority for CHANEL and we haveambitious goals.

Our strategy sets a path but it is ashared challenge. We know we won’t
be able to achieve this on our own.
All CHANEL employees have a key roleto play but we also need to work inclose collaboration with our partners,
our suppliers and our peers.

CHANEL Mission 1.5° outlines our plan
to reduce our carbon emissions in thenext decade and help accelerate thetransition to a more sustainable world,
addressing the targets set by the Paris
Climate Agreement (COP21).

By doing that, we believe that we canuse the power of our creativity and our
influence to be part of the solution.

Alain Wertheimer, CEO

Where is
CHANEL focusing
action?

How will
CHANEL enablechange?

How does
CHANEL measure
its impacts?

How does
CHANEL manage
accountability?

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March 2020

1

OUR JOURNEY TOWARDSA LOW-CARBON FUTURE

I COMMEND CHANEL FOR TAKING ON THE
1.5 DEGREE CHALLENGE, REDUCING ITS OWNEMISSIONS AND THOSE OF THEIR VALUE CHAINWITHIN THE CRITICAL DECADE WE ARE FACING.
SUCH CORPORATE LEADERSHIP WILL HELP US
ACHIEVE THE LONG TERM GLOBAL TARGETS.
CHRISTIANA FIGUERES, FOUNDING PARTNER,GLOBAL OPTIMISM & FORMER EXECUTIVE SECRETARY,UNITED NATIONS CLIMATE CONVENTION

We have called our strategy ‘CHANEL
Mission 1.5°’ because a mission
requires commitment and dedication,
not just warm words. Furthermore,a mission, by definition, has aspectsof the unknown. As with any otherbusiness, the pathway to reach ourtargets will become clearer as ourjourney progresses.

CHANEL Mission 1.5° is ourcommitment to mobilise and transform
our business in line with the Paris
Climate Agreement, decarbonising ourbusiness and value chain to help limit
average global mean temperature
increases to 1.5 degrees Celsius
above pre-industrial levels. Scientists
have made a clear and compellingcase that failing to achieve this puts
our planet at risk.

CHANEL is a creation-driven brand.
We are passionate about quality and
we design our products to ensure theirlongevity. These same values can be
deployed to help us play our part in
the protection and preservation of thenatural world upon which our societies
depend.

In keeping with the timeframe of
the United Nations Sustainable
Development Goals (SDGs), CHANEL
Mission 1.5° is a plan of action for the
next decade, setting out what we aim
to achieve by 2030.
The ambition builds on existing
progress to reduce our impacts. We
have been carbon neutral since 2019and have achieved this by investingin nature-based solutions to balance
the emissions across our full footprint(scopes 1, 2 and 3). We alreadysource 41% of our global electricity
from renewable sources. We signed up
to the Science Based Targets initiative(SBTi) to ensure that the methodology
set for our carbon targets, described inthis report, is ambitious and externallyvalidated to be in line with the Paris
Climate Agreement.

2

CHANEL Mission 1.5° supports SDGs
13 and 15:“Take urgent action to combat
climate change and its impacts
by regulating emissions andpromoting developments inrenewable energy.”“Protect, restore andpromote sustainable use ofterrestrial ecosystems, sustainably
manage forests, combat
desertification, and halt andreverse land degradationand halt biodiversity loss.”3

WHERE IS CHANEL
FOCUSING ACTION?
We are committed first and foremost to cutting CHANEL’s carbon footprint
by reducing our own emissions and those generated in our global value chain.
To do this, we are transforming our business and will help our partners do thesame. At the same time, we consider it our responsibility to help accelerate
the transition to a lower carbon and more resilient future by supporting
initiatives beyond our operational footprint. We aim to deliver on our ambition
for a low-carbon future through two commitments: reduce and accelerate.

REDUCEACCELERATEWe need to reduce the impact of our own
operations and our value chain as quickly as
possible and have set science-based targets
to help us achieve this:Beyond the boundaries of our business, wewant to help accelerate the speed of transition
to a lower carbon and more resilient world.
We will do this through:

DECREASE

BalancE e aim to decrease our own carbon
Wfootprint (scopes 1 and 2) by 50% by2030, which is equivalent to a 66%
reduction per unit sold.* e balance our carbon footprint byW
investing in nature-based solutions toremove and avoid carbon at least equal
to our global emissions, reaching carbon
neutrality in 2019.

 e aim to decrease emissions from ourWvalue chain (scope 3) by 40% per unit sold.*

ADAPT

SHIFT

MISSION 1.5°

decreasebalance

Decrease the emissionsof our own operations
and in our global
value chain

Invest in nature-based
solutions to remove and avoid
emissions at least equal to
our full footprint

SHIFT
Shift to renewableelectricity in ourown operations

reduceaccelerate

Reduce theimpacts of our own
operations and our
global value chain
to meet our sciencebased targets

Go beyond ourbusiness to support
solutions that preserve
the environment andaccelerate climate
mitigation andadaptation

 e support initiatives that preserve andWrestore the environment and build theresilience of landscapes and communities
to adapt to climate change.

 e want to shift to 100% renewableWelectricity in our own operations by 2025,with an interim goal of 97% by 2021.
We have joined RE100 as part of thiscommitment.

NEW
THINKING*Both DECREASE targets use
2018 as a baseline and havebeen approved by the Science
Based Targets initiative.

ENABLERS FOR CHANGE
We are working with technology innovatorsand scientific partners to advance new thinking
on climate solutions and to help accelerate
the transition to a low-carbon economy.

Support research and theadvancement of new technologies
with the potential to accelerate thejourney to a low carbon economy

to work in close collaboration with ourpartners and suppliers. In addition, each of ouremployees has a key role to play. We aim forour climate initiatives to deliver benefits for boththe environment and society wherever possible.
As an independent company, we are able totake decisions with long-term impact in mind.

We have clear guiding lights that inform ourapproach. This is a shared challenge: we need

4

5

ADAPT
Finance projects thatenable communities andlandscapes to adapt toclimate changeCOMMITMENT ONE

Waste

REDUCEOur most important priority is the reduction of our carbon emissions.
We are committed to making significant cuts to the carbon emitted
by our own operations and our global value chain.
In the same timeframe, we also commit to cutting thecarbon emissions of our value chain by 40% (per unit
sold, compared with 2018), meeting the SBTi’s criteria for
ambitious value chain goals, meaning they are in line withcurrent best practice.

OUR TARGETS

Decrease CHANEL’s scope 1 and2 emissions by 50% by 2030
(equivalent to 66% per unit sold)and our value chain emissions by
40% (per unit sold) by 2030

We will achieve these targets by rethinking every aspectof our business with the environment front of mind, by
working closely with others and by embracing innovation.
We have joined RE100, a coalition of global companies
that are committed to using 100% renewable energy.
Globally, we already source 41% of our electricity fromrenewable sources. We aim to achieve 97% renewableelectricity by 2021, with a target of 100% by 2025. We
are investing in solar and other renewable technologies
for our sites, and supporting our suppliers to increase
their use of renewable energy too. Our approach is also
designed to stimulate the creation of additional generating
capacity and provide access to clean and affordable
energy for communities that need it most.

Shift to 100% renewable electricity
in our operations by 2025

By 2030, we will halve emissions from our own operations(such as manufacturing sites, boutiques and offices)compared with 2018, which is equivalent to a 66%
reduction per unit sold. This objective has been approvedby the Science Based Targets initiative (SBTi) as consistent
with reductions required to keep warming to 1.5 degrees
Celsius, the most ambitious goal of the Paris Climate
Agreement.

rawmaterials(includes waste frommanufacturing sites,
distribution centres,
offices, point of salematerial and destructions)

These are ambitious, stretching targets that will require
us to take transformative action at every point in ourvalue chain.

(includes materials
used by our threebusinesses e.g.
leather, silk, cotton,
cosmetic and perfume
ingredients, precious
stones and metals)

Employee
travel(includes leased carfuel consumption andemployee commuting)

Packaging1%(includes primary,secondary and tertiary
packaging)

26%

2%

Product in use(includes consumer travel
to retail store, use of
product and end of life)

5%

OUR CARBON
FOOTPRINTHIGHLIGHTS

5%

Energy(includes manufacturing
sites, distribution centres,
warehouses, boutiques
and offices)

6%

Transportof finished
goods
24%

(includes global andregional flows)

7%
BUSINESS
travel(includes air and train)

10%
14%

UNDERSTANDING OURCARBON FOOTPRINT
We conducted our first corporate-wide
carbon footprint in 2015 and, over the lastyear, have extended the exercise to our full
perimeter (CHANEL Ltd) and all greenhousegas (GHG) protocol categories. This revised
footprint uses the most accurate available
data for both our business and our value
chain. We will continue to deepen our
understanding of our impacts over time to
inform our priorities.

TOTAL
870,800

Marketing& Events

Other Goods& Services(includes media andmarketing materials)(includes investments
in capital goods andconsulting services)tCO2e

Carbon footprint(tCO2e)S cope 1: 19,600
S cope 2: 22,200
Scope 3: 829,000

6

Our carbon footprint provides us with a deeper understanding of where our businessis generating carbon emissions and where we need to focus our attention in orderto make a material difference, quickly. Scope 3 emissions make up over 95% of our
total footprint. Half our footprint is generated by just two GHG Protocol categories:
the production of our raw materials; and transporting finished goods.

7

CUTTING EMISSIONS FROMOUR OWN OPERATIONS
We have set ourselves a target which will not be achieved through business as usual.
We are taking bold steps in every aspect of our operations, including the design and buildof our sites and how we manage our energy use.
Our boutiquestarget

CHANEL boutiques are a physical representation of ourbrand and it is therefore fitting that our approach to
managing energy in our retail environments is exemplary.
We are committed to building and renovating our boutiques
to the highest environmental standards and to considering
the impact of the furniture and fittings within them.

Decrease CHANEL’s scope 1 and 2
emissions by 50% by 2030 (equivalent
to 66% per unit sold)PositiveenergyWhenever we build a new boutique, or renovate an existing
one, we pursue LEED certification and seek to make ourbuildings highly energy efficient. The first of our boutiques
received LEED certification in 2012 – one of the first for
the luxury sector. Since then, over 65 boutiques have beencertified, with over 40 more in progress. This represents
40% of the boutiques eligible for LEED certification, a
proportion that we will grow over the coming years. We arealso pursuing LEED certification for our new office spaces.

Manufacturing and distribution
We own a number of manufacturing and distribution
sites which gives us greater freedom to explore the useof renewable energy and environmental design. Find out
more about this on page 14.

Our ACT3 manufacturingsite is a BEPOS-certified
positive energy building.

Cutting edge architecture
We aim to comply with the most exacting certification
standards for our buildings, such as LEED (Leadership in
Energy and Environmental Design), BREEAM (Building
Research Establishment Environmental Assessment Method)and HQE (Haute Qualité Environnementale). Our Fashion
business is undertaking cutting-edge architecture projects
at a number of sites in France.

ACCELERATING CHANGE
To ensure that we are able to make the capital
expenditure needed to drive down our energyuse, we are introducing an internal carbon priceof $60 per tonne of CO2, which we are using toassess all major investments. We wanted to set
an ambitious price which will increase over time.
This effectively acts as an incentive to develop
capital projects that will help to reduce our carbon
footprint.

Ateliers de Verneuil, our leather goods manufacturing
facility in Verneuil-en-Halatte, is being expanded andwill use photovoltaic panels to generate electricity for thehighly energy-efficient building. The facades have been
designed to take full advantage of the natural light, while
the structure itself integrates perfectly into its eco-systemwith a body of water around the facility and green spaces
to promote biodiversity. The project will also lead to
additional job opportunities for the local community, witharound 500 people working in the facility.

In 2016, we created a $45m transition budget
to kick-start or accelerate sustainability projects
over five years, including climate-related activities
that can push us faster and further towards oursustainable business transition. Over the past four
years, the fund has supported climate projects inareas including renewable energy, sustainableretail and sourcing collaborations.

Energy efficiency upgrades are also underway at our
distribution site in Vémars. Built in 2013 to meet HQE
standards, the renovations and on-going site expansions,both with photovoltaic panels, will increase the building’s
energy efficiency so that it complies with the highstandards of BEPOS (Bâtiment à Energie Positive),
the French certification for positive energy constructions,as well as LEED and BREAM. We also have a BEPOScertified building in Pau, France, for the House of ACT3,
a manufacturer of fabrics, specialised in the productionof the famous CHANEL Tweed. ACT3 is a subsidiary ofLesage. Photovoltaic panels were installed in 2018 and,today, these generate 40% of the electricity used onsite.

CHANEL currently has
65 boutiques with LEED
certification:

14 Gold
45 Silver
6 Certified

AS A LEADING LUXURY
BRAND, CHANEL HAS A REALOPPORTUNITY TO HELP
REDEFINE THE ROLE OF LUXURYIN A LOW CARBON ECONOMY.
IT ALL STARTS WITH RAPIDLY
REDUCING CARBON EMISSIONS,ACROSS ALL SCOPES OF THE
BUSINESS, IN LINE WITH WHATSCIENCE SAYS IS NEEDED TO
MEET THE PARIS AGREEMENT.
NIGEL TOPPING, HIGH LEVEL CLIMATE ACTION CHAMPION,
COP26

8

CUTTING EMISSIONSIN OUR VALUE CHAIN
The raw materials we use and the transportation of our finished products are the two largest
contributors to our scope 3 emissions, together accounting for half our carbon footprint.

TARGET

LOWER CARBON
SUGAR BEET

Decrease value chain emissions by
40% (per unit sold) by 2030

The natural alcohol used in CHANEL fragrances
is mainly derived from French sugar beet.
Through our agroecological programme, we are
actively involved in helping the sector in France
to innovate new farming techniques that address
the economic, ecological, climatic and social
challenges it faces. This includes embracingorganic approaches to farming and adapting
industrial processes to build a sustainable
and responsible sector. As part of this, we aresupporting those farmers who are pioneers inagroecology and exploring opportunities to certify
the carbon savings generated by their activities
using the ‘Label Bas-Carbone’. This carbon
certification framework generates additional
financial revenue and was introduced by the
French Ministry for Ecological Transition to reward
agricultural practices that reduce greenhouse gas
emissions at a local level.

Setting high standards for our raw materials
We want to safeguard the planet’s natural resources whilst
also protecting the livelihoods of the people working in
our value chain. Most of our products are made withnatural raw materials that are farmed or cultivated and
we are working in collaboration with suppliers of thesematerials to transition to a more regenerative and lowcarbon approach to agriculture.
Our policies set out the standards we expect from ourraw material suppliers. We have strong, long-standing
relationships with many of our core suppliers, as well as
a number of joint ventures in our value chain where wework in partnership. We are working together to advance
practices that improve the sustainability of their businesses– both economically and environmentally.
All three areas of our business face the same challenge:
whether we are procuring leather and textile fibres, stones
and precious metals or ingredients for our fragrance andcosmetic products, we need to have a good knowledge ofthe approaches being used. For our core raw materials,
we have a good understanding of our supply chain, all
the way to the farmer’s field. For others, we are working to
improve traceability to enable us to support these suppliersto evolve their approach to agriculture, breeding or
extraction – and the processes that transform the materials
for our use. This knowledge allows us to make decisions
that can reduce the carbon footprint of our creations.

Reducing the carbon footprintof our distribution network

Collaborating on insetting

Transporting our finished goods from our manufacturing
and distribution sites to our boutiques is a major
contributor to our scope 3 emissions, accounting foralmost a quarter of our total footprint. We therefore
require significant changes in how we approach our
logistics in order to meet our carbon reduction target.

We are one of the corporate founding membersof the International Platform for Insetting (IPI),
which is a collaborative platform for companies,
academics, project developers, operators, andcertification bodies to promote insetting practices
worldwide. The aim is to facilitate insetting
practices by enabling collaboration on common
projects, and promote best practice.

At its most simple, this involves working closely with our
logistics partners to improve efficiencies through route
optimisation and using lower emission vehicles. For
instance, we only use electric vehicles for all deliveries
in Paris and Milan and, in the UK, we are continuing totransition our delivery vans to electric over the next two
years. It also means reducing the weight of our shipments(by, for instance, replacing heavy wooden pallets withlighter cardboard boxes) and packing our products more
densely to reduce the volume, so that we can make betteruse of every vehicle journey.

INSETTING IN ACTION
An illustrative example of an insetting projectis the work we are doing to support farmers ofvetiver in Haiti, a key ingredient in our fragrances.
Haiti is one of the least developed countries in
the world and is frequently struck by tropical
cyclones. Deforestation and soil erosion haveleft the country vulnerable to severe flooding and
CHANEL’s Laboratory of Fragrance Creation andDevelopment is working to support vetiver farmers
to encourage ecosystem restoration and protect
the wider community from the impacts of climatechange. As well as improving the community’s
resilience to natural disaster, this will also help toreduce poverty.

REDUCING AIR FREIGHTThe largest impact on our footprint will comefrom reducing our use of air freight andtransitioning to more sustainable transport
solutions. For example, many of the Fragrance
and Beauty products that we retail in the USA are
made in Europe and, historically, we relied heavily
on air freight. In recent years, we have shiftedsome of the logistics from air to sea. In 2016,
55% of these products were sent by sea from ourmanufacturing site in Le Meux, France, to our
distribution centre in Piscataway, USA. During
2019, the proportion had risen to 80%.

INSETTING: CREATINGSHARED VALUE WITH
SUPPLIERS
We believe that creating shared value with our
suppliers is the most effective way to guarantee amore sustainable future. We are keen proponentsof regenerative agriculture, which is an approach
to farming that actively enriches soils and helps toprotect biodiversity, while increasing the livelihoodsof individual farmers. We support numerous
projects that promote the preservation of local
ecosystem health, helping both to reduce carbon
emissions and to promote natural carbon captureand storage. This approach also contributes toincreasing climate resilience, providing significant,measurable benefits to the communities thatsurround these farms.

As an example, leather is one of the key raw materials
in our fashion creations but it is known to have a highcarbon footprint. We are looking at all aspects of theleather production process to see how efficiencies can bemade, including sustainable breeding practices. As we
exclusively use leather that is a by-product of the foodindustry, we need to work with all actors in this industry to
try to influence change. We are also investing in researchand innovation for new materials.

We refer to these as insetting projects – in otherwords, carbon relevant projects that are within ourown value chain. Championing these integrated
socio-economic and environmental projects will
help us achieve our climate ambitions.

CHANEL’S COMMITMENT TO A 1.5° TARGET MAKES AN INVALUABLE
CONTRIBUTION TO CLIMATE LEADERSHIP. BY EMBRACING A 40%
REDUCTION IN ITS VALUE CHAIN, WHICH REPRESENTS THE MAJORITY
OF ITS OVERALL FOOTPRINT, CHANEL IS HELPING NOT ONLY TO SHIFTITS OWN OPERATIONS, BUT ALSO THE WIDER ECOSYSTEM. CHANEL’SCOMMITMENT TO SUPPORT REGENERATIVE AGRICULTURE WILLALSO HAVE ECHO EFFECTS THAT HELP DELIVER QUALITY PRODUCTS,HEALTHY FOOD SYSTEMS, AND LIVELIHOODS FOR FARMERS. THE NEW
STRATEGY DEMONSTRATES THE STEPS THAT ARE NEEDED ON THE
PATH TO A NET ZERO ECONOMY THAT WORKS FOR ALL.
ARON CRAMER, PRESIDENT & CEO, BSR (BUSINESS FOR SOCIAL RESPONSIBILITY)

1011

Our products

Marketing, media and events

We continually deepen our understanding of the raw
materials we use to create our products, so that we
can make informed decisions about what we choose.

We are exploring ways to close the loop on our sales
and promotional materials by using recycled materials,
and recycling them or finding alternative uses for themonce they have served their purpose. Our Fragrance andBeauty business has developed Sales and Promotional
Materials guidelines for suppliers and partners outlining
this approach.

Our Fragrance and Beauty business, for example,
has developed a proprietary environmental impact
methodology to assess each ingredient in ourformulations. It includes climate criteria in the scoring,which tells us about the footprint of each ingredient.
We make similar assessments of the overall formulations.

We have launched a best practice guide to facilitate theorganisation of responsible events across the three areasof our business. We are engaging in strategic partnerships
to reduce the carbon footprint of our events by optimisingtransportation flows and rethinking how set designs are
created, used and reused. Wherever possible, at the endof our shows or events we recover, recycle, re-use and/or
repurpose the materials used.

Our packaging
Packaging represents 5% of our carbon footprint. We are
exploring how eco-design and innovation can be used toreduce both the weight and the size of packaging, thus
also alleviating the emissions associated with transport.
We are inspired by the ways in which circular economy
principles can help us on our decarbonisation journey byintegrating more recycled content and eliminating waste.

Employee travel
As an international business with many different sites
and employees in countries across the world, businesstravel comprises around 7% of our carbon footprint atpresent. To help reduce the need to visit other sites and toencourage employees to reduce travel, every desk-based
employee has been equipped with high-quality video andteleconferencing tools over the last year, and our global
offices have state-of-the-art video conferencing suites.

We also continue to explore re-usable packaging solutions
for our Fragrance and Beauty products. Some of our
foundation ranges have been sold as refillable products
for many years. In 2019, we set up perfume fountains insome of our standalone boutiques where empty perfume
bottles can be refilled. This is available for some of ourmost popular perfumes, including CHANEL N°5. We will
monitor the environmental impact of this initiative as wellas consumer engagement.

-40%

The carbon footprintof a GABRIELLE CHANEL
perfume bottle is 40%
lower than a typical
50ml perfume bottle.

We are also investing in lower emission vehicles for local
travel. In 2018, we launched a Car and Mobility Policy.
Our French operations are converting the existing car fleet
to 100% hybrid or electric vehicles over three years andsimilar initiatives are being implemented in other regions.

LIGHTWEIGHT PACKAGING
In 2017, we launched the GABRIELLE CHANEL
fragrance in a glass bottle which has a 40% lower
carbon footprint during its life cycle than a typical
50ml perfume bottle. This has been achieved bychallenging the idea that luxury fragrances require
heavy, thick glass bottles;
instead our long-standing
glass bottle manufacturer
created a thin-walled bottlewith bevelled lines madefrom fine glass which has asignificantly lighter carbon
footprint.

We already use
reusable packaging forsome of our foundation
products.

12

We assess theenvironmental
footprint of each
ingredient in ourfragrance and beauty
formulations.

TRANSITIONING TO 100%
RENEWABLE ELECTRICITY

Enabling
access toclean energy
We have partnered with Sunrun in California to
expand access to clean energy to nearly 30,000
low-income residents across California, offeringfamilies significant monthly savings on their energy
bills. Under the Solar on Multifamily Affordable
Housing (SOMAH) incentive scheme and the federal
solar investment tax credit, individual low-income
tenants will receive solar energy completely free
for the next 20 years.

We are part of RE100, a collaborative, global initiative uniting more than 200 influential
businesses that are committed to using 100% renewable electricity. Together, we are working toincrease demand for – and delivery of – renewable energy.
In 2019, 41% of the electricity we used to power ourowned and operated facilities across the globe* was fromrenewable sources. In 2020, we are joining RE100 with aninterim target of using 97% renewable electricity by 2021,
and aim to achieve 100% by 2025. In a few countries,
market conditions make the transition to renewable energy
more challenging and we will work with others, and as amember of RE100, to help accelerate the transition
to clean energy.

targetShift to 100% renewable electricity
in our operations by 2025
At CHANEL, we have a three-step renewableenergy strategy:
1 Maximise our capacity for on-site green power
generation by installing renewable energy sources,
particularly solar voltaic panels, in all of our new
manufacturing and distribution sites, and retrofitting
renewable technologies into our existing estates,whenever possible.
2 Choose to purchase green tariffs when we make adirect purchase of electricity, wherever readily available on
the market. In France, for instance, 100% of the electricity
we procure is via a green tariff.
3 Gradually phase out green tariffs in favour of providing
direct financial support (such as Power Purchasing
Agreements – PPA) for new renewable-energy projects at
a community level in key regions. This will add new, lowcarbon and renewable energy resources and supporting
infrastructure to the energy grid, as well as providing
access to clean and affordable energy for individuals andfamilies who might otherwise not be able to afford access.

POWERING
MANUFACTURING AND
DISTRIBUTION CENTRESOur manufacturing and distribution sites tend
to be larger premises, which make them ideal
locations for installing renewable technologies.
In our new distribution centre in Shanghai andour manufacturing site in Châtelain, Switzerland,renewable technologies generate, on average,
15% of each site’s electricity requirements.
Recently installed solar panels in Vittuone, Italy,
are expected to cover 20% of the site’s electricity
use, and those at our UK distribution centre
meet around 30% of the site’s needs. In the US,
we have installed solar panels on the rooftop
and parking canopies at our distribution site
in Piscataway, New Jersey, which are able togenerate over 3 million kWh/yr – equivalent
to the site’s total annual energy use.

Our commitment to supporting
community energy generation iscontributing to UN SDG 7 on affordable
and clean energy: “Ensure access toaffordable, reliable, sustainable andmodern energy for all.”* Corresponding to 437 sites in 38 countries, excluding
department stores and airport duty free shops. About
12% of consumption volumes were estimated.

14

3 million kWhof solar energy
per year
Solar panels installed on
the rooftop and canopies
at our distribution site in
Piscataway, New Jersey,
are able to generate over
3 million kWh/yr –equivalent to the site’s
total annual energy use.

CHANEL IS TAKING ANAMBITIOUS AND IMPACTFULAPPROACH TO SOURCING 100%
RENEWABLE ELECTRICITYGLOBALLY, INCLUDING THROUGH
PROJECTS THAT BENEFIT LOCALCOMMUNITIES. WE COMMENDTHEIR LEADERSHIP ON CLEAN
ENERGY AND URGE OTHERSIN THE LUXURY SECTOR TO
FOLLOW SUIT.
MIKE PEIRCE, CORPORATE PARTNERSHIPS DIRECTOR,
THE CLIMATE GROUPCOMMITMENT TWOACCELERATE
It is not enough to decarbonise our business – we consider it our
responsibility to help accelerate a global transition to a low-carbon
future. We support a wide range of projects and initiatives that preserveand restore the environment and increase the resilience of communities
and landscapes to climate change.
Our commitment to accelerate the transition to a lower
carbon world has three focus areas.

OUR GOALSFirstly, as of 2019, we are balancing the carbon footprintof our entire value chain by supporting nature-based
projects that reduce and avoid carbon emissions.

Balance: Invest in nature-based
solutions to remove and avoid
emissions at least equal to ourfull footprint

Secondly, our belief in a fair transition means we areinvesting in programmes that support communities toadapt to climate change, helping them to thrive andprotecting their livelihoods. Over time, it is our ambition
to integrate these climate adaptation programmes into ourvalue chain.

Adapt: Finance projects that enablecommunities and landscapes to adapt
to climate change

FAIR
TRANSITIONWE CHOOSE TO SUPPORTPROGRAMMES THAT HELPCOMMUNITIES TO ADAPT TO
CLIMATE CHANGE, HELPING
THEM THRIVE AND PROTECTINGLIVELIHOODS.

Finally, we acknowledge that the transition we are working
towards will not come through ‘business as usual’efficiencies so we are supporting scientific and academic
research to identify new solutions, as well as investing intechnology to accelerate innovation breakthroughs.

RAISING BUSINESS AMBITION ON CLIMATE ACTION HAS NEVER
BEEN MORE URGENT. THE WORLD MUST ACCELERATE THE SPEED
OF THE TRANSITION TO NET ZERO EMISSIONS. CHANEL SHOWSTHROUGH ITS MISSION 1.5º COMMITMENT THAT COMPANIES CANREDUCE THEIR EMISSIONS AS MUCH AS POSSIBLE AND USE NATUREBASED SOLUTIONS TO BALANCE THEIR REMAINING EMISSIONSAND ACHIEVE NET ZERO EMISSIONS. CHANEL’S LEADERSHIP GOES
BEYOND THE BOUNDARIES OF WHAT THEY CONTROL, AND THEYINVEST IN NATURE-BASED SOLUTIONS BRINGING ADDITIONAL
BENEFITS TO VULNERABLE COMMUNITIES.
MARÍA MENDILUCE, MANAGING DIRECTOR CLIMATE AND ENERGY,WORLD BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT

16

Naturalcarbon sinks
We are investing morethan $55m in nature-based
solutions to climate change.
This includes helping
to protect and restore
9,000km2 of land.

BALANCE

We support a growing portfolio of projects. To balance our 2018 scope 1-3 carbon
emissions, we chose to support certified projects that protect natural carbon sinks,
restore degraded land and help local communities to thrive.

Our planet’s precious forests and marine ecosystems have billions of tonnes of carbon locked
up in them. As they grow and flourish, more carbon is absorbed, but if they are destroyed,that carbon is released. Protecting and restoring the natural world is therefore one of the mostimportant contributions that we can make to reducing greenhouse gases in ourplanet’s atmosphere.
We choose certified projects that enlist the local
population to protect natural carbon sinks such as forests,
mangroves and peatlands. In regions where the landscapehas been degraded by human activity, we support
projects which aim to restore the natural world throughreforestation.

GOAL

Invest in nature-based solutions toremove and avoid emissions at least
equal to our full footprint

We only support projects that are certified to the highest
carbon, biodiversity and community standards (such as
the Verified Carbon Standard (VCS) and the Climate
Community and Biodiversity Alliance (CCBA)) and that aredelivered by respected project developers and operators.
In addition to absorbing carbon, we expect conservation
projects to protect and restore biodiversity, improve theliving standards of local communities, and contribute todelivering on several Sustainable Development Goals(SDGs). To ensure that we have selected appropriate
projects and that they are being delivered as agreed,
we conduct our own annual on-site assessments andhave worked with our partners to develop rigorous impact
monitoring schemes. We also engage with our partners
on a five-yearly basis, to ensure they have the long-term
financial strength and stability necessary to develop the
projects appropriately.

At CHANEL, we are strong advocates of the benefits ofnatural carbon sinks and have been working with experts
in the field to better understand how we can support thenatural world to address man-made climate change.
Between 2019 and 2024, we are investing more than
$55m in a collection of carefully selected projects that
protect and preserve the natural world. Our investments
will enable the protection and restoration of 9,000km2 ofland. These projects more than compensate for the carbon
emissions of our operations and value chain, meeting ourgoal to be carbon neutral from 2019 onwards.

LIVELIHOODS CARBON FUND
CHANEL plans to make a significant investmentin the new Livelihoods Carbon Fund (LCF3) thatwill be created in 2020 with the purpose to sourcehigh-quality certified carbon offsets by investing incommunity-based solutions for the restoration ofnatural ecosystems, agroforestry and regenerative
agriculture. With a first Carbon Fund launched in2011, the Livelihoods’ investment funds are supported
by private companies committed to generate impact
while offsetting their carbon footprint or transforming
their supply chains. All Livelihoods Fund investments
aim at creating social and environmental value for thecommunities they partner with.

18

Ayiti Limyè, Haïti

Yedeni, Ethiopia

Providing low-income households(including vetiver producers) withimproved clean cooking devices
and solar lighting systems. The
project is developed by Palmis Eneji
and Entrepreneurs du Monde inpartnership with EcoAct. Since 2013,
more than 43,000 households havebeen supported, and 101,000 tonnesof wood saved, avoiding the emissionof around 9,000 tonnes of CO2 every
year. This project is a Gold Standard
certified project.

Implementing a participatory
forest management frameworkthat helps local populations to
avoid deforestation. The projectis developed by Farm Africa inpartnership with EcoAct. The projectprotects 335,000 hectares of forestand has avoided the deforestationof more than 12,000 hectares sincelaunch in 2012, representing acarbon sequestration of over
1.1 million tonnes of CO2 per year.
This project is a REDD+ VCS,
CCBA certified project.

Sumatra Merang,
Indonesia
Restoring 22,000 hectares of damaged
peatland rainforest, protecting an
area more than 3.5 times the sizeof Manhattan. The project reduces
the emissions of CO2 by >400,000
tonnes every year and is developedby PT Global Alam Lestari and Forest
Carbon. CHANEL supports the
project through a partnership with
Ecosphere+. This project targets the
Merang biodiversity corridor and isalso working with local communities
from nearby villages to improve
livelihoods and reduce pressures on theforest. This is a Wetlands Restoration& Conservation (WRC) project certified
under the VCS and CCBA.

Neema, Kenya

Gran Pajatén Biosphere Reserve, Peru
Conserving and restoring 300,000 hectares of primary rainforestand empowering the local population. The project is developed by
FUNDAVI in partnership with Pur Projet and avoids the emissionsof 100,000 tonnes of CO2 per year. The area has been recognised
as a biosphere reserve by UNESCO and includes unique naturaland cultural heritage. Project activities aim to reduce deforestation,
preserve the area’s natural resources, create social value andempower local communities through bottom-up governance.
This project is a REDD+ VCS, CCBA certified project.

19
19`

Preserving more than 200,000 hectaresof protected forest and establishingsustainable forest management practices
which, together, sequester more than
1 million tonnes of CO2 per year. The
project is developed by Wildlife Works
in partnership with EcoAct. It protects
the precious habitats of several hundred
species. It also favours the developmentof local small businesses, including asmall jojoba oil and soap factory.
This project is a REDD+ VCS, CCBA
certified project.

ADAPTATION
The impacts of climate change are already being felt around the world: rising sea levels are
displacing coast lines, droughts and desertification are affecting crop yields, and floods andforest fires are threatening wildlife and human communities. These impacts will only worsen as
temperatures increase.
Adaptation and resilience funds

GOAL

CHANEL is committing to invest $25m over the next five
years in projects aimed at protecting local communities
from the impacts of climate change within and outside
our supply chain.

Finance projects that enablecommunities and landscapes toadapt to climate change

Protecting
vulnerable
communities

We plan to invest with a focus on building resilience in
low income countries in Asia, Africa and Latin America,
particularly those from which we source.

CHANEL has committed
to invest $25m over
five years to enablecommunities andlandscapes to adapt
to climate change.

In particular, CHANEL is supporting the new purpose-built
Landscape Resilience Fund, announced at the COP25 in
Madrid. The fund is managed by South Pole, a leading
provider of global sustainability financing solutions
and services and will invest in projects and landscapes
being developed together with blue chip environmental
NGOs. The Landscape Resilience Fund is a winnerof the Global Environment Facility (GEF) Challenge
Program for Adaptation Innovation (South Pole with World
Wildlife Fund Inc.) and also supported by the European
Commission.

Our commitment to climate adaptation goes beyond theboundaries of our operational footprint: it is our convictionthat business needs to step up, alongside governments
and civil society, to protect the world’s most vulnerable
communities from the catastrophic consequences ofclimate change.
At the United Nations Climate Change Conferenceof 2015, COP21, world leaders acknowledged that
supporting the most vulnerable countries to adapt to theimpacts of climate change will require billions of dollars
in investment every year. However, despite regular callsfrom the United Nations and political leaders to redirectpart of global financial flows to adaptation, investments in
adaptation still constitute a fraction of what is needed.

Our focus will be in local projects or businesses that
reduce the exposure to climate hazards and diversify
the income of local communities in climate-affected
landscapes. The projects will aim to reduce thevulnerability of smallholder farmers and local populations
by improving their knowledge about climate-resilient
farming and ecosystem management practices. This
enables the production of climate-adapted agricultural
goods and the preservation of ecosystems, such as
mangroves and forests, that are vital for protecting local
communities against the worst impact of climate changesuch as floods or heat waves. This promotion of climateresilient agriculture and ecosystems will also have cobenefits for climate change mitigation and biodiversity.

We recognise that reaching these populations requires new
and different approaches and we want to be a catalyst for
greater private sector investment in adaptation.

We hope that our engagement in climate adaption willencourage other corporations, notably those that want tobuild climate resilience in their supply chain, to support themost vulnerable to adapt to the impacts of climate change
through this Fund or other adaptation initiatives.

AS A MEMBER OF THE GLOBALCOMMISSION ON ADAPTATION,
STRENGTHENING CLIMATERESILIENCE IN DEVELOPING
COUNTRIES IS AN ISSUE CLOSE
TO MY HEART, ONE WHICH IS IN
GREAT NEED FOR INNOVATION
AND SCALING UP. I VERY MUCH
LOOK FORWARD TO SEEING
THE RESULTS OF THESE NEW
GEF-SUPPORTED PROJECTS,
WHICH WILL PAVE THE WAY TO
INCREASE PRIVATE INVESTMENT
FOR CLIMATE RESILIENCE IN
MULTIPLE MARKETS.
NAOKO ISHII, CEO AND CHAIRPERSON,GLOBAL ENVIRONMENT FACILITY

20

We plan to invest witha focus on building
resilience in low
income countries in
Asia, Africa and Latin
America, particularly
those from which wesource.

NEW THINKING
We support new thinking to enable and accelerate the changes required to meet our climate commitments.
We seek to engage on projects with the potential to solve some of the issues that we, collectively, mustovercome in order to succeed in keeping global mean temperature increases to below 1.5 degrees Celsius.
Support research and the advancement of newtechnologies

Conserving coastal ecosystems
Coastal ecosystems, mangroves, salt marshes andmacroalgae are known as ‘blue carbon’. Between them,
they absorb around a third of the carbon dioxide producedby humans, buffering the impacts of global warming.

We are working closely with a number of experts andsuppliers to find ways to reduce the environmental impacts
associated with our raw materials and are investing in newtechnology and innovative companies that we believe will
help to overcome these challenges.

Not only are these ecosystems precious carbon sinks but
more than three billion people directly depend on marine
and coastal biodiversity for their livelihoods. As the oceansabsorb carbon emissions, their temperature increases andthey acidify, with serious implications for these coastal
ecosystems. It is therefore critically important that they
are conserved.

Supporting start-ups
We are constantly on the look out for companies which are
pioneering new ideas and technologies with the potential
to accelerate the journey to a low-carbon economy.
We are supporters of the Amsterdam-based start-up
Fashion For Good, launched in 2017. It connects
brands, producers, retailers, suppliers, non-profit
organisations, innovators and funders to work together
to make the fashion industry more restorative andregenerative by design. Its Five Goods framework
includes Good Energy, which promotes greater useof clean and renewable energy.

Preserving
precious
aquaculture
Pressure on marine stocks is a global issue, compoundedby the effects of climate change. We use both pearls
and coral in jewellery and new research is needed tosafeguard both of these precious resources by improving
understanding of how they develop and grow and how they
are impacted by climate change.
In 2019, we signed a scientific partnership agreement with
the Institut Français de Recherche pour l’Exploitation de laMer (Ifremer), to better understand the effects of a changing
climate on pearl cultivation. The five-year project will explore
how the impacts of climate change, such as warming watertemperatures and acidification, affect the oyster populationand the growth and cultivation of pearls.
We also have a scientific partnership with the Centre
Scientifique de Monaco to better understand the biologicalmechanisms underlying the formation of the skeleton of
precious red coral found in the Mediterranean and toinvestigate the impact of climate change on its growth.
This research programme will explore the impact of ocean
acidification and ocean warming on this fragile resource. The
outcomes will help to propose innovative solutions to support
the conservation of red coral and inform adequate responses
that preserve it from the impacts of climate change.

RETHINKING PACKAGING
MATERIALS
We have signed a partnership agreement with aFinnish start-up, SULAPAC, which has developed
a highly innovative material that is both biosourced and biodegradable. Made from FSC
certified woodchips from industrial waste streams
and plant-based materials, it offers an alternative
to controversial fossil-fuel based plastics. Thispatented material has already won a number ofinternational awards, including the 2017 Luxe
Pack in Green prize. As part of this partnership,
our teams are studying the possibilities this new
material offers for the design of our
future cosmetic packaging to reduce
our carbon footprint.

OCEANS AS CARBON SINKS
We are funding a research chair at the École
Normale Supérieure (ENS) over the next five years
to better understand the links between the carbon
cycle and climate change. It has three objectives:
Predict: Analyse the impact of water flows
on carbon uptake in the ocean. Mitigate:
Understand the ability of ‘blue carbon’ ecosystems
to store human-made carbon and whether it could
be replicated on land. Adapt: Explore ways toreverse the acidification of the oceans and reducethe impact on ocean ecosystems.
The partnership with ENS includes research
conducted in Madagascar into natural carbon
capture and storage systems in maritime
environments, specifically in relation to mangroves.

Our partnershipwith ENS includes
research conductedin Madagascar into
natural carbon captureand storage systems inmaritime environments,
specifically in relation
to mangroves.

WE ARE AT A CRISIS POINT AND
RESEARCH INTO SOLUTIONS TO
CLIMATE CHANGE HAS NEVER
BEEN MORE URGENT. CHANEL’SSUPPORT MEANS WE CANSECURE THE RESOURCES TO
CONDUCT LEADING RESEARCH
ON THE ROLE OF THE OCEAN
TO LIMIT ON-GOING CLIMATECHANGE. WE HAVE BEEN ABLETO GO INTO THE FIELD AND
CONDUCT NEW RESEARCH IN
PLACES LIKE MADAGASCAR, TO
EXPLORE MARINE ECOSYSTEMSAND THEIR POTENTIAL TO ACTAS A NATURAL CARBON SINK.
LAURENT BOPP, HEAD OF GEOSCIENCES DEPARTMENT,ÉCOLE NORMALE SUPÉRIEURE

22

HOW WILL CHANELENABLE CHANGE?
CHANEL is a private company with a belief that human partnerships
are the most powerful way to achieve our goals. This independent yet
collaborative spirit inspires the guiding lights for our approachto sustainability.
The role that the business community must play in mitigating climate change isclear: every corporation should strive to minimise its carbon footprint as muchas possible, to compensate for any unavoidable emissions and accelerate thejourney to a low-carbon economy.
The commitments set out in our CHANEL Mission 1.5° strategy, while stretching
and important, are to be expected of a leading global brand like CHANEL.
The guiding lights describe how we will approach these goals.

OUR GUIDING LIGHTSA LONGTERM VIEWAN INCLUSIVE
TRANSITIONWE TAKE A
LONG-TERM VIEW
We are using our independence
to drive positive change.

Unlike many large companies, CHANEL is privately owned,
meaning we can operate without short-term constraints. This
allows us to make long-term investments that improve ourenvironmental footprint. We are free to make decisions toinvest throughout our value chain in order to improve thesustainability of our business. We will continue to work with
our suppliers over generations to help them cut emissions,manage their resources efficiently and adapt to the impactsof climate change. And we can do this in a way that benefits
the whole community.

LONG-LASTING
RELATIONSHIPSSUPPORTING GROWERS OF
BITTER ORANGE BLOSSOMOur fragrances are developed through our close
association with flower growers from Grasse in
the South of France. We place great importanceon historical relationships and have been sourcing
some of our most important ingredients from thesame family, the Famille Mul, since 1987. Startingwith jasmine, the family now supply five of ourmost important ingredients: jasmine, tuberose,
iris, rose and geranium. We have been working
closely together for more than four generations toensure the flowers are being cultivated responsibly
and sustainably.

We have used neroli essential oil in CHANEL N°5
since its creation in 1921. The oil is obtained fromthe bitter orange blossom which is grown by themembers of Nérolium agricultural cooperative inthe south of France. In the 1950s, this cooperative
produced 400 tonnes of flowers each year but its
cultivation has significantly declined over time.
We wanted to revitalise the sector and to partnerwith Nerolium and Mul Aromatiques to delivera programme that helps growers to rehabilitate
their orchards, or plant new trees. Growers sign acharter of good practice, committing to integratingorganic farming principles, preserving biodiversity
and optimising water consumption. In return, weoffer a sustainable purchase price for the orange
blossom and its co-products, as well as year-roundtraining on maintenance, pruning and harvesting.

A SHARED
CHALLENGE

CHANEL’S LONG-TERM VISION HAS ENABLED US,
OVER SEVERAL DECADES, TO INCREASE THE VARIETY
OF FLOWERS THAT WE PRODUCE FOR THE COMPANY
AND TO GROW AS A LOCAL EMPLOYER. TODAY, WE
EMPLOY 48 FULL TIME STAFF. THIS LONG-TERM
COMMITMENT MEANS WE CAN MAKE DECISIONSTHAT ARE RIGHT FOR THE SUSTAINABILITY OF THE
SUPPLY CHAIN AND FOR THE CLIMATE.
JOSEPH MUL, FARMER

25

WE BELIEVE THE TRANSITIONMUST BE INCLUSIVE

WORKING TOGETHER TO ADDRESSA SHARED CHALLENGEOne of the harsh realities of climate change is that it hits disadvantaged communities thehardest. We aim to deliver initiatives that can have both an environmental and social impact,
to ensure that our climate strategy is as inclusive as possible.

To change the impact that our industry has on the environment, we must work with others, both
inside and outside our business, to create a culture of urgency, action and impact. Together, wemust reinvent the way we work and embrace new and imaginative solutions.
Partnerships for change
Our suppliers are a key partner on our mission. We will
not be able to achieve our ambitions without their support
and commitment. This means going beyond policies on
paper and working together to decarbonise our value chain
and advance sustainable sourcing practices to the highest
standards.

EMPOWERINGWOMEN WITHREGARD TO
CLIMATE CHANGE
We believe that women’s
empowerment and gender equality
are not only a question of equal
rights, but are also a key condition
to global progress. CHANEL is a signatory to the
UN Women Empowerment Principles (WEPs) and,since 2011, our corporate foundation supports
the empowerment of women as actors of change
in the world. Today, more than 140 projects havebeen supported.

RENEWABLE ENERGY FOR
LOW-INCOME FAMILIESIn the US, we are partnering with Sunrun, aleading residential solar energy provider, inbringing solar energy to nearly 30,000 residents
in low-income, multi-family accommodation in
California for the next 20 years. The investment
is expected to finance over 27 megawatts ofsolar installations in communities which aremost impacted by pollution, lack access to clean
energy, and where 80% of tenants fall below 60%of the area median income. Under California’s
Solar on Multifamily Affordable Housing(SOMAH) incentive programme, the partnershipwill expand access to clean energy to low-income
residents for free, providing critical relief to theirenergy bills. The partnership with Sunrun will also
provide access to training and job opportunities
to the local community as solar installationengineers.

In 2018, Fondation CHANEL and UN Women
started a partnership to accelerate women’s
economic empowerment and counter climatechange through a multi-year program in Asia.
It aims at engaging 42,000 women in initiatives
to strengthen resilience to climate change, using
environmentally sustainable methods and training
on new technologies. In 2019, ‘Gender, Climate
and Environment’ became one of the key thematic
areas of work for the Fondation CHANEL.

“Achieve gender equality andempower all women and girls.”

CREATING ACOMMON GOAL
Suppliers often have different definitions andapproaches to sustainability data capture andreporting. To address this, our Fragrance andBeauty business worked with ten strategic suppliers
to co-design a reporting framework for a seriesof key environmental and health and safety
performance indicators, including carbon emissions
and energy use. Together the group agreed oncommon definitions for metrics and methodologicalrecommendations that meet CHANEL’s expectations
regarding the robust and consistent collection andcalculation of sustainability data. The reporting
framework was tested by suppliers and adapted by
the group before being put into wider practice.

ENGAGING OUREMPLOYEESOur employees will be the driving force of ourtransformation and we need to equip them withthe knowledge, inspiration and freedom to leadthe change. This means reaching staff in every
region where we operate, from our corporate
offices to our boutiques, and our design studios to
our distribution centres.

Galvanising employees
Our employees are increasingly engaged onsustainability issues such as climate change andthey are key partners on this mission. We seek tomeet their appetite for information, knowledge
and support through engagement activities
across the business. For example, we discuss our
climate strategy with colleagues from across theworld through ‘Imagine CHANEL’, our employee
engagement and induction programme. This
programme was set up in 2012 and more than
15,000 CHANEL employees – both new joinersand existing employees – have since participated.

CHANEL’S INVESTMENT WILL HELP DISADVANTAGEDCOMMUNITIES GAIN ACCESS TO CLEAN, RELIABLE SOLAR
ENERGY. THIS INNOVATIVE APPROACH TO CORPORATESOCIAL RESPONSIBILITY WILL MAKE AN IMPACT TODAY AND
HOPEFULLY BECOME A MODEL FOR OTHER COMPANIES TO
INVEST IN OUR PLANET’S FUTURE.
LYNN JURICH, CO-FOUNDER AND CHIEF EXECUTIVE OFFICER, SUNRUN

26

27

WE ARE MEMBERS OR SUPPORTERS OF THE FOLLOWINGCOALITIONS AND INITIATIVES:HOW DOES CHANELMEASURE ITS IMPACTS?
We recognise the need to continue to measure, manage
and report our sustainability performance.
Our carbon footprint

The journey to create thesetargets has involved people atevery level and region of ourbusiness, and brings together
the different programmes andactivities we have engaged inover the last few years. The
result is an ambitious climate
strategy which spans all threebusiness areas of CHANEL,
as well as our value chain.

We worked with external consultants to conduct a
corporate-wide carbon footprint. We applied the GHG
Protocol Corporate Standard and used the financial
control approach to account for the most ambitious scopeof responsibility possible.
This exercise highlighted where the hot spots are in ourbusiness and we are now working to further improve ourdata collection systems to ensure we are using evermore
reliable data. Inevitably, our data is most accurate forour owned operations and we now wish to improve thereliability of the data we are using to calculate our scope
3 carbon footprint.

In November 2019, our targets were independently
assessed and approved by the Science Based Targets
initiative which champions science-based target setting
as a powerful way of boosting companies’ competitive
advantage in the transition to the low-carbon economy.
It is a collaboration between CDP, World Resources
Institute (WRI), the World Wide Fund for Nature (WWF),and the United Nations Global Compact (UNGC).

WE USED THREE TYPES OF DATA:SPECIFIC
DATA
Purchased goods,
Transport, Energy,
Waste

Around two-thirds of thedata we used was specific
to CHANEL’s activities. If
available data did not cover
all activities, extrapolations
were made.

When specific data
was not available,
we collectedfinancial data.

COLLABORATING WITH
THE FASHION INDUSTRY““Strengthen the meansof implementation andrevitalise the global
partnership for sustainable
development.”

Sustainability is not a competitive issue. We believe inthe power of collaboration and support a number ofcross sector or multi-sector partnerships that aim todeliver change.
As examples, we joined the Fashion Pact and have alreadymade significant commitments on a number of its focus
topics. We are aligned with the Pact’s objectives andsupport the development of best practices that bear inmind the specific characteristics of each group. We havealso joined the Fashion Industry Charter for Climate Action
which is an agreement to collectively address the climate
impact of the fashion sector across its entire value chain.

FINANCIALDATA
Capital goods,
Service, Events,
Media

Advancing data collection
We are advancing the ways in which we can measure theimpact of our corporate sustainability initiatives. We aredeveloping extra-financial reporting tools to allow us tocollect sustainability data at a site level (manufacturing,boutique, office or warehouse) for both internalmanagement and external reporting purposes.

GENERICDATA
Use of soldproducts, productend of life, consumertransportation

The data we collect will help to inform internal decision
making, ensuring we monitor risks and opportunities
across our value chain. It will also provide greatertransparency in our engagement with stakeholders as
we share with them the positive impact we can create.

For some categories,
where CHANEL has little
control, we used genericassumptions based on
public information.

Sharing progress
We recognise the expectations of our internal and external
stakeholders to be updated on the progress we are making
against the targets set out in our climate strategy. We
will define our approach and share updates on a regularbasis. We will also continue to share perspectives on our
wider sustainability commitments.

Developing Science Based Targets
We have set science-based carbon emission targets to help
keep a rise in global temperature to below 1.5 degrees
Celsius. These targets will help us manage our progress up
until 2030, and we will report on our achievements on anannual basis.

28

It is our intention that the research projects we supportshould benefit wider society. We expect that key outcomes
and results should be shared with peers and partners sothat we can collectively accelerate responses to climatechange and leverage innovations.

29HOW DOES
CHANEL MANAGEACCOUNTABILITY?
We believe governance and transparency are essential todemonstrating accountability and driving our desired results.
Our climate change strategy is part of our wider corporate
sustainability programme, in which every employee has
a part to play. While sustainability is at the core of themission of every employee, there are dedicated experts
at the global corporate, regional and business levels who
support and coordinate the journey of transition for ourbusiness.

Given the size and complexity of our sustainability agenda,
it requires monitoring at the global corporate, regionaland business level through:These teams design and deliver programmes and ensurethat everybody in our business has the tools to makeresponsible and sustainable decisions for the company
every day.

• A Corporate Sustainability team at corporate level• A CSR Committee of the Corporate Board•A CSR Steering Committee at business andregional level• A CSR team at business and regional level

SEEKING FEEDBACK

We have sought feedback on our climate strategy from both internal stakeholders and external experts.
We held roundtable discussions and meetings, at both a global and regional level, in order to ensurethat CHANEL Mission 1.5° is both realistic and as ambitious as possible.

CHANEL’S STRATEGY DEMONSTRATES A BOLDAMBITION TO RESPOND URGENTLY TO THE CLIMATEEMERGENCY. CHANEL IS MAKING HUGE LEAPSINTERNALLY BUT IS ALSO DETERMINED TO LEAD
THE MARKET AND SHARE ITS WORK OPENLY - THIS
IS AN IMPRESSIVE CULTURAL LEAP FOR SUCH ADISCREET AND PRIVATE COMPANY. AS CHAIR OF
THE CSR COMMITTEE, I SEE THE INCREDIBLE DETAILOF THE PLAN AND WHAT A DIFFERENCE IT IS
MAKING TO THE BUSINESS.
MARTHA LANE FOX,CHAIR OF THE CSR COMMITTEE OF THE BOARD30

WE WANT TO MAKE A MEANINGFULCONTRIBUTION TO THE GOAL OF CREATINGA NET-ZERO WORLD BY MID-CENTURY.
WE ARE DOING THIS BY PUTTING CHANEL
ON A 1.5° TRAJECTORY AND SUPPORTING
NATURE-BASED SOLUTIONS TO FULLYBALANCE OUR RESIDUAL EMISSIONS.

Image credits
Page 9 (top) © ACT3
(bottom left) © Olivier Saillant

Page 23 (top right) © Dr Éric Tambutté,Centre Scientifique de Monaco

Page 14 (centre right) © Photo2000

Page 19 Haïti: © Entrepreneurs
du Monde
Ethiopia: © Lisa MurrayIndonesia: © Devan Wardwell
Peru: © Christian Lamontagne
Kenya: © EcoAct

Page 15 (bottom left) © Mina Shenouda

Page 21 (top) © Equipe RSE Parfums

Page 26 (top left) © Sunrun(top right) © ONU Femmes

Page 17 (top & bottom left) © Olivier Pomes

Page 22 (bottom left) © SULAPAC

Page 31 (full page) © Anne Combaz

Page 11 (centre left) © Equipe RSE Parfums
CBP00019082504183028

This publication is produced by Pureprint,a CarbonNeutral company, using vegan inks.
The paper is Carbon Balanced with World Land
Trust, an international conservation charity, who
offset carbon emissions through the purchase andpreservation of high conservation value land.

Page 18 (left) © Livelihoods Funds

Page 13 (top) © Thomas Deschamps
and Julien Claessens

Page 24 (full page) © Thomas Deschamps
and Julien Claessens
Page 25 (bottom left) © CHANEL