CLIMATEPERFORMANCEUPDATE2022

introduction

OUR GOALSCHANEL Mission 1.5° is our climate action plan.
We have set science-based targets to reducethe carbon footprint of our own operations andvalue chain, supporting the transition to a low
carbon future.

We also aim to shift to 100% renewable electricity in
our own operations by 2025 and joined RE100 – a
global initiative of influential businesses committed
to achieving 100% renewable electricity – as partof this commitment.

We aim to decrease our own carbon footprint(scope 1 and 2) by 50% in absolute emissions
by 2030 (equivalent to -66% per unit sold); anddecrease emissions produced by our value chain(scope 3) by 40% per unit sold by 2030 (equivalent
to -10% reduction in absolute emissions).

We believe that the climate crisis requires
urgent action and business transformation.
As a result, we are currently evolving ourtargets and roadmaps to the SBTi Corporate
Net Zero Standard.

These targets are independently validated by
the Science Based Targets initiative (SBTi), in linewith the targets set by the Paris Agreement on
Climate Change, and use 2018 as a baseline year.

-50%

-40%

(equivalent to -66% perunit sold)(per unit sold, equivalent
to -10% reduction inabsolute emissions)

Decrease our own
emissions (scope 1
and 2) by 2030

DECREASE EMISSIONSFROM OUR VALUE CHAIN(SCOPE 3) BY 2030

100%

SHIFT TO RENEWABLE
ELECTRICITY IN OUROWN OPERATIONS BY
2025

CHANEL MISSION 1.5° UPDATE 2022 2

reduce

Performance update
We recognise the urgent global need to halt climatechange and the role that our business can play inprotecting and restoring our climate.

expanding regenerative agricultural practices,
decarbonising transportation and supply chain
manufacturing and investing in circularity.

This approach begins with addressing our Company’s
carbon footprint, to reduce emissions in our own
operations (scope 1 and 2) and our value chain(scope 3).

We continue to invest heavily in new resources andcapabilities to accelerate this transition, including
increasing the number of sustainability experts
and investing in sustainability education for our
employees across the House.

We strive for a deep level of rigour in our reporting
to support a greater understanding of our impact,
for example, by regularly updating our life cycle
assessments (LCAs) to be closer to real world
application. This accuracy serves to sharpen our
focus on the areas where we can drive the biggest
changes, within our own operations and those of ourwider value chain. This is a highly complex process,especially when assessing our scope 3 emissions,which represented 98% of our carbon footprint in
2022.
We are developing and implementing roadmaps toaddress our impacts, including increasing efficiency
in our operations, shifting to renewable electricity,

Understanding our carbon
footprint
Chanel’s total carbon footprint in 2022 was 1,029,120
tonnes CO2e. Two percent of our footprint comesfrom scope 1 and 2 emissions, while 98% stems
from scope 3.
Scope 1 & 2
2%

Scope 3
98%

25,211 tonnes CO2e

1,003,909 tonnes CO2e

Scope 3 Value Chain Emissions (tonnes CO2e, based on the GHG Protocol categories)
End of life of sold products
10,750Use of sold products
28,721
Transportation anddistribution (upstream
and downstream)
117,820

Franchises (wholesale points ofsale, e.g. in department stores,
airports and hotels)
20,571

Employee commuting
16,606
Business travel
29,460
Waste
7,012

Upstream fuel and energy use
15,353
Capital goods (including
boutique renovation,
furniture and IT hardware)
128,009

Chanel'sscope 3footprint

Purchased goods and services(including water; raw materials
for products and packaging,media, events)
629,607

1,003,909
tonnes CO2e

CHANEL MISSION 1.5° UPDATE 2022 3

reduce2022 Performance

In 2022, Chanel teams continued to advancedecarbonisation initiatives in our operations. As aresult, scope 1 and 2 emissions (from our owned
and operated production sites, distribution centres,boutiques and offices) decreased by 40% against
the 2018 baseline. This represents a 9% decrease inscope 1 and 2 emissions in comparison to 2021. We
are on track to reach our target of a 50% decreasein our footprint (scope 1 and 2) by 2030.
The main driving force of reductions to operationalemissions is our continued transition towards
renewable electricity, which helped support a 55%
reduction in scope 2 emissions from 2021 to 2022.

DECREASE OUR CARBON FOOTPRINTSCOPES 1 & 2
45,00041,76540,000TARGET-50%

35,00030,000
IN C02e TONNES

Emissions from our own operations(scope 1 and 2)

0.45
per
K unitsold(ABSOLUTE)

27,85725,211-66%(INTENSITY)

25,0000.33
per
K unitsold

20,0000.28
per
K unitsold

15,00020,8830.15
per
K unitsold

10,0005,000

Teams across our boutiques, offices andmanufacturing sites continue to work on reducing
energy consumption and implementing low
carbon solutions. Within our boutiques, sustainableachievements are celebrated annually through ourinternal Green Boutiques Awards.

0

2018

2021

2022

2030

BASELINE

We also continue to invest in building moresustainable boutiques, for example through LEED
certification. LEED-certified buildings improve
efficiency, have lower carbon emissions and reduce
waste. In 2022 alone, Chanel certified 40 sites – andalso reached the milestone of more than 200 LEEDcertified sites globally.

2022 Highlight

Increasing Sustainability Knowledge and Expertise
We continue to focus on the long-term building
blocks to advance our mission. For example,
in 2022 the number of people in sustainability
roles across our House increased by 60% incomparison to 2021, following a 40% increase
the previous year. We believe true sustainabletransformation is only possible with a collective
understanding of the topic. To support this,in 2022, we launched our global Chanel
Sustainability Academy, a learning programme
for all employees across the House. The aimof the Sustainability Academy is that everyone
within our House will have an opportunity todevelop the knowledge and skills to become

agents of change. A flagship initiative of the
Sustainability Academy is Chanel’s partnershipwith the University of Cambridge, throughwhich senior management teams participate inimmersive programmes of learning, workshops
and debates. These inspire collective action on
key sustainability issues.
At Chanel, employees are mobilised to beagents of change through the emphasis weplace on sustainability as one of our five key
performance drivers, weighed equally withother factors such as financial performance.

CHANEL MISSION 1.5° UPDATE 2022 4

reduce2022 Performance
Shift to renewable electricity
The transition to 100% renewable electricity
supports progress against CHANEL Mission 1.5°
goals and, in particular, promotes scope 2 emissions
reductions.
Chanel favours the inclusion of onsite renewables or
power purchase agreements (PPAs) where feasible,
followed by green tariffs, and finally the purchasingof unbundled energy attribute certificates. Chanelobtains all renewable electricity from sourcesaligned with the RE100 technical criteria, aiming
for innovative solutions to deliver additional positiveenvironmental and social impacts where possible.

SHIFT TO RENEWABLE ELECTRICITYTARGET

100%

92%

97%

100%

80%

60%

41%
40%

20%

By the end of 2022, we shifted to 97% renewableelectricity in our own operations – such as our
manufacturing sites, offices and boutiques – incomparison to 41% in 2018. We are focussed on
closing the gap to get to 100% renewable electricity
in our own operations by 2025. Worldwide, we have
23 sites that are now currently able to generate theirown renewable electricity.

0

2018

2021

2022

2025

BASELINE

2022 Highlight

Energy Focussed
Partnership
In 2022, CHANEL Korea worked on agreeing
a memorandum of understanding (MOU) with
Korea East-West Power (EWP), the country’s
primary green energy company. As the firstaction from the MOU, CHANEL Korea and
EWP are expected to enter into a virtual Power
Purchase Agreement (V-PPA), one of the firstagreements of this nature in Korea, that will
enable CHANEL Korea to secure 2MW – 3MWof renewable energy per year for the next 20
years.

CHANEL MISSION 1.5° UPDATE 2022 5

reduce2022 Performance
Emissions from our value chain (scope 3)
In the past year, scope 3 emissions were impacted
by continued recovery from the Covid-19 pandemic,
as certain business operations - most notably events,
employee commuting and business travel - returned.
The year also saw an increase in manufacturing
volume.

DECREASE EMISSIONS FROM our
VALUE CHAINSCOPE 3

1,003,909(ABSOLUTE)

1,000,000

829 ,000

Examples of our ongoing transformation
include continued shifts from air to sea and roadtransportation for our products and goods, reducing
the footprint of our website, partnering to build
sustainable supply chains and investing in circularity.
In the case of chanel.com, we worked closely withpartners to reduce the weight of webpages by 55%.
This made them 30% faster to load, which helped
drive a 16% reduction in emissions from 2021, despite
an almost 28% increase in website traffic in 2022.
We continue to address raw materials within
our supply chain, the largest part of our scope 3
footprint. From leather to vetiver to packaging andbeyond, we aim to ensure transparent supply chains
and implement strategies such as regenerative
agriculture and technology partnerships to reducethese emissions.

-40%

859 ,511(INTENSITY)

800,000

IN C02e TONNES

Throughout the year, we continued to transform,
as well as reinforce the foundations for deeper
business model transformation to address ourcarbon footprint; however, in 2022, scope 3
emissions increased by 21% in comparison to our2018 baseline.

TARGET-10%

746,097

600,000

400,000

10.8
per
K unit
sold

10.29
per
K unit
sold

11.21
per
K unit
sold

2018

2021

2022

5.42
per
K unitsold

200,000

02030

BASELINE

We are focussed on driving progress both within
and beyond our House, by partnering with internaland external experts on clear plans and roadmaps.
We remain committed to real transformationalchange, in line with the longevity of our historicHouse, and acknowledge that true business modeltransformation takes time.

2022 Highlight

Open Sky Laboratories
Chanel’s Open Sky Labs are research-focussed
biodiversity exploration territories for thecreation of our cosmetic ingredients. They areexperimental fields for plant production as well
as social and environmental innovation. One
example of this is Chanel’s Open Sky Lab in
Gaujacq, in southwestern France, where 2,700
Camellia japonica ‘Alba Plena’, 24,000 Camellia
oleifera and 5,000 gardenias have been planted

according to environmentally friendly agricultural
practices, without any chemical input. As aresult of these practices, Chanel’s Fragrance andBeauty business is in the process of obtaining
the Agriculture Biologique organic farming label
and has obtained environmental certification,
identifying environmentally friendly farming
practices covering four key areas: biodiversity
conservation, crop protection strategy,
management of fertiliser and management ofwater sources.

CHANEL MISSION 1.5° UPDATE 2022 6

accelerate

PARTNERSHIPS FOR
TRANSFORMATIVE CHANGE
Chanel is committed to accelerating climate adaption
through our support for nature-based solutions
beyond our value chain, by building partnerships
and investing in nature regeneration programmes.
In 2022, we partnered on project rollouts in thefollowing countries: Peru (agroforestry), Nepal(clean energy) and Indonesia (agroforestry).
We also continue to partner and collaborate with our
suppliers, research institutions, organisations andthe wider industry, through initiatives to accelerate
the transition to a more sustainable future.
For example, in 2022, Chanel’s Watches and Fine
Jewelry business joined the Watch & Jewellery
Initiative 2030. This collaborative initiative, open
to industry players, is focussed on three key areas:building climate resilience, preserving resources
and fostering inclusiveness.

Members of the Initiative have committed tochallenging each other, exchanging learnings andbest practices and moving together in partnership totransform the industry and deliver positive impact.
It’s important for Chanel Watches and Fine
Jewelry to have a seat at the table with the industry,
to have a voice that carries and to be involved inprojects relating to our sourcing issues, which arecertainly complex but shared with many important
players. Together we can be stronger and take
impactful actions within both our environmental
and social ecosystem. Together we can rely ona robust methodology and ensure consistency
within the industry.
Marianne Zani, CSR and Exceptional Sourcing Director,
Chanel Watches and Fine Jewelry

CHANEL MISSION 1.5° UPDATE 2022 7

accelerate

Looking ahead
We recognise that accelerated, collective action – both within and beyond our House –over the next few years is critical to support the transition to a low carbon future. We willcontinue to drive progress, focussing on areas where we can have the greatest impact,
accelerated by our shift towards net zero targets.

Accelerating the pace of emissions
reductions

Collaborating with partners todecarbonise our value chain

Through renewable electricity:– Continuing to advance regenerative agricultural programmes
in our supply chains whilst delivering positive impacts tonature and the livelihoods of local communities.

– Reducing our energy consumption and gas dependency
in our operations through a shift towards electrification ofprocesses.
–
Achieving our 100% renewable electricity target withenvironmental and social additionality.
Through digital activities:– Reducing the impact of our digital activities and services,
whilst still maintaining the highest standards of experienceand performance.

– Growing the volume of raw materials coming from circularsystems, such as recycled gold, whilst advocating for a
responsible industry definition and the establishment ofrecycled gold supply chains.
– Expanding our circularity approach to an increasing numberof events, visual merchandising and retail spaces, aiming
to re-use and recirculate décor as well as source recycledmaterials.

Through transportation:–Changing our behaviours around business travel, toincorporate our carbon footprint into our booking andtravelling choices.
– Continuing the transition to electric vehicles for our fleet
and for employees (in select markets) to help make theircommute more sustainable when alternative forms of public
transportation are not available.
– Scaling up changes to our transportation methods androutes in high traffic markets and increasing efficiencies
to reduce the number of shipments made.

Mobilising employees as agentsof change– Investing in talent and tools to continuously refine theaccuracy of our carbon footprint knowledge - suchas utilising LCAs and implementing Environmental
Management Systems across our sites and points of sale and making the information available to teams to integrate
into decision making.
– Continuing to engage employees through the global Chanel
Sustainability Academy on the transformation required tosupport our net zero ambition through our commitment
to SBTi.

CHANEL MISSION 1.5° UPDATE 2022 8

accountability

ABOUT our progress
Reporting boundaries

Setting Science Based Targets

For the financial year 2022, Chanel has reported on its GHG
emissions and energy usage as required under The Large
and Medium-Sized Companies and Groups (Accounts andReports) Regulations 2008 as amended (UK), also referred
to as the Streamlined Energy and Carbon Reporting (SECR).

Chanel’s targets were independently validated by the Science
Based Targets initiative (SBTi) in November 2019, based on a2018 baseline. SBTi 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 theUnited Nations Global Compact (UNGC). The targets help
manage our progress up until 2030. Chanel is also involvedin the Science Based Targets Network (SBTN) Corporate
Engagement programme. SBTN builds on the SBTi toempower companies and cities to set science-based targets
for both climate and nature, given the interconnected rolethat climate change has on the natural world.

The boundary for the energy and carbon reporting includes
all activities contributing to the CHANEL brand. Data isreported for sites where Chanel has operational control andthe ability to influence the energy management.
Chanel uses the Greenhouse Gas Protocol Corporate
Standard to estimate and calculate emissions. Where Chanel
does not have visibility of the energy consumed within a site,
consumption is estimated based on square metres and the
known consumption of other similar sites within the same
region. All renewable electricity is from sources alignedwith the RE100 technical criteria and supported by energy
attribute certificates.
Notes on the data
Chanel’s scope 1 GHG emissions arise from natural gas, fueland refrigerant gases consumed at our sites. The calculations
are based on specific energy data and are multiplied by theappropriate emission factors from ADEME and IEA. Scope 1
GHG emissions also include on-site landfill using a conversion
factor from EcoInvent.
Chanel’s indirect (market-based) scope 2 GHG emissions
arise from heat, steam and cooling, and electricity used inall sites. The calculations are based on specific data andare multiplied by the appropriate emission factor from AIB
and IEA.
Scope 3 emission factors have been sourced from: ADEME;
EcoInvent; EcoTransIT; EIO LCA; DEFRA; GLO; WALDB;WFLDB; SPICE; Trucost report on the Socioeconomic andEnvironmental Impact of Large-Scale Diamond Mining;
US EPA; assessments conducted by IJO; and life cycle
assessments conducted with consultants.
Further details on Chanel’s carbon performance can be foundin the company’s annual report for the year ended 2022, which
is publicly available at Companies House in the UK.

Shifting to renewable electricity
Chanel is a member of RE100, a global initiative bringing
together the world’s most influential businesses committed
to 100% renewable electricity. Led by Climate Group, in
partnership with CDP, its mission is to drive change towards
100% renewable grids, both through the direct investments of
its members, and by working with policymakers to accelerate
the transition to a clean economy.
The initiative has over 360 members, ranging from householdbrands to critical infrastructure and heavy industry suppliers.
Governance
Senior leaders at Chanel are committed to CHANEL Mission
1.5° and to building a resilient and sustainable business. To
ensure sustainability is truly embedded into its core businessstrategy, sustainability is frequently discussed at the Executive
Committee and the board of directors’ meetings, including
tracking climate performance.
Management within Chanel’s business areas and regions
also have dedicated and clear responsibilities to assess
and manage sustainability issues. There are sustainability
personnel and teams embedded within each business tomanage climate-related issues, relevant to their particularfunction, contributing to the overall sustainability strategy.

CHANEL MISSION 1.5° UPDATE 2022 9

About Chanel
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 last century, Chanel offers a broad range of high-end creations, including
Ready-to-Wear, Leather Goods, Fashion Accessories, Eyewear, Fragrances, Makeup, Skincare, Jewellery and Watches. Chanel
is also renowned for its Haute Couture collections, presented twice yearly in Paris, and for having acquired a large numberof specialized suppliers, collectively known as the Métiers d’Art. Chanel is dedicated to ultimate luxury and to the highest
level of craftsmanship. 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, sustainable
development and innovation. At the end of 2022, Chanel employed more than 32,000 people worldwide.

Image credits

sustainability@chanel.com

Page 2 - ©
 CHANEL – Chanel’s Open Sky
Lab in Gaujacq, in southwesternFrancePage 5 - ©
 CHANEL – CHANEL flagshipboutique in Seoul, South Korea
Page 7 - ©
 CHANEL - Dismantlingand polishing of the “TWEEDROYAL” necklace

CHANEL MISSION 1.5° UPDATE 2022 10