His Excellency Mr. Ban Ki-moon, UN Secretary General
United Nations Organization, Global Compact OfficeFirst Avenue & 46th Street
New York, NY 10017, USAParis, 05 January 2015

Dear Mr. Secretary General,
As a signatory to the UN Global Compact I am pleased to continue to commit to theTen Principles of the Global Compact. At Kering, we view the pursuit of environmental
and social sustainability as a business imperative and, as such, it is embedded
throughout every area of our business and across our brands. Within the Group, theTen Principles are part of the essential framework that underpins our sustainability
strategy.
To articulate our vision of sustainability and to show the progress we are making wecommitted to attaining a series of self-imposed Sustainability Targets across ourbrands by 2016. I have highlighted this in our previous ‘Communications on Progress’
and, as a reminder, these Targets encompass raw material sourcing, paper andpackaging, reduction of water use, waste and carbon emissions, hazardous chemicals
and materials, and supplier auditing and capacity building. They reflect the keyelements and areas of our business and our products – and where we need to drivechange and challenge ourselves to find solutions. As such, I am especially proud of
the comprehensive mid-term Progress Report we published in mid-2014 and sharedwith our shareholders during our General Assembly Meeting. The report outlines theachievements we have been making and the challenges that still need to be overcome
to attain our Sustainability Targets. Since committing to them in April 2012, we havebeen making concrete improvements as a Group. As an example, across all ourbrands the approximate amount of PVC use is less than 2% of the total Group SKU’sand we are on track to achieve our PVC-free Target having already achieved
approximately 98% of our goal. As a further example in 2014, and where our gold
Target is concerned, we purchased an initial 30 kg of Fairmined certified gold via ourbrand Gucci representing the single largest purchase Fairmined gold to date, andfollowing, another 25 kg was purchased by our brands.
I would like to highlight that through the lens of our Targets we are looking beyond ourown operations, and all the way to where we source our raw materials. Consequently,
we have implemented detailed internal policies and guidelines for all our sourcing of
raw materials to align with our Targets and have set the highest standards of sourcing
practices. Over the last year we have launched a number of initiatives to help enhance
traceable, sustainable sourcing and best practices in the industry and we havecontinued to focus on developing multi-stakeholder collaborations. We are working
closely with key international experts, NGO’s and governmental agencies that help todevelop international standards and drive policy including the International Trade
Centre (ITC), the International Union for Conservation of Nature (IUCN) and the IUCN
Species Specialist Commission, and CITES. In 2014 the Python Conservation
Partnership (PCP) I had noted in our last ‘Communications on Progress’ has madeinroads. Our first report under the PCP was published on captive breeding last Spring.
The “Assessment of Python Breeding Farms Supplying the International High-end

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Leather Industry” is a study evaluating the economic feasibility and viability of captive
breeding of pythons as a part of an approach to sustainable use and conservation ofthe species. And furthermore, this past Fall we launched a new collaboration with ITC
to support the monitoring and sustainable management of the trade in Nile crocodilesfrom Madagascar. The goal of our ‘Madagascar Crocodile Conservation & Sustainable
Use Programme (MCCSUP) is to support sustainable trade that contributes toeconomic opportunities, local livelihoods and the long-term conservation of crocodiles
and their habitats.
Simultaneously, over the last year we have been working diligently towards our goal to
publish a Group Environmental Profit and Loss (E P&L) account by 2016. We havebeen rolling out E P&L analyses across our brands and, in fact, we have alreadycovered over 95% of the business. I am pleased to share that we are ahead of ourtimeline commitment and plan to publish in 2015. As a reminder, the E P&L wepioneered gives us a deeper understanding of our environmental impact across ourentire supply chain and highlights the most important areas to focus on to find newsolutions where it matters most. Our E P&L is an innovative way for Kering, andcompanies in general, to address the crucial issue and current debate of Natural
Capital Accounting.
Overall, we have ramped up our efforts to address our environmental impacts in thelast twelve months and I am pleased to share that based on our environmentalperformance, in 2014 Kering was named industry leader of the Dow Jones
Sustainability Indices (DJSI) World and Europe topping the ranking in the Textiles,Apparel & Luxury Goods category. Additionally Kerning was included in ‘The A List:
The CDP Climate Performance Leadership Index 2014’ (CPLI) for our actions toreduce our carbon emissions and mitigate the business risks of climate change. As aresult we were presented with an award from the Carbon Disclosure Project (CDP) for
being one of 10 French companies to receive an “A” grade for our performance.
Similar to our pursuit of environmental sustainability, we view labour standards, humanrights and anti-corruption as top priorities. For Kering it is imperative that our suppliers
adopt and adhere to the highest environmental and social standards. To ensure thatthese standards are met, our suppliers are required to comply with the set of criteria
outlined in our Supplier Charter of the Group’s Code of Ethics. As a Group, we follow
the principles set out in the Global Compact and in our Code of Ethics in this regard.
As highlighted in our last ‘Communications on Progress’, we launched our new Codeof ethics which had been updated to reflect our regional spheres of operations andnow consists of the Kering Group Ethics Committee and two regional committees
reporting to the Group Committee; the Asia-Pacific Ethics Committee (APAC) and theAmericas Ethics Committee (Americas). 2014 was the first year that these three newEthics Committees were functioning. We have also now added a new element to help
the implementation of our Code of Ethics and launched the ‘e-learning complianceprogramme’ to all our 35,000 employees worldwide in nine languages, which covered
four themes in 2014 (anti-corruption, fraud, conflict of interest, social networkexposure). It will be renewed annually to address issues each year and the concept of
the initiative is very ‘hands on’. As such, four modules are set up to mimic real ethicalsituations and dilemmas, one of which is dedicated to fighting against corruption. The
four themes to be covered in 2015 will be the fight against corruption, diversity in theworkplace, the protection of the environment and respect for human rights in the
supply chain.

In regards to social compliance and auditing, we have strengthened our complianceacross both our Luxury and Sport & Lifestyle activities. In 2014 we established Groupaudit standards and our brands have comprehensive auditing programmes for supplierstandards in place. As an example, in 2013 our Luxury activities conducted 2,248
audits in total - Bottega Veneta conducted 731 audits, across its 406 active suppliers,and Gucci conducted 1,517 audits which was a reduction from the previous year and areflection of the long-standing supplier partnerships Gucci has built and the stability ofits supply chains. Furthermore by 2013, all of Gucci’s businesses (shoes, ready-towear, silk, leather goods, jewellery and stores), Bottega Veneta’s main businesses(ready-to-wear, jewellery, fine jewellery, shoes, leather goods and furniture) andKering’s international logis- tics platform for its Luxury brands, Luxury Goods
International (LGI), were SA 8000 certified. Gucci also continued to rollout an
integrated management system to incorporate and track all its initiatives. Based on thestandards for which it has gained certification (SA 8000, ISO 14001, OHSAS 18001),
the system will enable the brand to monitor improvements it has made in terms ofsocial responsibility, environmental performance and worker health and safety. In ourSport & Lifestyle activities, PUMA conducted 411 audits in 2013, of which 349 wererelated to direct suppliers, and Volcom’s social audit programme covered 63 of its
direct suppliers in 2013, equalling 84% of its Tier 1 (operations). Where PUMA isconcerned, the brand has had a comprehensive supplier-auditing programme in place
for years, through its PUMA.Safe programme of work, and as such, has been working
with the Fair Labour Association (FLA) since 2004 and has been FLA-certified since2007. I am pleased to share that our brand Volcom also joined the FLA in 2014.
Overall, compliance to our Code of Ethics is just the baseline level we ask of oursuppliers and in all cases, our supplier monitoring goes beyond the audits themselves
and is rounded out by our Kering Social Handbook, training programmes and thesharing of best practices.
At Kering we also look beyond our own business and are dedicated to supporting
initiatives that have positive impacts on communities and people. The Kering
Corporate Foundation has benefited over 140,000 women since its inception in 2009and its work to combat violence against women in 2014 has been exemplary. In ourlast ‘Report on Progress’ I shared the update that the Foundation has refocused its
attention on three geographic areas and prioritised three specific causes in eachregion: sexual violence in The Americas, harmful traditional practices in Western
Europe and domestic violence in Asia.
In these three areas, the Foundation
structures its actions around the three key pillars of supporting local and international
NGOs; awarding social entrepreneurs via the Foundation’s ‘Social Entrepreneurs
Awards’; and organising awareness campaigns. One such successful campaign in2014 I am especially proud of was the “White Ribbon for Women” campaign to alignwith the UN International Day for the Elimination of Violence against Women on 25
November, annually. By the end of the campaign, a total of 200,000 badges designedby Stella McCartney had been handed out in over 700 boutiques of eight Kering luxury
brands across 38 countries.
2014 also marked the beginning of another significant initiative we launched which will
have a positive impact on our own industry. Our new partnership and curriculum weare developing with the London College of Fashion will help shape the future ofsustainable fashion and, in my view, nothing is more important than providing theframework to educate and inspire the next generation to act and become the changemakers we will need to address our future challenges.

Over the next year Kering will continue to develop multi-stakeholder initiatives that will
help foster change and inspire new, more sustainable solutions, and internally we willcontinue to work towards attaining our Sustainability Targets.
I look forward to sharing the progress we are making in our pursuit to become a moresustainable business as we encourage and drive change within our Group, and ourindustry, to ultimately create positive outcomes for people and society.

Respectfully yours,François-Henri Pinault
Kering Chairman & CEO