PERFORMANCE UPDATE 2021

INTRODUCTION

introduction

only way for any company to understandits full footprint and to identify the levers
for change, both as a business and forthe wider sector. While we know that theeffects of some of these changes mighttake several years, we are committed tolong-lasting, sustainable progress in linewith the long-term vision and heritage ofour brand.
We are already making progress acrossthe House and the initiatives highlighted
in this report are the culmination of many
years of work.
We recognise that the road to achieving
CHANEL Mission 1.5° is a path that we
do not walk alone. Chanel employees, aswell as our collaboration with partners,
suppliers and peers all have a role to playin advancing this progress. We continue
to look ahead, towards innovations inmaterials, products and systems that will
accelerate our combined progress to amore sustainable future.

ACCELERATEPARTNERSHIPSCHANEL MISSION 1.5° UPDATE 2021

2

ACCOUNTABILITY

n 2021, the Covid-19 pandemic continued
to impact people, communities andeconomies. Meanwhile, the latest climate
science from the UN Intergovernmental
Panel on Climate Change (IPCC) and the
COP26 summit underlined the scale of theclimate crisis and the need for more urgent
action.
This time of significant social andenvironmental challenges highlights theneed for long-term and systemic change.
As an independent company, Chanel isstrongly positioned and committed totransform its business and to make longterm decisions that have a lasting positive
impact on the environment and society.
Over the past year, we have continued
to gain a deeper understanding of
our climate impacts. In particular, wehave sought from the outset to take acomprehensive approach to assessing
the emissions from our global value chain(scope 3). We firmly believe this is the

REDUCEIOVERVIEW OF OUR
PROGRESSINTRODUCTION

introduction

OUR GOALS
Scope 1 and 2:-50% by 2030 (equivalent
to -66% per unit sold)decreasebalance

Decrease theemissions of our own
operations and in our
global value chain

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

REDUCEC

Scope 3:-40% per unit sold by 2030
(equivalent to -10% absolute)

SHIFT

accelerate

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

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

ADAPT
Finance projects thatenable communities
and landscapes toadapt to climatechangePARTNERSHIPS

100% renewableelectricity by 2025

Shift to renewableelectricity in ourown operations

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

CHANEL MISSION 1.5° UPDATE 2021

3

ACCOUNTABILITYHANEL Mission 1.5° is our climate action
plan. It is focused on transforming thebusiness in line with the ambitions of
the Paris Agreement on climate change
to limit the average global mean temperature
increase to 1.5 degrees Celsius above preindustrial levels. Our commitments to both
reducing emissions and to accelerating climate
adaptation are also in line with the outcomes of
the Glasgow Climate Pact of 2021.
We have set science-based targets to decrease
our own carbon footprint (scope 1 and 2) by 50%
by 2030 (equivalent to -66% per unit sold) anddecrease emissions from our value chain (scope3) by 40% per unit sold by 2030 (equivalent to-10% absolute).
These targets are independently validated by
the Science Based Targets initiative (SBTi) anduse 2018 as a baseline year.
We also aim to shift to 100% renewableelectricity in our own operations by 2025 andjoined RE100 – a global initiative of influential
businesses committed to achieving 100%
renewable power – as part of this commitment.
In recognition of the urgent global need tohalt climate change, Chanel will be evolving
its approach and setting net zero goals in the
coming years in partnership with SBTi.

INTRODUCTION

reducePERFORMANCEUPDATE

Business travel
9,507
Employee commuting
10,074
Upstream fuel and energy use
14,650Franchises (wholesale points of sale,e.g. in department stores, airports and hotels)
14,960Use of sold products
30,703

Waste
6,053

REDUCED

End of life of sold products
5,037

Capital goods(including boutiquerenovation, furnitureand IT hardware)
141,110Chanel'sscope 3footprint

ACCELERATE

elivering CHANEL Mission 1.5° requires, first and foremost,emissions reductions in our operations (scope 1 and 2)
and our value chain (scope 3).
We strive to be ambitious in our approach to assessing
scope 3 emissions, which represent 97% of our footprint, so that
we have a comprehensive and accurate understanding of ourimpacts beyond what we can control in our own operations. We
are committed to doing so, even though methodologies, industry
practices and reporting frameworks are still in their relative infancy.
The continuous process of improvement will not always be asmooth journey as we progress towards our 2030 goals. We expect
short-term fluctuations to continue in the years ahead as economies
respond to the pandemic or other social and geo-political factors.
Our focus is on the longer-term and we remain confident in ourability to deliver on our climate targets by 2030.

Chanel’s scope 3 footprint (tonnes CO2e, based on the GHG Protocol categories)

Purchased goods
and services(including water;
raw materials for
products andpackaging,media, events)
445,820PARTNERSHIPS

859,511 tonnes CO2e

understanding our carbon footprint
Chanel’s total carbon footprint in 2021 was 887,368 tonnes
CO2e. Three percent of our footprint comes from scope 1
and 2 emissions, while 97% stems from scope 3.
Scope 3

3%

97%

27,857 tonnes CO2e859,511 tonnes CO2e

CHANEL MISSION 1.5° UPDATE 2021

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ACCOUNTABILITY

Scope 1 & 2Transportation anddistribution (upstream
and downstream)
181,597

INTRODUCTION

reduce2021 Performance

TARGET-50%
IN C02e TONNES(ABSOLUTE)

0.45
per
K unitsold-66%(INTENSITY)

0.33
per
K unitsold

20,883

2021

2030

0.15
per
K unitsold-10%(ABSOLUTE)

829 ,000

859 ,511-40%(INTENSITY)

746,097

9.04
per
K unit
sold

10.29
per
K unit
sold

2018

2021

5.42
per
K unitsold

PARTNERSHIPS

2018

27,857TARGETACCELERATE

41,765

DECREASE EMISSIONSFROM OUR VALUE CHAINSCOPE 3

IN C02e TONNES

DECREASE OURCARBON FOOTPRINTSCOPES 1 & 2

Emissions from our value chain(scope 3)
We firmly believe in taking a rigorous
approach to scope 3, in line with theGreenhouse Gas Protocol (GHG Protocol),so that we can build a realistic picture of
our impacts. We have continued to gaina deeper understanding of our scope 3
emissions across 11 of the 15 GHG Protocol
categories to give us a comprehensive scope
3 footprint.
In 2021, scope 3 increased by 4% in
absolute value versus 2018. The change isdriven in part by an increase in digital media
activities. A 13% reduction is needed to reachour absolute target of -10% by 2030.
Alongside the implementation of
decarbonisation pathways, we willcontinue to strengthen the comprehensive
understanding of our scope 3 emissions
by moving away in the years ahead fromspend-based estimations towards more
activity-based data wherever possible.

REDUCE

Emissions from our own operations(scope 1 and 2)
As in 2020, the Covid-19 pandemic continued
to impact the business and different markets
experienced periods of lockdown throughout
the year. Despite the challenging context,
teams continued to advance decarbonisation
initiatives.
As a result, scope 1 and 2 emissions(from our owned and operated production
sites, distribution centres, boutiques andoffices) decreased by 33% compared withour 2018 baseline, despite adding over 75
new boutiques into our footprint over the
past two years. We need to reduce a further
25% by 2030 to reach our target of -50%.
Our progress to date is mainly driven by
the continued transition towards renewableelectricity.

2030

5

ACCOUNTABILITY

CHANEL MISSION 1.5° UPDATE 2021

INTRODUCTION

reduceshift to 100% renewableelectricity

REDUCETARGET

100%
92%

ACCELERATE

41%

2018

2021

PARTNERSHIPS

2025

CHANEL MISSION 1.5° UPDATE 2021

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ACCOUNTABILITY

Transitioning to 100% renewable electricity
by 2025 is a key component of CHANEL
Mission 1.5°. Deploying renewable electricity
solutions across a vast range of global
markets is a complex endeavour. Chanelaims to implement solutions that will help
support this transition in accordance with
regional complexities, striving for the
additionality of renewable energy capacity or
positive social impacts as much as possible.
Consequently, Chanel favours the inclusionof onsite renewables or power purchaseagreements (PPAs) where feasible, followed
by green tariffs and, finally, the purchasing ofenergy attribute certificates. All renewableelectricity is from sources aligned with the
RE100 technical criteria.
By the end of 2021, we shifted to 92%
renewable electricity, in comparison to
41% in 2018. The progress made last year
contributed to a 58% decrease in our scope
2 emissions in 2021.
We now have nearly 20 sites worldwide,
including in Europe, the United States andAsia, able to generate their own renewableelectricity. As we continue to make progressin reporting on, and refining our transition to,
renewable electricity, the overall consumptionof self-generated renewables has increased
from 0.6 million kWh in 2019 to 4.8 million
kWh in 2021.

SHIFT TO RENEWABLE
ELECTRICITYINTRODUCTION

introductionR ED
U C ESTUDY
CASE

TRANSFORMATION IN ACTION

These can also be refilled to further reduce
impacts. An external life cycle assessment(LCA) indicates that refilling the jar of
Crème Revitalisante just twice reduces
the product’s carbon footprint by 50%.
A similar sustainable approach wastranslated into the marketing and display
materials of the product line. Chanel
worked with a committed supplier tosecure sources of recycled polymethyl
methacrylate (PMMA) plastic. Morethan 90% of the PMMA used in all the
N°1 DE CHANEL points of sale comesfrom a recycled source, saving a totalof 428 tonnes of CO2. Additional carbon
savings were also made in the transportof the product line, by relying on global
stock warehouses closer to production
facilities. A holistic and dedicated ecodesign approach was also taken by the
R&D, purchasing, artistic direction andsupplier teams.

ACCELERATEPARTNERSHIPSCHANEL MISSION 1.5° UPDATE 2021 7

ACCOUNTABILITY°1 DE CHANEL is Chanel’s
first eco-responsible skincare,make-up and fragrance line.
The culmination of several
years of work, the line was developed inconsideration of each product’s whole life
cycle, with the aim of reducing carbon
and other environmental impacts.
The N°1 DE CHANEL line uses
formulas that contain up to 97% natural
origin ingredients and up to 76% camellia
derivatives, some of which are grownin our open-air laboratory in Gaujacq,
southwestern France, with rigorous
environmentally friendly farming practices.
Products are contained in ecodesigned packaging. The weight of glass
jars and bottles was reduced by 30% on
average across the entire line and by up to
50% for the Crème Revitalisante product,in comparison with the average weightof jars and bottles of the same capacity.

REDUCEN

N°1 DE CHANELINTRODUCTION

introduction
CASE STUDYREDUCEECO-RESPONSIBLETWEEDSC

PARTNERSHIPS

8ACCOUNTABILITY

CHANEL MISSION 1.5° UPDATE 2021

ACCELERATE

hanel is also taking an eco-responsible approachthrough the choice of materials used in our fashion
products and the preservation of our savoir-faire.
The CHANEL Cruise 2021/22 collection was
one example of our approach. At the heart of the line werefour eco-responsible tweeds produced in close partnershipwith the tweed atelier Lesage, and drawing on the supportof other partners, including silk specialist Denis & Fils, tweed
manufacturer ACT3 and yarn twister Vimar.
Each of these tweeds was made from more than 70% ecoresponsible yarn, including GOTS-certified yarns. GOTS (Global
Organic Textile Standard) is a leading globally recognised
textile processing standard that ensures materials are produced
according to environmentally and socially responsible criteria
based on organic farming. From the initial processing of raw
materials, to the production of sustainable fibres, through tothe finished fabric, each step of the production process of these
tweeds had to meet GOTS’ rigorous requirements.

INTRODUCTION

introduction
CASE STUDY

flights on routes and carriers that produce
less CO2. An integrated measurement andsimulation tool helps us to decide whichroutes should be favoured by our freight
forwarder partners. This switch will allow
us to save around 10,000 tonnes of CO 2each year.
We are also accelerating emissions
reductions by transitioning away from
air transport towards sea. In Asia Pacific,
maritime transport is being implemented
as a main transportation mode for ourfragrance and beauty products for key
markets in the region, with the goal ofreaching 80% shipments by sea by 2024.
These projects have allowed us toformalise a process for applying greener
specifications to our supplier relationships
so that Chanel’s future transport will be
more sustainable.

PARTNERSHIPS

9ACCOUNTABILITY

CHANEL MISSION 1.5° UPDATE 2021

ACCELERATE

he transportation of our products
represents 20% of our carbon
footprint and we are working
across the business to findsolutions to reduce this.
Chanel’s global freight transition
represents the coming together of ourglobal procurement and operations teams
working with business areas and regions
on the contribution of transportation to
CHANEL Mission 1.5°. The work focuses on
embedding a more sustainable approach
to transport by translating our climate
ambition into our supplier relationships
and the procurement and RFP process.
This has served as a lever for changes
to our air freight methods, which comprisethe majority of our transport carbon
footprint. In situations where air shipments
are unavoidable, Chanel is shifting to cargo

REDUCET

FREIGHT
TRANSITIONINTRODUCTION

accelerate
Supporting land and livelihoods projects

INVESTING IN
RESILIENCE

Landscape Resilience Fund

Chanel has invested in the Livelihoods Carbon Fund(LCF3) with the aim of sourcing high-quality certified
carbon offsets by investment in community-based
solutions for the restoration of natural ecosystems,
agroforestry and regenerative agriculture. The
fund aims to create positive social, economic, andenvironmental impact for the communities it partners
with, which aligns with the principles of CHANEL
Mission 1.5°.

Chanel is the anchor investor and sits on the boardof trustees of the Landscape Resilience Fund, an
independent foundation co-developed by climate
solution company South Pole and the World Wide Fundfor Nature (WWF). The fund is focussed on enabling
the most vulnerable people in rural landscapes toadapt to climate change through the financing of small
businesses and projects to promote climate resilient
agriculture, forestry and sustainable development.

HECTARESPRESERVED
including highconservation habitats

6,859,800

51

Averageannual GHG
AVOIDEDSPECIESPROTECTED

tonnes of
CO2 eq/year
avoidedsuch as the Sunda
pangolin and otherendemic species offlora and fauna,through habitat
restoration andbiodiversity
inventories

Compensation
projects

105

165,934

COMMUNITY
ORGANISATIONS
establishedproject
beneficiaries
from the projects’ healthcare,education and livelihoods
diversification efforts

CHANEL MISSION 1.5° UPDATE 2021

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ACCOUNTABILITY

to define the plan ofactivities for the
projects

PARTNERSHIPS

Livelihoods Carbon Fund

809,388

ACCELERATE

These projects are certified as high-quality
carbon offsets and continue to contributeto Chanel being carbon neutral since 2019.
This past year, Chanel began investingin two separate funds which help advanceour commitment to climate adaptation andthe strengthening of local communities:
the Livelihoods Carbon Fund (LCF3) andthe Landscape Resilience Fund (LRF). In
addition to these funds, Chanel continues
to invest in specific initiatives to protect andrestore land and support the livelihoodsof communities in five landscape areas inAfrica, Southeast Asia and Latin America.

REDUCER

educing the impact of ourbusiness on climate change isa part of our journey to achieve
CHANEL Mission 1.5°, but wealso recognise the role we can play inaccelerating the transition to a low-carbon
future beyond our own operations andvalue chain.
We aim to facilitate this by investing in
projects that will make a lasting contribution
to communities and society. Chanel issupporting initiatives that preserve andrestore the natural environment andincrease the resilience of communities toadapt to the effects of climate change.

Chanel is a co-investor in nature-based solutions in countries in Africa,
Southeast Asia and Latin America. Below is a consolidated overview ofthe social, economic and environmental impacts of these programmes
in 2021, based on the total contribution from investors.

CASE STUDYWORKING IN
COLLABORATION

We are a member or supporter of a number of coalitions
and initiatives driving climate action:

UNLOCKINGTHE POWER OF
MANGROVES
could hold the key to future climate solutions.
We believe that direct connections between
corporate entities and research institutions canprovide a spark to ignite transformative change
at a time when breakthroughs are needed.
How do you define hope in tacklingclimate change? Hope is knowingthat we at least have a percentage
of chance. There is hope when thepercentage is not zero. What’s
important is that we know thisnumber is not zero, and that there are
solutions. There is hope because thechange is in our hands. We are only
one drop in a system, but we are allpart of that system, and each one ofour decisions counts in the system.

PARTNERSHIPS

Marina Levy, Deputy Director - Ocean Department of
the French National Research Institute for Sustainable
Development (IRD) and research scientist at National
Centre for Scientific Research (CNRS)CHANEL MISSION 1.5° UPDATE 2021

11

ACCOUNTABILITY

One way we can contribute to the accelerationof a sustainable future is by partnering with
scientists and research institutions to advancenew thinking on climate solutions and thetransition to a low-carbon society.
2021 marked the third year of Chanel’s sixyear partnership with École Normale Supérieure(ENS) in the funding of a research chair to better
understand the links between the carbon cycle
and climate change in oceans, through three key
pillars: prediction, mitigation and adaptation.
As part of this partnership, Chanel
is collaborating with ENS on research in
Madagascar to measure natural carbon captureand storage in mangrove forests, which represent
an important ecosystem for the removal andavoidance of CO2 emissions.
The project in Madagascar is one example
in which Chanel’s support has allowed ENS
to explore different areas of research which

ACCELERATEe understand that our ability to influence systems change is stronger
when working with partners and suppliers, and when engaging withstakeholders to develop the thinking and solutions to accelerate thistransition.
We continue to collaborate with and support world-leading institutions andorganisations such as the University of Cambridge (CISL – Cambridge Institute for
Sustainability Leadership), the Centre Scientifique de Monaco, RE100 and The Fashion
Pact. Chanel is also supporting Generation Glasgow, an initiative announced shortly
after COP26 that brings together business leaders from a cross-section of industries
to advance leadership for sustainable business transformation.

REDUCEW

INTRODUCTION

partnerships

INTRODUCTION

accountABILITYABOUT OUR PROGRESS
which is publicly available at Companies
House in the UK.

CHANEL MISSION 1.5° UPDATE 2021

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ACCOUNTABILITY

Shifting to renewable electricity
Chanel is a member of RE100, a global
initiative bringing together the world’s
most influential businesses committed to100% renewable electricity. Led by Climate

Governance
Senior leaders at Chanel are committed
to CHANEL Mission 1.5° and to buildinga resilient and sustainable business. To
ensure sustainability is truly embedded
into its core business strategy, Chanel has
established two Sustainability Committees(that include all regional and divisional
Presidents) as sub-committees of the
Executive Committee. The Sustainability
Committees meet regularly to discuss
the on-going sustainability strategy andperformance that are ultimately presented
to the broader Executive Committee. To
enhance engagement with Chanel’s Boardof Directors (the “Board”), going forward
there will be regular connections onsustainability performance and the overallsustainability strategy, as part of the set
meeting calendar with the Board.

PARTNERSHIPS

Setting Science Based Targets
Chanel’s targets were independently
validated by the Science Based Targets
initiative (SBTi) in November 2019, basedon a 2018 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 involved in the
Science Based Targets Network (SBTN)
Corporate Engagement programme. SBTN
builds on the SBTi to empower companies
and cities to set science-based targets
for both climate and nature, given theinterconnected role that climate change
has on the natural world.

Group, in partnership with CDP, its mission
is to drive change towards 100% renewablegrids, both through the direct investmentsof 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.

ACCELERATE

Notes on the data
Chanel’s scope 1 GHG emissions arise fromnatural gas, fuel and refrigerant gases

consumed at our sites. The calculations
are based on specific energy data and are
multiplied by the appropriate 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 usedin all sites. The calculations are based on
specific data and are multiplied by theappropriate emission factor from AIB and
the International Energy Agency (IEA).
Where Chanel does not have visibility of theenergy consumed at a site, consumption
is estimated based on square metres ofthe site and the known consumption ofother sites within that region.
Scope 3 emission factors havebeen sourced from: ADEME; EcoInvent;
EcoTransIT; EIO LCA; DEFRA; GLO; WALDB;WFLDB; SPICE; Trucost report on theSocioeconomic and Environmental Impactof Large-Scale Diamond Mining; US EPA;
assessments conducted by IJO; andlife cycle assessments conducted with
consultants.
Further details on Chanel’s carbon
performance can be found in the company’s
annual report for the year ended 2021,

REDUCE

Reporting boundaries
For the financial year 2021, Chanel has
reported on its GHG emissions and energy
usage as required under The Large andMedium-Sized Companies and Groups(Accounts and Reports) Regulations 2008
as amended (UK), also referred to as the
Streamlined Energy and Carbon Reporting(SECR).
The boundary for the energy andcarbon reporting includes all activities
contributing to the CHANEL brand.
Data is reported for sites where Chanel
has operational control and the ability
to influence the energy management.
Chanel uses the Greenhouse Gas Protocol
Corporate Standard to estimate andcalculate emissions.
Where Chanel does not have visibilityof the energy consumed within a site,
consumption is estimated based on square
metres and the known consumption ofother similar sites within the same region.
All renewable electricity is from sourcesaligned with the RE100 technical criteria andsupported by energy attribute certificates.

introduction

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 thelast 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 number of specialised suppliers,
collectively known as the Métiers d’Art. Chanel is dedicated to ultimate luxury and tothe highest level of craftsmanship. It is a brand whose core values remain historicallygrounded 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 2021, Chanel employed close to 28,500
people across the world.

Image credits
Page 1 © Maurice Leponce/Life on Trees
Page 2	(top left) N°1 DE CHANEL Serum in Lotion © CHANEL; (middle) CHANEL
Cruise Collection 2021/2022 © CHANEL; (bottom left) CHANEL Watches
and Fine Jewellery boutique - Place Vendôme © CHANEL
Page 6 © ACT3 / Laurent Pascal
Page 7 © CHANEL
Page 8 © CHANEL
Page 9 © Shaunl
Page 11 © Curioso.Photographysustainability@chanel.com
CHANEL MISSION 1.5° UPDATE 202113