His Excellency Mr. Ban Ki-moon, UN Secretary
United Nations, Global Compact OfficeFirst Avenue & 46th Street
New York, NY 10017, USA

2 January, 2016

Dear Mr. Secretary General,
I am pleased to share with you our 2015 “Communication on Progress” which
demonstrates our continued support and commitment to the Ten Principles of the UN
Global Compact. As a signatory to the Global Compact, Kering aligns our business
operations and strategy to these Ten Principles with respect to human rights, labour,
environment and anti-corruption.
At Kering, we believe that implementing an ambitious sustainability strategy is nonnegotiable given the challenges business is facing from the inevitable impacts ofclimate change. As such, we have both a responsibility and an opportunity to act, andover the previous twelve months since our last UNGC COP we have further
embedded environmental and social sustainability in our business practices,operations and policies. I am pleased to share that this progress was again recognized
whereby we were included for the second consecutive year in the Dow Jones
Sustainability Indices (DJSI) World and Europe and headed up the Textiles, Apparel &Luxury Goods sector. Improving on our overall performance from our 2014 results,
Kering achieved Industry Best scores across several categories within the set of 19
assessment criteria, including Supply Chain Management; Stakeholder Engagement;
Environmental Reporting and Social Reporting. Furthermore we received full marks forour approach to Product Stewardship; Codes of Conduct & Compliance; andCorporate Citizenship & Philanthropy.
Kering employs a robust sustainability programme and environmental stewardship andsustainability is a key driver for our overall business strategy. In our view, to continue
being a successful business in the increasingly volatile world in which we live, weneed to react and adapt. And the key to doing so is in understanding the relationshipbetween our business, the natural world and society. Our sustainability agenda helps
us do just this – to understand our risks and see potential opportunities.
Given the realities confronting us as natural resources decline and the impacts ofclimate change increase we believe that the business community needs to recognise
our reliance on natural capital. As a response, we developed the Environmental Profitand Loss Account (E P&L) – an innovative tool to help identify and account for thevalue of natural capital to our business. Over the last years Kering has implemented
an E P&L analysis across our brands to measure our environmental footprint, andhighlight environmental risks and business opportunities across our supply chains tosupport a more resilient business model. In May of last we published our first
consolidated Group E P&L based on 2013 data whereby the Group’s impacts equalled€776 million (pro forma). Simultaneously, we open-sourced our E P&L methodology toencourage other corporations to understand their impact on natural capital. Kering
also shared this work to support the development of corporate accounting of naturalcapital, and the Natural Capital Protocol, a cross-sector industry initiative developing a
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global methodology for environmental accounting. Then again in November, we
published our next Group E P&L reflecting the data from 2014 and totalling €793
million in impacts. This comparison between our 2013 and 2014 results was the firstof the annual benchmarks that we are committed to doing and demonstrated how
fundamental the E P&L is to our Group’s business reporting. We are now able to havea deeper understanding of the impacts from our business activities, especially in oursupply chain whereby our E P&L analysis revealed that 93% of our environmental
footprint falls within the supply chain, with over 50% of the impact associated with raw
material production. We are committed to continue to integrate our E P&L results into
decision-making and across our activities to understand how and where the businesscan better address environmental issues such as climate change.
As a Group, we recognise the need to understand and adapt to the impacts of climatechange. One of luxury’s distinctions is high quality and beautiful materials and as asector we need to focus our attention on finding ways to continue sourcing these in thelong term. We also want to ensure that the communities along our supply chain, butparticularly at the base of the supply chain where raw material production occurs, are
not negatively affected by climate change. These are the types of rural communities
that will be at the mercy of climate change and we need to support them in building
resilience, which is what Kering is trying to do through our smart sourcing programmes
and by focusing on our raw material producers such as organic cotton farmers in India,
nomadic herders in Mongolia and sheep farmers in South Africa. Furthermore, to help
our luxury peers, and the fashion industry more broadly, understand and respond totheir specific climate change risks, we co-published a new report, “Climate Change:Implications and Strategies for the Luxury Fashion Sector” with BSR in November
2015. The report analysis focused on six raw materials that are central to the luxury
fashion sector - cotton, beef leather, sheep and lamb leather, vicuña, cashmere, andsilk - and outlined tangible supply chain action.
The social side of our sustainability strategy has continued to evolve and adapt to theneeds of our expanding Group as well. Set out since 1996 in the Group’s first Ethics
Charter, Kering’s ethical principles reflect the Group’s strong convictions aboutbusiness practices. These principles are applicable to all of the Group’s brands andour employees, and are on occasion supplemented by additional commitments morein tune with the various brands’ operational issues.
The Kering Code of Ethics is based on international reference texts, such as theUniversal Declaration of Human Rights, the OECD Guidelines for Multinational
Enterprises, the United Nations Convention on the Rights of the Child, the main ILO
Conventions and the ten principles of the UN Global Compact. During a 2013 overhaulof the Group’s Code of Ethics, a Suppliers’ Charter was added in order to bolster theethical, social and environmental standards required of the Group’s suppliers. At thistime, the Group’s ethics governance was also restructured with the establishment of aworldwide Kering Group Ethics Committee and two regional committees reporting to it:
Asia-Pacific Ethics Committee (APAC) and the Americas Ethics Committee (Americas).
The committees monitor the distribution and implementation of the Code of Ethics andthe principles it defends: proactively developing the Group’s policy and actions insustainability and responding to complaints from any Group employee either directly orvia the Kering Ethics Hotline, also set up for all of our Group employees in 2013.
Central to the sustainability of our supply chain is our partnership with a select groupof suppliers that can grow with us and support our business. A key part of this isdeveloping the highest standards of labour conditions, environment management,
legal compliance and business integrity in our supply chain and these standards
describe the minimum we expect our partners to achieve. To support this approach,
Kering is currently implementing a worldwide supplier management system across ourluxury brands, which encompasses the entire supplier management lifecycle. Thissystem is designed to monitor compliance with regards to social, environmental andethical issues. Furthermore, in support of our Code of Ethics and sustainability policies,
we incorporate our sustainability principles into our supplier agreements. Theseprinciples specify the requirements and commitments on social and environmental
issues that we ask of our suppliers and audit against.
Where our brands are concerned, they engage with the Fair Labor Association, ETIand SAI to ensure we are embedding best practices into our operations and supply
chains to protect human rights. PUMA.Safe has been certified by the Fair Labor
Association (FLA) since 2007 and the cooperation between PUMA and FLA dates
back to 2004, and aims to manage and implement the required standards in terms ofworking conditions at suppliers. In 2014, PUMA also focused on the integration of theRuggie Framework (also known as the United Nations Guiding Principles on Businessand Human Rights) in its approach to human rights. Following in PUMA’s footsteps,
Volcom joined the FLA in 2014, strengthening its efforts to reinforce the standards of
its Code of Conduct and the checks conducted at its suppliers. In our Luxury activies,
in 2007 and 2009, respectively, Gucci and Bottega Veneta embarked on the processof obtaining Social Accountability 8000 (SA 8000) certification. This global standard
takes into account not only the company itself, but also the companies in its production
chain. It requires the certified company and its suppliers to respect nine corporate
responsibility requirements relating to child labour, forced labour, health and safety,
freedom of association and collective bargaining, discrimination, disciplinary practices,
working hours, remuneration and management systems, and to set up a specificmanagement system for this purpose. SA 8000 certification is awarded by Social
Accountability International and Gucci has been a member of the SA 8000
Consultative Committee since 2009. In 2013, Gucci and Bottega Veneta received SA
8000 certification for all their activities. Kering’s international logistics platform for ourluxury brands (Luxury Goods International, LGI) is also SA 8000 certified.
In regards to corruption, Kering prohibits any political, trade union, cultural orcharitable financing from being carried out with a view to obtaining direct or indirectmaterial, commercial or personal advantages. We comply with national andinternational regulations and 2015 has seen a new, worldwide team created to further
help fight against corruption on a Group-level and across our brands. This complianceorganizational structure is led by a Group Chief Compliance Officer supported by aworldwide network of Brands Compliance Officers and reporting to the chair of theGroup Ethics Committee. The Compliance Team collectively guides and assists all ouremployees at every level of the Group to implement the global policy regarding antitrust and anti-corruption and to comply with all applicable laws.
Our focus on labour and equality in the workplace continues to be a key topic, as
discussed in previous “Communication on Progress’“, and I am proud to share that in2015 Kering also promoted women and equality beyond our own four walls. As an
official partner of the Cannes film festival, during the festival last May we launched‘Women in Motion’ to bring a focus on women in the film industry. The programmeaims to not only highlight the talent of women in cinema, but also to emphasis theinterest of their work for audiences.
Our Kering Corporate Foundation made serious inroads around its focus on women as
well in the last year. The Foundation is dedicated to combating violence against
women and in 2015 we built a number of strategic partnerships I am particularly proudto share. The Kering Foundation now supports two projects that provide services tosurvivors of domestic violence in Beijing – the Maple Women's PsychologicalCounseling Center and Zhongze Women’s Legal Counseling and Service Center.
Additionally, last June in New York we announced our commitment to prevent andcombat sexual assault on college campuses in the US through a two-year partnershipwith Generation Progress and the “It’s On Us” campaign. The support of the Kering
Foundation will also improve the social impact of two 2015 Social Entrepreneurs
Awards winners: the Starfish Project, dedicated to restoring hope to exploited womenin China, and “We End Violence”, which aims to change behaviors leading to genderbased violence. And lastly, the Foundation’s annual White Ribbon for Women
campaign on the occasion of the International Day for the Elimination of Violence
Against Women, 25 November, was included in 800 boutiques of 9 of our brands in 41

countries, in partnership with Condé Nast International. In addition to this distributionof the brooch designed by Stella McCartney, the social media campaign with the#BeHerVoice signature was taken up by celebrities across fashion, film and sports
including Johnny Depp, Kate Moss, David Beckham, Paul McCartney and manyothers.
At Kering, we consider that raising awareness for social and environmental issues in
the public realm is a responsibility as a leader. In doing so, we have continued to form
partnerships and collaborations to help drive change for the unsustainable status quo
in our industry, and beyond. We also have a view to the future in our own business,and in our industry more broadly. The education of the next generation is particularly
key if we want to meet our global sustainability challenges and our partnership with theLondon College of Fashion continued to flourish in 2015. Kering has supported
education-based programmes over the last years but we wanted to take this toanother level by developing and supporting a dedicated programme in sustainabilityand fashion. I am pleased with the uptake and success it has had with the students at
the London School of Fashion. Our partnership is acting as an incubator forsustainable innovation and creativity and it is exciting to help influence and guide thefuture of our industry.
Overall it was a pivotal year for our industry and for the business community as awhole with the ambitious climate accord and the Sustainable Development Goals. We
all now have clear guidelines and a responsibility to address climate change and for
Kering it's not just about setting an example, but about doing smart business. Over thenext years Kering will be figuring out ways where we can orient our actions to deliver
business benefits and opportunities while also creating solutions to many of the global
goals and aligning them accordingly to our businesses. To this end, we will be sharing
the next steps in our sustainability strategy in the Fall of this year, following thepublication of our final Sustainability Target achievements in the Spring, which I had
set for the Group as a 5-year roadmap in 2012.
I look forward to sharing these new developments with you and our continued
progress towards becoming a more sustainable company, guided in part by the Ten
Principles of the Global Compact.

Respectfully yours,

François-Henri Pinault
Kering Chairman & CEO