REDUCING CARBON EMISSIONS IN OUR DIRECT OPERATIONS Emissions associated with our corporate buildings, main industrial sites, logistics facilities, and boutiques are approximately 40,000 tons CO 2 eq/year (2015 baseline). In line with the Paris Agreement ambitions, we aim to halve these emissions in absolute terms by 2030. An extrapolation of committed operational action plans indicates that a 50 percent reduction in emissions by 2030, from a 2015 baseline, is possible at certain key sites through energy-efficiency measures and the environmental certification of all our buildings, factories, and boutiques. Emissions associated with transporting goods and people are approximately 162,000 tons CO 2 eq/year. In line with COP21 ambitions, we aim to reduce these by between 40 percent and 46 percent, depending on the business activities. The operational action plans we have identified to date, including packing optimization to reduce the volume of transport, a shift from air to sea transport where feasible, and further optimizing transport flows, are not enough for us to reach our targets by 2030. Consequently, we will need to further rationalize elements of our supply chain and increase the volume of products shipped by sea. We will also need to work with our freight providers to identify more sustainable solutions for transport, including, for example, switching to electric vehicles. TRANSITIONING TO GREEN POWER IN OUR DIRECT OPERATIONS As one of the central pillars of our climate strategy, we have committed to making a gradual transition to using only green power in our direct operations, including manufacturing sites, distribution centers, offices, and stand- alone boutiques by 2030. Coupled with energy-efficiency measures, our approach to achieving this objective has three pillars: • Maximizing on-site renewable-energy production. • Purchasing green tariffs as an interim measure. • Investing in community renewable-energy projects. This transition will be challenging for several reasons, the main one being our presence in many markets where green power is not readily available and renewable-thermal- energy solutions are lacking. Nevertheless, we are committed to the transition to renewable energy wherever we can have an impact. 1 2 A COMMITTED LUXURY LEADER