A CREATION-DRIVEN BRAND INVESTING IN SUSTAINABILITY Working with local authorities, our support IN NEW CALEDONIA also contributed to reducing illegal exploitation Sandalwood extract is used as an ingredient by establishing controlled woodcutting zones. in many perfumes, including several CHANEL At the same time, we engaged with local Kanak fragrances. Although India has been our communities to resolve potential tensions and source of this ingredient for many decades, address economic concerns. We also set up its overexploitation in the country, due a number of associated conservation projects to its excessive use outside the perfume to protect indigenous plants and animals, industry, had led to severe deforestation. including rare butterfly and lizard species. In 2010, CHANEL decided instead to buy all sandalwood from New Caledonia, an OTHER RAW MATERIALS island territory in the South Pacific. While Where we don’t fully control other raw New Caledonia has extensive resources materials we use in our products, we follow of sandalwood, the supply chain faced a another strategy, which includes the combination of environmental, social, and following elements: economic risks. There was no regulation or control of sandalwood harvesting there, raising • Traceability: We try to trace the structure the threat of deforestation. Sourcing activities and composition of the supply chain to as risked disrupting local Kanak communities, close to the material’s origin as is possible. whose economies and cultural heritage • Audits: We assess and monitor the actual depended on sandalwood exploitation. and potential risks and impacts on the Since 2015, increased global competition, welfare of humans, animals, and natural caused by weakened global markets, had ecosystems. led to an intensification of illegal woodcutting in the area. • Remediation: We set up programs to remediate local environmental and social To ensure the long-term sustainability of impacts wherever possible through sandalwood in New Caledonia, we developed long-term cooperation with suppliers a supply-chain strategy involving three key and local communities. components: a breeding, conservation, and reforestation program, the control of wood exploitation, and a strong engagement with local communities. The sandalwood program aims to conserve 75,000 sandalwood trees in their natural habitat. For every tree cut in the conservation area, five new trees are now transplanted to and cultivated in the sandalwood nursery of our Kanak partner.