NATURAL RAW MATERIALS OF EXTRAORDINARY QUALITY In many cases, gaining greater visibility of PALM OIL: USING A RECOGNIZED all stages of our raw-material supply chains SUSTAINABILITY STANDARD can be difficult. This is especially true for the CHANEL is a relatively small user of palm oil, commodities we use in some of our products. yet, like most beauty-product producers, In these instances, we can take the initiative we do use derivatives of it in our cosmetics. to design and set up our own supply chain We use around 130 derivatives of palm oil in order to ensure full traceability and control, and palm kernel oil as raw materials, from as in the case of our beeswax supply chain 50 suppliers — the total amount being about in France. Where appropriate, we also use 300 tons a year. All the derivatives we use are materials which are certified to a recognized certified to the Roundtable on Sustainable sustainability standard. Palm Oil (RSPO) standard. There are many environmental issues linked to palm oil For example, we have achieved COC production, including deforestation, loss Responsible Jewellery Council (RJC) of wildlife habitat, and even climate change. certification, and we use certified palm oil So, despite the relatively low volume we derivatives. Where supply chains are highly use, we know we need to work on tracing complex and lacking in traceability, and where the supply, and ensuring none of our buying recognized sustainability standards do not contributes to these issues. exist, we try to work in association across sectors, with private, public, and nonprofit To understand this better, CHANEL parties that are trying to achieve responsible commissioned a third party to conduct a supply chains. This is the case with mica, traceability study of our supply chain for palm for example, through the Responsible Mica oil derivatives. This helped us trace 81 percent Initiative (RMI). of our products to the refineries, 75 percent to the mills, and 16 percent to as far as the The objectives of such initiatives focus on plantations. We have identified 58 refineries, increasing traceability, and ensuring fair 23 crushers, and 1,180 mills potentially and sustainable conditions for production connected to our supply chain that have risks or mining. This helps communities and related to deforestation and wildlife issues. governments build a legal framework and achieve acceptable standards. We will now move on to the second step of our traceability program by connecting these results with our sustainable-sourcing approach. We will talk to a selection of our palm oil derivative suppliers about planning and running resiliency projects along our value chain. In addition, since 2015 we have been trying to develop, with a local NGO, our own source of palm oil in Ghana to supplement our needs. Here we will have full traceability and better control over the social and environmental impacts.