NATURAL RAW MATERIALS OF EXTRAORDINARY QUALITY With the adoption of the UN SDGs in 2015, we recognize that best practice means linking project-level impacts to material sustainable- development goals and local indicators. For Bhutan and other markets in Africa, Asia, and South America where we source our natural raw-materials, we have defined a method for devising relevant and appropriate projects at raw-material origin. Our ambition is to set the trend in terms of corporate accountability for sustainable development in these areas and to share our approach with others. PRESERVING GROWING TRADITIONS IN COSTA RICA In Cerro Azul, Costa Rica, our suppliers cultivate approximately three tons of green coffee a year, using traditional methods, for our skincare products. In 2015, we carried out a study that highlighted a number of issues — one being that due to cheaper production methods in other countries, coffee in the region became far less profitable. Local producers were abandoning coffee and even moving away. The population of Cerro Azul fell from 2,500 to around 1,000 in just over 25 years. To address this, and help preserve coffee-growing traditions in Cerro Azul, we set Due to this close alignment with our up a supply-chain resiliency plan. We financed sustainable sourcing strategy, we signed a a new coffee-roasting unit to encourage the three-year renewable framework agreement production and sale of locally roasted coffee. for sustainably grown plant-based raw This increased the coffee’s purchase price materials. This provides visibility and financial and helped restore profitability. security for the business, while allowing CHANEL to benefit from their extensive Working with a local social-business company, agroecology and social expertise. we also developed an innovative social- entrepreneurship model for the sustainable development of vulnerable rural communities, using local resources and know-how in ingredient production.