Review the following terms. These concepts are central to LVMH’s climate strategy and appear across sustainability reporting, supplier communications, and external commitments.
| TERM | DEFINITION |
| Carbon Neutrality | A state in which the greenhouse gas emissions produced by an organisation are balanced by an equivalent amount of carbon removal or offsetting — resulting in a net zero contribution to atmospheric CO2. |
| Net Zero | A more rigorous standard than carbon neutrality, requiring deep reductions in actual emissions (not just offsetting) across all scopes, with only residual emissions addressed through verified carbon removal. |
| Scope 1 Emissions | Direct greenhouse gas emissions from sources owned or controlled by an organisation, such as fuel combustion in boilers, furnaces, or company vehicles. |
| Scope 2 Emissions | Indirect greenhouse gas emissions from the generation of purchased electricity, heat, or steam consumed by an organisation. |
| Scope 3 Emissions | All other indirect emissions in an organisation’s value chain, including those from suppliers, product transportation, customer use, and end-of-life disposal. Typically the largest emissions category for luxury companies. |
| Science Based Targets (SBTi) | Emissions reduction targets set in line with the latest climate science, specifically the Paris Agreement goal of limiting warming to 1.5°C. LVMH has committed to SBTi-aligned targets. |
| Renewable Energy | Energy from sources that are naturally replenished — such as solar, wind, hydropower, and geothermal — producing little or no greenhouse gas emissions during generation. |
| Carbon Sequestration | The process of capturing and storing atmospheric carbon dioxide, either through natural processes (such as soil, forests, and oceans) or technological means, to reduce net emissions. |