Louis Vuitton Moët Hennessy (LVMH), the luxury products group, was concerned that unknown exposure to water scarcity would affect its ability to operate and could lead to future impacts on profitability.
Trucost calculated a region-specific water risk map across the entire value chain and identified regionalized natural capital shadow prices, taking into account local water availability. Finally, Trucost assessed the degree of local regulatory momentum towards increased water tariffs. Trucost’s Regulatory Risk Framework combined an evaluation of shadow water costs and the local regulatory climate across LVMH’s key sites and raw material inputs. By taking into account both the cost and likelihood of any risk, the framework allows LVMH to prioritize risk management where it most matters and strengthen the business case for investment.