Investors Urge LVMH to Strengthen Supply Chain Transparency Amid Allegations

Major investors in LVMH, including Amundi, are pushing for greater transparency and improved treatment of workers in its supply chain following allegations of poor working conditions at Italian subcontractors. The investigation, which impacts high-end brand Dior, has highlighted potential worker exploitation in the global luxury goods industry.

Europe's top asset manager Amundi and other LVMH investors are calling for the $370 billion luxury giant controlled by billionaire Bernard Arnault to take decisive actions in monitoring suppliers' treatment of workers. This demand follows allegations of sweatshop-like conditions at subcontractors for Dior, according to three investors who spoke to Reuters.

The June 11 investigation into LVMH's fashion label suppliers has brought potential worker exploitation to light in the $1.6 trillion luxury goods industry. Amundi, holding a 0.6% stake in LVMH, reached out to the conglomerate post-investigation, urging for more transparency on supplier audits and internal practices.

Caroline Le Meaux, global head of ESG research at Amundi, emphasized the importance of addressing these allegations seriously to improve supply chain risk management. LVMH's efforts, as seen through Dior's recent actions and an updated supplier code of conduct, indicate movement towards resolving these issues, but investor pressure for tangible improvements continues to grow.

(With inputs from agencies.)