HERMÈS - 2018 Registration document

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Corporate social responsibility

communities: suppliers & partners

In accordance with the recommendations of the French law 2017-399 of 27 March 2017 concerning the duty of care of parent companies and contractors, this duty of care plan includes: s s riskmappings aimed at identifying and assessing the risks generated by the activities of our suppliers and subcontractors, and more gene- rally by all of our divisions; s s procedures to regularly assess the situation of our suppliers and subcontractors with which we have a trading relationship, but also increasingly to assess the situation of second-level suppliers and subcontractors, in order to gain an ever-stronger understanding of our supply chains; s s appropriate measures to mitigate the risks identified or prevent serious violations; s s an alert and reporting mechanism that is consistent with the House’s other internal alert mechanisms; s s a system for monitoring the measures implemented and assessing their effectiveness. The system was presented to all the Group’s purchasers (over 100 people) and internal controllers during a Purchasing day organised on 10 April 2018 on the theme of supplier risk management. After discus- sing the regulatory environment, the methodology and tools offered for supplier risk management were presented. In particular, a methodology to carry out risk mapping by purchase category, a supplier management analysis framework and a “know-your-supplier questionnaire” were pre- sented, and purchasers were requested to implement them.

2.6.2.2 Measures implemented and results Since2017, this coordination of Group purchasing has been reorganised into two divisions: that of direct purchasing, on the one hand, and that of indirect purchasing, on the other hand. The main duties of these two divisions are coordinating the network of purchases, raising their aware- ness and training them in CSR issues in the supply chain, structuring and strengthening the supplier support and guidance system, and accelera- ting its implementation in all the House’s métiers and subsidiaries. The Group’s direct and indirect purchasing departments also coordinate the supplier audit programme conducted with an external firm. Duty of care The supplier risk management system, which had already existed in the Hermès Group for many years, was strengthened and accelerated in 2018 as part of the implementation of a reasonable duty of care plan with respect to suppliers. Special attention was given to human rights and fundamental freedoms, the health and safety of people, and more generally their employment conditions, as well as the protection of the environment. The risk of corruption and influence peddling is also care- fully monitored.

This supplier risk management methodology is shown in the following diagram:

Risk mapping by métier Risk mapping by sector Analysis of risk by supplier Supplier information questionnaire

Third-party audit

During this day, a member of the Executive Committee and the Group’s Industrial Affairs Director officially requested purchasers to continue to strengthen their understanding of their supply chains and to better structure and formalise the measures taken. Following this day, several workshops and meetings were organised with direct purchasers on the topic of supplier risk management.

A web market solution has been put in place and will be ramped up over the next few years to allow suppliers to share their successes and subs- tantiating documents on the subject with Hermès.

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2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL