HERMÈS - 2018 Registration document

Corporate social responsibility

Business model

Communicating our corporate culture to all employees, throughout their careers, is combined with a raft of development and leadership initia- tives. These measures help to increase employee commitment and their pride in contributing to the Group’s growth. They underpin our labour relations andensure the success of our initiatives in theareas of diversity and disability. In this context, scrupulous attention is paid to everyone’s health and safety, with an uncompromising and pragmatic approach, site by site and métier by métier. The attention given to nurturing a positive and inclusive environment at all workplaces, and to investing in acquiring savoir-faire and developing skills, enables each individual to find his or her place, to be committed, and to develop and flourish throughout the course of their missions and positions. We are convinced that our customers are only happy when our employees are happy. Numerous internal communication initiatives enable the corporate pro- ject and the Group’s values to be shared and this attitude, which is so characteristic of the House, to be nurtured. MAIN RESOURCES Hermès manufactures high-quality products, mainly from renewable raw materials. The House’s most emblematic raw materials are leather, silk and cashmere. Leather Goods All leathers used for manufacturing are directly purchased from tanne- ries, withno intermediaries. The vastmajority of theneeds are coveredby the House’s own tanneries, and by French, Italian, German and Spanish tanneries, all of which must adhere to European standards, which are some of the highest in the world for the industry. Being of animal origin, leather reflects the animal’s life. You will only get a good hide froman animal that has been well-treated. Hence, the Group’s demand for high quality helps to improve the industry by encouraging livestock farming methods that respect the animals’ welfare. Hermès uses more than 30 different types of leather to make its goods. Most of the leather comes from calves raised in France (including our flagship “Box” leather, made using an English tanning technique), but also natural cowhide (in our saddlery leather products line) and “exotic” leathers. Other than these exotic leathers, the hides used by Hermès come almost exclusively from small, sustainable farms in Europe, par- ticularly in France. As a by-product of meat production, the calfskin is collected from abattoirs in the European Union, in practice almost exclu- sively in France. The farming activities help to preserve essential vitality in these rural areas, creating local revenues, and contributing to the management of the territories and preservation of our regions’ lands- capes and ecosystems. 2.1.4

Before it becomes leather, the hide is specially tanned and made imputrescible, either in a “mégisserie” for lamb, sheep, and goatskin or in traditional tanneries for hides fromcattle or reptiles. Hermès uses only full-grain leather, the top part of the skin, without altering it in order to improve its appearance. To maintain consistency in the finished product it also only uses entire hides. Hermès works together with its tannery partners, with a view to long-term cooperation, and has a dedicated annual budget to organise programmes to improve the quality of the industry, working together with farmers, their cooperatives and their pro- fessional associations. These exotic leathers include the skins of crocodiles, alligators, lizards and ostriches. Exotic tanneries essentially use the skins of crocodilians. The vast majority of the skins come from farms located in the United States, Africa, and Australia. All Hermès partner farms must comply scrupulously with the rules drawn up under the aegis of the UN for the Washington Convention, which defines protection for endangered species and very stringent conditions (see section 2.4.1). In addition, Hermès requires that its partners meet the highest standards for the ethical treatment of alligators and crocodiles following recommenda- tions by expert veterinarians and local authorities such as the United States Fish and Wildlife Service, the federal nature protection agency. Silk and cashmere The Silk division essentially uses two materials — silk and cashmere. Long-standing partnerships have been developed with a small number of suppliers for these two precious fabrics. A supply chain for high-quality silk thread has thus been developed for more than 20 years in Brazil. The use of Japanese savoir-faire enabled cultivation of themulberry tree, whose leaves are used to feed silkworms, to be sustainably established in the state of Paraná. This industry pre- serves low-chemicalhardwoodbiotopes(silkwormseatonlynon-polluted mulberry leaves). It preserves soil fertility through a circular economy mechanism (silkworms produce several kilos of natural fertilizer per kilo of raw silk). It also generates income for small local farms and thousands of families, as silkworm farming is labour-intensive. The cashmere used by our textile departments mainly comes from Inner Mongolia (People’s Republic of China). It is supplied to us via a specia- lisedEuropeanpartner withwhomHermès has hada relationshipof trust for nearly 20 years. The farms fromwhich we sourcemost of our supplies apply extremely stringent standards, overseen by local authorities, in terms of treatment of the herds and preservation of plant biodiversity.

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2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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