HERMÈS - 2018 Registration document

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Corporate social responsibility

Business model

MAIN CSR CHALLENGES

offset initiatives) control of waste (by reducing waste production and by recovery); and preservation of biodiversity. s s Suppliers and partners: the challenge is to maintain the existing savoir-faire through close long-term partnerships with our suppliers. It also involves increasing diversity in our collaborations, for example by placing work with socially supported organisations in France, while exercising our duty of care over our supply chain. These relationships are governed by a suppliers’ policy drawn up in line with our duty of care over our supply chain. s s Stakeholders: the challenge is to assume our territorial responsibi- lity and fulfil our ambition of being a socially responsible company. This is reflected in the development of our sites in France, by being a committed player within local communities around the world, and by pursuing initiatives through the Fondation d’entreprise and the Livelihoods Fund. These challenges are the foundations of the six pillars of the Group’s CSR strategy. GOVERNANCE AND CRS POLICY Since 2007, the House’s sustainable development actions have been overseen by a Sustainable Development Committee, in which two members of the Executive Committee play an active role alongside the heads of the human resources, industrial affairs and distribution depart- ments, as well as the heads of two métiers (Leather Goods and Silk) and themanagement of the Fondation d’entreprise Hermès. The Committee, which is organised by the sustainable development department, met five times during the year, with eachmeeting providing an opportunity to take stock of strategic challenges, to decide on the implementation of opera- tional projects and to hear reports by managers on the progress of their sustainable development initiatives. The minutes of the committees are submitted to the Executive Committee. The Committee reports to the Supervisory Board’s CAG-CSR Committee twice a year. The Supervisory Board (see chapter 3) approved the implementation of a variable com- pensation component for the Executive Chairman of Hermès based on three CSR criteria (environmental, social and societal) that will be appli- cable starting in 2019. The Group sustainable development department , which reports to a member of the Executive Committee, implements strategy, oversees the approach taken by all operating departments and Group subsidia- ries, both in France and internationally. It monitors accomplishments, coordinates the operation of various committees (the Sustainable Development Committee and a Group Operations Committee), assists local committees and manages cross-functional projects. In 2018, it hosted 15 in-house seminars in France and internationally. It ensures the cohesion of the entire system, manages internal communications, takes part in external communication and helps share best practices. The GroupOperations Committeemeets every twomonths; it comprises the heads of the House’s main corporate functions (approximately 15 people). It analyses and validates projects’ technical and functional aspects, facilitates information sharing and serves as a collective deci- sion-making body providing a pragmatic perspective on sustainable 2.1.8

2.1.7

In 2018, the Group updated its analysis of its main risks and CSR challenges. A materiality analysis, conducted in 2015 (on the impact for the Group and impact for stakeholders), was updated. The Group’s risk maps, produced in-house by the audit and risk management department, were analysed and specific risk mappings (including supplier risks, and ethics/compliance risks) were taken into account. During the summer, the data was compared with that of major CAC 40 groups. The distri- bution subsidiaries’ CSR Officers were consulted in order to take into account our customers’ perceptions. In addition, a study on major socie- tal trends (in particular the relationships between living things) was included in the analysis. On these bases, in September 2018, the Sustainable Development Committee, in the presence of two Executive Committee members, vali- dated a list of the main risks and challenges for Hermès. This list is used as a framework for the Statement of Non-Financial Performance. To take account of the fact that the identified risks also provide opportunities, the term “challenge” was chosen for this report. Given the subjectivity inherent in the rating of these challenges, the Group has decided not to prioritize them in a specific way. These challenges are summarised hereunder. They are described in more detail in the next sections of the document. s s Savoir-faire : the challenge is to ensure the perpetuation of the crafts- manship model, which rests on exceptional savoir-faire . This goal entails exacting recruitment, the sharing of the House’s culture, trai- ning, and the development of the creative savoir-faire , craftsmanship and trading know-how. It involves the integration of sustainable deve- lopment challenges in our operations, and our capacity to communi- cate more extensively on our achievements. s s Teams: people have been at the heart of our approach since 1837. The challenge is to maintain favourable conditions for the well-being and fulfilment of our employees over the long term and in their daily activities, through meaningful high-quality jobs and by sharing the fruits of our growth. Increasing diversity in all its forms (gender balance, generations, profiles, origins, and people with disabilities) is an asset and necessary to ensure vitality. Gender balance is a priority. We will also achieve this by sharing our values and our ethical principles with our employees. s s Raw Materials: the challenge is to safeguard high-quality renewable supplies that respect biodiversity and the ethical treatment of ani- mals, and to manage these materials parsimoniously throughout their life cycle (reducing waste, and recycling). s s Environment: the challenge is to comply scrupulously with regulatory requirements and do better whenever possible (practically all of the Group’s production is based in highly regulated countries). It involves the controlled use of natural resources (water and energy) and impro- vement of our processes. The key points are use of the cleanest tech- nologies and the most environmentally-friendly substances; control of the carbon footprint of our activities (and implementation of carbon

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2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL