HERMES_REGISTRATION_DOCUMENT_2017

2

CORPORATE SOCIAL RESPONSIBILITY

SUPPLIERS AND PARTNERS

SUPPLIERS AND PARTNERS

2.6

on the other. The main aim of these corporate functions is to coordinate the buyers’ network, notably reinforce the implementation of the supplier relationship framework. The audit and risk management department (A&RMD) provides coordination in liaisonwith the industrial department. Duty of care In 2017 the group continued work on its “reasonable monitoring plan” regarding its suppliers, inparticular in relation to human rights, employee health and safety and environmental protection. In accordance with the recommendations of Law 2017-399 of 27 March 2017 concerning the duty of care of parent companies and contractors, the plan includes: (1) a risk assessment mechanism, structured around first- and second-level assessments, and risk mappings; (2) a management and mitigation mechanism (in particular for major violations); (3) an alert mechanism that is consistent with the House’s other inter- nal alert mechanisms and whistleblower programmes (as detailed in the code of business conduct, see 3.2.1.3); (4) a tracking mechanism for major issues. Risk assessment The Group has produced a risk mapping, which is fed into by the map- pings produced by each of the main sectors, distribution subsidiaries and support activities. Each of these mappings takes into account sup- plier and outsourcing risk, where these exist. In addition, each of the métiers has tools to produce its mapping of outsourcing and associated risks. 2.6.1.1

The majority of production is integrated in-house, in line with Hermès strategy that focuses on preserving unique savoir-faire and securing supplies (72% of our objects are made in-house). Our ability to grow is, however, also linked to the development of our suppliers, whose excep- tional savoir-faire and future success will contribute to that of the Group. Most of our subcontractors and suppliers have been partners for many years, and these stable relationships mean that we can work closely and sustainably with our partners on a wide range of matters. Hermès is committed to supporting the sustainability of our partners, and maintaining balanced relationships characterised by goodwill and high standards: we ensure that they comply with and share our social, environmental and ethical ambitions. Aware of its social responsibility, the group also uses socially sup- ported organisations in France for its direct and indirect purchases (see chapter 2.6.2 “Corporate responsibility and using socially supported organisations”). SUPPLIERS MONITORING For a long time, the Hermès Group’s supplier guidance management system has been suitably formalised. Operationally, each sector is res- ponsibleforthemanagementofitssuppliers.Themétier-basedapproach guarantees proximity, understanding of issues and pragmatism of its mechanisms, while complying with the company’s rules. Coordination is provided by the Group through policies, tools and controls. In 2017, supplier relationship coordination was reorganised into two main areas: direct purchasing, on the one hand, and indirect purchasing, 2.6.1

2 nd level assessment

Conduct of supplier audits

Risk analysis questionnaires made available to buyers

1 st level assessment

Legal framework for relations with suppliers

Central platform for sharing of documents on suppliers

Training & aware- ness-raising of buyers

Risk mitigation and preventive actions

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2017 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL