HERMES_REGISTRATION_DOCUMENT_2017

CORPORATE SOCIAL RESPONSIBILITY

SUPPLIERS AND PARTNERS

Risk Management and Mitigation Buyers and more broadly those who are responsible for activities that are more directly concerned with supplier relations are reminded on a regular basis of risks on this subject, including through the development of internal control positions within the Group. As described in several operational examples below, these actions must be specific. The Group’s ethics charter as well as the code of business conduct, described in section 3.2.1, provide a clear framework for all employees. In 2017, training continued on these subjects. Training sessions are also organised by and for the House’s network of buyers. The training pertains to the purchasing policy of the Group, legal rules, and tools, but also relates to raising awareness around risk and how to evaluate it. On the legal front, Hermès formally asks suppliers for their engagement in complying with its corporate and regulatory responsibilities, through guidebooks on undertakings that are updated on a regular basis (non-disclosure, fair trading and corporate social, environmental and ethical policies). In particular they include the following sections: this section deals with the following subjects: child labour, forced labour, compliance with health and safety rules, respect for freedom of association, non-discrimination, working time, compensation, clandestine workers; s Good practices in relation to environmental responsibility: this section states our expectations in terms of compliance with envi- ronmental regulations, natural resource and consumption manage- ment, effluents and waste materials, respect for biodiversity; Good ethical conduct: this section covers subjects that include corruption, money launde- ring, specific requirements for certain sensitive divisions, and recom- mendations on good practices in relation to subcontracting. TheGroupalso asks its partners to check their own suppliers, throughout their supply chain, to ensure that they are fulfilling their obligations. The contract clauses provide for the possibility of verifying that these under- takings are real through an operational audit. The legal framework and standard clauses that the Group asks its suppliers to sign also include an anti-corruption section. In terms of IT, there is a central platform. This tool makes it possible to share all supplier data throughout the Company. It also hosts legal docu- ments (agreements, commitments, etc.) from partners and providing an overview of generated business volumes. s Good practices in relation to social responsibility: s

1 st level assessment: The direct and indirect purchasing corporate functions coordinate the House’s network of buyers. They also carry out common, cross-functio- nal actions, such as the development of risk analysis questionnaires to provide a first-level overview of supplier EHS compliance. They parti- cipate in establishing common rules for filling in and completing these questionnaires in the caseof anewsupplier, renewal andupdating of this evaluation, and they ensure that this knowledge is shared throughout the network. Field visits are carried out by each métiers, when during which they fill out the risk analysis questionnaire as an alert mechanism enabling any weak points to be identified. 2 nd level assessment If a buyer has a doubt about a given area, he or she may decide to complete the visit with a full audit, which will confirm or invalidate the diagnosis and lead to corrective action plans being implemented and monitored—or even the suspension of the relationship with the supplier if necessary. The audits are conductedwith the support of an external firm. Theymake it possible to performan on-site check of supplier commitment, ensuring that relevant regulations are being complied with, and verifying the real working conditions and well-being of their employees. These audits are concludedwith a shared statement and an action plan, if necessary, and are followed up. These audits cover in particular the following aspects:

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SUPPLIER AUDIT

Management

Confidentiality, safety

Subcontracting

Risk assessment

Ethics, human rights and integrity

Environment

Health and safety conditions

2017 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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