HERMES_REGISTRATION_DOCUMENT_2017

CORPORATE SOCIAL RESPONSIBILITY

RAW MATERIALS

leathers. In addition, the diversity and richness of our collections repre- sent a good opportunity for optimal use of our exceptional leathers. Between2014and2017, these optimisation actionsmade it possible to makemuch better use of the leather surfaces that the tanners put at our disposal. The consumption ratio improved by almost 15% in three years. In addition, some industrial departments (leather goods, fashion acces- sories), like Petit h, have designed products that can be made with the aimof improving the utilisation rate of available skins, and reduce waste. In 2017, several thousand products were made. As indicated in 2.4.3, leather cutting waste follows a recycling cycle with external partners that gives a second life to all recycled volumes. Tanneries Improving the quality of raw skins is one of the priority drivers helping to reduce the requirements formaterials. For our lineof calfskin, likeour line of reptile skin products, the division is spearheading a number of qua- lity improvement projects. Some of these initiatives happen directly on the farms, and others are partnerships with farmers and cooperatives, professional organisations, veterinarians or independent laboratories. Silk and Textiles Once the raw materials have been provided (essentially silk and cash- mere), this division takes over all processing tasks: weaving, printing, finishing, fabrication. This uniquely integrated process makes it possible for us to control the use of materials down to the last thread. Programmes minimising waste and spoilage, which make up part of a quality process encompassing the entire product line, are particularly active and involve every manufacturing unit. Crystal Thanks to thee technology adopted for the new tank furnace, which came into operation in the last quarter of 2016, more cullet can be recycled, thereby reducing the consumption of raw materials, the waste transport flows and also the energy required for operation of this furnace. The quantity of raw materials consumed in 2017 was accordingly down by almost 10% compared to 2016. Porcelain and Enamel Each “blank”, or piece of porcelain before decoration has been applied and fired, is different. A process has gradually been implemented via which the blanks are positioned based on their own characteristics, so that they receive the decoration that is best adapted to them. Using this method to position the blanks has enabled us to prevent a significant number of pieces from being rejected each year.

Silk and Textiles The Silk division’s business essentially depends on 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 was developed more than 20 years ago in Brazil. Thanks to cultivation of the mulberry tree, whose leaves are used to feed silkworms, it has been made possible to sustai- nably establish this sector in the state of Paraná, thanks to Japanese savoir-faire. This industry preserves low-chemical hardwood biotopes (silkworms eat only non-pollutedmulberry leaves) and generates income for local small farms and thousands of families. There is a dedicated annual budget to develop the knowledge, tech- niques and sustainability of the businesses and supply chains of these partners. Programmes to improve the quality of their products are also carried out and we maintain high levels of exchanges and sharing. Perfumes Hermèsperfumesaremadein-housefromcarefullyselectedingredients. Hermès has for many years taken part in a collective movement by the profession to ensure that natural ingredients used by the cosmetics and perfumes industry are exploited in a sustainable and balanced way. This is a painstaking process, pursued patiently ingredient by ingredient. USING RAW MATERIALS WISELY The rawmaterials used in the manufacture of Hermès products undergo a rigorous selection process to identify those which meet stringent qua- lity and sustainability requirements. Each sector works to constantly improve the use of these rare and precious materials, consuming only what is necessary and optimising use of the material. As detailed below, the Group has launched a number of initiatives to reuse its materials on the basis of internal circular economy within the Leather Goods division or in property management, or externally (Textiles, Leather Goods, Perfume Division). Leather Goods The leathers used by Hermès are rare and of exceptional quality. Our desire to create durable products is guided by very strict parameters when choosing these materials: as Robert Dumas used to say, a luxury product is one that can be repaired. Their very careful usage is one of the main concerns for leather goods production units. To achieve this, the industry is encouraged to employ any and all methods: using off-cuts, the technique of related cuts and sharing good cutting practices are just a few examples that are used and encouraged within the industry. They help to increase the expertise of the cutters and to optimise the usage of 2.4.2

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2017 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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