HERMÈS - 2020 Universal registration document

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CORPORATE SOCIAL RESPONSIBILITY PLANET: RAW MATERIALS

RAW MATERIALS 2.4.1 Hermès’ approach to sustainable development is based on exceptional raw materials, from renewable natural sources, obtained with a determination to limit their footprint. In addition to actions to control consumption of materials, each métier and production unit is committed to using materials wisely at each stage of their life, reducing waste and promoting recycling. The Group’s policy is to use only the best quality materials, to optimise their use by adapting production methods, and to work on the recycling or reuse of any production waste. This policy consists of aligning purchases as closely as possible with needs, thereby reducing waste. The artisanal approach is an advantage in this respect, ensuring close proximity between buyers and craftspeople. In order to control the use of all materials, for several years reuse initiatives have been launched in a circular economy approach, both internally and externally, and Hermès regularly examines different ways to reduce the waste generated by its activities. Each métier works to constantly improve the use of these rare and precious materials, consuming only what is necessary. POLICY

A number of craftspeople are trained and then dedicated to this specific activity, performed exclusively by Group employees. They are grouped in workshops in France and abroad. In total, more than 80 craftspeople in 12 countries contribute in this way to extending the life of products. The very sparing use of leather is one of the main concerns for production units. From the moment a cutter craftsman joins the House, he or she is trained to cut exactly the right amount of leather. After taking his or her first steps, cutters are supported every day by their foremen to nurture this culture of optimisation, in particular by matching different models cut out of the same hide. Coordination among production units is managed on a daily basis to optimise the use of offcuts and hides. A Best Practices Guide is reviewed annually at each Leather Goods manufacturing site and optimisation is monitored monthly at all sites. This guide is gradually supplemented with new best practices, and tested by cutter craftspeople with positive results. Each site is regularly assessed by the central team (Hermès Maroquinerie-Sellerie production department) and 95% have been assessed during the last three years. In 2020, the health crisis delayed this assessment, which will be completed in early 2021. In addition, the sites’ hide consumption target, managed on a monthly basis, made it possible to achieve 99% optimisation, a steady improvement for the past seven years. Lastly, a new management tool was developed and rolled out in 2020: it enables the weekly consumption of each workshop to be measured, which improves its accuracy and thus promotes reduction. Tanneries The leathers manufactured by the division are rare and precious. Management of crocodile breeding on the Alligator Mississippiensis and Crocodylus Porosus farms, close and constant relations with suppliers of raw hides (crocodile, calfskin and goatskin), and the control of all processing operations (river, tanning, dyeing and finishing) enable the division to control as accurately as possible its purchases and use of materials in manufacturing processes. Several projects are being rolled out in farms and tanneries in order to improve quality levels and thus optimise the use of the material. As an example, one of the division’s tanneries is equipped with a system for taking images of the hides at the start of the process (optical reader), which makes it possible to identify defects, facilitate sorting and maximise the use of hides, reducing waste. The division also takes part, in the context of the recovery of production waste, in working groups on the reuse, recycling and recovery of its waste within Hermès, as well as in the work carried out by the Centre technique du cuir (CTC – Leather Technical Centre) on this subject. For example, some of the hides not used in Leather Goods are offered to other métiers through an internal digital platform, allowing them to be used for various projects or objects. Furthermore, discussions are underway on the recovery of tanned waste by pyro-gasification, a process that generates a synthesis bio-gas that can then be used as fuel.

MEASURES IMPLEMENTED AND RESULTS

Hermès is constantly seeking the best quality for all the raw materials used to manufacture its products. This quality guarantees the durability of Hermès objects: “A luxury product is one that can be repaired”, said Robert Dumas. The selection of raw materials is therefore the subject of a rigorous selection process.

OPTIMISING THE USE OF RAW MATERIALS OVER THE ENTIRE LIFE CYCLE BY INTEGRATING THE PRINCIPLES OF THE CIRCULAR ECONOMY

2.4.1.1

As detailed below, the Group has launched a number of actions to reuse its materials, following a circular economy logic, for the most representative métiers in terms of materials consumption. A Circularity Committee was also set up in 2020 : it brings together all métiers and makes it possible to simplify the search for channels, other than those already existing for supplying petit h, in order to make materials not used of the original métiers available.

2.4.1.1.1 Materials Leather

The leathers used by Hermès are rare and of exceptional quality. Purchases by tanneries are concentrated exclusively on the superior categories available. Hermès’ Leather Goods are made to last and be passed on, thanks in particular to the cleaning and repair service offered to customers all over the world.

110 2020 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL