HERMÈS - 2018 Registration document

2

Corporate social responsibility

planet: raw materials

CHALLENGE: MANAGING MATERIALS SPARINGLY

units is managed on a daily basis to optimise the use of off-cuts. A best practices guideline is assessed every year at each leather goods site. This guideline is gradually supplementedwith newbest practices tried by artisan cutters with positive results. In addition, the diversity and wealth of our collections represent an unrivalled opportunity for optimal use of our exceptional leathers. Between 2015 and 2018, these optimisation actions made it possible to make much better use of the leather hides that the tanners put at our disposal. The consumption ratio improved by almost 11% in three years. In addition, some métiers (leather goods, fashion accessories), like petit h (section 1.4.7.7), have designed products that can be made with the aim of improving the utilisation rate of available hides, and reduce waste. In 2018, several thousand products were made in this way. All leather offcuts from production units are resold to special processors and recycled, to then become new raw material for non-leather goods articles. Thanks to better sorting quality and increased work upstream to identify the most appropriate sectors in a more relevant way: s s the fraction of recycled waste rose from 22% to 28% between 2017 and 2018; s s the overall tonnage of hazardous industrial waste decreased slightly (3%) over the same period, despite growth in activity. Each type of waste is directed to an appropriate treatment or sorting chain. Waste generated in the Leather Goods division to 832 tonnes in 2018, an increase of 12% compared with 2017 (see further information on page 104). Silk Once the raw materials have been provided (essentially silk and cash- mere), the division takes over all processing tasks: weaving, printing, finishing, fabrication. This unique 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. With the aimof reducing waste, the Textile divi- sion has established a production organisation geared towards dealing with “exactly enough” as opposed to “surplus” supplies. As a result, from the autumn/winter 2018 collection the rate of surplus volume produc- tion has been cut by 40%. A detailed analysis of products initially rejected has also resulted in the reuse of silk products for limited series marketed during specific events, adopting a practice implemented by petit h. The division is working with a number of different service providers to recycle a portion of the silk waste and production offcuts. Twenty-seven percent of our waste is sorted and recycled (excluding exceptional waste collection). A multidisciplinary working group has launched R&D work to make silk and cashmere recycling methodologies operational, together with partners in France and abroad. Several tonnes of materials were used in tests for the recreation of new materials.

2.4.2

Using materials wisely throughout their life cycle, reducing waste and promoting recycling.

2.4.2.1 Policy In addition to initiatives aimed at limiting the consumption of materials, the House’s artisanal model has always included the optimisation of use of materials and the fight against waste in its activities. The Group’s policy evolves around using raw materials wisely. In order to limit its use of all materials, the Group has launched several initiatives to reuse its materials as part of an internal and external circular economy strategy. Hermès regularly examines different ways to reduce the waste generated by its activities. Measures implemented and results The rawmaterials used in the manufacture of Hermès products undergo a rigorous selection process to identify those which meet the House’s stringent quality and sustainability requirements. This policy helps to ensure that the quantities purchased are appropriate and thereby to reduce waste. Each sector works to constantly improve the use of these rare and precious materials, consuming only what is necessary and opti- mising use of the material. As detailed below, the Group has also launched a number of initiatives to reuse its materials on the basis of an internal circular economy for the most representative métiers in terms of material consumption, namely within the Leather Goods division, in the construction department, or externally (Silk, Leather Goods, Perfume Divisions). Leather Goods Improving the quality of raw hides is one of the priority drivers helping to reduce the requirements for materials. For our supply chain of calfskin, like the one of reptile skin products, the division is spearheading a num- ber of quality improvement projects. Some of these initiatives happen directly on the farms, and others are partnerships with farmers and cooperatives, professional organisations and independent laboratories. The leathers used by Hermès are rare and of exceptional quality. Our desire to create sustainable products is guided by very strict parameters when choosing these materials: as Mr Robert Dumas used to say, “a luxury product is one that can be repaired”. Hermès leather goods are made to last and be passed on. The cleaning and repair service offering is being developed. As such, a second cleaning and repair workshop was openedat our PierreBénite site tomeet the growingdemand for solutions to prolong the life of leather goods. The very sparing use of leather is one of the main concerns for produc- tion units. As soon as artisan cutters join the House, they are trained to cut exactly the right amount of leather. After taking their first steps, they are supported every day by their foremen to nurture this culture of the material and its optimisation, in particular by matching different models cut from the same skin. Coordination between the production 2.4.2.2

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2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL