HERMÈS - 2018 Registration document

Corporate social responsibility

planet: environment

PLANET: ENVIRONMENT

2.5

Introduction The respect for nature, the source of its exceptional materials and the living environment of its sites, is one of Hermès’s strong and abiding values. Pragmatic but ambitious solutions to preserve the environment in the long-term are systematically sought, trying to go further than required by regulations wherever possible. Our priority is to control our impacts across our entire value chain, from upstream agricultural pro- duction to distribution, and from purchasing to internal operations. This commitment is amindset that requires the involvement of everyone, from everyday eco-actions to a robust Environmental, Health andSafety (EHS) culture on all sites. Since the Group launched its environmental programme in 2002, and despite the four-fold increase in its industrial output: s s water consumption by industrial sites increased by only (26%), reflec- ting the efficiency of the programme and of water-saving actions, in particular within the Tanneries and the Silk division, where water is a precious resource; s s energy consumption by industrial sites only doubled, testifying to the improved control of consumption, since Les Tanneries and La Cristallerie use half of the energy consumed by the industrial sites. Work has also been undertaken on low-carbon logistics solutions. The French logistics centres , for example, use hybrid or electric vehicles for deliveries to the Paris sites. Since 2013, the Group has acquired tools to carry out an annual update of the overall assessment of greenhouse gas emissions from its produc- tion and distribution sites. It has also gradually implemented practical initiatives to reduce its water and energy consumption, along with its extended carbon footprint. In June 2012, Hermès joined the Livelihoods fund, a group of companies financingcarbonoffsetprojectswithahighsocialandenvironmentalvalue enabling the Group to offset 85% of scope 1 and 2 carbon emissions. Description of risks and challenges Workingwithall métiers andallplayers involved inourproductionentities, the House’s industrial affairs and construction departments have imple- mented programmes to address the House’s environmental challenges. The industrial affairs department, together with the métiers and all players in the production entities, is pursuing an environmental policy formally approved by the Executive Committee, whose goals remain unchanged since 2002: s s to comply with workplace Environmental, Health and Safety (EHS) regulations and to prepare for changes in these regulations whene- ver possible. The industrial department coordinates a network of Environmental, Health and Safety (EHS) operatives at the manufac- turing sites; s s to respect natural resources, particularly water, and control energy consumption; s s to enhance production processes by choosing the cleanest, most energy-efficient technologies and the most environmentally-friendly materials available;

s s to minimise waste production and to recover waste whenever possible; s s to limit the “carbon” impact of activities. The industrial department, with the support of the sales and construc- tion departments, manages the House’s energy programmes (construc- tion, transport). In addition, the House’s environmental policy includes the following elements: s s a commitment in principle for the respect and protection of nature, the source of our raw materials and the conditions at our sites. The Group’s commitment to the “Act4Nature” initiative in 2018 has added a focus on biodiversity to this commitment. Our commitment alongside WWF (see page 35) reinforces this policy; s s the implementation of a métier -based environmental management system, coordinated by the industrial affairs department that ope- rates in a network (see EHS network below); s s a desire to use natural resources sparingly, particularly with regard to energy, water, and, more broadly, all natural materials needed to manufacture our products; s s the goal of reducing our footprint, especially in terms of discharges, emissions and waste management, which includes seeking to opti- mise the resources that we use. Since 2012, our policy has incorpo- rated the concept of voluntary carbon offsetting (see “Livelihoods” below); s s internal monitoring of the results of these policies, through opera- tional dashboards and reporting that is controlled by the Industrial Affairs Department and serves as a basis for external audits; s s a practice of sharing and discussion with external stakeholders. Since production is mainly in France, a large part of these discus- sions is carried out in the legal framework of discussions with Dreal, but there are also frequent discussions with themunicipalities where our sites are located. In addition, our natural material supply policy (for exotic leathers, for example) includes a discussion with the rele- vant professional and regulatory associations (such as the crocodile specialists group, CSG or IUCN). Methodological note Thepublished figuresdonot includedata fromPrecious Leathersdivision entities in Australia and theUnited States (HCP). Moreover, consumption figures for certain leased sites, for which no data are available, are not taken into account as they are not significant. Since 2012, Hermès has monitored environmental data from its industrial sites using reporting software accessible as a web resource to collect data about consump- tion at each site. The software also provides access to documentation explaining how the performance indicators are organised and defined. A consistency check is carried out automatically when the figures are entered, and again when the global consolidation is performed by the Industrial Affairs Department. From this year, all industrial environ- mental indicators have been reported over a period from November to October. For methodological reasons, some of the business data used in the Scope 3 calculation cover a calendar year.

2

2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

91