Hermès // 2021 Universal Registration Document

4

RISK FACTORS AND MANAGEMENT RISK FACTORS

RISK FACTORS

4.1

developments. A detailed description of the management of these risks is presented in this chapter. Risk factors are presented in five main categories according to their nature, the most material risks being presented first. The mapping below classifies these risk factors according to their potential impact and probability of occurrence and therefore reflects the Group’s exposure, after taking into account the control measures implemented. The impact of the risks identified is assessed using a multi-criteria grid defined at Group level and shared with the subsidiaries. The analysis criteria include, as an inseparable whole, financial, reputational and legal criteria, as well as criteria relating to social, societal and environmental responsibility. This methodology makes it possible to address a concept of double materiality by taking into account the impacts on the Group itself and on its stakeholders. The Audit and Risk Committee was involved in drawing up this matrix.

In accordance with European regulation (EU) no. 2017/1129 of 14 June 2017 (Prospectus) and the ESMA guidelines, the risk factors presented in this chapter are, as at the date of this universal registration document, those that the Hermès Group believes could have a material adverse effect on its activity, results, financial position or prospects. In the context of the current health crisis, certain risks have been exacerbated such as the risks of personal safety, supply disruption, non-continuity of activities, cyberattacks, fraud, etc. The Group quickly adapted by setting up a crisis management organisation and developing protocols to protect the health and safety of employees, as well as to secure sites. Reinforced monitoring has been put in place with the Group’s suppliers and service providers in order to ensure the continuity of operations at industrial, commercial and logistical levels. In general, the Group has put in place a system to anticipate and control the risks identified. It is periodically updated to take into account regulatory, legislative, economic, societal, geopolitical and competitive

O Changes in major global climate and biodiversity issues

O Compliance with

applicable laws and regulations in all areas

O Safety High Likelihood of occurrence

O Major external crisis

O Commercial appeal

O Intellectual property and combating counterfeiting

O Image and reputation

O Management of supplies

O Availability and proper use of natural resources

O Information systems and cyberattacks

O Respect for human rights, fundamental freedoms and ethics

O Business disruption O Fraud O Health & safety

O Changes in, complexity and interpretation of tax regulations

O Exchange rates O Management of talent and savoir-faire

O Bank counterparties

Impact

High

Expected change in the medium to long term

O Strategy & operations

O Industry

O CSR

O Regulatory compliance

O Finance

328 2021 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL