Hermès // 2022 UNIVERSAL REGISTRATION DOCUMENT

CORPORATE SOCIAL RESPONSIBILITY AND NON ટ FINANCIAL PERFORMANCE COMMUNITIES: SUPPLIERS & PARTNERS

2.6 COMMUNITIES: SUPPLIERS & PARTNERS

Hermès’ sustainable development is linked to the ability of its partners and suppliers to develop sustainably with regard to social, environmental and ethics issues, in particular human rights, fundamental freedoms, employment conditions, respect for nature and its biodiversity. More broadly, Hermès contributes to the deployment of responsible sustainable development practices through its influence, and by exercising a duty of care towards its partners as well as by promoting socially supported organisations and local economic activity, particularly in disadvantaged areas.

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POLICY In line with its strategy of preserving unique savoir‑faire and securing supplies, most of Hermès’ production is integrated: 55% of our objects are made in Hermès exclusive and in‑house workshops. Our ability to grow is however also linked to the retention and development of our suppliers and subcontractors, whose exceptional savoir‑faire and future success will contribute to that of the Hermès Group and whose social and environmental practices must be irreproachable. These subcontractors and suppliers of the House are, for the most part, historical partners. As such, for direct purchasing (production purchases), the average length of trading relationships with the Hermès Group’s 50 largest suppliers in 2022 was 19 years. They operate mainly in the Leather Goods division (tanneries and manufacturers) but also in Textiles (HTH division) and other métiers (Jewellery and Shoes, notably). This stability is also true for smaller suppliers, some of which have been working with the House for more than 60 years. The Hermès Group has also been working with socially supported organisations in France for many years for its direct and indirect purchases, and this practice is growing steadily every year. The approach is now being extended to other players located, for example, in economically disadvantaged areas, whether urban or rural.

GOVERNANCE In terms of organisation, indirect purchases are supervised by a Group department, which pools certain items (such as packaging) and coordinates a network of dedicated buyers in the métiers , subsidiaries and central services. It also coordinates Group action plans on major topics, such as the elimination of single‑use plastics (§2.4.1.4). Direct purchasing ( i.e. related to production) is also supervised by a dedicated Group department which coordinates a network of buyers within the métiers and coordinates the process of analysing supply chains (§2.4.2), managing supplier risks and the supplier audit programme. Moreover, it also defines the Group’s purchasing policy as well as the CSR objectives for suppliers and partners (human rights and labour‑related rights, biodiversity, energy and carbon, water, plastics). Particular attention is paid to human rights issues, which are, for instance, the main topic of a dedicated section in the supplier handbook signed by suppliers. Hermès pursues a corporate strategy in which ethics and proper business conduct are the pillars and guardians of responsible and sustainable performance. An Ethics Committee has been set up to receive and process alerts, as well as to provide advice and recommendations on the Group’s ethics culture (§2.8).

In 2022, the Group made progress on the major procurement issues, with the aim of making a long‑term difference through steady improvements with a significant impact. Among these, the selected elements below are particularly illustrative of the year for this section: CSR brief and supply chain brief communicated to suppliers, in total 62 materials covered; s roll‑out of a supplier CSR maturity self‑assessment questionnaire (direct purchases); s whistleblowing line for suppliers made easier to access; s 43% of our indirect purchasing suppliers in France (€242 million) contribute to the development of socially supported organisations and to the development of priority regions (rural areas, disadvantaged neighbourhoods, the long‑term unemployed). s

2022 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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