Hermès // 2022 UNIVERSAL REGISTRATION DOCUMENT

RISK FACTORS AND MANAGEMENT RISK FACTORS

CHANGES IN MAJOR GLOBAL CLIMATE AND BIODIVERSITY ISSUES ӳ

4.1.4.1

DESCRIPTION OF THE RISK ◆

POTENTIAL IMPACTS ON THE GROUP ◆

Rapid changes could impact supply chains, manufacturing operations, logistics or distribution, as well as customer behaviour.

Climate change causes disruption (heat, rising water levels, extreme events) and impacts on biodiversity and ecosystems. It also involves operational, regulatory and political transition issues (taxation, restriction of operations). The loss of biodiversity and the degradation of ecosystems threaten the sustainability of the natural resources from which the House’s materials are sourced, weaken the planet and disrupt the living conditions of populations.

IMPACT PROBABILITÉ

RISK MANAGEMENT ◆

Hermès’ French craftsmanship model, through its presence across France, reduces its vulnerability to extreme events already experienced in certain parts of the world. In accordance with the recommendations of the TCFD (Taskforce on Climate‑related Financial Disclosures), the Group’s work to reduce risk is organised around four axes: 1. governance at the highest level (Executive Committee); 2. a strategy aligned with the Paris Agreements and validated by SBTi (Science Based Targets initiative) as being in line with a trajectory limiting global warming to 1.5°C: defossilisation: 100% renewable energy in direct operations by 2030, • a reduction in greenhouse gas emissions of 50.4% in absolute value for scopes 1 and 2, and by 58.1% in relative value for scope 3 by 2030; • 4. monitoring of results and alignment with objectives, with a carbon footprint drawn up for the three scopes each year and the gradual implementation of indicators within the métiers and subsidiaries. As a reminder, 10% of the Executive Chairmen’s variable compensation is subject to CSR criteria, including industrial energy consumption (scopes 1 and 2 GHG emission performance). In addition, the Group is committed to an active policy of offsetting its greenhouse gas emissions (scopes 1 and 2). A biodiversity strategy, formalised in 2018, was launched and updated in 2020 as part of the commitment to Act4Nature international. It has been reviewed by external organisations and is divided into four areas: taking the subject into account in the updated risk mapping within the Group, • the implementation of a prospective analysis of climate risks for our main activities by 2030 (leather goods, textiles), • specific risk analysis for certain sectors (cashmere, silk, etc.); • training all employees in biodiversity by 2025, a dedicated e‑learning programme was made available to them in March 2022, • collaboration with recognised external stakeholders (WWF France, ICFA, SAOBC), • measuring the Group’s biodiversity footprint (via the Global Biodiversity Score tool, see chapter 2 “Corporate social responsibility and non‑financial performance”) and its supply chains (leather, silk, cashmere, wood, cotton), finalised in 2021, which highlights the priority action levers to reduce the Group’s impact on biodiversity, • act through action plans commensurate with the issues and pursue positive actions beyond the Group’s activities (Livelihoods, Fondation d’entreprise). • 3. operational risk management by:

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The content of these action plans is detailed in chapter 2.

● Strategy and operations ● Industry

● CSR

● Regulatory compliance

● Finance

2022 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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