Hermès // CSR Extract 2023

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RISK FACTORS AND MANAGEMENT RISK FACTORS

4.1 RISK FACTORS

In accordance with European regulation no. 2017/1129 of 14 June 2017 (Prospectus), supplemented by European Delegated Regulation no. 2019/980 of 14 March 2019, 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. These are the risks specific to the Hermès Group identified in the Group risk mapping, updated in 2023. Generally, the Group has set up a system enabling it to anticipate and control the risks identified. It is periodically updated to take into account regulatory, legislative, economic, societal, geopolitical and competitive 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. It includes emerging risks and their changes. 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.

● Changes in major global climate and biodiversity issues

● Compliance with

applicable laws and regulations in all areas

Not possible Possible Very possible Almost certain ● Fraud

● Commercial appeal

● Intellectual property and combating counterfeiting

● Management of supplies

Availability and proper use of natural resources

●

● Information systems and cyberattacks

● Major external crisis

● Management of talent and savoir-faire

● Image and reputation

● Changes in, complexity and interpretation of tax regulations

● Health & security

● Business disruption

● Respect for human rights, fundamental freedoms and ethics

● Exchange rates

Likelihood of occurrence

● Safety

● Bank counterparties

Limited

Significant

Critical

Major

Impact

Expected change in the medium to long term

● Strategy & operations

● Industry

● CSR

● Regulatory compliance

● Finance

2023 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL EXTRACT FROM 2023 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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