Hermès // CSR Extract 2023

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RISK FACTORS AND MANAGEMENT RISK FACTORS

4.1.4.3 AVAILABILITY AND PROPER USE OF NATURAL RESOURCES ●

DESCRIPTION OF THE RISK s

POTENTIAL IMPACTS ON THE GROUP s

The Group seeks to secure quality supplies of natural and renewable materials, obtained while fully respecting biodiversity. The risk relates to access and availability of materials, as well as the conditions under which they are obtained: social and environmental impact and their societal acceptability (animal welfare).

Decrease in the quality and volumes of exceptional natural raw materials, increase in costs. Loss of some customers who choose not to purchase leather.

IMPACT PROBABILITY

RISK MANAGEMENT s

The Group works in each of its métiers , under the coordination and control of the direct purchasing department, to gain a better understanding of the supply chains and develop operational practices in order to jointly build the resilience of these channels. This entire system is described in chapter 2 “Corporate social responsibility and non‑financial performance”, § 2.4.2. The approach undertaken aims to: Control the entire value chain with operational traceability and long‑term partnerships with suppliers, partners and NGOs; 1) Contribute to the development of the most demanding standards for responsible and sustainable management of supply chains: 2) environmental footprint: biodiversity, water, energy, carbon, • social: working conditions, ethics, corruption, • societal: link with communities. • Audits supplement this system and are carried out regularly with specialised service providers, or for certain sectors with the WWF, in order to best identify risks; Support regenerative agriculture that is more respectful of nature; 3) Set the highest standards in terms of animal welfare and ethics in the relationship with living organisms: a dedicated committee has been in place since 2019 and a policy was formalised in 2021. An e‑learning module on animal welfare was made available to all employees in March 2022 to raise their awareness of the issues and share the Group’s strategy and objectives; 4) Creating circularity: the industrial transition & quality department, created in 2022, provides cross‑functional support for the Women’s and Men’s Ready‑to‑wear, Shoes, Fashion Accessories, Silk and Textile, Home and Jewellery métiers on eco‑design and the circular economy. This approach is also underway in the Leather Goods, Watches and Perfume and Beauty métiers. 5) With a view to continuous improvement, these processes are reviewed on a regular basis and action plans are implemented. The content of these action plans is detailed in chapter 2 “Corporate social responsibility and non‑financial performance”.

Strategy and operations

Industry

CSR

Regulatory compliance

Finance

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

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