Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced aggregate water consumption by 38% between 2002 and 2010 despite nearly doubling revenue and increased in-house production.
• Maintained overall water consumption at 2009 levels in 2010 despite higher production across all sectors.
• Improved the quality of pollutant releases through investments in new systems and environmentally friendly effluent treatment.
• Confined aggregate energy consumption growth to 5% despite higher production volumes and a colder winter.
• Replaced fuel oil-fired furnaces with gas units at two facilities.
• Implemented various energy efficiency measures across production sites, including insulation, weatherproofing, and low-energy lighting.
• Reduced carbon footprint per shipment by a factor of ten by shipping untanned hides by sea instead of air.

Social Achievements

• Created 309 new jobs, mainly in sales and production.
• Implemented the IFH training program to enhance house culture and commitment.
• Stepped up the Mosaïque orientation program for new employees.
• Implemented management training programs to improve leadership skills and teamwork.
• Launched the Hermès Merchant School to improve customer service.
• Implemented a VAE program to recognize employee skills and improve employability.
• Distributed bonus shares to employees.
• Extended the Tandem program to foster cross-disciplinary relationships.
• Organized a trip to Hong Kong for Asian employees.
• Launched a storytelling competition for sales teams.
• Implemented programs to improve employee well-being, including warm-up sessions and stress prevention training.

Governance Achievements

• Adopted the latest version of the AFEP/MEDEF recommendations on corporate governance.
• Expanded the duties of the Compensation and Appointments Committee to include corporate governance issues.
• Adopted Rules of Procedure for the Audit Committee and the Compensation, Appointments and Governance Committee.
• Increased the percentage of women on the Supervisory Board to 20%.
• Set a target to increase the percentage of women on the Board to at least 40% by 2016.
• Implemented a Code of Conduct for the Supervisory Board.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions are not explicitly mentioned, but the report highlights the importance of maintaining control over sourcing and production.
• Counterfeiting of Hermès products, particularly online.
• Economic downturn impacting certain sectors (e.g., upholstery fabrics).

Mitigation Strategies

• Developed long-term relationships with suppliers and invested in selected companies to ensure supply chain stability.
• Actively prosecutes sites selling counterfeit goods online and in brick-and-mortar stores.
• Focused on developing its network of exclusive stores and inaugurated its first two locations in China, in Shanghai and Beijing.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• People (teams, savoir-faire)
• Planet (raw materials, environment)
• Communities (suppliers & partners, stakeholders & local integration)
• Ethics & Compliance

Environmental Achievements

• Offsetting 100% of carbon emissions from production, administrative and logistics sites, and stores (scopes 1 and 2) with Livelihoods
• 78% green electricity supply
• 95% of leathers are by-products of human food (recycling)
• 100% recycled gold for jewellery
• Over the last 10 years, decoupling of energy consumption (x1.34) and industrial water consumption (x1.9) from activity growth (x3.6)

Social Achievements

• Growth in workforce by around 1,100 people, totaling 15,417 employees at the end of 2019, including 9,522 in France
• €1,500 bonus to all employees in 2020 following good 2019 results
• New free share plan to all employees in July 2019
• 463,750 hours of training in 2019
• Hermès voted “2nd best Glassdoor employer in 2019”
• 676 jobs created in France in 2019, 3,699 in the last five years
• 54.2% of women in governing bodies
• Disability employment rate of 7.42% (legal threshold of 6%)

Governance Achievements

• Inclusion of CSR criteria in the variable compensation of the two Executive Chairmen
• Signature of the Fashion Pact in 2019
• Sustainalytics rating: 72/100 (outperformer)
• ISS-Oekom rating: C (prime threshold: C+)
• CDP rating: B (Carbon, Forest, Water. Sector average rating on Carbon: C)

Climate Goals & Targets

Environmental Challenges

• Risks related to changes in major global issues regarding climate and biodiversity
• Risks related to availability and judicious use of natural resources
• Respect for human rights and fundamental freedoms
• Risks related to strategy and operations (image and reputation, commercial appeal, information systems and cyber-attacks, major external crisis, management of talents and savoir-faire)
• Industrial risks (management of supplies, business disruption, health and safety of people and consumers, safety of property)
• Legal and regulatory risks (compliance with applicable laws and regulations, intellectual property and combating counterfeiting)
• Financial risks (risk of fraud, foreign exchange risk, bank counterparty risk, financial risks related to changes in tax regulations)

Mitigation Strategies

• Ethics charter, code of business conduct, anti-corruption code of conduct, crisis management manual, IT security measures, supply chain diversification, vigilance plan, risk management system, insurance policy

Supply Chain Management

Responsible Procurement

• Long-term partnerships with suppliers, ethical and trust-based relationships, supplier audits

Climate-Related Risks & Opportunities

Physical Risks

• More intense natural disasters, substantial rise in temperatures, loss of habitats

Transition Risks

• Change in regulatory requirements

Reporting Standards

Frameworks Used: UN Global Compact

Third-party Assurance: PricewaterhouseCoopers (reasonable assurance)

UN Sustainable Development Goals

• 3
• 4
• 5
• 8

Details provided in section 2.2.3

Awards & Recognition

• Glassdoor ranking (2nd best employer)
• Epoka-Harris Interactive ranking (3rd best employer in luxury industry)
• Hermès Australia named “Best Retail Employer of the Year”

Environmental Metrics

ESG Focus Areas

• Community Engagement
• Supply Chain Sustainability
• Tax Transparency
• Human Rights
• Environmental Protection
• Climate Change
• Savoir-faire Preservation

Environmental Achievements

• Replanted nearly 8,000 hectares of mangrove forests in Casamance, 4,500 hectares in the Ganges delta, and 5,000 hectares in Indonesia.
• Equipped 120,000 households with improved wood-burning cooking stoves, reducing wood consumption and deforestation.
• Planted over 130 million trees.

Social Achievements

• Donated €20 million to AP-HP hospitals in Seine-Saint-Denis for equipment, caregiver training, and innovation.
• Produced and donated nearly 50,000 liters of hydroalcoholic solution and 110,000 fabric masks to hospitals and local entities during the COVID-19 pandemic.
• Distributed 122,000 surgical masks and other protective equipment to associations in France and abroad.
• Carried out over 340 operations involving employees worldwide in environmental, cultural, or solidarity actions with local communities.
• Supported numerous social associations internationally through financial donations and in-kind contributions.
• Launched Manufacto workshops, involving craftspeople teaching students about craft métiers.

Governance Achievements

• Complied with all applicable regulations in the countries where Hermès operates.
• Implemented a tax strategy based on principles of compliance, transparency, and ethical conduct.
• Files a country-by-country report (CBCR) with the French tax administration.
• Actively engages with stakeholders, including through responses to questionnaires and dialogue with the press.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the COVID-19 pandemic.
• Ensuring compliance with evolving regulations on chemical substances.
• Managing environmental risks associated with raw material sourcing.

Mitigation Strategies

• Adapted and anticipated actions to maintain generous initiatives despite the pandemic.
• Implemented strict regulatory monitoring and product validation processes to ensure compliance with chemical regulations.
• Conducted regular audits of suppliers to verify compliance with social, environmental, and ethical obligations.
• Collaborated with WWF and the University of Cambridge to review water use and silk supply chains.

Supply Chain Management

Supplier Audits: Systematic audits of top 50 suppliers; 100% of subcontractors carrying out operations on leather audited; 96% of exotic skins from farms with comprehensive social and environmental audits.

Responsible Procurement

• Formal commitment from suppliers to comply with social, regulatory, and environmental obligations.
• Use of two undertaking handbooks signed by both parties.
• Certification targets for purchasing sectors (e.g., ICFA, SAOBC, RJC, SA 8000, ISO 14001, LWG, GOTS, FSC).

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, TCFD, CDP, SASB

Third-party Assurance: Independent audit with a conclusion of “reasonable” assurance

Environmental Metrics

ESG Focus Areas

• Climate Change
• Biodiversity
• Employee Well-being
• Diversity & Inclusion
• Savoir-faire Preservation
• Responsible Supply Chains
• Ethics & Human Rights

Environmental Achievements

• Reduced carbon emissions by 15.3% in absolute value across all scopes since 2018.
• Achieved 86.9% renewable electricity worldwide.
• Offset 100% of scopes 1 and 2 GHG emissions and 63.6% of transportation GHG emissions.
• Reduced industrial water consumption intensity by 35.4% over 10 years.
• Reduced industrial energy intensity by 48.2% over 10 years.

Social Achievements

• Granted an exceptional bonus of €3,000 to every employee worldwide.
• Launched the École Hermès des Savoir-Faire (Hermès school of know-how).
• Increased workforce by nearly 1,000 people.
• Maintained salaries worldwide during the pandemic without state aid.
• Implemented a global maternity policy with maintained compensation.

Governance Achievements

• Included CSR criteria in the variable compensation of the two Executive Chairmen.
• Established internal and external ethics whistleblowing systems.
• Achieved an “A” rating from MSCI for resilience to ESG risks.
• Included in the CAC40 ESG index and ranked in the “Advanced” category by Vigeo-Eiris.
• Ranked second best player in the Textiles and Clothing sector by Sustainalytics.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the pandemic.
• Climate change impacts on raw material availability and quality.
• Maintaining high ethical standards throughout the supply chain.
• Attracting and retaining talent in a competitive market.
• Balancing growth with environmental sustainability.

Mitigation Strategies

• Developed alternative sourcing strategies and strengthened supplier relationships.
• Updated 2030 carbon reduction targets validated by SBTi.
• Implemented supply chain briefs with CSR requirements.
• Invested in employee training and development programs.
• Implemented eco-design principles and circular economy initiatives.

Supply Chain Management

Supplier Audits: 113 audits carried out at tier 1 and tier 2 suppliers.

Responsible Procurement

• Supply chain briefs with CSR requirements.
• Long-term partnerships with suppliers.
• Implementation of certifications and labels.

Climate-Related Risks & Opportunities

Physical Risks

• Climate change impacts on raw material availability and quality.

Transition Risks

• Regulatory changes related to environmental protection.

Opportunities

• Development of sustainable products and processes.

Reporting Standards

Frameworks Used: GRI, SBTi, TCFD, UNGC

Certifications: ISO 16128 (Perfumes & Cosmetics), GOTS (Textiles), FSC (Packaging), RJC COC (Jewellery)

Third-party Assurance: PricewaterhouseCoopers

UN Sustainable Development Goals

• Goal 3 (Good Health and Well-being)
• Goal 4 (Quality Education)
• Goal 5 (Gender Equality)
• Goal 8 (Decent Work and Economic Growth)
• Goal 10 (Reduced Inequalities)
• Goal 11 (Sustainable Cities and Communities)
• Goal 12 (Responsible Consumption and Production)
• Goal 15 (Life on Land)
• Goal 16 (Peace, Justice and Strong Institutions)
• Goal 17 (Partnerships for the Goals)

Hermès initiatives contribute to these goals through various programs and policies.

Sustainable Products & Innovation

• Victoria bag in Fine Mycelium
• Refillable perfumes and cosmetics

Awards & Recognition

• MSCI “A” rating
• CAC40 ESG index inclusion
• Vigeo-Eiris “Advanced” ranking
• Sustainalytics ranking as second best in Textiles and Clothing
• CDP Climate “A-” ranking

Environmental Metrics

ESG Focus Areas

• Climate Change
• Biodiversity
• Responsible Sourcing
• Employee Well-being
• Diversity & Inclusion
• Ethical Sourcing
• Supply Chain Management
• Circular Economy

Environmental Achievements

• Reduced Scope 1 and 2 emissions by 28.4% in absolute value and Scope 3 emissions by 46.5% in intensity since 2018.
• 100% offsetting of Scope 1 & 2 emissions and most transport-related emissions.
• Certified a demanding responsible construction standard exceeding global standards.
• 89.1% renewable electricity supply.
• 202,000 repairs conducted.

Social Achievements

• Created 2,100 jobs in 2022, including 1,263 in France.
• Launched École des artisans de la vente and continued rollout of École Hermès des savoir-faire.
• Paid an exceptional bonus of €4,000 to all employees in 2023 for 2022 performance.
• 79% employee participation in well-being surveys.
• Gender equality index of 95/100 in France.

Governance Achievements

• Improved MSCI rating to "AA" (from A in 2021).
• Ranked #1 in Textiles and Clothing and Luxury Goods sectors by Sustainalytics.
• Joined CDP's A-list.
• 10% of Executive Chairmen's variable compensation linked to CSR criteria.

Climate Goals & Targets

Environmental Challenges

• Climate change impacts on operations and supply chains.
• Attracting and retaining talent in a competitive market.
• Ensuring responsible sourcing across all supply chains.

Mitigation Strategies

• Implemented climate risk analyses on French sites.
• Developed alternative sourcing strategies.
• Launched various employee well-being and development programs.
• Strengthened supplier audits and CSR briefs.

Supply Chain Management

Supplier Audits: 100% of top 50 suppliers audited over 3 years; 153 audits carried out at tier-one and tier-two suppliers in 2022.

Responsible Procurement

• CSR supply chain briefs, animal welfare policy, traceability requirements, certifications (LWG, ICFA, SAOBC).

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes

Opportunities

• Development of eco-designed products

Reporting Standards

Frameworks Used: GRI, SBTi, UNGC

Certifications: RJC COP, LWG, ICFA, SAOBC, GOTS

Third-party Assurance: PricewaterhouseCoopers

UN Sustainable Development Goals

• Multiple SDGs (specific goals not explicitly listed)

Hermès' CSR strategy contributes to most of the 17 UN SDGs.

Sustainable Products & Innovation

• Victoria bag (Fine Mycelium), Vulcanium™ (recycled leather).

Awards & Recognition

• MSCI AA rating, Sustainalytics #1 ranking, CDP A-list, Grand Prix de la Transparence.

Environmental Metrics

ESG Focus Areas

• Climate Change
• Biodiversity
• Responsible Supply Chains
• Preservation of Natural Resources
• Social Model
• Education and Knowledge Transmission
• Ethics
• Human Rights

Environmental Achievements

• Inaugurated two leather goods workshops in Louviers and Tournes-Cliron, the first two industrial buildings in France with the E4C2 label (positive energy buildings with high operational efficiency for carbon footprint reduction).
• Reduced scopes 1 and 2 emissions by 49.6% in absolute value compared to 2018, and scope 3 emissions by 52.2% in intensity.
• More than 80% of the Leather Goods division’s suppliers were LWG certified.
• Initiated the Science Based Targets for Nature (SBTN) process to set scientific targets for nature, particularly in biodiversity, freshwater, forests, and soils.
• Implemented a demanding responsible real estate standard integrating sustainability issues across the life cycle of real estate projects.

Social Achievements

• Recruited around 2,400 new employees in 2023.
• École Hermès des savoir-faire awarded a certificate of professional qualification (CQP) in cutting and stitching in addition to the CAP vocational qualification in leatherwork.
• Awarded the Grand Prix Emploi France by the Humpact rating agency for the third time.
• Paid a bonus of €4,000 to all its employees worldwide in respect of 2023.
• Increased the employment rate of people with disabilities in France to 6.85%.

Governance Achievements

• Improved non-financial ratings reflecting the strength of its CSR commitments.
• Received the Grand Prix CAC Large 60 of the Transparency Awards.
• Strengthened commitments in education and knowledge transmission through the École Hermès des savoir-faire.

Climate Goals & Targets

Environmental Challenges

• Global warming and its impact on biodiversity.
• Industrialisation of raw materials.
• Securing supply chains.
• Maintaining high standards in a changing economic and geopolitical context.

Mitigation Strategies

• Climate strategy aligned with a 1.5°C trajectory validated by SBTi.
• Concrete initiatives in terms of responsible supply chains.
• Policies for preserving natural resources.
• Investing in increasing capacity and accelerating vertical integration projects.
• Commitment to the SBTN initiative.

Supply Chain Management

Supplier Audits: 88% of top 50 suppliers audited; 220 audits carried out at Tier 1 and Tier 2 suppliers in 2023.

Responsible Procurement

• CSR supply chain briefs
• Supplier code of conduct
• Forest policy
• Animal welfare policy
• Traceability initiatives

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, SBTi, SBTN, UNGC, TCFD (implicitly)

Certifications: LWG, RJC CoP, E4C2, Qualiopi

Third-party Assurance: PricewaterhouseCoopers Audit

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 15 (Life on Land)

Hermès' actions contribute to these goals through its integrated craftsmanship model, responsible supply chains, climate strategy, biodiversity initiatives, and commitment to social and environmental responsibility.

Sustainable Products & Innovation

• Products incorporating circular and eco-responsible approaches

Awards & Recognition

• Grand Prix Emploi France (3rd time)
• Grand Prix CAC Large 60 Transparency Awards
• CDP A List (Climate and Water)
• Universum ranking of most attractive companies for students (2nd place)