24, rue du faubourg Saint-Honore
Paris, 75008 France
- #32 World’s Most Valuable Brands 2020
- #723 Global 2000 2020
- #29 World’s Most Innovative COmpanies 2018
- #173 Top Multinational Performers 2017
CHIEF SUSTAINABILITY OFFICER
- CDP climate change B score
- CDP water B score
Report created by Cec Ehrhard
Hermès is a luxury french brand that was established in 1837 by Thierry Hermès.
Thierry originally made high quality harnesses and bridles for carriages, and won several awards for his works. In 1880, his two sons helped retail the brand and grew the market to not only leather goods, but accessories and clothing. In 1929, Hermès opened up two more shops in Paris and ventured into the United States. Soon after the “Kelly bag” was introduced and it is still one of the brands most well known pieces.
Hermès added scarves, neckties, and watches to its repertoire along with a number of perfumes and colognes. Hermès is one of the most valuable brands to date and continues to be a staple in luxury fashion.
Company Sustainability Activity
Hermès’ action for sustainable development is founded on the values passed down through the generations by the artisans who have shaped their company since 1837. The roots of their longevity lie in a sense of responsibility, a quest for authenticity, and respect for time and natural resources.
The company wishes to leave a positive imprint on the world. Men and women, the communities that they belong to, and materials derived from the natural environment have been Hermès constant companions from their very origins. Today, they are more than ever at the heart of their preoccupations and their commitment to progress.
- Hermès sought the best solution that favored green electricity for its own consumption in France, supporting the Paris agreement of December 2015 without delay – EDF‘s 100% renewable energy option
UN Sustainable Development Goals
UN SDGs Compliance
- The Hermès retail subsidiaries, as part of a Hermès Group policy, take part in many local actions in favor of disadvantaged communities.
- Through its contribution to the Livelihoods Fund, Hermès also helps to reduce poverty and hunger in countries where it does not operate. The various projects supported by the Livelihood Fund improve the living conditions of communities in Africa, Asia and South America, with a positive impact on almost one million people.
- The House’s employees have access to health coverage and social protection based on each country’s regulations and practices.
- The Hermès Group also offers health insurance and welfare benefits, not only in France but also in the other countries where it operates
- With the signature in France of a Group agreement for 2018-2020, Hermès set itself the ambitious goal of increasing its use of socially supported organizations by 20% per year. This target was met in 2019.
- As part of social dialogue in France, an agreement was signed on gender equality in 2019. In addition, during salary reviews, compliance with the principle of equality is systematically executed.
- Specific training in diversity management has been provided since 2017.
- The Fondation d’entreprise Hermès (Hermès Foundation), contributes through its programmes to the training of artisans.
- Women represent an important part within the Hemrès Group (68% of employees). At Group level, women managers represent 61% of employees.
- The main métiers that are concerned (textile, tanneries, crystal) are located in areas with low water stress. Improving discharge levels is governed by very stringent European or US regulations.
- Within the tanneries and the silk division’s sites, where water is a precious resource, the House has implemented water-saving measures resulting in a reduction in consumption.
- Since 2019, 78% of the Hermès Group’s worldwide electricity supply comes from renewable sources.
- The Hermès Group has installed renewable energy devices (wood boilers at production sites, photovoltaic panels at sites and for the logistics centre in New Jersey in the United States.
- There has been a reduction in energy consumption in stores following the replacement of lighting with LED lighting.
- At the end of 2018, 80% of stores were fitted with LEDs.
- The various group entities work to reduce energy consumption and carbon emissions: the craftsmanship mode of production consumes little energy and the location of industrial sites in France enables upstream reduction of logistical flows.
- Hermès has been contributing to the Livelihoods Fund since 2012 which offsets part of its carbon emissions.
- By joining 64 other national economic stakeholders in the French act4nature project on 10 July 2018, Hermès has confirmed its commitment to including biodiversity in its global development strategy.
Hermès has claimed to support sustainable issues on their website, such as protecting endangered species and the carbon fund, but there’s no data or facts showing what Hermès has done to help these efforts. There’s minimal substance to the stories that are shown on the website and no specific sustainability report.
According to the Annual Financial Report, there’s several areas in which the company’s carbon footprint has increased, including waste (“waste volume increased by 7% in 2019”) and precious leathers. The company also makes claims with no evidence or data behind it: “Hermès is achieving significant results, having gradually uncoupled growth from consumption, and through the implementation of improved technical systems now available.”
Relevant information can be found in the SDG sections in the 2019 sustainability report, yet in those sections there’s little substance regarding facts or figures to what Hermès has done to contribute to sustainability.
Overall, the company’s attempts toward sustainability are fragmented. Hermès has been given a “C” rating.
Analyst Outlook: Negative
Hermès will be receiving a negative outlook with a C rating. About 50% of revenue comes from leather products; exotic animals are being used for this production which is of high environmental cost. Minimal to no certifications or awards.
- Limited facts or data to support company activity (SDGs are all information based with no data points to back up any progress the company has made)
- Not transparent with information on website
- Although claiming to be a sustainable company, its sales rely significantly on unsustainable business practices with little evidence of how it will attempt to reconcile their environmental impact