“[in 2021], Hermès is pleased to share the validation of its new greenhouse gas (GHG) emission reduction targets by the SBTi initiative. These targets have been revised upwards to align with a pathway that limits global warming to 1.5°C.”
Axel Dumas, Executive Chairman of Hermès
The group’s climate policy has several stages: measuring the impact of its activities on scope 1, 2 and 3 emissions; prioritising action to reduce emissions in the different categories where the group can act; and putting in place actions to offset its activities.
As it rolls out this policy, the Hermès group is currently one of the lowest carbon emitters of the CAC 40, thanks to its craftsmanship model and France-based production.
The issue of climate change is central to the company’s governance and high-level strategic dialogue. The subject is overseen by the Sustainable Development Committee, which includes three members of the Executive Committee, the Deputy Managing Directors in charge of Industrial Affairs and several senior executives for métiers.
On an operational level, it is managed by the métiers, as well as transversally by the real estate development and commercial departments. Each one has objectives and activities and reports on them every year.
Hermès has committed to setting science-based greenhouse gas emission reduction targets through the Science-Based Targets initiative (SBTi) and putting in place actions to achieve net zero emissions by 2050:
- -50.4% reduction in absolute value for scopes 1 and 2 emissions over the period 2018 to 2030;
- -58.1% reduction in relative value for scope 3 emissions over the period 2018 to 2030;
- 100% renewable electricity in direct operations by 2025;
- 100% renewable energy in direct operations by 2030;
- -50% reduction of the carbon footprint/m2 of new or renovated real estate by 2030;
- Defossilisation of industrial sites: Hermès has decided to stop using fossil fuels as a source of energy for all new industrial investments, unless it is technically impossible;
- Update of the physical risk analysis for 100% of the scope of our physical sites by 2025 Finalisation of the IRIS transition risk analysis by 2025;
- Achieve offsetting of 50% of our residual emissions between 2030 and 2040, and 100% by 2050.
In addition, Herm ès has demonstrated its commitment and increased transparency by presenting its actions in accordance with the framework recommended by the Task Force on Climate-related Financial Disclosures (TCFD) and by responding to the CDP climate questionnaires, as well as by participating in responsible market initiatives, the Fashion Pact and the UNFCCC (Fashion Industry Charter for Climate Action).
These commitments will enable the Group to move towards reducing its direct and indirect emissions, thereby contributing to limiting global warming to below 1.5°C by 2050.
In addition, the Group has undertaken an analysis of the risks linked to the impact of climate change on its operations and value chain, particularly on the supply chains for leather, silk and cashmere, the company’s emblematic materials, using a scenario-based approach.
The Group has tools that allow it to analyse and update the overall greenhouse gas emissions of its production and distribution sites on an annual basis. This work is done with the help of an independent external specialist firm according to the Bilan Carbone® and GHG Protocol method, and detailed in the CDP Climate.
k tonnes CO2 equivalent on scope 1 and 2 emissions in 2022 (market-based)
k tonnes CO2 equivalent on scope 3 emissions in 2022
Reduction of carbon footprint
Objective -50,4% in absolute value on scopes 1 and 2 in 2030
reduction on scope 1 and 2 emissions since 2018
Reduction of carbon intensity
Objective -58,1% in relative value on scope 3 in 2030
reduction on scope 3 carbon intensity since 2018
Renewable energy in direct operations
green electricity worldwide (87% in 2021)
carbon offset of scope 1 and 2 emissions
of upstream and downstream goods transportation emissions, in addition to scopes 1&2
million trees planted by the Livelihoods Fund (LCF1 and LCF2)
As part of its ambition to reduce its Scope 3 GHG emissions (-58.1% reduction in relative value over the period 2018 to 2030), Hermès is committed to reducing the carbon footprint of the transport of its product. As around 90% of the company’s turnover is made out of France, logistic is a major area for improvement.
The Group has cut the intensity of its transport-related GHG emissions by 66% between 2018 and 2022, thanks notably to modal shifts, the use of alternative fuels that generate less CO2, and the optimization of packaging to reduce the volume transported for equivalent quantities of products.
To improve the carbon footprint of transportation, Hermès focuses on two main levers, on top of the actions already achieved: implementing alternative transportation methods, particularly for air travel, and transitioning to different fuels. Local transportation, such as deliveries from local warehouses to city centers, is carried out using electric or hybrid vehicles whenever possible. For instance, it’s been the case from the logistic center in Bobigny to the 3 Parisian stores since 2015.
For longer-distance transportation, maritime shipping is preferred when the nature, volume, and quantity of items allow for it. Tender processes for freight transportation now systematically include criteria related to carbon footprint improvement, such as the use of natural gas (GNV) and bioGNV for road transport, sustainable aviation fuel (SAF) for air transport, and sustainable maritime fuel (SMF) for maritime transport.
Since 2012, Hermès has been a partner of the Livelihoods Funds, a coalition of companies financing carbon offset projects with high social and environmental value.
Their objective is to establish long-term projects which have a real impact on climate change, for example, restoring and preserving natural ecosystems, supporting sustainable agricultural practices to promote soil restoration and agroforestry and acting to combat deforestation. Since their creation, the first Livelihoods Funds have contributed to planting more than 132 million trees. In 2019, the group extended its commitment for another 20 years.