As regulatory scrutiny and stakeholder demands around environmental, social, and governance (ESG) issues intensify across the fashion and luxury sectors, Hermès International has released a detailed look at how it is adapting its artisanal heritage to meet the pressures of the modern marketplace. In its responses to shareholder questions submitted ahead of the company’s 2025 General Meeting on April 30, the French luxury brand outlines a multi-pronged sustainability strategy encompassing resource sufficiency, supply chain ethics, and artificial intelligence governance.
While Hermès has long leaned on its reputation for timeless design and high-quality products meant to last for lifetimes, it now positions these legacy practices within a more formalized ESG framework – complete with quantified emissions targets, supply chain mapping, and emerging oversight mechanisms for digital technologies. As the industry grapples with balancing innovation and integrity, Hermès is angling to offer a model rooted more in selectivity than sheer scale. (It is worth noting that Hermès is not opposed to scale; it has been increasing its handbag production to meet rising demand, opening a number of new workshops in France in recent years.)
In response to questions on environmental sufficiency, a principle defined by the Intergovernmental Panel on Climate Change as the reduction of resource use while ensuring well-being, Hermès emphasized that its business model is already aligned with these objectives. The company cited the durability (and repairability) of its products and frugal use of materials – including on-demand production – as inherent elements of a sufficiency strategy. In particular, Hermès highlights the following as central to its model …
> Durability: Hermès emphasizes that it creates and manufactures “quality objects designed to last,” and offers a repair service to extend the product lifecycle. These durable goods are meant to be “passed on from one generation to the next,” reducing the need for new materials and minimizing waste.
> Repairability: In 2024 alone, Hermès states that it provided after-sales services for 200,000 products, supported by a global network of craftspeople. This commitment to repair is a central tenet of its circularity and sufficiency approach.
> Controlled Resource Use: Hermès refers to a “moderate and controlled environmental impact,” noting strict management of both energy and water use. It also stresses its controlled sourcing of high-quality raw materials, the reuse and recycling of production offcuts, and its implementation of resource optimization practices, which are aligned with sufficiency principles such as on-demand production.
> Circular Economy Integration: The company adopts the 9Rs principle promoted by the EU (Refuse, Rethink, Reduce, Reuse, Repair, Refurbish, Remanufacture, Repurpose, Recycle) as a foundation for its sufficiency model. These practices are integrated “by all métiers” across the group.
> Minimized Environmental Impact Despite Growth: Hermès notes a “limited increase in energy consumption despite the growth in operations,” suggesting that operational expansion is being managed in line with resource efficiency goals.
Hermès did not quantify the proportion of its activities covered by sufficiency-based strategies but stated that the principle informs all métiers and operations.
Climate Targets, Value Chain Labor
Hermès reported progress against its climate commitments, noting that it has already exceeded its targets for Scope 1 and 2 emissions, with a 63.7 percent reduction compared to 2018 levels – surpassing its Science-Based Targets initiative (SBTi)-validated goal of a 50.4 percent reduction by 2030. Scope 3 emissions, which cover the majority of upstream and downstream activity, have been reduced by 50.5% in intensity over the same period.
The company reiterated its target to transition all operations to 100 percent renewable electricity by 2025, and to 100 percent renewable energy by 2030. Key performance indicators disclosed include metrics tied to energy and water consumption, material circularity (e.g., offcut reuse, plastic reduction), and biodiversity impact, measured using the Global Biodiversity Score.
On the social front, Hermès outlined its policies related to securing a decent standard of living for workers in its supply chain, particularly among its Tier 1 and Tier 2 suppliers. While the company stopped short of disclosing quantitative data on wage levels, it stated that it conducts annual mapping of human rights risks – including wage sufficiency – and that 95 percent of its suppliers operate within OECD jurisdictions.
The brand’s supplier code of conduct explicitly references living wage frameworks, such as those established by the Fair Wage Network and Global Living Wage Coalition. In the event of non-compliance, Hermès stated that it initiates corrective action plans and reserves the right to terminate supplier relationships in cases of serious violations. The group also noted that its average relationship with its top 50 direct suppliers is 19 years, which it characterized as a key enabler of shared social and environmental standards.
AI Governance & Ethical Oversight
In response to questions regarding the adoption and governance of artificial intelligence, Hermès clarified that it currently uses AI in limited applications – including IT service optimization, supply chain support, and internal reporting – via external cloud-based platforms. The group emphasized that core creative and artisanal processes will remain human-led, and that it does not foresee AI substituting its métier-specific skills.
Hermès announced the formation of an Artificial Intelligence Governance Committee in 2025, tasked with overseeing model accuracy, transparency, ethical risks, and regulatory compliance. It also disclosed that it is monitoring the environmental impact of AI systems indirectly via its cloud usage, and that social and ethical training is being introduced to minimize bias and support employee adoption.
Regulatory Alignment and Materiality
Hermès’ filing reflects an increasing degree of alignment with evolving EU and global sustainability reporting frameworks, particularly in the areas of climate and circular economy. References to its 2024 Universal Registration Document include mapped disclosures consistent with the European Sustainability Reporting Standards, suggesting that the group is positioning itself for compliance with the Corporate Sustainability Reporting Directive, which takes effect for large listed companies beginning in FY2025.
THE BOTTOM LINE: Hermès’ disclosure stops short of providing granular, product-level data on recycled content or revenue tied to eco-design. However, its filing demonstrates a structured approach to ESG governance and performance. The company continues to rely on the scarcity and longevity of its products as a differentiator, suggesting that its sustainability strategy is less focused on innovation at scale and more on extending the lifespan and responsibility of each item it creates.
As investor and regulatory focus continues to shift from commitments to quantifiable outcomes, Hermès will likely face ongoing pressure to translate its qualitative strategy into material disclosures. That said, among publicly listed luxury groups, it remains one of the few to assert a clear position that sustainability is not an external overlay, but a condition embedded within its economic and creative model.
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