Hermes

Student Name: Muhieddine Taha

Hermès International S.A. is an ultra-luxury brand mainly engaged in the

management of leather goods, fashion accessories and leisure goods(Roll,

2021). Since 1837, the consistent beliefs of the Hermès brand reflect traditional

craftsmanship, in which the company remains an important part of, as a fortress

of luxury (Hermès International, 2025). As the luxury goods industry continues to

come under scrutiny for demonstrating responsible management actions across

environmental sustainability, ethical sourcing and social responsibility the next

sections will cover the current state surrounding Hermès' responsible

management practice and offer recommendations to help Hermès achieve its

sustainability and social responsibility agenda while retaining the Hermès brand

(Green Digest, 2024). The management frameworks presented, will make clear

direct options for introducing responsible management practices into operational

routines; managing supply chains responsibly; considering stakeholders to give

Hermès the best chance at a sustainably developed future, having without the

luxury goods industry (The Fashion Law, 2025).

Brand Analysis

Hermès as a luxury brand offers a different business model as it produces its

products using artisanal craftsmanship and has a managed scarcity model

compared to mass luxury competitors to provide distinctiveness (Hermès

International, 2025; Roll, 2021). In 2024, Hermès earned a net profit of €4.6
billion and an astonishing operating margin of 40.5% (Wikipedia, 2025). Hermès

is a large competitor in the global luxury landscape with plenty of revenues

generated from leather goods and regional revenue diversity from the Asia-

Pacific region (Saxo Bank, 2024). Hermès is involved with sustainability via

longevity and circularity products and repaired and maintained more than

200,000 products in 2024. In addition, the brand tracks the consumption outcome

of water, energy and emissions, and has managed to develop sustainable

networks of land. Nonetheless, there are no full sustainability reports created by

the company, the brand lacks full visibility of its supply chain, and it has no

systematic procedures to sustainably reduce the brand’s environmental impact.

Frameworks and Models for Alignment

The Triple Bottom Line (TBL) framework encourages performance measures

relative to people, planet, and profit. Hermès demonstrates good profit and

people measures, such as employing artisans and preserving relevant craft skills

(Roll, 2021; Saxo Bank, 2024). The environmental impact of its performance

measures, however, will not help with, as far as it takes all of them into account at

once; whatever resonates with the brand is another question (Good On You,

2024; Green Digest, 2024). TBL provides a framework for Hermès to engage with

sustainable value while retaining its luxury brand branding focus. It provides an

outline of essential stakeholders, with respect to standards such as artisans,

customers, suppliers, communities, and environmental stakeholders. Hermès has

communities, which it appears it has. We have else-we;

Hermès has a duty to engage once again with the environmental stakeholders

and not diminish itself as a luxury brand in doing so. These frameworks are

needed to keep Hermès' unique perspective on heritage and artisanal skill set in

a luxury marketplace afloat. Using a well-structured process for an

implementation plan adds importance about accountability and maintaining

artisan excellence; otherwise the historical exclusivity of the brand credentials is

appropriate only in a responsive manner. The first phase of integration will build

on transparency of relevance, reduce Hermès environmental impact, and ethical

standards of supply chain.

Sustainability Strategy Recommendations

Hermès needs to launch an extensive "Heritage Sustainability" strategy that

brings

together elements of ecological responsibility with heritage craft values (Prive

Porter,

2023). Firstly, implement a circular economy program that evolves their repair

service

business to develop complete take-back programs, refurbished product

programs, and
pre-owned authentication services (The Fashion Law, 2025). This leverages

Hermès'

skill in making products that last while generating new revenue streams and

reducing

environmental impact by extending product lifecycles (Roll, 2021).Second to the

second, Hermès should generate an "Artisan Sustainability Academy" that will

integrate environmental initiatives as part of traditional craft training (Roll,2021).

This

organization will address how brands educate traditional craftspersons regarding

ethical material selection and elimination of waste, efficiencies, green

manufacturing

implications in front of artisan development of their practical craft experience

(Hermès

International, 2024). This type of positioning creates an identity of leading

sustainable

luxury education, without concern to quality crafts and traditions (Good On You,

2024).

Thirdly, Hermès should initiate comprehensive traceability throughout their entire

supply chain, particularly for leather and exotic materials (Prive Porter, 2023).

Establish blockchain-based supply chain systems to ensure ethical animal

welfare

practices and environmental compliance at every supply chain level (The Fashion

Law, 2025).Transparency is fast becoming a key consumer motivator and allows

Hermès to set itself apart from competitors based on sustainable craft credentials
(Green Digest, 2024).

Fourth, Hermès should spend money developing new materials and product

innovation, not limited to lab-grown leather, sustainable synthetic materials, and

biofabricated textiles while keeping luxury quality in mind (Elven, 2018). This

allows Hermès to be perceived as a sustainability innovator as well as transition

as consumers and legislation change their behaviors (Good On You, 2024).

The implementation roadmap will take three years to implement: Year 1 will focus

on the supply chain transparency and expanded repair services (The Fashion

Law, 2025). Year 2 emphasizes alternative material development and artisan

sustainability training (Roll, 2021). Year 3 concentrates on comprehensive

circular economy program launch and sustainability communication

improvements (Hermès International, 2024). Resource considerations include

€50 million annual investment in sustainability initiatives, approximately 1% of

revenue, ensuring adequate funding without compromising financial performance

or artisan investment priorities (Wikipedia, 2025).

CSR Measurement and Reporting

Hermès has to establish metrics to respond to sustainability discussions

regarding their luxury goods representing their brand reputation (Green Digest,

2024). Key Performance Indicators include: Product Lifecycle Extension Rate

which represents the average product lifecycle extension by 25%, Supply Chain
Transparency Score represents supply chain traceability of key materials of 90%,

Carbon Footprint Reduction which decreases carbon footprint by 30% with a goal

of 2030, and Artisan Retention Rate which tracks an artisan retention rate of 95%

based on sustainable work ethic (The Fashion Law, 2025). Product unit water

consumption and waste reduction percentages are indicative of operational

efficiency compatible with significant environmental benefits(Hermès

International, 2024).

Stakeholder engagement will center on sustainability derived from storytelling

related to the cultural heritage of artisanship that presents accountability for

nature as it relates to values of craftsmanship to artisanal values (Roll, 2021).

Produce annual "Craftsmanship & Sustainability Reports" which will include

stories of artisans, the artisanal journey of materials, and steps toward success

related to sustainability case studies (Prive Porter, 2023). This may not entirely

diminish mysteries related to luxury brands, it will much more engage

stakeholders in an accountable and transparent way (Saxo Bank, 2024).

Virtual transparency web sites could have supply chain maps to navigate,

dashboards of environmental impacts that include indicating practitioners

incorporating green practices, and producers that assist in understanding

complex systems (The Fashion Law, 2025). Social media campaigns to support

repair services, alternative material design, and community driven impact

initiatives while protecting brand exclusivity (Hermès International, 2024).

objectives, and with standalone brands implementing circular economy

guidelines, it establishes competitiveness (Good On You, 2024). The Global

Reporting Initiative (GRI) standards and Science-Based Targets initiative can

also offer credibility whilst addressing industry-specific concerns for the brand

(Green Digest, 2024). Continuous sustainability audits and thirdparty certification

validate the credibility of an organisation with continual improvements taking

place across all operations and stakeholder engagement processes (The Fashion

Law, 2025).

Conclusion

The analysis above showed Hermès firm grounding in responsible management,

based on their craftsmanship, longevity of product, while demonstrating potential

for continual growth in their overall sustainability strategy. The "Heritage

Sustainability" framework proposed here could be a pathway to harness the

foundations of traditional craft as a backstop against socially/environmentally

compelled issues such as supply chain transparency, circular economy

collaborations or new material based developments that would have social

implications. This strategic approach also showed that management and

accountability to stakeholders must be protected and not undermine brand

authenticity, as a value identified by consumers to protect luxury experience. The

actionable and integrated approach to the recommendations contained within the

sustainability strategy, with action and transparent reporting, shows an example

embodying artisanal heritage values. The intended effect of the strategic

recommendation provided would reduce operational and reputational risk,

increase stakeholder connection, improve brand loyalty amongst

environmentally-minded luxury consumers, and improve competitiveness in an

evolving luxury sector. The additional commercial benefits would reduce many of

the previous problems, improved risk management practices, improved the

efficiency of business operations, the opportunity for potentially new income

streams, and possibly improve brand loyalty amongst environmentally-minded

luxury consumers, allowing continued growth and business evolution whilst

finding better accountability to the corporate responsibility agenda.

References

Elven, M. van (2018) 'How sustainable is recycled polyester?', FashionUnited.

Good On You (2024) 'Hermès - Sustainability Rating',

Good On You Directory. Green Digest (2024) 'Evaluating a company's impact

(the case of Hermès)',

Green Digest.

Hermès International (2024) 'Sustainable Development', Hermès USA.

Prive Porter (2023) 'The Sustainability of Hermès: Ethical Leather Sourcing for

Iconic Birkin and Kelly Bags', Prive Porter, 6 October.

Roll, M. (2021) 'Hermès - The Strategy Insights Behind The Iconic Luxury Brand',

Martin Roll, 19 March.

Saxo Bank (2024) 'Hermès: The pinnacle of timeless luxury and craftsmanship',

Saxo, 3 July.

The Fashion Law (2025) 'Hermès' ESG Playbook: Circularity, Supply Chain

Ethics, AI', The Fashion Law, 5 May.

Wikipedia (2025) 'Hermès', Wikipedia.

Appendix Page

1. Webpage Address: [Link]

sustainabledevelopment/

Harvard Style Reference: Hermès International (2024) 'Sustainable

Development', Hermès USA.

Original Author's work: "In this regard, transparency, security and the local

dimension of supply chains are the subject of particular consideration. The

group also strives to control its water and energy consumption as well as

its carbon footprint throughout production and in the sustainable

construction of its new sites."

Summary: Hermès International (2024) emphasizes supply chain

transparency and environmental responsibility through controlled water

and energy consumption, carbon footprint management, and sustainable

site construction practices.

2. Webpage Address: [Link]

Harvard Style Reference: Hermès International (2025) 'Policies and

Publications', Hermès Finance.

In-text citation: (Hermès International, 2025)

Original Author's work: "Hermès has remained true to its values since 1837

and continues to thrive as a house where craftspeople are at the fore. By

selecting the finest materials, it produces exceptional objects, designed to

last, thanks to their quality and desirability, and to be passed on."

has maintained consistent values centered on artisanal craftsmanship,

creating durable, desirable luxury products through careful material

selection and superior quality designed for generational inheritance.

3. Webpage Address:

[Link]

behind-the-global-luxury-success/

Harvard Style Reference: Roll, M. (2021) 'Hermès - The Strategy Insights

Behind The Iconic Luxury Brand', Martin Roll, 19 March.

In-text citation: (Roll, 2021)

Original Author's work: "Craftsmanship: There is a mandatory 2-year

training for a craftsman before he or she can start working on putting

together any leather product in the Hermès portfolio. This slows down

production time but the company's philosophy has always been to maintain

scarcity and exclusivity."

Summary: Roll (2021) explains that Hermès requires extensive two-year

artisan training before craftspeople can work on leather products,

brand philosophy elements.

4. Webpage Address:

[Link]

timeless-luxury-and-craftsmanship-26062024

Harvard Style Reference: Saxo Bank (2024) 'Hermès: The pinnacle of

timeless luxury and craftsmanship', Saxo, 3 July.

In-text citation: (Saxo Bank, 2024)

Original Author's work: "Hermès is a formidable high quality company in

the luxury goods industry with its business centred on leather goods and

with a big revenue exposure to the Asia-Pacific region."

Paraphrase: According to Saxo Bank (2024), Hermès represents a

powerful luxury goods company specializing primarily in leather products

while maintaining significant financial dependence on Asia-Pacific market

performance.

5. Webpage Address: [Link]

Harvard Style Reference: Wikipedia (2025) 'Hermès', Wikipedia.

Original Author's work: "About 60 employees were affected across three

stores. In 2024, Hermès' net profit reached €4.6 billion, with a 40.5%

operating margin. Sales growth spanned all regions, totaling €15.2 billion.

Analysts suggest this resilience is due to Hermès impeccable brand image,

storytelling, and ..."

Summary: Wikipedia (2025) reports Hermès achieved exceptional financial

performance in 2024 with €4.6 billion net profit and 40.5% operating

margin, attributed to strong brand image and effective storytelling across

global markets totaling €15.2 billion in sales.