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RESPONSIBLE SOURCING

At Moncler, excellence means quality, style, and elegance, but also commitment to promoting respect for workers’ rights, animal welfare, and the environment across the supply chain.
Moncler’s relationship with its suppliers goes beyond commercial aspects. It also encompasses the continuous sharing of best practices, so as to ensure responsible and sustainable business growth as per the principles of the Group’s Code of Ethics, which all partners are contractually required to comply with1.
Moncler believes in the value of stable relationships built on trust and cooperation, and seeks long-term relationships with suppliers that not only guarantee reliability in their manufacturing performance, but also endorse the same values as the Group.
Moncler commissions regular audits to verify the supply chain’s compliance with applicable laws and the principles of the Company’s Code of Ethics. Audits are conducted by a qualified and experienced independent body to ensure maximum impartiality of judgement. Social and ethical audits focus on fundamental human and workers’ rights, particularly on forced labour, child labour, freedom of association, working hours, minimum wages, and – last but not least – occupational health and safety. In 2016, the Company also carried out its first audits on environmental issues and wastewaters, focusing specifically on suppliers with internal production units. The scope of the audits and the suppliers and subcontractors to involve in the auditing process are determined by the Internal Audit division based on a risk analysis, which takes into account various factors such as the amount of orders placed with the given supplier, the type of good or service provided, and geographic location. The risk analysis also considers other parameters, such as the supplier’s number of employees and plants, and/or the use of subcontractors and their geographic location. The outcomes of previous audits are also an important selection criterion.

In 2016, a total of 55 social, ethical, and environmental audits were performed (on both suppliers and subcontractors), covering 31% of Moncler’s total value of orders. Additionally, 119 animal welfare audits were carried out across the down supply chain, covering 100% of the value of down purchased during the year.
Moncler has a “zero tolerance” policy against major compliance breaches, which could indeed lead to immediate contract termination. That being said, the Group is committed to raising awareness and driving continuous improvement within its supply chain, requiring the implementation of corrective measures, within a reasonable period, when deemed necessary. In this case, the Group verifies that measures are implemented by an agreed deadline through follow-up audits.
In 2016, most instances of non-compliance were related to aspects concerning employment contract management and occupational health and safety. All non-compliance cases were addressed through corrective actions agreed upon with the suppliers, which will be verified via follow-up audits. The audits performed in 2016 did not reveal any major supplier breach requiring contract termination.
Building on the progress made so far, Moncler is committed to further expand its social, ethical, and environmental audit programme in 2017, in particular by including its façon manufacturers (of jackets) alongside a significant sample of suppliers from the rest of the categories. The programme will be further complemented by the down certification process as per DIST Protocol, providing for the auditing of the entire down supply chain.

2016 marked a further milestone in promoting responsible behaviour among the Group’s partners, with the official approval and distribution of the Supplier Code of Conduct and relevant guidelines, devised to steer and help Moncler’s suppliers achieve operational compliance.
The Supplier Code of Conduct is consistent with the Universal Declaration of Human Rights and the main principles of the International Labour Organization (ILO), and sets forth the mandatory requirements to become or continue to be a supplier of the Moncler Group. The Code addresses Moncler’s expectations regarding responsible purchasing, and consists of six sections describing the binding provisions related to: Labour and Human Rights, Occupational Health and Safety, Environment, Animal Health and Welfare, Safety and Quality of Products and Services, and Corporate Ethics.
Targeted training on the Supplier Code of Conduct is expected to be delivered to Moncler’s partners within the first months of 2017, both during a convention organised at the corporate offices in Trebaseleghe (Padua, Italy), and via the new supplier portal, which includes a dedicated online training section.
Moncler is also continuing to update its own vendor rating system by incorporating new indicators – including environmental ones. Each indicator will be weighted, contributing to the assessment of each supplier based on scores achieved in the different areas. The macro-areas of the vendor rating system are:
• Risk (country risk, financial risk, number of subcontractors, etc.)
• Service (technological capacity, innovation, timely delivery, etc.)
• Quality (defect rate in manufacturing, quality grievances reported to client service, etc.)
• Costs (price competitiveness, logistics costs, etc.)
• Ethics (working conditions, environmental practices, animal welfare, etc.).

NOTES

1 90% of signi cant contracts require compliance with the Group’s Code of Ethics.