In terms of financial instruments, Moncler is testing and adopt- ing new mechanisms linked to sustainability performance. In Ju- ly 2020, the Company signed a financial credit line that consists of a sustainability-linked revolving credit facility with a rewarding mechanism linked to the achievement of environmental impact reduction targets. In November 2020, Moncler signed an agree- ment for forex risk hedging which provides for a premium in terms of improvement in hedging strikes on currencies based on the recognition of high sustainability standards by an external and in- dependent assessment body.

The Moncler Group, in compliance with article 5, paragraph 3, letter b of Legislative Decree no. 254/2016, has issued a Con- solidated Non-Financial Statement, which comprises a separate report and describes the year s main environmental and social ac- tivities and also publishes the results achieved in relation to Sus- tainability Plan objectives. The 2021 Consolidated Non-Financial Statement is prepared in compliance with the Global Reporting Initiative Sustainability Reporting Standards (GRI Standards) core option and is partially audited by KPMG S.p.A.

In order to continue to improve the transparency of the ESG (Environmental Social Governance) performance and facilitate the comparability of the data and information provided to differ- ent stakeholders, starting from 2020 Moncler has also begun to consider some indicators provided by Sustainability Accounting Standards Board (SASB) with the aim of gradually expanding dis- closures in subsequent publications.

THE DIST PROTOCOL As part of its commitment to ensuring animal welfare and the full traceability of the down, Moncler requires and ensures that all its down suppliers comply with the strict standards of the Down In- tegrity System & Traceability (DIST) Protocol. Applied since 2015, the DIST Protocol sets out standards for farming and animal wel- fare, traceability and the technical quality of down. Moncler only purchases down that is DIST-certified.

Key requirements that must be met at all levels of the supply chain include: down must be derived exclusively from farmed geese and

as a by-product of the food chain; no live-plucking or force-feeding of animals is permitted.

Moncler s down supply chain is particularly vertically integrated, and includes various types of entities: geese farms, slaughterhous- es, the companies responsible for washing, cleaning, sorting and processing the raw materials. Moreover, the supply chain includes façon manufacturers, which, using the down, manufacture fi nished products. All suppliers must comply scrupulously with the Proto- col, to ensure the traceability of the raw materials, respect for ani- mal welfare and the highest possible quality throughout the down supply chain: from the farm to the down injection into the garments.

The Protocol, defined taking into consideration the pecu- liarities of the supply chain structure, was the outcome of open, constructive engagement with a multi-stakeholder forum, estab- lished in 2014 that meets annually to review and reinforce the protocol. The forum considered the expectations of all the various stakeholders and ensured a scientific and comprehensive ap- proach to the issue of animal welfare and product traceability.

Starting from 2023, the Protocol will be integrated with three specific modules on human rights, environment, and the DIST down recycling procedure.

The Protocol assesses animal welfare in an innovative way. Alongside a traditional approach that focuses on the farming en- vironment, the DIST, following the European Union guidelines, also evaluates animal welfare through careful observation of An- imal-Based Measures (ABM10).

Moncler is constantly involved in the on-site auditing process to certify compliance with the DIST Protocol. To ensure maximum audit impartiality: audits are commissioned and paid directly by Moncler and

not by the supplier; certification is conducted by a qualified third-party organ-

isation whose auditors are trained by veterinarians and an-

10 The Animal-Based Measures are indicators of the real welfare of an animal, determined through the direct observation of its capaci- ty to adapt to specific farming environments. The measures in- clude physiological, pathological and behavioural indicators.

imal husbandry experts from the Department of Veterinary Medicine at the University of Milan;

the certification body s work is in turn audited by an accred- ited external organisation.

The presence of certified down in Moncler garments is guaran- teed by the DIST down certified label.

In 2021, 136 audits were conducted by third-parties along the entire supply chain.

As another important step towards a more circular econo- my, Moncler started recycling DIST-certified down through an innovative mechanical process that requires 70% less water com- pared to traditional down recycling processes.

Stone Island is also committed to ensuring that the down used in its products is obtained with respect for animal welfare. The Company purchases only certified duck down according to the Responsible Down Standard (RDS) protocol. Social and envi- ronmental pilot audits on the Stone Island supply chain will start from 2022. And starting in 2023, all suppliers of the Brand will have to be compliant with the social and environmental require- ments verified through audits.

MONCLER AND THE FINANCIAL MARKETS

2021 has been another year marked by the Covid-19 pandemic, whose spread has continued to cause high uncertainties and volatility on the fi nancial markets. However, annual performance, both for most of the global markets and for the Luxury Goods sector, was defi nitely positive, driven by the strong optimism regarding the recovery and by the continuation of accommodating monetary policy by central banks.

In 2021 all Western stock indices recorded double-digit increas- es: the global index (S&P Global Index, BMI) was up by 44%. In Europe the EuroSTOXX50 was up 21% and the FTSE MIB ended the year with one of the strongest performances of all European stock exchanges at +23%, whereas in the United States the S&P 500 registered a +27%.

On the other side, annual performances were more mod- est in Asia: in Japan, the NIKKEI 225 was up by 5%; in China, the Shanghai Stock Exchange index (SSE Composite) closed at break- even, while in Hong Kong SAR the Hang Seng Index (HSI) closed with the worst performance of the decade at -14%, weighed down in particular by the real-estate market crisis.

From an economic perspective, the year was marked ini- tially by the pandemic restrictions and then by a pronounced and growing optimism driven by the good results of the vaccina- tion campaign in many countries, which drove a sudden boom in demand for goods and services. This sharp and unexpected in- crease led to the emergence of tensions in the supply of raw ma- terials and in the offer of logistics services at global level with a consequent significant price increases for many raw materials, including oil, and an inflationary pressure on global economies.

In particular, in the United States infl ation rose at year-end, reaching levels never seen before in the past 40 years. In November it reached nearly 7%, the highest level since 1982, arising strong concerns of an increase in interest rates. To contain this infl ationary pressure, in December the US Federal Reserve announced that it was ready to adopt a more restrictive monetary policy.

In China, the uncertainties regarding the announcement by President Xi Jinping in August that he wishes to pursue a pol- icy of promoting common prosperity , together with an increase in Covid-19 outbreaks, which caused some temporary business closures at the end of December, fuelled concerns of a potential slowdown of Chinese economic growth and of the demand for lux- ury goods products.

Notwithstanding the strong volatility experienced through- out 2021, also the luxury good sector recorded remarkable posi- tive performances. In 2021, the value of the shares of companies operating in the sector increased by 39% on average. Hermès re- corded the best performance at +75%, while Prada was the on- ly company to report a negative performance (-2.5%). Moncler shares also continued to record positive performances: its price reached EUR 64.1 at the end of 2021 growing +28% in the year, +60% in the last two years and +287% in the past 5 years.

BOARD OF DIRECTORS REPORT48 49 MONCLER GROUP

2021BOARD OF DIRECTORS REPORT