For the Moncler Group, talking about quality also means talking about health and safety, respect for human rights, environmental protection and, in general, ethics in business conduct along the entire value chain. Being a socially responsible company involves taking a commitment that extends well beyond its boundaries, embracing the entire supply chain.

Suppliers are strategic partners, this is why the Group’s relationship with them goes beyond the economic and commercial sphere. For Moncler and Stone Island, excellence means quality, style, and innovation, but also a commitment to promote a supply chain that is attentive and respectful of workers’ rights, of animal welfare, and of the environment.
The focus on ethical, social and environmental aspects along the supply chain starts with the supplier selection phase and continues with systematic awareness-raising and monitoring activities. Knowledge, traceability, sharing of best practices and verification are in fact fundamental, not only to limit situations of risk, but also, and above all, to generate culture and promote the responsible, sustainable development of the business for the benefit of the entire supply chain.
During the contracting phase, all suppliers4 must sign the Code of Ethics and the related policies (including the Environmental Policy and Human Rights Policy) outlining the principles and guidelines that inspire the Group’s business and guide the behaviour and actions of all those with whom Moncler and Stone Island interact. By signing the Code, suppliers commit to comply with these principles and ensure that their subcontractors comply with them as well. Violation of the principles of the Code constitutes a breach of contract, with the right, depending on the severity of the situation, to immediately terminate the relationship.
In order to better steer the actions of its partners, the Group has adopted a Supplier Code of Conduct. The Code is inspired by the Universal Declaration of Human Rights and the ILO Conventions, and sets out the Group’s expectations for the main areas of responsible business. It consists of six sections (Labour and Human Rights, Health and Safety, the Environment, Animal Health and Welfare, Product and Service Safety and Quality and Business Ethics) and contains the mandatory requirements that suppliers must follow in order to begin or continue working with the Group.
The Group procedure that governs the selection of all new suppliers was updated in 2021. The assessment of a new supplier consists primarily of an on-site visit carried out by the Quality Team to evaluate the supplier’s alignment with the Group’s quality standards and report potential visual critical social and environmental situations. After this technical analysis, the assessment process for new façon manufacturers and finished products suppliers involves an ethical, social and environmental audit by a third party. For raw material suppliers, it requires the completion of an environmental and social evaluation questionnaire supported by documentary evidence and then an audit that is carried out in line with the provisions of the audit plan. By doing so, the Group commits to not include in its supply chain companies that do not comply with the Group’s quality standards and basic ethical, social and environmental principles.
The monitoring of the supply chain continues over the years with periodic and systematic ethical, social and environmental audits performed on suppliers with which the Group already has a collaborative relationship in order to verify compliance with applicable laws and principles contained in the aforementioned codes.
The checklist used for Group’s on-site ethical, social and environmental audits has been updated in 2022 and is prepared with technical inputs provided by the International Labour Organization (ILO).
In order to ensure maximum impartiality, audits are regularly conducted by qualified, experienced third parties. The audits focus on verifying respect for fundamental human and worker rights, with particular attention to issues of forced labour, child labour, freedom of association, working hours, guaranteed minimum wage and health and safety. In addition, since 2020 the Group has required all members of its supply chain to comply with applicable national legislation, operating authorisations, decrees, regulations and health protection guidelines aimed at containing the spread of the Covid-19 pandemic. These aspects were monitored by the Group’s technicians and the auditors during the audit.
The Group also has a plan aimed at ensuring to audit 100% of its façon manufacturers and finished product suppliers at least once every three years.
Although in 2022 the planning of the ethical and social audits continued to suffer from the effects of the Covid-19 pandemic – which in some periods of the year and in some countries prevented auditors from visiting suppliers – the Group was able to stick to the pre-established audit plan.
In 2020-2022, Moncler conducted 452 ethical and social audits (on both suppliers and subcontractors), accounting for approximately 100% of the volumes assigned to outerwear façon manufacturers, 

90% of the volumes assigned to suppliers of other outerwear processes (dye houses, printing works, embroideries, etc.), 99% of footwear and bag suppliers, 83% of tanneries, 96% and 78% of the volumes assigned respectively to knitwear suppliers and soft accessories suppliers, and 53% of the 2022 turnover of pattern making and prototyping suppliers.
Stone Island, which has a three-year ethical and social audit plan aimed at ensuring the highest coverage of suppliers in its supply chain, also carried out 212 ethical and social audits during the same three-year period (on both suppliers and subcontractors), equal to around 87% of the value of orders assigned to finished products suppliers and 91% of the value of orders assigned to façon manufacturers.
Notwithstanding the zero-tolerance approach for major breaches, for which the Group reserves the right to terminate immediately the existing contractual relationship with the supplier, both Brands are committed to support their supply chain raising awareness and driving continuous improvement, requiring the implementation of corrective actions where needed. Following each audit, an improvement plan is issued and its implementation is then verified. The Group undertakes to proactively support all suppliers in implementing the agreed corrective actions.
In order to verify that corrective measures are effectively implemented by the agreed deadline, the Group carries out both on-site and documentary follow-up audits.
With regard to the 239 suppliers audited in 2022, at year-end more than 86% of them were in line with the Group’s social and environmental standards (85% of critical suppliers). Collaboration was ended with around 7% of them (17 suppliers), and the remaining 7% turned out to have non-compliances at the end of 2022, as the audit activity took place just before the last months of the year and not all the projects aimed at remediating the non-compliances had already been closed.
In 2022, with particular reference to social aspects, 76 of the 239 sites were found to have non-compliances and the relative improvement plan was issued. The main areas of non-compliance were related to workplace health and safety (70%) and, in 30% of cases, aspects related to management of work relationships, including non-compliances involving working hours (11%), salaries and remuneration (10%), and management of employment contracts (9%). In such cases, for the least critical non-compliances, it was agreed with suppliers to implement a resolution plan promptly, while in the most critical cases collaboration with the supplier was always ended.
Moreover, during 2022 both Brands also conducted ethical and social audits on major raw materials suppliers representing 66% of total material purchases for Moncler and Stone Island. In particular, with regard to the down supply chain, Moncler has set the target of having 100% of down suppliers compliant with the new human rights and environmental module included in the DIST Protocol by 2023. In 2021 the additional checklist was formulated and tested with the new module to be applied during DIST audits, while in 2022 preliminary assessments were carried out at all Moncler down suppliers: 100% of suppliers turned out to be already in line with the requirements of the new checklist on human rights and environmental compliance. Stone Island has also begun to implement this process with its down suppliers.
Lastly, ethical and social audits also continued to be carried out on strategic service suppliers: logistic platforms, external quality control platforms, providers of services at Group offices and stores for which no significant non-compliances were identified.
The ethical and social audits carried out by both Group’s brands include environmental compliance modules. In addition, in 2022 Stone Island conducted 24 environmental audits on a sample of fabric, finishing and dyeing suppliers, while Moncler examined the analyses of the waste water of 26 companies with wet processes on a sample of fabric, down, dyeing, weaving and tannery suppliers to identify impacts related to potential spills or cases of water contamination. From the activities no significant non-compliances emerged. It is the Group’s goal to continue to monitor these activities in the upcoming years.
These audit activities were complemented by audits on animal welfare and on down traceability as per the DIST (Down Integrity System & Traceability) Protocol across the entire supply chain for Moncler and according to the Responsible Down Standard (RDS) for Stone Island.
Aware of the fact that promoting principles of responsibility among its suppliers is beneficial to mutual sustainable growth, in addition to constantly raising awareness of ethical, social, environmental and animal welfare issues, the Moncler Group supports its supply chain in several ways. In particular, Moncler supports some strategic suppliers, making health and safety experts available to give advice and develop knowledge of best practices (12 suppliers benefited in the three-year period 2020-2022) and

providing operational support for investments in technologically advanced machinery for particular processes (16 suppliers in 2022). The programme was also extended to Stone Island suppliers in 2022.
Lastly, with the aim of providing an overall supplier assessment that also takes into account sustainability aspects, Moncler has implemented a vendor rating system. Each indicator is weighted and helps to assess a supplier based on the results achieved in each area. The vendor rating areas are:

• sustainability and compliance (working conditions and respect for human rights, chemical requirements, indicators relating to the results of compliance tests carried out on products, environmental practices, animal welfare, etc.)

• quality (rate of production defects, quality complaints reported to client service, etc.)

• delivery service level (flexibility, delivery punctuality, etc.)

• cost (price competitiveness, logistics costs, etc.)

• innovation (technological capacity, aptitude for innovation, etc.)

• financial sustainability (degree of economic resilience of the supplier).

With regard to indirect suppliers, i.e. suppliers of goods and services not related to products, since 2018 the mapping of suppliers’ quality, social, environmental and health and safety certifications is continuously updated. In 2022 the vast majority of the approximately 800 Group’s main indirect suppliers mapped have at least one certification, and around half of them already have ISO 45001 health and safety certification and/or ISO 14001 environmental certification (in line with the results emerged from the mapping activity carried out by Moncler on around 270 suppliers in 2019, 380 in 2020 and 600 in 2021). The Group also continued its awareness-raising activities to promote improvement objectives with suppliers relating to the importance of certification processes. Lastly, in 2022 Moncler continued to verify the reliability of its partners, including by deepening information on the management of sustainability issues with the involvement of 14 suppliers for which the 2021 assessments were found to be not in line with the standards. These indirect suppliers, mainly manufacturers and maintenance and service providers, have been evaluated according to 28 criteria, divided into four categories: environmental, work and human rights, health and safety, and ethics. This tool – based on international principles, standards and guidelines such as the Global Compact, Global Reporting Initiative, ISO26000 and the OECD Guidelines – provided a series of parameters making it possible to assess and compare the social and environmental performance of indirect suppliers.

All the activities described so far, both those of periodic monitoring and control of the supply chain and those of collaboration and dialogue with suppliers to promote more sustainable and responsible practices, are part of the Moncler Group’s program defined for suppliers on sustainability topics.

In this context, the Group has defined a governance system aimed at guaranteeing harmonization between the sustainability strategy for the supply chain and the Group’s purchasing practices. Above all, a Control, Risk and Sustainability Committee has been established at Board level which is entrusted by the Board of Directors with supervising the implementation of all sustainability practices, including responsible sourcing with all related activities included into Group’s program defined for suppliers on sustainability topics. This committee acts with the support of various corporate functions (including the Sustainability Unit and the Operation Team) that have operational responsibility for carrying out the various activities, for each area of responsibility, within the program.

Moreover, the Group pays special attention to the management of its purchasing practices in order to ensure their alignment with the Group’s Code of Ethics and Supplier Code of Conduct and to avoid potential conflicts with sustainability requirements. To this end, the purchasing practices are periodically reviewed and updated, and all Group’s employees involved in their implementation (both buyers and other employees who are in contact with suppliers) are trained on their proper application and on the principles of sustainability and responsibility most relevant to their work (in particular, for example, a specific training course on the principles of the Code of Ethics and a training course on Human Rights are provided).
As evidence of this, the guidelines to be followed for the purchase of all packaging used by the Group have recently been further updated precisely in order to keep them in tune with the latest scientific developments in the area of materials with a lower environmental impact; in addition, the Responsible supply chain team is responsible for periodically updating the Guidelines for Sustainable Materials, which summarizes the criteria and thresholds that guide the choice of materials and which are integrated into the purchasing practices of all raw materials purchased by the Group.


In its Supplier Code of Conduct and Human Rights Policy, the Group recognises the importance of ensuring wages that are compliant with the law or binding collective agreements and, in any case, adequate to the cost of living, the employee’s basic needs, discretionary profit, market benchmarks and the type of professional performances.
Suppliers must provide a fair level of compensation and career development that reflects knowledge, skills, abilities, professional experience, benefits, salary and non-salary incentives.
Like the Group, suppliers are expected to provide all the benefits required by the law, including, but not limited to, social security, parental leave, annual holidays and calendar holidays, in addition to engage in regular social dialogue on compensation issues.
In 2021 the Group, with the support of a third

party, began carrying out specific assessments on the living wage on both its corporate sites and suppliers, with the aim of covering 100% of the Group’s critical suppliers by 2025.
In particular, Moncler partners with the Fair Wage Network, an independent organisation dedicated to progressing fair wage practices across global supply chains. The methodology adopted by Fair Wage focuses on partnership with companies and suppliers to assess wage practices through workers and managers questionnaires, identifying root causes and implementing improvement activities.
The Fair Wage Network assessment methodology is structured around 12 dimensions, covering the entire spectrum of wage indicators: the living wage is therefore only one of the dimensions analysed while other variables of the wages practices and pay systems are evaluated such as wage negotiation with workers’ representatives

through collective bargaining, the presence of grievance mechanisms for complaints on remuneration issues, etc.. Another area of the analysis involves comparing the results of the assessment with sector and country benchmarks.
The implementation of this analysis and the gradual extension to other Moncler suppliers have been assessed and prioritised on the basis of the risk profile associated with the geographical location of the supplier and other factors, such as the presence of collective labour agreements, which ensure dialogue and respect for social and environmental aspects. To this regard, approximately 70% of the Moncler Group’s suppliers is located in Italy and is covered by collective bargaining agreements.
At December 2022, approximately 40% of strategic suppliers had been evaluated and engaged in a living wage assessment.
The 12 dimensions of analysis of the assessment carried out by the Fair Wage Network are:




4 Over 85% of significant contracts include compliance with the Brands’ Code of Ethics (95% for Moncler).