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ENVIRONMENTAL, SOCIAL, AND COMPLIANCE RISKS

With operations in several countries around the world, Moncler firmly believes that respect for people, human rights, and the environment, and compliance with applicable laws, are prerequisites for responsible business management. To this end, it is committed to implementing the necessary policies, carrying out due diligence activities and appropriate checks, and providing training and information to minimise any risks related to these issues. These risks are described in Moncler’s Enterprise Risk Management model, along with their respective probability of occurrence and level of impact.
As regards our people, the main risks associated with human resources management include, in particular, the reliance on key figures and the difficulty to retain and develop talent. In this regard, the Company implemented a performance evaluation system that covers the entire workforce (excluding workers in Romania) and takes into account both soft and hard (technical) skills. The system is designed to leverage and develop individual skills in the medium and long term, define succession plans, and nurture the best talent. The Group also developed an incentive plan specifically for managers and key personnel to facilitate retention. Lastly, with the aim of creating a more attractive work environment, Moncler implemented a welfare plan for its employees at corporate offices in Italy, as well as specific employee wellbeing initiatives at the production site in Romania and other Regions.

The risk of human rights violations against the employees of Group companies is considered solely at a theoretical risk level, owing to the level of protection ensured by various laws and/or collective labour agreements, the working standards set out in Moncler’s Code of Ethics, and the oversight activities in place at corporate offices. Furthermore, Moncler has adopted a Group-wide Personnel Search and Recruitment Policy to ensure a robust personnel selection and recruitment process while guaranteeing equal opportunities. The Group also provides its people with a whistleblowing system enabling anyone to report violations.
As per Moncler’s business model, only part of the Company’s product manufacturing is carried out in-house, at the production site in Romania, while the remaining activities are contracted out mainly to sub-contractors and finished product suppliers in Italy and abroad. In addition, the Company purchases raw materials and services from a large number of suppliers worldwide. The variety of partners and the geographical scope in which Moncler operates have led the Group to make huge investments in preventing and monitoring risks associated with possible human rights violations along the supply chain, with a particular focus on façon manufacturers, specialised workshops, and the main logistics operators.
Moncler conducts regular audits, also through certified specialised firms, on compliance by the supply chain with applicable laws and the principles set out in the Code of Ethics and the Supplier Code of Conduct. More specifically, these set out binding standards of conduct to be held by suppliers and provide that any violation will result in the termination of collaboration. Moreover, the Group is

committed to raising awareness of responsible sourcing principles among its partners through specific training activities.
Moncler pays particular attention to the environmental aspects involved in the conduct of its business, although its most significant environmental impacts are indirect. To this end, the Group has set out specific rules, processes, and control procedures to prevent and manage any environmental risks linked to its suppliers of raw materials and manufacturing services, which are required to adopt the Group’s Code of Ethics and Supplier Code of Conduct. Compliance with the binding provisions contained in these documents is monitored through environmental audits carried out by specialised third parties. See also page XXX. As regards its direct environmental impacts, Moncler implements numerous initiatives to minimise them, by: leveraging the adoption of both an Environmental Policy and an Environmental Management System; engaging its employees in reducing paper, toner, and energy consumption; and promoting waste sorting. In 2018, Moncler obtained ISO 14001 certification for its Italian corporate offices and logistics hub in Castel San Giovanni, Piacenza, in addition to the production site in Romania, which was certified in 2017.
Moncler has also adopted a Group-wide compliance procedure to: (i) disseminate the meaning of compliance at Moncler; (ii) define the areas of application; (iii) establish the general compliance principles adopted by Moncler; (iv) define employee roles and responsibilities; and (v) provide guidelines based on the pillars of the Group Compliance Programme, which is regularly updated.
Since its establishment, the Group’s Compliance function has been engaged in activities aimed at strengthening the monitoring and management of risks of non-compliance, starting from the areas considered to be most sensitive, such as those related to antitrust, health and safety, privacy, and anti-corruption issues.
Moncler considers the promotion and protection of employee health, safety, and wellbeing as a value and key priority of its operations. For this reason, it has implemented an effective management system in compliance with the OHSAS 18001 international standard, which provides for the application of streamlined management procedures with a specific focus on the Health and Safety Management Policy, as well as for periodic checks across the Group employees’ work locations (offices, stores, showrooms, and logistics and production sites). Bolstered by training and awareness activities targeting Moncler personnel and suppliers, the management system plays a crucial role in the Group’s strategy to mitigate the risk of accidents in the workplace.
The Group has always handled privacy issues very carefully. To this end, in addition to strengthening the relevant section of its Code of Ethics, it has completed the preliminary work to adapt its Model to the new European regulation that entered into force in May 2018 by adopting, inter alia, a specific policy and carrying awareness-raising activities among all employees.
As regards corruption prevention measures, Moncler developed and

adopted an Anti-Corruption Model that provides, among other things, for the regulatory review of corruption offences in the countries in which the Company operates, identifying the areas and business processes most at risk of corruption. An Anti-Corruption Policy was therefore implemented by each company of the Moncler Group, regulating the responsibilities for monitoring regulatory changes, risk controls, training, audit activities, management, and the reporting of any cases of non-compliance.
The main social risks identified by Moncler are primarily those that affect clients (i.e., related to product safety and counterfeiting) as well as animal welfare.
To protect the health and safety of its clients, Moncler requires all its suppliers to perform in full compliance with the most stringent international regulations on hazardous and potentially hazardous chemical substances, and regularly conducts strict tests on the chemical composition and physical and mechanical properties of their products. Suppliers are also required by contract to comply with the guidelines of the Restricted Substances List (RSL), which outlines the most stringent standards for the use of certain substances. The proper implementation of these guidelines is verified through tests on the chemical composition of raw materials at independent specialised laboratories, at the request of the supplier and/or Moncler itself. Furthermore, the Group ensures comprehensive monitoring of this risk through an ad hoc corporate function, the Operations Compliance Department.
The Group’s commitment to protecting its clients and Brand has also been pursued for years now through the fight against counterfeiting. To this end, Moncler has implemented a series of management and prevention tools, including: the creation of an internal department specialised in Intellectual Property and Brand Protection; the development of detailed procedures; collaborations with law enforcement agencies, customs, and other luxury brands; supplier training and auditing; and finally the use of anti-counterfeiting tags applied on all products.
In its effort to promote animal welfare, Moncler calls for its suppliers to comply with animal welfare requirements as set out in its Supplier Code of Conduct. The Company demands and verifies that all its down suppliers comply with the strict requirements of the DIST Protocol (Down Integrity System and Traceability).
In order to ensure animal welfare, Moncler demands to its suppliers to comply with animal welfare requirements as set out in its Supplier Code of Conduct. In particular, the Company demands and verifies that all its down supply chains comply with the strict requirements of the DIST (Down Integrity System & Traceability) Protocol. With the support of specialised independent bodies, the Group conducts regular audits to ensure that animals are treated satisfactorily from the farm to the slaughterhouse.
For an overview of the different types of risks to which Moncler is exposed, and to complete the information provided above, see also the Board of Directors’ Report contained in the Annual Report 2018.

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