DOUBLE MATERIALITY ANALYSIS

For the Moncler Group, the materiality analysis has always been an important tool for identifying the most significant environmental and social priorities for its stakeholders and for the industry, in line with its strategy and business impacts, to identify and manage risks and opportunities and to define the contents of the sustainability reporting.

With the entry into force of EU Directive 2022/2464 on the Corporate Sustainability Reporting Directive (CSRD), the double materiality analysis was introduced, considering two complementary perspectives: impact materiality, which concerns the identification and assessment of the impacts that the Group has (or could have) on the environment and people, and financial materiality, which focuses on the theoretical risks and opportunities arising from environmental, social or governance issues that may negatively or positively affect the financial position, operating result, cash flows, access to finance or cost of capital.

As a result, the Group’s Sustainability Unit, with the support of a specialised firm, has revised its materiality analysis process to align it with the requirements of the new sustainability reporting standards, the European Sustainability Reporting Standards (ESRS), updating the methodology and structuring it into the following phases, as indicated in the “IG1: Materiality Assessment Implementation Guidance” issued by the European Financial Reporting Advisory Group (EFRAG):

• Understanding the context. This phase involved an in-depth analysis of the Group’s activities, its business relationships, the context in which it operates and the relevant stakeholders. The goal was to gather the necessary information to map the phases of the value chain, identify the actors involved in each of them, assess the positive, negative, actual and potential impacts as well as identify risks and opportunities. In addition to the in-depth analysis of internal documentation, a benchmarking analysis was conducted to compare the Group with its industry peers, identifying relevant sustainability issues and ensuring a comprehensive and best practice-aligned perspective. To deepen the understanding of the external context, the legislative landscape in which the Group operates and the issues of interest to clients and investors were then considered, as well as the ESG macro-themes described in articles and scientific publications.

• Identification of impacts, risks and opportunities based on the list of topics and sub-topics provided by the ESRS¹ and in the light of what emerged from the analysis of the internal and external context, the list of risks identified through the Group’s integrated risk management model (Enterprise Risk Management – ERM), the relevant sustainability topics published in the 2023 Consolidated Non-Financial Statement and the results of the due diligence processes. In the majority of cases, the identified impacts had corresponding risks and/or opportunities.

The identification of potentially material

The identification of potentially material impacts, risks and opportunities for the Group was also possible thanks to the support of public databases that facilitate the identification of sectoral impacts. In the process of identifying and assessing impacts, risks and opportunities, the Moncler Group took into consideration all the geographical areas in which it operates, as well as the various activities along its value chain. In addition, where necessary, the specificities linked to individual countries, production sites or business relationships were highlighted. The list of impacts, risks and opportunities identified was subsequently approved by the competent functions during the assessment phase.

• Assessment and determination of relevant impacts, theoretical risks and opportunities. Each impact, risk and opportunity was subsequently assessed by the relevant competent function, supported by the Sustainability Unit and Risk Management, taking into account several factors. In particular, for the purposes of the assessment, an analysis was performed to determine whether the generation of the impact, risk or opportunity emerged predominantly in the Group’s own activities and/or along its value chain (in the case of the value chain, both upstream and downstream impacts, risks and opportunities were considered), also taking into account the short, medium or long-term time horizon² in which the impact, risk or opportunity occurs or may occur. In line with the provisions of ESRS, the functions assessed the impacts taking into account their materiality, measured according to scale, scope, irremediable character (the latter only for negative impacts) and likelihood (only for potential impacts). Scale is defined as the measure of the benefit deriving from a positive impact or the severity of a negative impact, scope represents the extent of the impact and irremediable character indicates the extent to which a negative impact can be remedied. The risks and opportunities were instead assessed considering, in addition to the likelihood, the magnitude, defined according to scale and nature, of the related financial, reputational or compliance effects.  It is important to stress that the impacts, risks and opportunities have been identified and assessed without taking into account the mitigation or, in the case of opportunities, enhancement actions already implemented by the Group. The assessment scales described above, whether qualitative or quantitative, have been defined starting with those used for the assessment of corporate risks according to the Group’s Enterprise Risk Management system. Opportunities have been identified and assessed in continuity with the priorities according to which the 2020-2025 Strategic Sustainability Plan is being developed. In line with what has been done in the past regarding social and environmental risks, and also with the aim of including opportunities and their management, the Group plans to integrate the results of the double materiality analysis into the ERM register. This approach aims to optimise the monitoring and strategic and operational management of these aspects,

ensuring a more integrated vision that is consistent with business priorities.

The analysis involved both internal and external stakeholders of the Group. Internal stakeholders include the Group corporate functions of the individual Brands and members of the Moncler Sustainability Unit, in their capacity as experts in environmental and social topics related to the strategic pillars of the Sustainability Plan. As for external stakeholders, investors and sustainability experts were involved through individual interviews, aimed at gathering opinions and feedback on the analysis process.

To determine the sustainability matters relevant for reporting purposes, the results of the assessments of each impact, risk and opportunity were reported within two separate matrices: one for impacts and the other for risks and opportunities³. This distinction has become necessary to ensure, in the case of impacts, a greater weight to significance than likelihood of occurrence, as required by ESRS standards (ESRS 1 – General requirements, paragraph 45) for potential negative on human rights impacts. The materiality threshold has been defined, for both impacts and for risks and opportunities, in the medium-high and high relevance areas. The results of the materiality analysis, following approval by the members of the Strategic Committee and after assessment by the Control, Risks and Sustainability Committee, were subsequently presented to the Board of Directors for approval for reporting purposes. The analysis carried out led to the definition of a list of 29 relevant impacts, risks and opportunities based on the financial or impact materiality perspectives, attributable to all the Topical Standards provided by the ESRS, except for “S3 Affected communities” with respect to which no impacts, risks or opportunities have emerged, above the materiality threshold, in relation to the sub-sub-topics identified by the standard, including the economic, social and cultural, civil and political rights of communities and the rights of indigenous people. The Group reserves the right to carry out, in the future, specific analyses to re-assess the analysis performed.

In line with the priorities of the 2020-2025 Sustainability Plan, an entity-specific topic (not provided by the sector-agnostic ESRS) emerged as relevant since the Group considered it as one of the strategic pillars on which several initiatives have been implemented for years: support to communities.

The results obtained from the double materiality analysis are in line with the list of topics reported in the 2023 Consolidated Non-Financial Statement. The only changes are related to the inclusion of a risk related to pollution and the promotion of the circular economy as a business opportunity.

In order to ensure the alignment of the analysis with regulatory developments and the business in which it operates, the Group plans to regularly update the double materiality analysis.