PRODUCT AND INNOVATION

From the design phase to garment end of life, the challenge and ambition are to develop new techniques and materials with a lower environmental impact compared to the Group’s conventional solutions, minimise the resources used for production, extend product life and promote recovery of materials.

PRODUCT
To implement a circular economy model, environmental considerations must be fully integrated into the product and processes by tackling various aspects ranging from the choice of materials, made for example with recycled raw materials, to initiatives to extend product use and life, such as dedicated repair services, to a garment design aimed at facilitating recovery and recycling, up to production processes, distribution and packaging that involve processes or materials capable of ensuring an ever lower environmental impact. These are all aspects that require an aptitude towards innovation, experimenting with new solutions and collaborating with all actors in the supply chain.

USE OF “PREFERRED” MATERIALS
In recent years, the Group has begun to introduce products made with “preferred” materials into its collections. “Preferred” materials are those that aim to have a lower impact compared to conventional solutions used by the Moncler Group.

The journey began in 2019 with the bio-based down jacket, designed with plant-based and natural-origin materials and whose emissions were offset through REDD+ certified projects, as well as the range of garments created with recycled fabrics in the Moncler Grenoble collection, followed in January 2021 by the launch of the Moncler Men, Women and Enfant “Born to Protect” jackets made entirely from materials with a lower impact compared the conventional materials used by the Brand. In 2022 the Moncler Born to Protect range was expanded to become a total look, including, in addition to jackets, various types of garments and accessories, all made from fabrics and components with lower environmental impact than the conventional solutions used by the Brand and certified according to specific sustainability standards. In 2023, the Fall/Winter (FW) collection continued to evolve: in addition to these fabrics and components, recycled R•DIST down, i.e. DIST down recycled through an innovative mechanical process, was used in down jackets. Further information on the materials in the collection can be found at: https://www.monclergroup.com/en/sustainability/think-circular-bold/born-to-protect-collection.

In 2023, in addition to focusing on specific projects, the Moncler Group, in line with the commitments made in the 2020-2025 Sustainability Plan, progressively included raw materials with a lower impact than the conventional materials used by the Group in the Moncler and Stone Island as indicated through specific hangtags on products.

Through the collaboration of its Design, Fabric Research and Development, Operations and Merchandising teams, and with the involvement of the supply chain, the Group aims to integrate over 50% yarns and fabrics with a lower impact than the conventional solutions used by the Group into its collections by 2025. In line with this goal, the Raw Material Manual was drafted in 2023. This guide sets out the criteria that steer the choices of the corporate departments responsible for searching for, selecting and purchasing raw materials while taking into account their environmental, social and animal welfare impacts. The work and commitment of the teams involved led to significant progress: in 2023, over 25% of yarns and fabrics used in the Moncler and Stone Island Fall/Winter (FW) and Spring/Summer (SS) collections were lower impact than the conventional solutions used by the Group. This was made possible by the adoption of 41% recycled nylon, 42% recycled polyester, 12% cotton from organic or recycled practices, 49% certified wool (Responsible Wool Standard or Nativa or Sustainawool), 100% certified alpaca (Responsible Alpaca Standard), and 100% certified mohair (Responsible Mohair Standard).
Since 2021 Stone Island, in addition to materials, has also integrated new treatments into its collection, maintaining the technical and performance aspect of its products but with lower environmental impacts, such as reduced-water consumption treatments compared to the conventional solutions in the Soft Shell e.dye^® waterless colour system ^TM.

The assessment of the environmental impact of materials and components is supported by Life Cycle Assessment (LCA) analyses that quantify the potential environmental impacts. These analyses, which are based on a structured methodology and in line with ISO 14040, 14044 and 14067 and are certified by an independent, external third-party, are a useful tool for various considerations on the sustainability of the products, processes and materials used. To date, about 86% of the Group’s products have been evaluated through an LCA methodology.

A dedicated training programme was launched in 2023 in order to continue to spread sustainability culture and provide technical knowledge to Sales Assistants. The programme aims to increase knowledge of good environmental and social practices and the characteristics, certifications and corporate objectives of “preferred” materials and components used in the collections. This programme involved the entire sales force.

ADOPTION OF RECYCLING SOLUTIONS
One of the phases of the circular economy model to which the Group has devoted particular attention in recent years is the reuse of scrap materials through more efficient resource management.
To this end, the Group works actively at its production sites and with various suppliers, to reduce scrap and waste, and consequently textile waste, by optimising the use and cutting of fabrics, while implementing the infrastructure needed to recycle and maintain the intrinsic value of unavoidable scrap. Through recycling networks, production scrap can be turned into recycled raw materials, driving the production of new materials and contributing to the promotion of a circular economy. Since 2022, these activities have led to the inclusion in the recycling process of all nylon production scrap generated at the Moncler Group’s direct sites in Italy and Romania. This project was also extended to the Moncler brand’s outerwear production network, reaching over 55% of total outerwear nylon scrap in 2023.
This was made possible thanks to the collaboration of the Moncler Sustainable Innovation Department, which set the scope, parameters and methods of recycling, and the Operations and Supply Chain Department, which implemented the Nylon Scrap Management Process.
According to the procedure, during the year nylon scraps were classified and collected by line operators into specific recycling categories, weighed, recorded, stored and sent to the recycler. In order to monitor the correct assignment of scraps to the respective recycling category, the Group carried out physical and process checks at the sites, as well as differential scanning calorimetry analyses performed on a sample basis at third-party laboratories.
At the recycler’s site, nylon scrap may be subject to unravelling or to shredding, melting, cooling, extrusion, and finally cutting the material into chips to be used by as a “secondary raw material”.
In terms of other raw materials, production scrap of cotton, wool and mixed compositions from directly managed production sites are also sorted into various categories by composition and subjected to different recycling processes.
At Stone Island, the Closed Loop project continued, with the aim of recovering cotton scraps generated by suppliers during garment production by subjecting them to a mechanical recycling process. This process yields 50% recycled cotton fabric used to make about 20 models, including outerwear, trousers, sweatshirts and t-shirts, included in the 2024 summer and winter collection. In addition, the finished garments were treated with pigments of natural, plant or mineral origin. The entire process was verified by a third party that validated the recycled content and its origin from production scraps.
Thanks to constant collaboration with its suppliers in further pursuit of innovative circular economy solutions for the business, in 2021 Moncler and a supplier specialising in recycling technologies pooled their expertise with down to create a machine used to recycle DIST down through an innovative mechanical process. In 2023 the patented process was finalised in Italy and launched at the international level. Over the last three years, this process has led to the recycling of approximately 5 tonnes of down present in Moncler garments, certified according to the R•DIST module of the DIST protocol, which sets the requirements for recycled down certification.
In 2023 the Moncler Group further refined its system for selecting and recycling garments that cannot be sold in collaboration with several international companies with leading roles in fabric reuse and recycling.
Depending on the category, products are recycled and put to various uses such as the creation of new yarns or components for jackets, the production of furnishings and objects often used as visual merchandising for stores. In this direction, in 2022 the Moncler Group joined the Re.Crea consortium, with its ten brand members, under the coordination of the Camera Nazionale della Moda Italiana. The consortium was founded to organise the management of textile and fashion products at end of life and to promote research and development of innovative recycling solutions.
The Group’s commercial strategy is based on the principle of scarcity and, from an operational point of view, on effective inventory management, translating into efficient production planning and the right quantities at the right time and in the right place in order to avoid excessive inventories.

This approach, combined with a high level of sell-through, allows to limit the amount of unsold products.
The “seasonal” garments, i.e. those that are offered for one season only (which differ from carry-overs, which can be reoffered for several seasons) remain unsold, they are placed in the outlet channel operated by the Company or marketed through “Family and Friends” sales initiatives. In collaboration with some non-governmental organisations (NGOs), some of them are donated to people in difficult situations through the Warmly Moncler programme, designed to protect people from the cold. Lastly, the limited number of remaining products are all recycled through innovative and also experimental processes.
Besides innovative creative designs, the brand maintains a base of garments (including carry overs and permanent) that are always present in stores representing approximately 30% of the Group’s total revenues.

ABILITY TO LAST OVER TIME
Some of the key principles of the circular economy, such as garments’ ability to last over time, have always been a part of Moncler’s DNA. The high quality of its products and the way they stand beyond fashion and trends ensure that they have a very long average life. Despite these core strengths, Moncler is aware of how important it is to constantly work to find ways to extend the life of its garments even further (e.g., by repairing garments that would otherwise be at the end of their lifecycle), as this is one of the pillars of the circular economy and is a good practice that allows clients to avoid the environmental impact associated with the production, purchasing and disposal of a new garment. This characteristic was the foundation of the Extra-Life project, a service aimed at providing a second life to Moncler’s jackets through specific repairs. In 2021 the initiative was launched at a selected group of stores in Italy, France and Denmark, involving tailors from local repair platforms and sharing with clients the available garment repair solutions. Thanks to efficient and personalised service, tailors are able to repair damaged fabrics, thus extending product life. In 2022 the project was extended to all Regions in which Moncler operates. This initiative is part of a process of increasing customers’ awareness of how they can contribute to avoiding the environmental impact associated with the production, purchase and disposal of new garments.
In 2023, through this initiative and the other services of the after-sales channel, the Moncler brand handled more than 38,000 requests for repairs of garments used by its customers, equal to about 32 tonnes, 76% of which were fulfilled. All garments that cannot be repaired and returned to customers are recycled.
Finally, through the Extra-Life project, Moncler estimates that it has enabled its clients to avoid emissions for about 374 tonnes of CO2e¹ corresponding to about 70,000.00 $¹ of estimated positive impact of the social cost of carbon emissions avoided.
Over the next years, Moncler is committed to continuing extend this advanced extra repair repair service for the garments used by its customers, thus expecting also to increase the number of used garments collected to be repaired. Moncler’s first objective will always be to ensure a longer life to these garments through advanced repair techniques. At the same time, Moncler expects and is committed to increase accordingly the volume of recycled materials from used garments included in new collections through the development of innovative techniques.
With regards to product durability, the information reported within the care labels on our products and in the composition & care section on our website indicates specific washing and care guidelines that are studied to engage and educate customers to take care of their garments in the most appropriate ways, extending their lifespan as much as possible. In particular, the care labels suggest that the washing phase should be performed at low temperatures and with the exclusion of tumble drying, in order to limit the deterioration of the garments’ materials (e.g. possible shedding of plastic microfibers). In any case, the majority of Moncler’s products is comprised of outerwear nylon fabric garments, a product that usually does not undergo frequent washing (approximately once a year), and that is not composed of brushed fabrics, which represent the type of fabrics that is most subject to shedding of plastic microfibers.

SEARCH FOR INNOVATIVE SOLUTIONS
The Group’s innovation journey is based on an open innovation model that encourages the exploration and development of ideas, solutions, skills, processes and materials coming from the outside world, such as universities, innovation centres and suppliers of different sectors as well as accelerator hubs or research bodies.
This includes collaboration with and support of national and international start-ups, institutes, accelerators and universities, to which research and development investments are allocated, as well as constant collaboration with suppliers to identify innovative solutions for the business.
The Sustainable Innovation team, among its various activities, works closely with the Operations and Supply Chain teams in identifying partners in the various Regions that can guarantee the most innovative, cutting-edge techniques for recycling the main product categories. In addition, it has set up working groups with the Sustainability Unit to identify circularity solutions aimed at reducing the impact of materials.