135 BE FAIR134 BE FAIR MONCLER GROUP 2022
Lastly, in 2022, to promote the inclusion in the Company of technical personnel specialised in the fashion sector, Moncler launched the MATE (Moncler Academy for Technical Excellence) programme to create a school of craftmanship aimed at training the technical per- sonnel required to develop the business, such as prototypers, pat- tern makers and quality experts. In 2022 the programme involved 24 participants who, following the first basic training phase, are con- tinuing with specialist training in Italy and abroad. The process will conclude at the end of 2023 with their inclusion in the company s production functions. In addition, in 2022 a training programme of three to six months was also launched in Romania to train new man- ufacturing personnel for the production site. Sixty new workstations were introduced as part of this programme. See also page 104.
For the Moncler Group, talking about quality also means talking about health and safety, respect for human rights, environmen- tal protection and, in general, ethics in business conduct along the entire value chain. Being a socially responsible company in- volves taking a commitment that extends well beyond its bound- aries, embracing the entire supply chain.
Suppliers are strategic partners, this is why the Group s relation- ship 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 con- tinues with systematic awareness-raising and monitoring ac- tivities. 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 re- sponsible, 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 guide- lines 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 princi- ples and ensure that their subcontractors comply with them as well. Violation of the principles of the Code constitutes a breach of con- tract, with the right, depending on the severity of the situation, to im- mediately terminate the relationship. See also pages 52-53; 55; 58.
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 Conven- tions, and sets out the Group s expectations for the main areas of responsible business. It consists of six sections (Labour and Hu- man Rights, Health and Safety, the Environment, Animal Health and Welfare, Product and Service Safety and Quality and Business Eth- ics) 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 suppli- er consists primarily of an on-site visit carried out by the Quality Team to evaluate the supplier s alignment with the Group s quali- ty standards. After this technical analysis, the assessment process for new façon manufacturers and finished products suppliers in- volves an ethical, social and environmental audit by a third party. For raw material suppliers, it requires the completion of an environ- mental and social evaluation questionnaire supported by docu- mentary 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 environ- mental 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 appli- cable laws and principles contained in the aforementioned codes.
RESPONSIBLE SOURCING
In order to ensure maximum impartiality, audits are regularly con- ducted 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, free- dom 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 nation- al 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% ofits 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 ap- proximately 100% of the volumes assigned to outerwear façon manufacturers, 90% of the volumes assigned to suppliers of oth- er 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 suppli- ers 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 au- dit 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 subcontrac- tors), equal to around 87% of the value of orders assigned to fin- ished 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 im- mediately the existing contractual relationship with the supplier, both Brands are committed to support their supply chain raising awareness and driving continuous improvement, requiring the im- plementation 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 im- plemented 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 en- vironmental standards (85% of critical suppliers). Collaboration was ended with around 7% of them (17 suppliers), and the remain- ing 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 im- provement plan was issued. The main areas of non-compliance were related to workplace health and safety (70%) and, in 30% of cas- es, aspects related to management of work relationships, including non-compliances involving working hours (11%), salaries and remu- neration (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 ethi- cal and social audits on major raw materials suppliers represent- ing 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 Mon-
4 Over 85% of significant contracts include compliance with the Brands Code of Ethics (95% for Moncler).