137 BE FAIR136 BE FAIR MONCLER GROUP 2022
cler 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 imple- ment this process with its down suppliers.
Lastly, ethical and social audits also continued to be carried out on strategic service suppliers: logistic platforms, external qual- ity 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 process- es on a sample of fabric, down, dyeing, weaving and tannery sup- pliers 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 activi- ties in the upcoming years.
These audit activities were complemented by audits on ani- mal welfare and on down traceability as per the DIST (Down Integ- rity System & Traceability) Protocol across the entire supply chain for Moncler and according to the Responsible Down Standard (RDS) for Stone Island. See also pages 138-140; 146-147; 163.
SUPPLY CHAIN AUDITS: ETHICAL, SOCIAL, ENVIRONMENTAL AND ANIMAL WELFARE
NUMBER Moncler Group Moncler Brand 2022 2021 2022 2021 2020 Ethical, social and environmental audits 239 180 150 148 154 Animal welfare and traceability (DIST) audits 136 136 136 136 161 down supply chain Total 375 316 286 284 315
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 sup- ply 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 suppli- ers 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 pro- gramme 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 imple- mented 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, envi- ronmental 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 ser- vices 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 certi- fication, 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 con- tinued to verify the reliability of its partners, including by deepening information on the management of sustainability issues with the in- volvement 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 catego- ries: 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 parame- ters making it possible to assess and compare the social and envi- ronmental performance of indirect suppliers.
FAIR WAGE PRACTICES ALONG THE VALUE CHAIN
In its Supplier Code of Conduct and Human Rights Policy, the Group recognis- es 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 em- ployee s basic needs, discretionary profit, market benchmarks and the type of professional performances.
Suppliers must provide a fair level of compensation and career develop- ment 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 sup- pliers, with the aim of covering 100% of the Group s critical suppliers by 2025.
In particular, Moncler partners with the Fair Wage Network, an indepen- dent 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 improve- ment 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 griev- ance 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 oth- er Moncler suppliers have been assessed and prioritised on the basis of the risk profile associated with the geographical location of the supplier and oth- er factors, such as the presence of collective labour agreements, which ensure dialogue and respect for social and environmental aspects. To this regard, ap- proximately 70% of the Moncler Group s suppliers is located in Italy and is cov- ered 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:
DIMENSION DEFINITION 1 Payment of salaries A wage which is regularly and formally paid
in full to the workers.
2 Living wage A wage that ensures minimum acceptable living standards.
3 Minimum wage A wage that complies with the regulations on legal minimum wage.
4 Prevailing salary A wage that is comparable to wages in similar enterprises operating in the same sector in the same country.
5 Payment of hours A wage based mainly on ordinary working hours worked without requiring to use excessive overtime.