59 RESPONSIBLE BUSINESS MANAGEMENT58 RESPONSIBLE BUSINESS MANAGEMENT MONCLER GROUP 2022
SOCIAL RISKS Concerning people, among the main risks relating to human re- sources management the Group has identified the potential risks of reliance on key people and the difficulty in retaining and developing talent. To address these risks, a performance evaluation system has been implemented, covering the entire corporate population and tak- ing into account both soft skills and technical skills. This system al- lows to enhance and develop individual skills in the medium-to-long term, to define succession plans and nurture the best talents. In ad- dition, the Group has developed a medium-to-long-term incentive plan specifically aimed at managers and key roles in order to pro- mote their retention. See also pages 101-104; 105-106; 107.
The risk of human rights violation against employees of Group companies is considered at the theoretical risk level, due to the protections provided by the various laws and/or collective labour agreements, the working standards set out in the Moncler and Stone Island Codes of Ethics, the Human Rights Policy issued in early 2023 as an integral part of the Code of Ethics and of the Supplier Code of Conduct and, above all, the oversight activities carried out at corporate sites. In 2022, to continue to ensure equal opportunities in the personnel selection and recruitment and to promote diversity and an environment that is increasingly inclusive right from the candidate experience phase, the Group updated the Personnel search and selection Policy. See also pages 99; 110-112. In addition, the Group has always been encouraging to report on witnessed or suffered misconduct to their superiors or Human Re- sources team. The Group has thus implemented a system of rules and a whistleblowing process for reporting irregularities, also in anonymous form, offences and violations of the Code of Ethics and internal regulations, including alleged human rights violations.
The Group s business model entails for its products to be manufactured at the production site owned by Moncler in Roma- nia, the smart factory in Trebaseleghe (Padua) as well as through façon manufacturers and finished-products suppliers operating in Italy and abroad. Moncler and Stone Island also purchase raw materials and services from a large number of suppliers world- wide. The diversity of partners and the geographical location of the Group s operations have led to significant investments in prevent- ing and monitoring the existence of any risks related to human rights violations along the supply chain, with a particular focus on façon manufacturers, specialised workshops and major logistics operators. With the help of certified specialist firms, Moncler and Stone Island regularly verify that their supply chain complies with applicable laws and the principles set forth in the Code of Ethics and Suppliers Code of Conduct. The latter, in particular, lays down the standards of conduct with which suppliers must comply with, failing which the collaboration relationship may be terminated. The Group is also committed to raising awareness among its partners, through training, on the importance of responsible sourcing prin- ciples. Following the verifications concluded in 2022, some limit- ed situations of non-compliance with specific regulatory elements were identified, including certain aspects of remuneration, such as overtime pay for overtime hours worked, and of health and safe- ty, such as on certification on fire prevention, inadequate manage- ment of training at plants, safety exits and extinguishers that do not meet regulatory requirements. The resolution of these aspects is the subject of follow-up activities on the basis of predefined times- cales according to the severity of the irregularities detected. See al- so pages 134-138; 141.
ENVIRONMENTAL RISKS Environmental issues and the related risks are also subject to as- sessment and formulation of mitigation plans.
With reference to the environmental risks linked to climate change, since 2021 the Group voluntarily reports company risks re- lated to climate change in both its 2022 Non-Financial Statement and the CDP Climate Change Questionnaire, as required by the European Securities and Market Authority (ESMA) and the recom- mendations of the Task Force on Climate-related Financial Disclo- sures (TCFD) of the Financial Stability Board: Governance, Strategy, Risk Management, Metrics and Targets.
The potential and actual risks analysed concern the intensi- fication of extreme climatic events, the increase in the cost of cer- tain types of raw materials, the introduction of regulations aimed
ENVIRONMENTAL, SOCIAL AND COMPLIANCE RISKS at containing climate change and possible changes in clients pur- chasing dynamics.
In addition to the risks associated with climate change, the Group also identifies among potential environmental risks the fail- ure to comply or incomplete compliance with relevant laws and regulations which could result in possible criminal penalties and/ or financial outlays; environmental pollution phenomena related, for example, to uncontrolled emissions, inadequate disposal of waste and wastewater or spills of dangerous substances into the ground.
The Group is committed to preventing and mitigating any en- vironmental risks through various initiatives and projects.
In 2020 Moncler joined the Science-Based Targets initiative (SBTi), setting targets for reducing greenhouse gas emissions in line with the United Nations commitment to limiting the maximum increase in global temperatures from pre-industrial levels.
The Group defined rules, processes and control activities to prevent and manage any environmental risks from its processing and raw materials suppliers, through the adoption of the Code of Ethics, the Supplier Code of Conduct and the Environmental Policy, updated in July 2022. Compliance with the binding provisions con- tained in these documents is verified through environmental audits carried out by specialised third-parties.
The Group also manages risks arising from the temporary dis- ruption of operations deriving from external events or natural events through various initiatives, including business continuity plans, as well as insurance policies covering the loss of the integrity of com- pany assets and damages arising from the disruption of business.
Lastly, the focus on animal welfare is an area of particular commitment for the Moncler Group. Both Brands thus require their suppliers to comply with the animal welfare requirements set forth in the Supplier Code of Conduct. In particular, Moncler requires and verifies that its down supply chains comply with stringent require- ments set out in its proprietary Down Integrity System & Traceabil- ity (DIST) Protocol. The Group continuously carries out audits, with the support of a specialised third party, to ensure adequate treat- ment of animals. Stone Island only purchases down certified ac- cording to the RDS (Responsible Down Standard). See also pages 136; 138-140; 146-147; 163.
Moncler will phase out fur from all its collections. The Com- pany stopped sourcing fur in 2022 and the last collection featuring fur will be Fall/Winter 2023. This decision reflects Moncler s on- going commitment to increasingly responsible business practic- es and is consistent with the constructive dialogue that has long been established with the Italian animal welfare association LAV as a representative of the Fur Free Alliance. Stone Island has not used fur since 2018 and has also joined the Fur Free Retailer Policy. See also page 140.
COMPLIANCE AND OTHER RISKS In terms of non-compliance risks, a Group-wide Compliance Pro- cedure has also been adopted in order to: circulate the definition of compliance, determine the scope of its applicability, set general compliance principles, identify employee roles and responsibilities and provide guidelines based on the pillars of the Group Compli- ance Programme, regularly updated.
The activities carried out by the Group Compliance func- tion aim to strengthen the system for monitoring and managing non-compliance risks, starting from the areas considered most sensitive, such as health and safety, privacy, anti-corruption and product compliance.
The Group regards the protection and promotion of em- ployees health, safety and wellbeing as a key value and a priority principle of its way of doing business. For this reason, an effective management system has been implemented at the global level in compliance with the international ISO 45001 standard in all offices, direct stores and logistics and production sites. In addition, in or- der to ensure the protection and promotion of health and safety at corporate sites, uniform management rules are applied, as detailed in the Health and Safety Management Policy adopted at Group lev- el, and periodic audits are carried out at all sites where Moncler and Stone Island employees work. The management system, support- ed by important training and awareness-raising activities for both Group personnel and suppliers, plays a fundamental role in reduc- ing the risk of workplace accidents. See also pages 113-115.