61 RESPONSIBLE BUSINESS MANAGEMENT60 RESPONSIBLE BUSINESS MANAGEMENT MONCLER GROUP 2022
Both Moncler and Stone Island monitor privacy issues. In their Codes, both Brands indicate their commitment to implementing ap- propriate measures of an organisational and technological nature to respond appropriately to the privacy protection needs of their employees, collaborators, clients and suppliers, in compliance with all applicable laws and regulations and in accordance with the best and most recent applicable practices. Accordingly, all the neces- sary steps were also adopted to promptly ensure compliance with all the measures required by Regulation (EU) 2016/679, the Gener- al Data Protection Regulation (GDPR). See also pages 243-244.
Regarding corruption prevention measures Moncler adopts an Anti-Corruption Model, which provides, inter alia, for a regulato- ry review of corruption offences in the countries in which the Com- pany operates, identifying the areas and corporate processes at greatest risk of corruption. An Anti-Corruption Policy is therefore in force and has been adopted by each company of the Moncler Group. It defines the responsibilities for monitoring changes in leg- islation, risk monitoring controls, training, audit activities, manage- ment and reporting of cases of non-compliance. See also pages 53; 54-55.
The main compliance risks identified by the Group include, as a priority, those for clients, related to product safety and coun- terfeiting. To protect the health and safety of its clients, the Group requires its suppliers to operate in accordance with the most re- strictive international laws applicable to hazardous or potentially hazardous chemicals and constantly verifies the chemical com- position and the physical and mechanical characteristics of its products. Suppliers are contractually bound to comply with the guidelines contained in the Group s Product Restricted Substanc- es List (PRSL) and Manufacturing Restricted Substances List (MRSL) published in February 2022 on the corporate website. In particular, the PRSL applies to materials, treatments and products, and includes not only the requirements of the most restrictive reg- ulations of the countries where production and sale take place, but also other, more stringent voluntary requirements, according to a precautionary approach. The proper implementation of these guidelines is verified through tests on the chemical composition of the raw materials carried out at specialised third-party laboratories by the supplier and/or Moncler and Stone Island. Both brands have established a completely dedicated internal function (Operations Compliance Department) to fully monitor this risk. See also pages 171-173.
With the aim of protecting the clients and the Brand the Group has been committed to fight counterfeiting. Both Brands have therefore put in place a series of management and prevention tools managed by the Group s Brand Protection and Intellectual Proper- ty department: from the formulation of detailed procedures to col- laboration with law enforcement, customs and other luxury brands, training and audits of suppliers and use of anti-counterfeiting labels applied on all products. See also pages 145-146.
For an overview of the various types of risks to which Moncler is exposed, in addition to the above, see the Board of Directors Re- port in the 2022 Annual Financial Report.
CLIMATE CHANGE RISK ANALYSIS IN LINE WITH THE TCFD
It is now clear that climate change is a complex and urgent challenge that will have a major impact on the future of the planet and society. Rising tempera- tures are at the base of extreme natural events such as floods, tornadoes, forest fires, rising sea levels, droughts, decreased productivity and altered agricultur- al ecosystems, etc. These events are resulting in significant changes as well as economic, environmental and social and costs. This scenario can also have sub- stantial impacts and repercussions on various industries and companies.
Since 2021 the Moncler Group has been voluntarily reporting on business risks linked to climate change, assessed according to the recommendations of the Financial Stability Board Task Force on Climate-related Financial Disclo- sures (TCFD): Governance, Strategy, Risk Management, Metrics and Targets.
In particular, the Head of Internal Audit responsible for risk management and the Enterprise Risk Management (ERM) process, in collaboration with the Sustainability Unit, carries out a scenario analysis aimed at assessing the main climate change risks with potential impacts on the main operating sites locat- ed in Italy and Romania and on specific geographical areas of the Moncler and Stone Island supply chain.
In addition to physical risks, i.e. those related to the physical impact of climate events, transition risks, namely the ones related to the process of ad- justment to a low-carbon economy, related to changes in public policies, regu- lations, technology and client choices, were also considered.
Regarding physical risks, an assessment was performed on the basis of the climate scenarios identified by the Intergovernmental Panel on Climate Change (IPCC) (RCP 2.6, 4.5 and RCP 8.5)3. In particular, the RCP 4.5 and RCP 8.5 scenarios present an intermediate emissions scenario, aligned with the Par- is Agreement, and a business-as-usual scenario with increasing greenhouse gas emissions and limited climate policies, respectively. The analysis was per- formed over two different time horizons: medium term (2030) and long term (2050), to assess how climate events can evolve and affect the business.
Also with regard to transition risks an analysis was carried out on the ba- sis of the two scenarios identified by the International Energy Agency (IEA), which sets out two main paths of the energy system evolution: a scenario that reflects existing and planned government policies, without achieving the ob- jective of containing the temperature increase within 2°C, and a decarbonised scenario (Sustainable Development Scenario - SDS), which pursues the main energy objectives of sustainable development, including full access to ener- gy and the containment of the temperature increase well-below 2°C and which calls for developed economies to achieve net-zero emissions by 2050. Accord- ingly, in line with what has been done for physical risks, the analysis of transition risks was also performed over two different time horizons: medium term (2030) and long term (2050), in order to assess how climate events can evolve and af- fect the business.
In 2022 the risks and opportunities identified were quantified in terms of their financial implications. The financial impact assessment was carried out through a tool of an internationally recognised provider, whose methodol- ogy and results are aligned with the recommendations of the Task Force on Cli- mate-Related Financial Disclosures (TCFD).
The results of the climate scenario analysis were integrated into the quan- titative assessment of the ERM, which estimates the likelihood of occurrence and impact and classifies risks by level of importance based on financial impact. The most significant risks are monitored by the Control, Risks and Sustainabil- ity Committee.
The Group is committed to periodically repeat these analyses and as- sessments and to enrich the list of risks and opportunities, where necessary.4
The Group is committed to continuing to align itself with the TCFD recom- mendations with the goal of continuing to integrate the metrics and targets used to measure the climate-related financial impact on the basis of the risks and op- portunities analysed.
3 Representative Concentration Pathway. 4 Further details on the climate scenario analysis methodology and results
of the financial impact assessment are accessible and can be downloaded from the website at the following link: https://d2jb2t40p81ydg.cloudfront. net/wp-content/uploads/2017/08/TCFD-Disclosure-v.13.pdf and reported on the Group s CDP Climate Questionnaire 2022 (https://d2jb2t40p81y- dg.cloudfront.net/wp-content/uploads/2023/01/Moncler-CDP-2022.pdf).