67 BOARd OF dIReCTORS RePORT66 BOARd OF dIReCTORS RePORT MONCLER GROUP 2023

line with the United nations commitment to limiting the maximum increase in global temperatures from pre-industrial levels.

The Group formulated 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, containing binding rules observance of which is verified through environmental compliance audits carried out by specialised third-party entities.

The Group also manages risks arising from the temporary dis- ruption of operations arising 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 damage arising from the disruption of business.

Please refer to the 2023 non-Financial Statement for more information.

IMPACT OF CLIMATE CHANGE ISSUES ON THE GROUP S CONSOLIDATED BALANCE SHEET The Group defined a climate strategy aimed at reducing green- house gas (GHG) emissions, with the intention of positively contrib- uting to the global goal of combating climate change, in line with the requirements of the Paris Agreement on climate. This strategy, inte- grated into the Group s business model, includes medium and long- term objectives.

In particular, the Group committed to reducing absolute CO2e emissions by 70% within Scope 1 and Scope 2 by 2030 (in line with the «1.5°C» ambition) and by 52% within Scope 3 (in line with the «Well-Below 2°C» ambition) per unit of product sold com- pared to 2021.

Furthermore, Moncler Group committed to achieving net ze- ro emissions (net Zero10) along the entire value chain by 2050.

These objectives have been formally approved by the Sci- ence Based Targets initiative (SBTi)11 and deemed consistent with the contribution required of companies to limit the maximum in- crease in global temperature compared to pre-industrial levels.

The main actions undertaken to achieve these objectives include: use of electricity from renewable sources (both purchased

and self-generated); implementation of energy efficiency activities (Building Man-

agement System - BMS, lighting systems, more efficient heat- ing and cooling, improvement of building thermal insulation, and promotion of environmental standards for buildings);

adoption of low-impact environmental vehicles in the Group s car fleet;

obtaining Leed certifications for new stores12 and all new corporate buildings.

For Scope 3 emissions: the progressive introduction of «preferred» materials in col-

lections; promotion of regenerative agriculture projects; decarbonization of the supply chain through energy efficien-

cy measures and the adoption of renewable energy sources.

The actions described above are reflected and will be reflected in the Group s Consolidated Financial Statements in terms of new in- vestments and recurring operations (e.g., purchase of origin guar- antee certificates, purchase of certified raw materials, etc.). The Group voluntarily reports on non-financial aspects in both the non-Financial Statement and the CdP Climate Change question- naire, addressing climate change-related business risks as per the requirements of the european Securities and Market Authority (eS- MA) and the recommendations of the Task Force on Climate-relat- ed Financial disclosures (TCFd) of the Financial Stability Board: Governance, Strategy, Risk Management, Metrics, and Objectives.

The impact of climate change has also been evaluated in rela- tion to estimates and assessments made in the financial statements. Medium-term impacts have been taken into account in the business plan projections, which form the basis for the impairment test.

The impact of climate change on the Group s Consolidat- ed Financial Statements is not significant as of the reporting date. As of the reporting date, there are no significant effects on the fig-

10 Achieving net Zero involves the overall balance between greenhouse gas (GHG) emissions produced and those absorbed by ecosystems, through neutralisation mechanisms. Specifically, to contribute to net Zero, companies must reduce emissions and neutralise residual emissions.

11 Promoted by CdP, United nations Global Compact, World Resources In- stitute (WRI) and World Wide Fund for nature (WWF), the Science Based Targets initiative establishes and promotes best-practice in defin- ing science-based targets, as well as assessing companies objectives.

12 excluding Shop-in-shop.

ures presented in the Group s Consolidated Financial Statements. Furthermore, to strengthen the Group s commitment to eSG

issues, starting from 2020 Performance Share plan, an eSG Perfor- mance Indicator focused on carbon neutrality has been introduced for all directly managed Group locations worldwide (offices, stores, logistics hub, production sites), on reducing single-use fossil ori- gin plastic, and on recycling nylon production waste, taking into ac- count the Group s inclusion in the dow Jones Sustainability World and europe indices.

RISKS ASSOCIATED WITH DEPENDENCE ON KEY PERSONNEL The Moncler Group s results also depend on the ability of its man- agement, which plays a crucial role in the Group s development and which has significant experience in the luxury goods sector. If the re- lationship with some of these professionals is terminated without a timely, appropriate replacement, the Group s ability to compete and its growth prospects may be affected.

The Moncler Group has an operational and management struc- ture capable of ensuring business continuity, including through the definition of succession plans and the adoption of retention plans for key professionals, as well as talent management aimed at developing skills and retaining talent.

RISKS RELATED TO THE COUNTERFEITING OF BRANDS AND PRODUCTS AND THE PROTECTION OF INTELLECTUAL PROPERTY RIGHTS The luxury goods market is characterised by the counterfeiting of brands and products.

The Moncler Group has made significant investments in the adoption of innovative technologies that enable tracking of prod- ucts throughout the value chain to prevent and mitigate the effects of counterfeiting of its brands and products and to protect its intel- lectual property rights in the territories where it operates. However, the presence on the market of significant quantities of counterfeit products could still adversely affect the brand image, with a nega- tive impact on sales and financial performance.

RISKS RELATED TO THE EVOLUTION OF THE REGULATORY FRAMEWORK The Moncler Group operates in a complex international context and is subject, in the various jurisdictions in which it operates, to laws and regulations that are constantly monitored with regard to the health and safety of workers, environmental protection, rules on the manufacture and composition of products, consumer protection, personal data protection, industrial and intellectual property rights protection, competition rules, tax and customs rules, and in gener- al all the relevant regulatory provisions.

The Group operates in accordance with applicable provi- sions of law and has established processes that ensure knowl- edge of the specific local regulations in the contexts in which it operates and of the regulatory changes that are gradually made. However, since legislation on certain matters, for example taxa- tion or personal data protection, is characterised by a high de- gree of complexity, an interpretation other than that applied by the Group may still have a significant impact on economic results. In this regard, the Moncler Group is involved in a programme to ne- gotiate advance pricing agreements with the tax authorities of the main countries in which the Group operates, some finalised and some still in progress.

In addition, the enactment of new legislation or amendments to existing legislation that impose more stringent standards for example with regard to product compliance may entail, by way of example, costs of adapting the production methods or characteris- tics of the products or may limit the Group s operations, with nega- tive consequences for its financial performance.

RISKS ASSOCIATed WITH exCHAnGe RATe PeRFORMAnCe The Moncler Group also operates on international markets in cur- rencies other than the euro, mainly the Chinese Yuan Renminbi, Japanese Yen, US dollar, Korean Won and British Pound. It is there- fore exposed to risk arising from the fluctuation of exchange rates, to an extent equal to the amount of transactions (mainly revenues) not covered by transactions of the opposite sign expressed in the