Moncler Group | Annual Report 2024 Board of Directors’ Report 262 Moncler Group | Annual Report 2024 Board of Directors’ Report 263

[S2 SBM–3] Material impacts, risks and opportunities

and their interaction with strategy and business model

The value chain of the Moncler Group includes, in the upstream

phase, the workers of the supplier companies (including those

involved in the production of raw materials, façon manufacturers,

f inished product suppliers, and service providers) and, in the

downstream phase, the workers of the business partners of the

wholesale channel. As part of the double materiality process,

potential negative impacts and risks (the assessments did not take

into account the mitigation actions implemented by the Group)

have been identif ied mainly among workers in the upstream phases,

namely those within the supply chain.

The Moncler and Stone Island supply chains ref lect the

complexity typical of the fashion industry and are characterised

by a network of suppliers with whom the Group maintains direct

contractual relationships (Tier 1) which, in turn, collaborate

with

other operators (Tier n). During 2024, the number of Tier 1 suppliers

amounted to 5891, showing a slight decrease compared

with

the previous year due to increasing synergies and the partial

internalisation of production.

Suppliers (Tier 1 and Tier n) are divided into four main

categories: raw materials, façon manufacturers, f inished products

and services.

Raw material suppliers primarily provide fabrics, yarns, down,

leather and production accessories (buttons, zippers, ribbons,

elastics, etc.). Fabrics mainly come from Italy, Japan, South Korea,

China and France. Suppliers of yarn and production accessories

are mainly Italian, while the down suppliers are European, North

American and Asian.

Façon manufacturers are suppliers that employ workers with

strong technical expertise to which the Group entrusts the

production of f inished products or intermediate phases of processing

(dying, embroidery, etc.), while providing them with all the raw

materials needed. This category includes dye houses that perform

garment-dyeing, to which Stone Island directly entrusts this

process in Italy. The entire manufacturing process is carefully

monitored by Group technicians who verify its compliance

with the required standards through rigorous, ongoing f ield audits.

In particular through this process outerwear trousers skirts

dresses all tricot knitwear and some cutandsewn knitwear

are produced Façon manufacturers are mainly located in Italy

and Eastern Europe areas where long manufacturing tradition

guarantees very strong technical expertise and adequate production

capacity In particular Italy is characterised by a strong expertise

in very complex and unusual processes

Finished products suppliers are suppliers whose workers

having received the technical design of the products are responsible

for the creation of the garment including the raw materials

sourcing phase according to the Group standards in addition

Moncler directly provides its f inished products suppliers with some

key raw materials such as down, nylon and logoed materials.

During garment production there is constant interaction between

the supplier and the Group experts, who make on-site visits and

scrupulously supervise the process, to ensure that the f inal

product

meets the expected high level of quality. Some cut-and-sewn

knitwear (mainly t-shirts and polo shirts), some soft accessories

(such as hats and gloves), shoes and bags, and small leather

goods are mainly produced in this way. In particular, suppliers

of cut-and-sewn knitwear are based in Europe and Türkiye;

shoes are made by suppliers in Asia and bags and small leather

goods are made by European suppliers, mainly Italian.

Service providers support the Moncler Group in its pattern

making, prototyping and quality control processes and are mainly

based near its corporate sites.

As for indirect suppliers, they are partners that provide goods

and services not directly related to product manufacturing. This

category includes construction companies and security,

cleaning,

porterage and maintenance, logistics and consulting services.

The heterogeneity of suppliers, their geographical distribution,

the nature of certain processing and services, and the seasonal

variability of production could lead to potential negative impacts

on workers in the supply chain on issues related to human rights

(such as forced or child labour, the right to collective bargaining, etc.),

inadequate labour standards (management of contracts and working

hours, wages, occupational health and safety systems, etc.) and

employment stability. These impacts could translate into potential

reputational risks for the Group.

To address these challenges, the Group has been dedicating

signif icant resources for years to the prevention and monitoring

of potential violations of applicable laws, as well as its own standards,

along the supply chain. In this context, the traceability process

has been important enabling an increasingly detailed understanding

of the supply chain while simultaneously establishing a structured

due diligence system, with a particular focus on those who might

be in situations of greater vulnerability.

1

Excluding suppliers with sales order of

less than 1000 Euros per year

[S2–1] Policies related to value chain workers

The Moncler Group has adopted specif ic policies in order to promote

a responsible value chain in all the countries in which it operates,

and to manage or mitigate theoretical risks and potential

negative impacts.

The Codes of Ethics of the Moncler brand and the Stone Island

brand encompass the set of values that both Brands recognise, share

and also promote with all partners. Employees and collaborators

are required to act with honesty and integrity and to build

relationships with stakeholders based on mutual trust, so that

growth is guided by the principle of shared value. In particular,

through the Codes, the Group requires its partners to make the

same commitment and, among other requirements, not to

knowingly enter into relationships of any kind, either directly

or indirectly, with parties who in any way violate the rules

on adequate labour standards, with particular, but not exclusive,

reference to the f ight against child labour and forced labour as

well as the protection of health and safety (see also page 302).

The Group’s Supplier Code of Conduct sets out expectations

for how partners should operate. It consists of six sections

(Labour and Human Rights — which includes a prohibition of

any form of forced and child labour —, Health and Safety,

the Environment, Animal Health and Welfare, Product and

Service Safety and Quality, and Business Ethics) and contains

the mandatory requirements that suppliers must comply with

in order to begin or continue working with the Group.

The Group’s Human Rights Policy, which is an integral part

of the Code of Ethics and is prepared with the technical support

of the International Labour Organization (ILO), def ines the principles

underlying the Group’s commitment to respecting and promoting

fundamental human rights and preventing or mitigating any

negative impact of its activities through an approach based on risk

assessment criteria at all levels of its value chain. These documents

are inspired by the main laws, regulations and national and

international standards in the f ield of corporate social responsibility,

corporate governance, human rights and environmental protection,

such as the International Bill of Human Rights of the United Nations,

the Universal Declaration of Human Rights and the Charter of

Fundamental Rights of the European Union the decent work

standards set out in the conventions of the International Labour

Organization ILO the OECD Organization for Economic

Cooperation and Development Guidelines for Multinational

Enterprises of the Organization for Economic Cooperation and

Development the Ten Principles of the United Nations

Global

Compact etc

Codes and policies are periodically updated to respond to

stakeholder needs and expectations, to ensure alignment

with international best practices, and to integrate them in

light of emerging sustainability issues.

The Group’s Board of Directors is the body responsible for

approving, adopting and supervising compliance with the documents

described above.

The documents are published, in Italian and English, on the

monclergroup.com website in the “Sustainability/Documents” section.

All suppliers2, during the contractual phase, are required

to sign the Code of Ethics, with its related Policies, and the

Supplier Code of Conduct. By signing, suppliers commit to

respecting its principles and ensuring that their own suppliers

comply with them, as well as displaying these documents

in the workplace to make them easily accessible to workers.

Moncler publishes an annual Modern Slavery Statement to

transparently communicate its approach to managing human

rights issues. In particular, the document describes the measures

taken to ensure, as required by the law of the United Kingdom

“Modern Slavery Act 2015 – Section 54”, by the law of Canada

“Fighting Against Forced Labour and Child Labour in Supply

Chain Act”, and by the “California Transparency in Supply Chains

Act of 2010”, the absence of any forms of modern slavery, forced

labour, child labour and human traf f icking within its direct scope

and along its supply chain.

2

Approximately 90 of signif icant Group

contracts include compliance with the

Brands Code of Ethics 95 for Moncler