Moncler Group | Annual Report 2024 Board of Directors’ Report 266 Moncler Group | Annual Report 2024 Board of Directors’ Report 267

•Prevention and mitigation of impacts

The risk analysis process is essential to prevent negative impacts

and def ine mitigation actions, such as prioritizing ethical-social

and environmental audit plans and integrating the results into

the selection process for new suppliers.

The ethical, social and environmental audits are in fact carried

out both on potential suppliers, to assess their suitability for

establishing a business relationship with the Group, and on

existing suppliers to verify ongoing compliance with applicable

laws and the principles outlined in the corporate Codes. For the

latter, any violation of the Group’s requirements constitutes a

contractual breach, granting Moncler and Stone Island the right

to request the immediate termination of the existing contract

in the event of serious non-compliance or, in less severe cases,

the implementation of a timely corrective action plan. In order

to ensure maximum impartiality, audits are regularly entrusted

to qualif ied, accredited third-party entities with recognized

expertise. The audits, regarding social aspects, focus on

verifying respect for fundamental human and labour rights,

with particular attention to the issues of forced labour, child

labour, freedom of association, working hours, guaranteed

minimum wage, and, not least, health and safety. The Group’s

proprietary checklist, used to perform audits, is regularly

updated to take account of changes in reference standards

and local and international regulations. It was developed

based on a benchmarking analysis of major industry-recognised

and multi-stakeholder standards and methodologies, including

SMETA3, the Responsible Business Alliance, amfori BSCI4

and other management systems and international initiatives.

This tool has been subsequently adapted to the specif icities

of the Group’s supply chains and is periodically reviewed with

the technical support of the International Labour Organization

(ILO) and certif ication and consulting companies (including

SGS, Control Union, IDFL and KPMG). The Group has

a

three-year audit plan aimed at ensuring that all façon

manufacturers and f inished product suppliers are audited

at least once every three years In 20222024 Moncler

conducted 794 ethical social and environmental audits

on both suppliers and subsuppliers accounting for 100

of the volumes assigned to outerwear façon manufacturers

93 of the volumes assigned to suppliers of other outerwear

processes dye houses printing works embroideries etc

100% of footwear and bag suppliers, 88% of tanneries, 97%

of volumes assigned to knitwear suppliers and soft accessories

suppliers and 96% of the 2024 turnover of pattern making

and prototyping suppliers.

Stone Island, which has a three-year ethical, social and

environmental audit plan to ensure the highest coverage of

suppliers in its supply chain, also carried out 380 ethical,

social and environmental audits during the same three-year

period (on both suppliers and sub-suppliers), equal to around

100% of the value of orders assigned to f inished products

suppliers and 99% of the value of orders assigned to

façon manufacturers.

Moreover, in 2024, both Brands also conducted ethical, social

and environmental audits on their main raw materials suppliers

representing 75% of total material purchases for Moncler

and 90% for Stone Island. In particular, with regard to the

down supply chain, 100% of Moncler’s suppliers were also

found to comply with the new human rights and environmental

compliance modules of f icially included in the DIST Protocol.

Those environmental and social modules were also applied to

Stone Island’s RDS-certif ied down supplier verif ication processes.

Lastly, ethical, social and environmental audits also continued

to be carried out on strategic service suppliers: logistic

platforms, external quality control platforms, providers of

services at Group sites and stores for which no material

non-compliance was identif ied.

These verif ication activities were accompanied by audits on

animal welfare and down traceability. See also pages 305–306.

3

Sedex Members Ethical Trade Audit

4

Business Social Compliance Initiative

NUMBER Moncler Group

2022 2023 2024

Ethical social and environmental audits 239 389 546

Animal welfare and traceability DIST audits down supply chain 136 156 210

TOTAL 375 545 756

The increase in the number of ethical, social and environmental

audits in recent years is also attributable to the strengthening

of verif ication activities.

In 2024, with the ongoing goal of preventing impacts on suppliers’

workers and, at the same time, the potential risks for Moncler

and Stone Island, the Group’s procedure applied to the selection

process for new suppliers was updated. The evaluation of a new

supplier involves an on-site visit conducted by the quality team

to assess the supplier’s alignment with the Group’s quality

standards. After this technical analysis, the evaluation process

for new façon manufacturers and new f inished products

suppliers involves a document review of compliance and

f inancial aspects as well as a preliminary ethical, social and

environmental audit carried out by a third party. For raw

material suppliers, instead, the process requires the f illing in of

an environmental and social assessment questionnaire

supported by documentary evidence followed by an on-site audit.

The Group thus commits to not include in its supply chain

companies that do not comply with the Group’s quality standards

and basic ethical, social and environmental principles.

The results of the audit activities, including preliminary ones,

are regularly shared by the Sustainability and Internal Audit

Functions with the Operations & Supply Chain and Purchasing

& Procurement teams. This ongoing dialogue allows the latter

to review the management of relationships with suppliers, also

considering the potential risks and impacts on workers within

the supply chain.

With reference to wage practices, which is another key topic in

the fashion industry, in the Supplier Code of Conduct and in

the Human Rights Policy the Group recognises the importance of

ensuring wages that are aligned with the law or with binding

collective agreements in force in the countries where it

operates and, in any case, are adequate to the cost of living, the

employee’s basic needs, discretionary prof it, market benchmarks

and the type of professional performance. The Group indeed

requires its suppliers to of fer the workforce a fair wage level and

a career development path that ref lects knowledge skills

abilities professional experience as well as benef its and salary

and nonsalary incentives

Suppliers like the Group are expected to both provide all the

benef its required by the law including but not limited to social

security parental leave annual holidays and calendar holidays

and engage in regular social dialogue on compensationrelated

matters In addition all suppliers are required to full cover taxes

and other recruitment and hiring costs for workers including

migrant workers temporary workers and f ixedterm contracts

Since 2021 the Group with the support of a third party

has been conducting specif ic assessments on living wage for

both its own corporate sites and its suppliers with the aim of

covering 100 of its critical suppliers see also page 309

by 2025. In particular, Moncler partners with the Fair Wage

Network, an independent organisation dedicated to progressing

fair wage practices across global supply chains.

The methodology adopted by the Fair Wage Network involves

collaboration with companies and suppliers to assess wage

practices through questionnaires completed by both workers

and managers, identifying any problems and suggesting

improvement actions.

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, alongside other aspects and variables

of the wages practices and pay systems are evaluated such

as wage negotiation with workers’ representatives through

collective bargaining, the presence of grievance mechanisms

for complaints on remuneration issues, etc.. Another area of

the analysis involves comparing the results of the assessment

with industry and country-specif ic benchmarks.

The implementation of this analysis and the gradual extension

to other Group suppliers have been assessed and prioritised

on the basis of the risk prof ile associated with the geographical

location of the supplier and other factors, such as the presence

of collective labour agreements, which ensure dialogue and

respect for social and environmental aspects. In this regard,

approximately 70% of the Moncler Group’s suppliers are located

in Italy and are covered by collective bargaining agreements.

At the end of 2024, the percentage of “critical suppliers” (see also

page 309) assessed and involved in a living wage analysis,

carried out with the Fair Wage Network, was equal to 86%.

The analysis, which in the last three years has involved more

than 16,000 workers of the Group’s suppliers, conf irmed that

all of these workers receive remuneration in line with or above

the applicable local minimum wage according to current

regulations. In particular, the results show that more than 85%

of the workers involved in the assessment receive a salary

in line with the country-specif ic living wage (where possible,

regionspecif ic and parameterized according to specif ic

indicators for that country such as the average fertility rate

and the average number of people per household who receive

an income from work

For raw materials suppliers one lever that helps mitigate

potential human rights risks is the progressive introduction

of raw materials certif ied according to standards such as

for example the Responsible Wool Standard RWS the

Responsible Alpaca Standard RAS and the Responsible

Mohair Standard RMS These standards include criteria that

go beyond sole animal welfare and also cover social aspects

The Group also uses training and capacity building as tools to

prevent potential negative impacts and at the same time