57 ReSPOnSIBLe BUSIneSS MAnAGeMenT56 ReSPOnSIBLe BUSIneSS MAnAGeMenT MONCLER GROUP 2023

lations of the Code of ethics and internal regulations, including al- leged human rights violations.

The Group s business model entails for its products to be manufactured at the production site owned by Moncler in Romania, 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 worldwide. The diversity of partners and the geographical location of the Group s operations have led to significant investments in preventing and monitoring, also through a traceability process, the existence of any risks re- lated to human rights violations along the supply chain, with a par- ticular 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 com- plies with applicable laws and the principles set forth in the Code of ethics and Suppliers Code of Conduct. Both Codes, in particular, lay 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, through training activities, among its internal teams and partners, on the importance of responsible sourcing principles. Following the verifications con- cluded in 2023, some limited situations of non-compliance with spe- cific regulatory elements were identified, including certain aspects of remuneration, such as overtime pay for overtime hours worked, and of health and safety, such as on certification on fire prevention, inadequate management of training at plants, safety exits and extin- guishers that do not meet regulatory requirements. The resolution of these aspects is the subject of follow-up activities on the basis of predefined timescales according to the severity of the irregularities detected. See also pages 131-136; 139.

ENVIRONMENTAL RISKS environmental topics 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, in 2021 the Group began voluntarily reporting compa- ny risks related to climate change in both its non-Financial State- ment and the CDP Climate Change questionnaire, as required by the European Securities and Market Authority (eSMA) and the recommendations of the Task Force on Climate-related Financial Disclosures (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 phenomena, the increase in the cost of certain types of raw materials, the introduction of regulations aimed at containing climate change and possible changes in client 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 also analyses some potential risks relating to the loss of biodiversity, and the consequent impact on the supply of certain raw materials, due to deforestation, soil degradation and water contamination processes.

The Group is committed to preventing and mitigating any en- vironmental risks through various initiatives and projects.

The Group has 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 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.

Finally, the Group considers the potential risk of violation of the principles of animal welfare. 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 & Trace- ability (dIST) Protocol, continuously carrying out audits, with the support of a specialised third party, to ensure adequate treatment of animals. Stone Island only purchases down certified according to the RdS (Responsible Down Standard). See also pages 132-133; 136-139; 145; 161-163.

With effect from the Spring/Summer 2024 collection, Mon- cler has stopped using fur4 in all its collections. The Company stopped buying fur from animals raised or caught in the wild exclu- sively or primarily for their fur in 2022 and the last collection with fur garments was Fall/Winter 2023. This decision is consistent with Moncler s ongoing commitment to responsible business practices and builds on the Brand s constructive and long-term engagement with the Italian animal rights organisation 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 138.

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 function aim to strengthen the system for monitoring and managing non-compli- ance 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 108-110.

Both Moncler and Stone Island oversee issues relating to pri- vacy, to manage the risks of a data breach, and those relating to cybersecurity, to mitigate the risks of business disruption due to cyber attacks. In their Codes, both Brands indicate their commit- ment to implementing appropriate measures of an organisational and technological nature to respond appropriately to the privacy protection needs of their employees, collaborators, clients and sup- pliers, in compliance with all applicable laws and regulations and in accordance with the best and most recent applicable practices. Accordingly, all the necessary steps were also adopted to prompt- ly ensure compliance with all the measures required by Regulation (eU) 2016/679, the General Data Protection Regulation (GDPR). See also pages 240-241.

Regarding corruption prevention measures Moncler adopts an Anti-Corruption Model, which provides, inter alia, for a regulatory review of corruption offences in the countries in which the Compa- ny operates, identifying the areas and corporate processes at great- est 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 legislation, risk monitoring controls, training, audit activities, management and reporting of cases of non-compliance. See also pages 50; 53-54.

The main compliance risks identified by the Group include, as a priority, those for clients, related to product safety and coun-

4 The term fur refers to any skin with hair from animals raised or caught in the wild exclusively or primarily for their fur, for example fox, mink, coyote, finn raccoon, ermine, etc..