In 2020 the National Chamber of Italian Fash-
ion conducted a survey endorsed by the inde-
pendent Fair Wage Network, to verify compli-
ance with Article 36 of the Italian Constitution
( workers are entitled to wages proportionate
to the quantity and quality of their work and in
any case sufficient to ensure a free and digni-
fied existence for themselves and their fami-
lies ) in the Italian fashion supply chain.
Moncler took part in the roundtable together
with other fashion brands and confirmed its
commitment to carry out a project aimed at
evaluating the fair living wage at its produc-
tion site in Romania and then extending the
evaluation model to its strategic suppliers,
which will provide a better understanding of
wage conditions within its supply chain and
offer a structured approach to ensuring a fair
living wage in every country.
FAIR WAGE POLICIES IN THE SUPPLY CHAIN
The audits are focused on ensuring fundamental human and labour rights with a particular emphasis on the topics of forced labour, child labour, freedom of association, work- ing hours, minimum wage, and last but not least, health and safety. Additionally, in 2020 Moncler required all members of its supply chain to comply with national regulations, work authorizations, decrees, regulations, and guidelines on the subject of health protections and the containment of the COVID-19 pandemic. Even where not expressly required by local regulations, Moncler asked its suppliers to adopt inter- nal safety protocols describing all measures to prevent con- tagion. These aspects were monitored by Moncler technical personnel and by the auditors.
The scope of audit and the suppliers subject to audits are determined on the basis of a risk analysis and the stra- tegic importance of the supplier and its own supply chain, considering matters such as quality, delivery times, and ani- mal welfare. Specifically, the Company considers the size of orders, the type of goods or services provided and their sig- nificance to the business, geographical location, and other parameters such as the number of employees and manufac- turing plants, whether there are subcontractors and where they are located, and how difficult it would be to replace the supplier quickly.
Although ethical and social audits were difficult to schedule in 2020 because of the pandemic, which prevented auditors from visiting suppliers at various points during the year, Moncler managed to keep the number of audits in line with 2019 by including follow-ups with suppliers and sub- contractors.
During the three-year period 2018-2020, 450 social and ethical audits were carried out (both on suppliers and sub-contractors), equal to approximately 100% of the volumes assigned to outerwear façon manufacturers and suppliers of footwear and bags, 86% of the number of down suppliers and tanneries, and 82% and 73% of the volumes assigned, re- spectively, to suppliers of knitwear and soft accessories. In addition, in 2020 ethical and social audits were carried out on the main raw material suppliers, accounting for 7% of all raw materials purchased in 2019 (excluding down). Moncler has set a target of covering 80% of its purchases from strate- gic raw material suppliers by 2025.
It is also committed to maintaining 100% coverage of its façon manufacturers every three years and to extending that threshold to other categories of supplier. Finally, it will continue to carry out ethical and social audits on providers of strategic services: logistics platforms, external quality control platforms, and service providers at Moncler offices and stores.
Additional audits on animal welfare and on down trace- ability as per the DIST (Down Integrity System & Traceabili- ty) Protocol were conducted across the entire supply chain. See also pages 121-122.
Moncler has a zero tolerance policy against major com- pliance breaches, which can lead to immediate contract ter- mination. Moncler is committed to raising awareness and driving continuous improvement within its supply chain, requiring the implementation of corrective measures when deemed necessary. In this case, the Group verifies that cor- rective measures are implemented by an agreed deadline through on-site and documentary follow-up audits.
Upon conclusion of every audit, an improvement plan is issued and its implementation is checked during subsequent audits. In 2020, most instances of non-compliance were re- lated to issues of occupational health and safety and, in a few cases only, to the management of employment relation- ships. During the year there were 15 cases in which suppliers were found to be non-compliant with Moncler s ethical prin- ciples, leading to termination of the partnership.
Aware that fostering the principles of supplier respon- sibility benefits mutual sustainable growth, in addition to ongoing awareness-raising activities on ethical, social, envi- ronmental, and animal welfare issues, Moncler supports its supply chain in several ways.
The Company continued its support programme for a number of strategic suppliers in 2020, making health and safety experts available to provide advice and develop knowl- edge of best practices to 11 suppliers (41 during the period 2018-2020), and providing financial support for investments in technologically advanced machinery for special processes.
Moncler is updating its vendor rating system by includ- ing new social and environmental indicators for raw material suppliers, with the aim of providing an overall assessment that also takes account of sustainability aspects. Each indi- cator is weighted, contributing to the rating of every vendor on the basis of the results achieved in the different areas. The vendor rating macro-areas are: sustainability and compliance (working conditions, en-
vironmental practices, animal welfare, etc.); quality (manufacturing defect rate, quality complaints
reported to customer service, etc.); delivery and service level (flexibility, punctuality of de-
livery, etc.); costs (price competitiveness, delivery charges, etc.); innovation (technological capacity, appetite for innova-
tion, etc.). The vendor rating system will be gradually extended to other suppliers in the coming years.
2020 2019 2018
Social and ethical audits 154 152 144
Animal welfare and traceability audits (DIST) 161 215 176
Total 315 367 320
SUPPLY CHAIN AUDITS: SOCIAL AND ETHICAL, ANIMAL WELFARE AND TRACEABILITY (No.)
119118 CONSOLIDATED NON FINANCIAL STATEMENT 2020BE FAIR