SUPPLY CHAIN AUDITS: SOCIAL AND ETHICAL, ANIMAL WELFARE AND TRACEABILITY
NUMBER Moncler Group Moncler Brand 2021 2021 2020 2019 Social and ethical audits 180 148 154 152 Animal welfare and traceability audits (DIST) 136 136 161 215 Total 316 284 315 367
Notwithstanding the zero-tolerance approach for major breaches, for which the Group reserves the right to terminate immediately the existing contractual relationship with the supplier, both Brands are committed to support their supply chain raising awareness and driving continuous improvement, requiring the implementation of corrective actions where needed. Following each audit, an im- provement plan is issued and its implementation is then verified.
In order to verify that corrective measures are effectively implemented by the agreed deadline, the Group carries out both on-site and documentary follow-up audits.
Aware of the fact that promoting principles of responsibili- ty among its suppliers is beneficial to mutual sustainable growth, in addition to constantly raising awareness of ethical, social, envi- ronmental and animal welfare issues, the Moncler Group supports its supply chain in several ways. In particular, Moncler supports some strategic suppliers, making health and safety experts avail- able to give advice and develop knowledge of best practices (33 suppliers benefited in the three-year period 2019-2021) and providing financial support for investments in technological- ly advanced machinery for particular processes (21 suppliers in 2021). The programme will also be extended to Stone Island sup- pliers in 2022.
Lastly, with the aim of providing an overall supplier assessment that also takes into account sustainability aspects, Moncler has implemented a vendor rating system. Each indicator is weighted and helps to assess a supplier based on the results achieved in each area. The vendor rating areas are: sustainability and compliance (working conditions and re-
spect of human rights, chemical requirements, environ- mental practices, animal welfare, etc.)
quality (rate of production defects, quality complaints re- ported to client service, etc.)
delivery service level (fl exibility, punctuality of delivery, etc.) cost (price competitiveness, logistics costs, etc.) innovation (technological capacity, aptitude for innovation,
etc.).
With regard to indirect suppliers, namely suppliers of goods and services not related to products, since 2018 the mapping of sup- pliers quality, social, environmental and health and safety cer- tifications is continuously updated. In 2021, the vast majority of the approximately 600 main indirect suppliers of the Group that have been mapped have at least one certification, and a third of them already have ISO 45001 health and safety certification and/ or ISO 14001 environmental certification (in line with the results emerged from the mapping activity carried out by Moncler on around 30 suppliers in 2018, 270 in 2019 and 380 in 2020). The Group also continued its awareness-raising activities aimed at promoting improvement objectives among suppliers linked to the importance of certification processes and has set itself the target of extending the mapping to 200 more indirect suppliers by 2022. Lastly, in 2021, Moncler continued to carry out checks on the re- liability of partners, also including information on the manage- ment of sustainability issues. In particular, during the year more than 100 indirect suppliers, including manufacturers and main- tenance and service providers, have been assessed according to the 28 criteria of the scorecard defined in 2020 and divided into four categories: environment, labor and human rights, health and safety, and ethics. This tool, based on international principles, standards and guidelines such as the Global Compact, Global Re- porting Initiative, ISO26000 and the OECD Guidelines, provided a set of parameters making it possible to assess and compare the social and environmental performance of indirect suppliers.
FAIR WAGE IN THE VALUE CHAIN
In the Supplier Code of Conduct, the Group acknowledges the importance of ensuring wages aligned with the law or binding collective agreements and, in any case, ad- justed to the cost of living, the employee s basic needs, discretionary income, market benchmarks and the type of professional performances.
Suppliers must provide a fair level of compensation and a career development path that reflects knowledge, skills, abilities and professional experience. Workers must be paid and rewarded for their performances through benefits and wage or non-wage incentives.
Suppliers are required to grant all the benefits provided by the law, including, but not limited to, social security, parental leave, annual holidays and calendar holidays, in addition to engage in regular social dialogue on compensation issues.
In 2020 Moncler took part in a working group organised by Camera Nazionale della Moda Italiana (the National Chamber of Italian Fashion) to discuss and understand the issue of the living wage, meant as a level of income that ensures people to meet the basic needs of family, food, housing, education and child care, savings for leisure and/or for facing unexpected expenses.
In the same year, the National Chamber of Italian Fashion, of which Moncler is a member, conducted a survey endorsed by an independent organization, the Fair Wage Network, to verify compliance 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 guarantee a free and dignified existence for themselves and their fami- lies ) in the Italian fashion supply chain.
In 2021, with the support of a third party, Moncler launched a pilot project to test the assessment method for living wage implemented at its production site in Romania and at the premises of two strategic suppliers with the aim of extending it and cover 100% of the Group s strategic suppliers by 2025.
In particular, in 2021 Moncler partnered with the Fair Wage Network, an indepen- dent organisation dedicated to progressing fair wage practices across global supply chains. The methodology adopted by Fair Wage focuses on partnership with com- panies and suppliers to assess wage practices through workers and managers ques- tionnaires, identifying root causes and implementing improvement activities.
The analysis is structured around 12 dimensions, covering the entire spectrum of wage indicators: the living wage is therefore only one of the dimensions analysed while other 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.. Anoth- er area of the analysis involves comparing the results of the assessment with sector and country benchmarks.
The implementation of this analysis and the gradual extension to other Moncler suppliers have been assessed and prioritised on the basis of the risk profile 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 envi- ronmental aspects. To this regard, approximately 70% of the Moncler Group s sup- pliers is located in Italy and is covered by collective bargaining agreements.
Overall, the Group is committed to working with all players in its supply chain, with specialised associations and with other strategic partners to increase the awareness and the understanding of the issue of fair wage.
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2021BE FAIR BE FAIR