Aeffe S p A : Non Financial Declaration 2022

2022

CONSOLIDATED NON-FINANCIAL STATEMENT OF THE AEFFE GROUP FOR 2022

Prepared pursuant to Decree 254/2016

Summary

Summary

2

LETTER TO THE STAKEHOLDERS

METHODOLOGY

MATERIALITY ANALYSIS

Process of mapping sustainability risks

3 4 8 15

GOVERNANCE 17

Corporate governance and transparency in business operations Resilience and business continuity

EU Environmental Taxonomy pursuant to Reg. (EU) 2020/852: the regulatory context European Environmental Taxonomy for the AEFFE Group

17 20 21 22

HUMAN RESOURCES 26

Management of Human Resources Collective bargaining agreements Employment, Diversity and Inclusion Training

26

28

28

32

Occupational Health and Safety Welfare and Well-being Relations with the Community

33

35

37

ENVIRONMENT

Energy Consumption and Emissions

Management of water resources

Waste disposal

38 39 42 43

FIGHT AGAINST CORRUPTION AND HUMAN RIGHTS

Prevention of corruption

45 45

ECONOMIC PERFORMANCE AND PROCUREMENT

Territorial presence

Transparent fiscal approach Procurement

48 48 50 50

PRODUCTS 54

Research and development Packaging

54

54

Quality of raw materials Clients

55

57

Responsible marketing and communications

57

ANNEXES 59

TEMPLATES PER ANNEX II TO DELEGATED REGULATION (EU) 2021/2178 59

TURNOVER CAPEX OPEX

59 60 61

TEMPLATES PER ANNEX XII TO DELEGATED REGULATION (EU) 2021/2178 62

GRI CONTENT INDEX 63

LETTER TO THE STAKEHOLDERS

Dear Stakeholders,

Against a macroeconomic background marked by numerous challenges but with, on the bright side, the pandemic fading away, we managed to close 2022 with highly satisfactory results. This enables us to tackle the subject of sustainability in even greater detail, across all functions and in every activity.

As a European player, we recognize the urgent need to approach sustainability in a structured manner now that recently, even in our sector, it has become a strategic objective. This has been made clear at various official European and domestic conferences, including the EFA (European Fashion Alliance) Summit held in Maspalomas in June 2022, in which we participated via our sector representatives, led by the National Chamber of Italian Fashion and Altagamma.

One of the principal topics on the agenda was the EU Green Deal formulated in 2019 by Commission President Ursula von der Leyen, whose objectives include the reduction of greenhouse gas emissions, to which the fashion sector must also contribute. These objectives, which cannot be procrastinated any longer if we want to assure a future for the coming generations, are also confirmed by international research including, for example, that carried out by McKinsey (The State of Fashion 2022), which found that 43% of Gen Z prefers businesses with a sound reputation in terms of sustainability.

At corporate level, we have laid the foundations for the transition towards a more sustainable business model inspired by the 17 Sustainable Development Goals (SDGs) embodied in the UN 2030 Agenda. In practical terms, we began with the introduction of a Code of Ethics back in 2008, which guides business activity at all levels, and we maintain sound relations with the community via our participation in social initiatives. I am pleased to mention "Fashion Deserves the World" in this regard, an initiative promoted by the UN Refugee Agency (UNHCR) with support from the Pura Vida association (ULDB project). Other initiatives pursued in 2022 included an increase in clean energy production, following the installation by Pollini of a new photovoltaic system, and various product-related initiatives.

This said, commencing from 2023 we will introduce objectives for sustainability at a strategic level and then, based on priorities, target more specific goals in each area. We are already holding discussions with Re.Crea, consortium established and coordinated by the National Chamber of Italian Fashion, to identify the steps needed to reduce the production of waste or improve its reuse, analyze areas for improvement in the value chain, determine how best to manage end-of-life textile-clothing products and, of course, increase the use of eco-sustainable or regenerated materials in the production of our collections.

In other words, aware of our responsibilities towards all employees and the various communities with which our business interacts via the purchase of our products, we want to continue building an environment-focused culture and transform the impending challenges into an opportunity to make our processes and our collections even more attractive and environment friendly.

Massimo Ferretti

Executive Chairman

METHODOLOGY

Decree 254/2016 transposed into Italian legislation the requirement for public interest entities and large companies or groups to report to their shareholders and, more generally, all stakeholders, on the principal aspects of their social and environmental performance. This Non-Financial Statement for the year ended 31st December 2022 confirms the commitment of the AEFFE Group (hereinafter also AEFFE or the Group) to report on social and environmental impacts, respect for human rights and the diversity policies implemented and, above all, confirms the desire to follow a strategy that delivers long-term sustainability.

Reporting period

This NFS relates to the period from 1st January 2022 to 31st December 2022. Where possible or considered appropriate, the data for the past year has been compared with the information for previous financial years, so that all stakeholders can compare the performance achieved over time.

Reporting standards

In order to comply with the reporting criteria envisaged in Decree 254/2016, the Group made technical-methodological reference to the guidelines accompanying the GRI Sustainability Reporting Standards (GRI Standards) when preparing this Consolidated Non-Financial Statement. These guidelines, issued in 2016 by the Global Reporting Initiative and amended subsequently, represent the reference model most widely adopted at an international level for reporting on sustainability. In order to comply more closely with the requirements of the reporting standards, from this year the Group has applied the GRI Universal Standards published on 5th October 2021 by the Global Reporting Initiative (GRI), using the "with reference" option.

Scope of the Consolidated Non-Financial Statement

The following Group companies are included within the reporting scope of this Non-Financial Statement: AEFFE S.p.A., AEFFE Retail S.p.A., AEFFE USA Inc., Velmar S.p.A., Pollini S.p.A., Pollini Retail S.r.l., Moschino S.p.A., Moschino Korea Ltd.

The following Group companies have been excluded from the reporting scope: Fashoff UK Ltd; Moschino France Sarl; Bloody Mary Inc; Moschino USA Inc; AEFFE UK Ltd; AEFFE France Sarl; AEFFE Shanghai Ltd; AEFFE Germany GmbH; AEFFE Spagna Slu; Pollini Suisse Sagl; Pollini Austria Gmbh.

These exclusions are explained by the fact that the socio-economic and environmental impacts of the above companies are not believed significant, considering their incidence in terms of consolidated sales and employment. This possibility is envisaged in Art. 4 of Decree 254/2016, pursuant to which the Consolidated Statement may exclude subsidiaries that, despite inclusion in the consolidated financial statements, are not needed in order to understand the activities of the Group, its performance, its results and the impact of its activities.

Notably, as part of work to simplify the Group structure, AEFFE S.p.A. absorbed Velmar S.p.A., a wholly-owned subsidiary, with effect from 28th December 2022. That company is considered separately when mentioned in sections of this NFS, partly due to the way certain non-financial data is collected, which is currently being simplified and ratified. The chart presents the corporate structure of the Group, including its controlling interests at 31st December 2022.