CSP International Fashion S p A : Non Financial Consolidated Statement 2020

CONSOLIDATED NON-FINANCIAL STATEMENT 2020

pursuant to Italian Leg. Decree 254/2016

Sustainability Report

CSP INTERNATIONAL FASHION GROUP S.p.A. VIA PIUBEGA, 5C - 46040 CERESARA (MN) - ITALY

TVA No./TAX CODE/COMMERCIAL REGISTER no. 00226290203 SHARE CAPITAL Euro 17,294,850.56 F.P. Phone [phone] - Fax [phone]

www.cspinternational.it

INDEX
LETTER TO THE STAKEHOLDERS
……………………………………………………………………………………………. 3
SUSTAINABILITY PERFORMANCE AT A GLANCE ..................................................................	4
METHODOLOGICAL NOTE.......................................................................................................	5
01 CSP - SUSTAINABILITY AND STRATEGY ..........................................................................	8
CSP INTERNATIONAL ....................................................................................................................................................................	8
THE SECTOR: STRATEGIC SCENARIO AND TARGETS.....................................................................................................................	9
REPUTATION & CREDIBILITY.......................................................................................................................................................	10
CSP IMPACTS - MATERIALITY ANALYSIS ...................................................................................................................................	14
02 MADE IN CSP.....................................................................................................................	21
THE CHOICE OF CSP....................................................................................................................................................................	21
TRANSPARENCY............................................................................................................................................................................	22
TRACEABILITY : PRODUCTION CYCLE AND SUPPLIERS ...............................................................................................................	22
CIRCULAR ECONOMY AND SUSTAINABLE COMMITMENT.........................................................................................................	27
THE RELATIONSHIP WITH THE CUSTOMER - SHARED CONSENT AND RESPONSIBLE MARKETING ........................................	31
CSP AND THE TERRITORY............................................................................................................................................................	32
03 GOVERNANCE ...................................................................................................................	35
CORPORATE GOVERNANCE .........................................................................................................................................................	35
RESPONSIBLE BUSINESS MANAGEMENT ...................................................................................................................................	37
RISK MANAGEMENT ....................................................................................................................................................................	41
COMPLIANCE................................................................................................................................................................................	44
04 ECONOMIC RESULTS AND DISTRIBUTED VALUE ..........................................................	49
THE ECONOMIC VALUE GENERATED AND DISTRIBUTED ...........................................................................................................	49
THE INVESTMENTS .......................................................................................................................................................................	50
05 THE HUMAN RESOURCES ................................................................................................	52
PERSONNEL MANAGEMENT, VALUE ENHANCEMENT AND DEVELOPMENT POLICIES .............................................................	52
MARKET DIFFICULTIES, PRODUCTION RESTRUCTURING MEASURES AND COVID-19 IMPACTS ............................................	53
THE EMPLOYEES............................................................................................................................................................................	56
TRAINING......................................................................................................................................................................................	60
OCCUPATIONAL HEALTH AND SAFETY .......................................................................................................................................	61
06 THE ENVIRONMENT .........................................................................................................	68
ENVIRONMENTAL PROTECTION AND USE OF NATURAL RESOURCES.......................................................................................	68
RESPONSIBLE USE OF RESOURCES ..............................................................................................................................................	68
ENERGY, EMISSIONS AND CLIMATE CHANGE.............................................................................................................................	72
GRI CONTENT INDEX .............................................................................................................	77
REPORT BY THE AUDITING COMPANY................................................................................	85

LETTER TO THE STAKEHOLDERS

| GRI 102-14

Since 1973 we have been working closely with the territory in which we live, believing that what we do every day says a lot about us, explains who we are as a company and as people.

2020 was a complex year, during which we demonstrated to the market our ability to react to the pandemic with tangible actions: we did not stop when faced with the uncertainties, but we chose to invest in the future by focusing on our new vision of eco-sustainability.

As far as we are concerned, safeguarding resources means paying particular attention to the use of raw materials. Currently, most pantyhose on the market are made of fossil-based, non- renewable materials, "virgin polyamide". Our goal is to help change this normality and become increasingly independent of non-renewable raw materials. How? Preferring, where possible, the use of pre- or post-consumer recycled yarns or bio-based yarns. A preference we also apply to the research on environmentally friendly materials that we use in the development of all our product categories such as hosiery, underwear, corsetry, nightwear and house wear; products that we develop in a manner that ensures that they are durable over time because of their excellent quality.

We have always loved the territory where the company has its headquarters and we are committed to developing production processes with reduced environmental impact. This is why we have introduced a partial dyeing water recovery stage, which allows us to reduce the consumption of water and electricity. In addition, as of 2020 we have chosen to use energy from renewable sources only.

We view transparency and traceability two pillar values of our vision of eco-sustainability. We have undertaken an important commitment towards our customers: we want to make our value chain transparent and traceable, with our "Made in CSP" project, a venture with which we intend to disclose where and how the pantyhose and hosiery we produce are made. Over the years we have accomplished a wealth of experience, which we cherish with affection at our production facilities in the province of Mantua (Ceresara), preferring where possible Italian manufacturing and outsourcing only when absolutely necessary. We firmly believe that showing the level of extreme attention and care we put into the designing and manufacturing of our products is of vital importance.

Today we present to you the fourth edition of the Non-Financial Statement, with which we are delighted to tell you as much as possible about ourselves and our products.

Maria Grazia Bertoni	Francesco Bertoni	Carlo Bertoni
Chairman of the Board of	CEO	CEO
Directors
CEO

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CSP - Consolidated Non-Financial Statement 2020

SUSTAINABILITY PERFORMANCE AT A GLANCE

			Unit of		2018				2019		2020
			measure
	Economic results and Distributed value
	Sales revenue		Euro mil		111.5				108.6		82.9
	Economic value distributed		Euro mil		113.6				108.4		85.3
	Territorial supply value -incidence		%		20.8				22.0		24.4
	Governance
	Management systems		Integrated Environment, Health and Safety Management
			System
			ISO 14001 - ISO 45001
	Legality Rating		Three stars (maximum rating)
	Circular economy and sustainable commitment
	Product Certifications		Oeko-Tex® Confidence in Textiles - Standard 100
			Partners on projects: GSR (Global Recycle Standard)
			FSC certified paper - Forest Stewardship Council
			(catalogues)
	Innovative and sustainable materials used		Organic Cotton
			Organic Fibres: EVO® by Fulgar
			Regenerated Fibres: Q-NOVA®
			Regenerated Cotton
			Repetable - Yarn from recycled PET bottles
			Metal free dyes / Chemical management
	Customer health and safety
	Cases of non-compliance with product		No.		none				none		none
	health and safety regulations
	The human resources
	Employees		No.		807				750		703
	Gender equality: % of female employees		%		65				64		64
	Employees per geographical area-- Italy		No.		393				362		339
	Employees per geographical area- France		No.		414				388		364
	Serious accidents		No.		None				None		None
	The environment
	Energy - Direct consumption		GJoule		133.8				126.9		109.5
	% energy consumption from renewable		%		0.4				0.3		21.5
	sources
	GHG Emissions (Scope 1 + Scope 2		t CO2e		10,226				8,426		4,266
	MARKET-based method)
	Emissions reduction vs. previous year		%		-				18%		49%
	Water - Withdrawals		Mega litres		249				270		234
	Water drawn from wells		%		88.2				87.9		88.1

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CSP - Consolidated Non-Financial Statement 2020

METHODOLOGICAL NOTE

GRI 102-45 GRI 102-46 GRI 102-48 GRI 102-49 GRI 102-50 GRI 102-51 GRI 102-52 GRI 102-53 GRI 102-54

The Consolidated Non-Financial Statement (hereinafter also referred to as the "Non- Financial Statement" or "DNF") of CSP International Fashion Group S.p.A. and its subsidiaries (hereinafter also referred to as "CSP" or the "Group" or the "CSP Group") was drawn up according to articles 3 and 4 of Leg. Decree no. 254/2016 (hereinafter also referred to as "Decree"), implementing Directive 2014/95/EU, and contains information on environmental and social topics, employees, respect for human rights and anti-corruption, useful for ensuring proper understanding of the activities carried out by the CSP Group, its performance trend, its results and the impact of its activities.

The Non-Financial Statement pertains to the 2020 financial year and was drawn up according to the methodologies and principles set out in the GRI Sustainability Reporting Standards (In accordance - core option), defined by the Global Reporting Initiative ("GRI Standards"). As indicated in the specific paragraphs, GRI 207 (Taxes - published in 2019) and GRI 403 (Occupational health and safety - published in 2018) have been adopted from this DNF. GRI 306 (Waste - published in 2020) will be adopted from the next financial year 2021, the mandatory application date.

The general principles applied during drafting of the Non-Financial Statement are the ones established by the GRI Standards: materiality,

inclusiveness, sustainability context, completeness, balance between positive and negative aspects, comparability, accuracy, timeliness, reliability, clarity. The performance indicators used are the ones provided for by the adopted reporting standards, and are representative of the various sustainability areas and consistent with the activity carried out and the impacts of said activity. In particular, these indicators were chosen on the basis of the materiality analysis and of the topics referenced by Leg. Decree no. 254/2016. In the different sections of the DNF, quantitative information for which estimates have been used is reported.

For the purpose of drawing up the Non- Financial Statement, consideration was also given to the Communication from the European Commission, published in June 2019, "Guidelines on the Communication of Non- Financial Information: Supplement on reporting climate-related information (2019/C 209/01)".

The reporting scope of the qualitative and quantitative data contained in the Consolidated Non-Financial Statement of CSP refers to the performance of the Parent Company CSP International Fashion Group S.p.A. and of its subsidiaries, fully consolidated, as resulting from the consolidated financial statements of CSP Group as at 31 December 2020, with the only exclusion being the Companies Oroblù USA and Oroblù Germany as regards environmental and social topics, due to the absence of employees and production units.

For the purpose of allowing a comparison of data over time and the evaluation of the trend of CSP's activities, the comparative data pertaining to the two previous periods were included.

The Non-Financial Statement contains a summary of the information pertaining to the various areas covered (GRI Content Index), so as to allow traceability of the indicators and of the other quantitative and qualitative information presented in the document.

The drafting process of the Non-Financial Statement saw the involvement of the heads of the various functions of CSP.

This document was approved by the Board of Directors of CSP International Fashion Group S.p.A. on 19 March 2021 and, according to the provisions of Leg. Decree 254/2016, it was audited by the designated auditing company PricewaterhouseCoopers S.p.A. based on the principles and indications contained in ISAE3000 (International Standard on Assurance Engagements 3000 - Revised) of the

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CSP - Consolidated Non-Financial Statement 2020