Elica S p A : NON FINANCIAL DECALRATION KPMG REPORT INCLUDED 2022

ASPIRA, ISPIRA.

SUSTAINABILITY

REPORT 2022

Consolidated Non-Financial Report drawn up in accordance with the provisions of Legislative Decree No. 254/2016

CONTENTS

MESSAGE TO THE STAKEHOLDERS 2

METHODOLOGICAL NOTE AND REPORTING SCOPE 4

WE INSPIRE SUSTAINABILITY 9

Elica Group profile 10

Elica's Economic Network 17

The Industry Network of Elica and the Group 19

External initiatives and role of the foundation 20

The supply chain 23

Elica's Governance System and procedural division 25

Governance at the subsidiaries 26

Composition of the corporate boards and performance assessment 27

Remuneration Policies 28

Conflict of interest control policies 30 Definition of the Group's Strategies, Objectives and Values:

the actions of the Board of Directors 31

Effectiveness of the Risk Management Model 32

Elica's sustainability footprint 37

Who are our stakeholders? 39

Shaping Elica's Sustainability 44

Reporting changes 49

WE INSPIRE VALUE 51

Group economic performance 53

The Group's economic "weight" (Financial Highlights) 54

Group fiscal compliance 56

Supporting continuous innovation 59

Supporting after-sales service quality 61

Combatting corruption 62

WE ARE INSPIRED BY THE ENVIRONMENT 65

The sustainability footprint in the environmental arena 67

Eco Product Design 69

Energy consumption and emissions 71

Use of materials 76

Waste management 78

Suppliers assessed according to Environmental and Social criteria 82

WE INSPIRE PEOPLE 84

Supporting our employees 86

Equal opportunity and anti-discrimination 95

Training 96

Health and Safety 98

Industrial relations 107

Supporting our customers and quality 108

We protect customers by providing accurate information 110

We protect customer privacy 112

GRI CONTENT INDEX 113

Communications pursuant to Regulation (EU) 2020/852 (Taxonomy) 120

Independent Auditors Limited Assurance Report 129

1

MESSAGE TO

THE STAKEHOLDERS

Dear Readers, At Elica we believe that only through effective management and appreciation of all Stakeholders can companies achieve lasting profitability and create and sustain value over the long term. For us this means paying close attention not only to the products and materials used in the production process by employing increasingly innovative solutions and design, but also to the communities in which we operate, our people, processes and necessarily the needs of our customers.

We may have entered a new year, but the challenges en-countered in 2021 persisted into 2022. Despite not affecting the continuity of the Group's supplies, the ongoing global health emergency and the start of the Russian-Ukrainian War caused energy and raw material prices to rise.

To manage the potential impact of the conflict on our op- erating risks, Elica adopted a monitoring process in 2022 to analyse potential repercussions on business and identify possible mitigation actions.

Despite the challenging geopolitical climate, at Elica we had a successful year and, for the second consecutive pe- riod, maintained our leadership position, and beat our own records. At the same time, we doubled down on our Sus-tainability Roadmap with the creation of a Strategic Plan based on three pillars: Production and Processes with low environmental, social and governance impact.

As for our environmental efforts, we have made a formal commitment to improving energy efficiency in our pro-duction processes, reducing the environmental impact throughout our supply chain, increasing the energy effi- ciency of our products, and researching and innovating more sustainable packaging in line with specific targets.

As part of our efforts to provide people with attention and care, we will increasingly focus on upskilling employees and investing in training, ultimately becoming a learning organisation.

We have also defined and planned actions to involve our suppliers in the Group's sustainability commitments, as we strive to extend our social responsibility criteria to our en- tire supply chain. We plan to report our progress in 2023, which is the target year for many of our KPIs. In terms of disclosing our performance to our readers, we remain committed to the significant commitment we made when we published our first Report in 2017, which took further shape in 2022.

This year, we sought to provide a more transparent and comprehensive overview of our economic, environmental,and social impact on our stakeholders, enabling readers to fully comprehend our performance. As evidence of our commitment to sustainability, we are proud to announce our transition to the "In accordance with" reporting ap- proach, as defined in the Global Reporting Initiative's Sus-tainability Reporting Standards (GRI Standards).

In the sixth edition of our Group's Sustainability Report, we have a number of accomplishments that we wish to share with you.

Without a doubt, one of our most significant achieve- ments is our return - after many years of major commit-ment and hard work - to rewarding those who have been at our side as patient and trusting partners. In October, Elica distributed a dividend of approximately Euro 3.8 million. Our success in achieving our aspirations has in- spired our employees, and the strength of our team has enabled us to embark on a new chapter in our history and create and distribute value to both our shareholders and communities.

We have done this, as always, by maintaining our unwa-vering commitment to protecting the region in which we operate. Our previous efforts have yielded results, and we have achieved our ambitious yet attainable target.

In 2022, we were able to use 100% renewable energy at almost all of our Italian production sites and our Polish site, resulting in a reduction of approximately 9,900 tonnes of CO2 emissions. However, we will not settle for that alone. Through our energy efficiency projects, we have reduced our environmental footprint by a further 399 tonnes. And we do not plan to stop there.

We have already begun a new project that involves devel- oping our first GHG (greenhouse gas emissions) inventory for the entire production scope of the Group and its sup-ply chain in 2023. This initiative will help us map our direct and indirect impacts so that we can define medium- and long-term mitigation strategies. The ultimate goal of this roadmap is to achieve "net zero emissions" by 2050, in line with the 2015 Paris Agreement target. While our products play a key role in supporting economic sustainability, we are also mindful of their environmental impact.

We have therefore established a current energy efficien-cy baseline for our "cooking products" and devised a plan to incorporate motorisation, which could make them up to 70% more efficient than traditional solutions.

In 2023 we also plan to further expand the "Hydrogen 100% Ready" product range and to accelerate in the heat pump segment.

WE HAVE ALREADY OBTAINED CERTIFICATION ON 50% OF THE RANGE OF MOTORS IN THE "PREMIX" SEGMENT FOR 100% HYDROGEN USE. THE ENTIRE RANGE IS ALREADY CERTIFIED TO USE "HYDROGEN 30% READY" BLENDS.

This will see even more efficient products brought to market in the last quarter of the year. Finally our people are the resource with whom we share our vision and values and we strive to contribute to their well-being.

Here too, in 2022, we reaped the fruits of our efforts to inspire our employees, reward merit, and nurture talent.

The numbers pay testament to our work in this regard. The Group recorded an increase in the percentage of women in our workforce, from 39% in 2021 to 45% in 2022. We have also invested in the training of all em- ployees, with an increase in training hours per person from 16.8 to 20.

We believe that social responsibility towards our suppli- ers is an equally important topic. In 2022, we defined and shared the first "Elica Group Supplier Code of Conduct" with our suppliers, and launched a process to monitor its effective adoption. Although this may seem like an obvi- ous step, we believe that our focus on human rights and

working conditions must never waver, especially given the times we are living in.

In 2022, we also set ourselves the goal of obtaining ISO 45001:2018 certification for our Mexican site in Quereta- ro. We successfully achieved this in May, but are not con- tent with that alone. We also plan to obtain certification for our Polish site by the end of 2023.

These are only a few of the accomplishments we have made and the objectives we seek to fulfil in the near fu- ture. Although 2023 will likely present challenges, our innovative products, capacity to predict market trends, and opportunities from an ever-growing Motors Divi-sion will enable us to continue expanding and leading change, in addition to promoting sustainable initiatives that satisfy the needs of our Stakeholders. As such, we invite you to read this document in the hope that you will continue to share in our enthusiasm.

Francesco Casoli - Chairperson Giulio Cocci - Chief Executive Officer

METHODOLOGICAL NOTE AND REPORTING SCOPE

METHODOLOGICAL NOTE

This Non-Financial Report (or also "Sustainability Report", "Report" or "NFR") seeks to provide the reader with clear, accurate, transparent and understandable information on the impacts generated by the Elica Group in the environmental and social spheres, in addition to impacts pertaining to personnel, respect for human rights and the fight against corruption caused directly or indirectly by the Company, or to which the Company contributes. In addition, through this document, the Company intends to provide an accurate understanding of the main risks associated with the Group's business activities, in addition to the results achieved and the performances in the area of sustainability during 2022.

This document, prepared in accordance with Article 4 of Legislative Decree No. 254/2016, was approved by the Board of Directors of the Elica Group on March 16, 2023.

IDENTIFYING MATERIAL TOPICS

For reporting upon the year ending December 31, 2022, the materiality analysis was updated in accordance with the new requirements of the GRI 2021 Standard and approved by the Company's Board of Directors on October 27, 2022.

For a more in-depth look at the process of identifying material topics, please see "Shaping Elica's Sustainability."