The purchase process in a group that produces widely-consumed products and which wants to keep costs low for the end consumer involves various obstacles:

• We must find raw materials and products that satisfy consumer demands and tastes;
• These materials and products need to not only be beautiful, but safe for the wearer;
• They need to have reasonable, sustainable costs for our business model;
• Lastly, they need to be manufactured under civil, sustainable conditions.

The way down this path is not always easy, as a series of incidents which have impacted other important groups has demonstrated, and it is important to fully verify the production chain.

It isn’t always feasible to be absolutely sure that things are done in the best way possible, which is why we need everyone's commitment so that, in-line with their business model, the key players in the market and the production and distribution chain can head down a path of continuous gradual improvement.

We have started this journey and intend to pursue it decisively and transparently. This is how we, to date, handle our purchases and the improvements we intend to make.

With the aim of spreading our ideals and sensitising all suppliers making up our supply chain to social-environmental topics, we have embarked on an ESG rating process of the supply chain. The first phase of the project involves sending out a questionnaire (the “SAQ” - “Supplier Assessment Questionnaire”) to all suppliers, which are required to report back to us, through filling in specific information sheets, on their commitments relating to:

• Health and safety at work
• Respect for human and workers’ rights
• Environmental impact, consumptions of resources and waste
• Ethics and compliance
• Sub-supply and traceability policies

Upon completion of the questionnaire, in order to enrich the first objective assessment of social and environmental topics, the supplier is asked to attach the following documentation, if available:

• Social topic: Audits already carried out with SMETA methodology (2 or 4 pillars), SA8000, ISO45001 certifications, other audits or certifications.
• Environmental topic: Audits already carried out with SMETA methodology (4 pillars), ISO14001, EMAS, ISO14067, ZDHC, ISO5001 certifications, other audits or certifications.

Once their responses have been assessed and after careful analysis of the risk levels of the supplier’s operations and the country in which it operates, the Group reserves the right to organise physical audits with a view to verifying compliance with the standards laid down by Calzedonia policies, directly in situ.

The possibility of carrying out audits at all the suppliers’ production sites is guaranteed by the acceptance and examination of the Code of Ethics and Supplier Code of Conduct and this is an essential prerequisite to gain access to the specific portal and start collaborating and supplying our Group.

Upon completion of the audit, a report is issued highlighting all non-conformities found during the inspection. Depending on the severity of the default and the danger for workers and the environment, a deadline is set by which to solve the problem.  If the supplier should fail to collaborate with the requests made, the Calzedonia Group reserves the right to review its commercial relations with the supplier.

The aim of this project is to assess and minimise the potential impacts of our business on the communities and society in which it operates and on the surrounding environment.

 The project started back in 2023 and during the first quarter, we assessed suppliers accounting for 15% of the value purchased; our chain mapping objectives are:

• by 2027, to audit 50% of the Group’s production chain
• by 2030 to audit 70% of the Group’s production chain

We seek to encourage anyone working with us to improve and invest in a shared future that embraces collaboration philosophies in harmony with people and the environment.

Additional initiatives to continue to evolve

In addition to the commitments stated in the "Production Facilities" section, the Group has also set some important objectives regarding suppliers and the use of materials:

• All suppliers are obliged to accept our Supplier Code of Conduct as a condition for being able to work with us;
• We are currently in the process of identifying the best possible ways by which to share our whistleblowing channels with those working for our third party suppliers;
• Reduce the use of non-recyclable materials and all packaging that is not strictly necessary;
• Drastically reduce the use of animal-origin materials, for example fur, even where obtained from certified farms;
• Constantly add to the list of harmful or potentially harmful substances not to be used in our items;
• Constantly pursue research into environmentally-sustainable and environmentally-friendly solutions;
• We are working to identify the very best analysis method to understand just what percentage of workers of our suppliers earn a salary that is above what is termed a “living wage”. A living wage is higher than the minimum wage and entails a complex level of calculation, as it requires the identification of objective, stable parameters in the places where our suppliers work. At present, in fact, we are unable to define a percentage (and this should therefore be considered as 0%).

We intend to report periodically to our stakeholders on the progress made in various industries.