Brunello Cucinelli

Brunello Cucinelli's corporate governance is divided into administrative bodies (the Board of Directors), management bodies (the Chief Executive Officers and the Chief Financial Officer) and control bodies (the Board of Statutory Auditors and External Auditors), plus a Supervisory Board under Legislative Decree 231/2001. The Board of Directors shows 43% independent directors and 57% male representation. The Board of Statutory Auditors shows 40% male representation, and the management bodies (Stefanelli, Lisandroni, Pipitone) 100% male representation. The Control and Risk Committee and the Remuneration and Appointments Committee are each 100% independent. Independence follows Article 147-ter of Legislative Decree 58/1998 and the Borsa Italiana Corporate Governance Code. The CEOs are responsible for identifying and assessing sustainability IROs, company directors participate, and the Board of Directors has final responsibility for approving the Double Materiality analysis. Contributing functions are Administration, Finance and Control (CFO), Human Sustainability (CEOs) and ERM and Internal Audit (Board). A dedicated Human Sustainability team and the Council for Human Sustainability and Humanistic Capitalism provide advisory support.

The Board of Directors, the Chief Executive Officers, the CFO and the Board of Statutory Auditors are informed at least annually on the relevant impacts, risks and opportunities through information flows managed by the Enterprise Risk Management and Internal Audit function and the Human Sustainability team. The Human Sustainability team also provides annual disclosures to these bodies on the results and effectiveness of the policies, actions, metrics and objectives. Starting from 2024, the Internal Audit team, with support from consultants and the direct involvement of at least one CEO, carries out an annual session that performs a deeper analysis of strategic risks, including emerging ones, that could affect the Group's Industrial plan in the short term.

The incentive systems and remuneration policies connected to sustainability are regulated within the Company Remuneration Report. The remuneration policy for the Company's Directors, Top Management and Statutory Auditors is approved by the Shareholders' Meeting following a proposal by the Board of Directors assisted by the Remuneration and Appointments Committee, in line with the Italian Stock Exchange Corporate Governance Code. The policy provides fixed remuneration and variable remuneration (Management By Objectives, MBO), to which sustainability performance metrics are added. For the CEOs, the policy distinguishes short-term components on an annual time frame connected to short-term objectives including non-economic ESG goals, paid primarily in cash, and medium- to long-term components of at least 24 months paid also in equity-based financial instruments. The short-term variable remuneration for CEOs is associated 50% with economic performance (turnover) and 50% with Human Sustainability goals.

The Company implements due diligence to identify, assess and manage its negative impacts on the environment and on people, together with the risks deriving from these aspects, for both its own activities and the value chain. A table maps the core elements of due diligence to the corresponding paragraphs of the sustainability statement. Integrating due diligence into governance, strategy and the business model is covered by GOV-1, GOV-2, GOV-3 and SBM-3; involving stakeholders is covered by SBM-2; identifying and assessing negative impacts by GOV-1, SBM-3 and IRO-1; intervening to address negative impacts by the environmental and social action disclosures (E1-3, E2-2, E3-2, E4-3, E5-2, S1-3, S1-4, S2-3, S2-4, S3-3, S3-4, S4-3, S4-4); and monitoring effectiveness and communicating by a range of environmental and social metrics disclosures and G1-4 on confirmed incidents of corruption or bribery.

The Company has defined an internal control and management system for the risks connected to the sustainability reporting process, updated for CSRD and ESRS requirements and building on prior experience from reporting before the CSRD obligation. Two interconnected procedures govern the process: the procedure for collecting the data necessary for sustainability reporting under Legislative Decree 125/2024, and the procedure for defining the Double Materiality process under ESRS. The main reporting risks identified concern the quality, accuracy and completeness of data, failure to observe deadlines and compliance with applicable regulations. Data collection and validation uses three control levels: the first performed by the data owners and operational contact persons; the second by the Administration, Finance and Control team and the Human Sustainability team, including reconciliation with other information sources; the third by the Internal Audit team, whose checks are reported to the administrative and control bodies. The GHG emission inventory, including Scope 3, has been subject to Limited Assurance by third parties for many years. In 2024 the Company started a group-wide digitalisation process that will also apply to sustainability reporting.

The business of the Casa di Moda is focused on the creation, production and sale of Brunello Cucinelli branded clothing, accessories and lifestyle, forming Women's, Men's and Children's total look collections conceived as an expression of the ethical and human values cultivated in the hamlet of Solomeo. The brand is a benchmark of Made in Italy excellence in the ultra-high end of the luxury goods sector, and the total look has been expanded with the Ready to Wear collection and the Eyewear and Fragrances collection. The Company is universally recognised as an example of Humanistic Capitalism. In 2024 Group human resources equalled 3,326. The Group operates in the retail trade sector (NACE Section G), classified as high climatic impact. The sustainability strategy is set out in the Sustainability Plan In Harmony with Creation (2024 to 2028), approved by the Board of Directors on 11 July 2024, organised into six pillars representing six forms of Human Sustainability and linked to the Decalogue. The value chain runs from upstream raw material cultivation, breeding and extraction through raw material suppliers and artisan workshops to the physical and digital retail channel, the wholesale channel and end customers.

The Company aims to keep stakeholders informed on the Group's strategy, commitments and activities and to gather their feedback. Its approach is defined in the Human Relations Policy and made operative through a formalised Stakeholder Engagement Plan, whose objectives are to promote strategic continuous engagement, identify areas of improvement, plan involvement initiatives differentiated by stakeholder category, and provide a mechanism for evaluating engagement opportunities. Each stakeholder category is classified by management according to four guidelines of strategic importance (Inform, Monitor, Collaborate, Involve). Since 2022 the Company has organised ad hoc annual occasions to involve representatives of various stakeholder categories, including human resources, schools and universities, public administration and professional associations, artisan companies and raw material suppliers, and the financial and regional community. Engagement is monitored on a semi-annual basis and the aggregate results are shared with the Council for Human Sustainability and Humanistic Capitalism and with the administration, management and control bodies. Stakeholders are also involved annually in the Double Materiality analysis, whose results are reported to the CEO and the Board of Directors for final approval.

The relevant impacts, risks and opportunities cover all the ESRS standard topics and two entity specific disclosures, work sites and generational transition. They are mainly of a social nature and secondarily environmental, with potential impacts prevailing and equally distributed between own operations and the value chain. Value chain impacts and risks require continuous management of collaboration with suppliers and artisan laboratories and a high degree of control over purchased raw materials; to mitigate greenhouse gas emissions the Group has developed a Carbon Strategy whose targets have been approved by the Science Based Target initiative. Territory requalification and safeguarding initiatives generate positive impacts and reputational opportunities. Impacts at own operations mainly concern employees, while environmental impacts at own operations are modest because garments are produced externally. Risks derive from internal issues such as corruption, generational transition, breaches of personal data integrity and failure to respect accessibility and inclusion for end customers. Entity specific items include a positive impact on employee wellbeing from the beauty of workplaces and a risk to brand positioning from inadequate management of the generational transition. An analysis of financial effects showed that in 2024 these risks and opportunities did not involve any financial effect.

The process of identifying impacts, risks and opportunities draws on multiple documentary sources, including macrotrends and sector reports, economic and financial results, the Group's 2023 Consolidated non-financial statement, ESG and Group risk ratings, ESRS, the former TCFD and the TNFD frameworks, a selection of peers and regulatory sources. The value chain was mapped by actor category, sector, relevance, relationship, activity and geographical location. Each impact was linked to ESRS sub-sub-topics and characterised by nature, value chain area, geography, time period and any human rights correlation. Assessment involved company management through interviews on their areas of responsibility and selected stakeholders (one expert stakeholder, a representative sample of human resources and the financial community), using face-to-face focus groups and digital interviews and surveys. Impact relevance was assessed on probability and severity, with severity built from extent, scope and, for negative impacts, irreparable nature, and a stricter threshold applied for human rights. Risks are identified and assessed through the Enterprise Risk Management annual risk assessment, based on interviews with risk owners by Internal Audit at an inherent level of probability and extent. Opportunities linked to ESG topics are assessed during the Double Materiality process on qualitative and quantitative metrics, with Administration, Finance and Control responsible. Risks are prioritised by residual level, with sustainability risks included without prevalence.

The sustainability statement includes a detailed index listing the ESRS disclosure requirements covered and the page where each is reported, together with information deriving from other EU legislative acts and reasons for any exclusions. For ESRS 2 it covers BP-1, BP-2, GOV-1 to GOV-5, SBM-1 to SBM-3, IRO-1 and IRO-2, plus the minimum disclosure requirements MDR-P, MDR-A, MDR-M and MDR-T. GOV-1 reports gender diversity and the percentage of independent board members. Under SBM-1, involvement in fossil fuel and chemicals production activities is addressed, while participation in controversial weapons and in tobacco cultivation and production is marked not applicable. The index continues across the thematic standards E1 to E5, S1 to S4, the workplaces and generational transition entity specific disclosures, and G1. It flags several items as not applicable (for example E1-7 and E1-8), certain anticipated financial effect disclosures as phase-in, and topics such as S1-8 collective bargaining and social dialogue and S1-11 social protection as non-material.

Within the scope of its sustainability plan "In Harmony with Creation" (2024 to 2028), the Casa di Moda decided to develop a transition plan for climate change mitigation by 2026, so a full transition plan is not yet in place. In line with the Group's Carbon Strategy, the company has defined specific targets for reducing direct (Scope 1) and indirect (Scope 2 and 3) emissions. In 2023 these targets, set in line with the actions needed to contain warming to 1.5 degrees C as defined in the Paris Agreement, were approved by the Science Based Targets initiative (SBTi).

The company reports two policies. The Human Sustainability Policy "In Harmony with Creation" defines the philosophical framework and affirms awareness of environmental challenges and the objective of limiting negative impacts as far as possible. The Environmental Sustainability Policy "We always act as loyal guardians of Creation" covers reducing environmental impact and improving energy efficiency, including maximum attention to climate change through constant monitoring of direct and indirect CO2 emissions, use of renewable energy, and responsible use of resources and water. Together the policies define commitments related to climate change mitigation and to energy, aiming to limit negative impacts through reduced energy consumption and greenhouse gas emissions. The policies address direct impacts such as energy and fuel consumption and indirect impacts across the supply chain. The policies do not currently define commitments related to adaptation to climate change.

During 2024 the Casa di Moda continued various projects to reduce its impact. Construction continued on the new production hub near Solomeo according to the criteria for LEED certification, focusing on material selection, use of renewable photovoltaic energy, wellbeing of people and environmental requalification of the territory. The company also continued construction of the new production hub in Penne under LEED guidelines, started a company carpooling service, began using biodiesel (HVO) with reduced emissions impact for compatible fleet vehicles, and progressively replaced the company fleet with lower emission vehicles. Actions planned for 2025 include continuing the Solomeo hub, completing the Penne hub and obtaining its LEED certification, starting construction of a new production hub in Gubbio under LEED guidelines, continuing the carpooling service and HVO use, and continuing the fleet replacement. The company states these initiatives are not conditioned by resource constraints.

The Company defined greenhouse gas emission reduction targets based on its carbon footprint calculated under the GHG Protocol and validated by the SBTi in 2023. The validated targets are a 70% reduction in Scope 1 and 2 emissions by 2028 compared to 2019, a 22.5% reduction in Scope 3 emissions by 2028 compared to 2019, a 90% reduction in Scope 1, 2 and 3 emissions by 2050 compared to 2019, and achieving net-zero by 2050 as outlined in the SBTi Net-Zero Standard, through participation in the Business Ambition for 1.5 degrees C and the net-zero UNFCCC Race to Zero campaign. The targets are published on the SBTi website and monitored annually via the Group's GHG inventory. The reduction targets do not foresee the use of offset credits, except the net-zero target, for which residual emissions are to be neutralised using removal credits.

For 2024 total energy consumption was 27,106 MWh. Consumption from fossil sources totalled 18,308 MWh, representing 68% of the total, comprising crude oil and oil products at 2,991 MWh, natural gas at 6,159 MWh, and purchased electricity, heat, steam and cooling from fossil sources at 9,159 MWh. Consumption from coal and other non-renewable sources was zero, and nuclear consumption was zero. Consumption from renewable sources totalled 8,798 MWh, representing 32% of the total, comprising fuels from renewable sources including biomass at 241 MWh, purchased renewable electricity, heat, steam and cooling at 8,399 MWh, and self-produced renewable energy without fuels at 158 MWh. Energy production from renewable sources was 158 MWh. Energy intensity was 21 MWh per euro million, based on net revenues of 1,278.5 euro million. Some natural gas and electricity data was partially estimated and converted using 2024 DEFRA factors.

For 2024 total GHG emissions were 122,005 t CO2e on a location-based basis and 119,999 t CO2e on a market-based basis. Gross Scope 1 direct emissions were 1,886 t CO2e (1,682 in 2023), deriving from stationary and mobile combustion, process and fugitive emissions, with no emissions covered by ETS. Gross Scope 2 indirect emissions were 6,168 t CO2e location-based and 4,163 t CO2e market-based (5,418 and 3,696 respectively in 2023). The Group acquired Guarantees of Origin, avoiding approximately 4,029 tCO2 of emissions. Gross Scope 3 indirect emissions were 113,950 t CO2e, the predominant share of the footprint, with purchased goods and services (67,650), capital goods (18,553) and transport and distribution (14,894) representing 89% of Scope 3. A new category, capital goods, was added in 2024, so historical comparison is not possible. Emissions intensity was 95 tCO2eq per euro million location-based and 94 market-based.

Brunello Cucinelli addresses pollution through two policies, the Environmental Sustainability Policy "We always act as loyal guardians of Creation" and the Human Sustainability Policy "In Harmony with Creation", further described in the MDR-P section. These define commitments related to water pollution and the constant monitoring of chemical use, proceeding where necessary toward a gradual phase out of substances considered potentially harmful, in collaboration with direct suppliers. The Company states its activities do not present relevant risks of accidents or emergency situations capable of causing significant pollution-related harm. For the value chain, when signing contracts the Company shares its Framework Agreement, which sets rules of conduct suppliers must comply with, including observance of all current laws and regulations on pollution.

Environmental provisions require working with respect for Creation, adopting behaviour that protects the environment in line with applicable environmental regulations. In 2024, continuing prior years, the Casa di Moda shared the following regulations and standards with suppliers during the contract phase: standards governing use of certain materials and substances in the fabric and tannery industry to protect human health and the environment, such as the EU REACH Regulation (2007), California Proposition 65 and the Chinese GB Standards; the Restricted Substances List (RSL) defined by the Company and shared with suppliers since 2020 and continuously updated, aimed at regulating and progressively reducing use of potentially harmful chemical substances in materials processing to ensure greater product safety; Directive 2001/95/EC, the General Product Safety Directive; and compliance with standards controlling fire risk and mechanical risk, with particular attention to Boys' and Girls' collections.

The Company intends to further expand periodic and preventive checks of raw materials to ensure compliance with product safety standards regarding the use of chemicals considered potentially harmful and specifically regulated. In addition, the Casa di Moda performs testing activities to verify that its products comply with current regulations. The Company undertakes to guarantee compliance with the rules of conduct of the Code of Ethics also by its suppliers of raw materials and small craft enterprises, who must sign it when stipulating any agreement. The Framework Agreement, which defines rules of behaviour, commitments and duties to be respected, must also be signed.

The Solomeo site holds the Single Environmental Authorisation (A.U.A.) for the water and air matrices, since business activities carried out there could potentially involve the release of polluting substances with reference to these two matrices. The Casa di Moda monitors its activities and analyses pollutants emitted by the Solomeo site annually. Analyses carried out in 2024 certify that no polluting substances were released to the air and that pollutants released to water do not exceed the applicable threshold value indicated in Annex II of EC regulation 166/2006. The ground is not included among the matrices potentially affected by site activities.

Substances of concern and substances of very high concern

Brunello Cucinelli is the only one of the three companies with an explicit, dedicated "E2-5" heading. All relevant text is reproduced verbatim below, in document order, from the Consolidated Sustainability Report.

Table 15: List of impacts, risks and opportunities relevant to the topic of pollution (p.133; footnote 25: "The assets analysed are the sites and facilities of the Casa di Moda and those of the direct suppliers of the supply chain.")

(The same impacts/risks recur, worded identically, in the earlier consolidated SBM-3 double-materiality table on p.88 – not reproduced twice here.)

E2-1 Policies related to pollution (p.133) [excerpt]

"The concrete commitments made by the Casa di Moda regarding pollution are divided into the following policies: the Environmental Sustainability Policy “We always act as loyal guardians of Creation” and the Human Sustainability Policy “In Harmony with Creation”. Please refer to the section “MDR-P Policies of the Casa di Moda” for more information. In particular, the cited policies define the commitments related to water pollution and the constant monitoring of the use of chemicals, proceeding, where necessary, from the point of view of a gradual phase out of those considered potentially harmful, in collaboration with our direct suppliers."

E2-2 Actions and resources related to pollution (p.134) [excerpt]

"In 2024, in line with company strategy and in continuation of previous years, the Casa di Moda has shared the following regulations and standards with its suppliers during the contract phase: – Standards that regulate the use in the fabric and tannery industry of certain materials and substances for the protection of health of people and the environment, such as the REACH Regulation of the European Union (2007) on the use of chemical substances, Californian Law Proposition 65 and the Chinese GB Standards; – The Restricted Substances List (RSL) defined by the Company and shared with suppliers starting from 2020, which is continuously updated. The RSL aims to regulate and progressively reduce the use of chemical substances used in the processing of materials that may be harmful to human health and the environment, and thus ensure greater safety of the final product; – Directive 2001/95/EC called the “General Product Safety Directive”; – Compliance with standards controlling the “fire risk” or the “mechanical risk”, with particular concern for the garments for the Boys’ and Girls’ collections."

E2-5 Substances of concern and substances of very high concern (p.135) [full section text]

"In line with the business activities conducted by the Casa di Moda, there are no substances of concern that leave the Casa di Moda systems in the form of emissions, products or parts of products or services. With reference to the supply chain, upon stipulation of the Framework Agreement, the direct suppliers of the Group commit to observing the RSL shared by the Casa di Moda and prepared in line with the current regulations on the management of substances of concern and of very high concern."

ESRS content index, Pollution/E2 rows (p.106) [table partially garbled in text extraction – the E2-4 row's page-reference cell could not be reliably separated from the surrounding rows in the linear text stream; other rows are legible]

(For comparison, the same index gives "Phase-in" as the reason for the exclusion of E1-9 "Anticipated financial effects from material physical and transition risks and potential climate-related opportunities". No such exclusion/phase-in flag is given for E2-5 – it carries only a page reference, confirming it was disclosed in full rather than omitted.)

[Peripheral material trimmed: E2-3 Targets related to pollution (p.134, general product-safety testing commitments, no SoC-specific content), E2-4 Pollution of air, water and soil (p.134-135, Solomeo site air/water emissions monitoring against EC regulation 166/2006 thresholds – a different disclosure requirement with its own quantitative pollutant-compliance statement, not SoC/SVHC amounts), and the duplicate SBM-3 double-materiality table (p.88) were omitted as peripheral to E2-5.]

The Company refers to the MDR-P section for details on the Environmental Sustainability Policy "We always act as loyal guardians of Creation" and the Human Sustainability Policy "In Harmony with Creation", which define its concrete commitments on water and marine resources. In particular, these policies specify commitments related to the responsible and economical use of water, as well as water withdrawals, with particular reference to those connected to the laundry activities. The Company states that currently the cited policies do not contain specific information concerning water withdrawals.

Aware of the importance of water resources, the Group pays great attention to their management to ensure increasingly responsible consumption. In 2024, for the second consecutive year, the Casa di Moda publicly reported its commitments and results on water resources through the CDP Water Security questionnaire, confirming a B- score. Construction of new Group production sites follows the LEED standard guidelines, which require increasingly responsible and efficient consumption and management of water resources. The Solomeo site holds the Single Environmental Authorisation (A.U.A.). The Casa di Moda has a contract with a company specialised in chemical-biological water analyses, performing checks at a frequency higher than required by regulation to guarantee constant monitoring. Periodic maintenance is also carried out on the reverse osmosis system used at the Solomeo site for water recovery.

The impacts on the water matrix are limited to the operation of the laundry at the Solomeo headquarters and to civil use. The Company is committed to observing the legally mandatory parameters and, for that purpose, chemical-biological sampling and analysis of the waste water are performed periodically to check compliance with the legal limits required by Legislative Decree 152/06.

The Group reports total water consumption of 31,768 m3 for 2024 (the narrative text cites 31,761 m3). Water consumption in areas at water risk was 0 m3, and consumption in areas of high water stress was 27,103 m3. Recycled water, drawn from the well, was 7,540 m3, reused water was 0 m3, giving a total water volume of 7,540 m3. Total volume of stored water and changes in stored water were both 0 m3. Water intensity, calculated as total water consumption in relation to net revenues of 1,278.5 EUR million, was 25 m3 per EUR million. Water consumption is estimated for most shops and commercial offices abroad and some Italian sites, using an assumption of 30 litres per person per day.

The resilience analysis of the Casa di Moda included all identified impacts, including those related to biodiversity, considering short-term periods; for the moment, a process of involving these topics with Company stakeholders has not started. The Company has not identified sites in or near biodiversity-sensitive areas that it negatively affects, and Italian production sites are classified as "not protected" under the Natura 2000 network. At Solomeo, the Company has contributed to progressive requalification of surrounding territory and creation of parks that support local biodiversity. Its own artisan, non-industrial operations do not generate relevant impacts on natural habitats, soil desertification, degradation and sealing, or endangered species, though potential impacts were identified in the upstream value chain. The Company also contributes to the "Himalayan Regenerative Fashion Living Lab" project restoring degraded landscapes.

The governance of the Casa di Moda requires clear identification of environmental impacts as a starting point for monitoring and, if necessary, improvement actions, guided by identification of relevant risks and opportunities across the entire value chain. The Company is committed to reducing soil consumption as much as possible; all building projects follow the principle of respect for occupied land and valorisation of surrounding peripheries under the ideal of "pleasant peripheries", favouring land clearance and recovery of preexisting buildings. A guiding policy also concerns growing traceability of fabric products to inform customers about design, fabrication and production. The Environmental Sustainability Policy and Human Sustainability Policy are cited via the MDR-P section. The Company states that currently these policies do not contain references to soil desertification and sealing. No specific deforestation policy is described.

The Casa di Moda expresses its environmental sustainability first through conscious protection of the planet and the richness of its biodiversity, with particular attention to respecting resources and natural cycles. The Company addresses potential impacts from the supply of raw materials starting from the design phase and is committed to continuously increasing internal awareness and knowledge about biodiversity, collaborating with local associations and communities at national and international level, and implementing regenerative agricultural practices. In 2024 no biodiversity compensation measures were used, nor were particular measures implemented in terms of biodiversity and ecosystems. However, the Casa di Moda has established the definition of a policy dedicated exclusively to biodiversity by 2025.

The Company reports that currently there are no targets related to biodiversity and ecosystems. It states that such targets will be defined within the dedicated biodiversity policy that the Casa di Moda has committed to establish by 2025.

The Casa di Moda designs its garments on the concept of longevity by design, making them to last over time and to be passed down to future generations, and provides all customers with an exclusive, free of charge repair service offered globally with no time constraint. Production mainly uses natural fibres such as cashmere, wool, cotton and linen, and the Company is promoting a progressive transition towards electrification and electricity from renewable sources. The Group seeks low environmental impact packaging using certified origin and recycled materials, monitors chemical use and gradually phases out potentially hazardous substances with raw material suppliers, and pursues greater traceability of fabric products. For waste, it prioritises material and energy recovery over disposal along the value chain. Two formal policies underpin these commitments: the Environmental Sustainability Policy We always act as loyal guardians of Creation and the Human Sustainability Policy In Harmony with Creation, which cover raw material supply and consumption, maximisation of resource value, waste management, progressive abandonment of virgin resources, increase in recycled resources and use of renewable resources.

Careful selection of high quality raw materials, supply based on trusted relationships with breeders and suppliers, and scrupulous attention across all production phases are key to efficient resource use and reducing waste. The Casa di Moda works closely with raw material suppliers and artisan laboratories to define a shared improvement path, assesses supplier sustainability performance, and collaborates on recycling of production scraps. During the year the project Recovery of production scraps continued, involving 50 small crafts enterprises engaged in cutting and complete cycle phases. Actions target mainly own operations and the upstream value chain in Italy. The Company also began calculating the environmental impact of strategic raw materials, involving ten suppliers. Actions performed in 2024 include 3,723 garments repaired, continuation of the production scraps project with increased fabric packaging from waste processing, and start of testing paper packaging from scraps, plus calculation of the environmental impact of three strategic raw materials (cashmere, cotton and leather). Actions planned for 2025 include continuing the free garment repair service, new packaging types from scraps, recycled paper and cardboard trunks, recyclable polystyrene boxes and a study of main product certifications.

In line with the company philosophy of the value and appeal of safeguarding and reuse on which its production activities are based, the Company has defined targets connected to the management of waste and the flow of resources, covering both inflows and outflows, in order to manage the impacts, risks and opportunities related to resource use and circular economy. The report notes that ecological thresholds were not taken into consideration when defining the targets. For further detail the report refers to the section MDR-T Targets of the Casa di Moda.

Resource inflows cover raw materials for producing garments (yarns, fabrics and leathers), composition accessories (chain, zip, buttons, ribbons, labels, buckles, rivets, metal), packaging materials, and stones and metals for jewellery. Yarns include cashmere, mohair, camel, lightweight wool, linen, silk and cotton, alongside fabrics such as denim and leathers. Packaging mainly uses paper and cardboard, plastic of biological origin, recycled paper for hangers, wood and fabric, with compostable bags from biomass sources replacing virgin fossil plastic. Materials totalled 172,134 kg technical and 1,013,831 kg of natural origin, including leather 190,919 kg, yarn 29,832 kg technical and 174,919 kg natural, fabrics 93,015 kg technical and 639,300 kg natural, and composition accessories 49,287 kg technical and 8,693 kg natural. Products totalled 396,751 kg technical and 1,531,330 kg natural, including packaging 372,141 kg technical and 1,508,172 kg natural. For products with certification or recycled origin, packaging showed 612,885 kg total recycled, 70 percent FSC certified and 33 percent recycled origin, and fabric packaging 22,003 kg with 19 percent recycled. Data derives from internal management systems based on direct measurements.

Resource outflows, including waste, derive from internal management systems based on direct measurements. The recyclable content of packaging in 2024 was 100 percent for paper and cardboard, 100 percent for plastic, 100 percent for cotton fabric packaging and 100 percent for polyester fabric packaging. The report links outflows to the concept of longevity and reuse of products, the free worldwide repair service, and packaging designed to be kept and reused, such as fabric containers for shoes, bags and accessories and self-assembling e-commerce boxes. Recycled origin figures for inflowing packaging materials are reported under E5-4, and the waste generated by own operations is detailed in the accompanying waste tables.

The total quantity of waste produced by own operations in 2024 was 606,162 kg. Hazardous waste totalled 2,368 kg, split into 1,099 kg diverted from disposal and 1,269 kg directed to disposal. Non-hazardous waste comprised 580,894 kg diverted from disposal and 22,900 kg directed to disposal. The total quantity of non-recycled waste was 24,169 kg, equal to 4 percent. Waste is reported by type and disposal method, with major non-hazardous streams including paper and cardboard packaging 287,643 kg, wood 77,400 kg, mixed material packaging 63,510 kg, wooden packaging 41,320 kg, plastic packaging 36,038 kg, bulky waste 31,390 kg, waste from processed textile fibres 25,880 kg and biological treatment muds 18,000 kg. Hazardous streams include solvent sludge or solid waste 940 kg, packaging with hazardous residues 837 kg, mineral motor oils 240 kg, contaminated absorbent materials 180 kg and materials containing asbestos 134 kg. No radioactive waste is reported. For 2024 it was not possible to provide detailed quantities of the various recovery operations. Waste management complies with Legislative Decree 152/2006.

The principles guiding the relationship with human resources are set out in the Code of Ethics, which is based on respect for the personality and dignity of every individual, valorisation of meritocracy, fair compensation and prevention of discrimination, harassment and abuse, promoting equal opportunities. The Company acts in accordance with the UN Guiding Principles on Business and Human Rights, the OECD Guiding Principles and the Ten Principles of the UN Global Compact, and adheres to the Modern Slavery Act published on its investor site. A whistleblowing procedure offers a safe and reserved channel for reporting violations. The policy system supporting the workforce comprises the Diversity and Inclusion Policy, the Human Sustainability Policy 'In Harmony with Creation', the Human Relations Policy and the Privacy Policy System. These define commitments on suitable salaries, work-life balance, health and safety, gender equality and equal pay, skill training and development, employment and inclusion of persons with disabilities, diversity and privacy. No discriminatory episodes occurred during 2024.

Engagement of human resources takes place directly with the own workforce and is regulated by the Human Relations Policy. In July 2024 ad hoc days were organised using the LEGO Serious Play facilitation method to foster creative thinking and collaboration. The engagement aimed at active listening of expectations and suggestions on sustainability, involvement in the Double Materiality analysis, and reinforcement of the dialogue with human resources. This involvement takes place every year, normally during the phase of evaluating the effectiveness of mitigation measures. The Company guarantees fair involvement of the entire company population using the same approaches. In 2024 a sample of employees was involved as worker representatives through an anonymous questionnaire, whose results were submitted to Management to identify areas of improvement. Reference functions collect and prioritise stakeholder requests in a database every six months, shared with the Human Sustainability team, which transmits findings to the Council for Human Sustainability and Humanistic Capitalism. No conflicts of interest took place within the workforce during 2024.

The Casa di Moda has implemented various processes to remedy negative impacts and channels for workers to raise concerns. The main channel is the whistleblowing Procedure, updated and in force since 2023, with a dedicated training module made available to all employees via the Sympo e-learning platform. Under the Diversity and Inclusion Policy, reports may be made informally by directly contacting one's department manager or HR office, or formally, including anonymously, via the email address under the Whistleblowing Procedure pursuant to Legislative Decree 24/2023. Whistleblowers are guaranteed protection against retaliation, and breaches trigger a disciplinary procedure up to dismissal. At local level, specific grievance procedures exist in the UK, China, Russia and the United Arab Emirates in line with Employee Handbooks, involving direct non-anonymous contact with HR. A dedicated HR email address is available, and personnel evaluation processes, health and safety reporting channels (RSPP and store managers), and a Data Protection Officer with Privacy Policy support privacy concerns. No privacy complaints were received in 2024.

Human resource management is based on internal strategic and operational organisation involving the head office in Solomeo and the various regions. The Human Resources Committee coordinates the relationship and strategic lines, the Human Resources Manager supervises the people life cycle, and HR directors are appointed in the main regions. In 2024 the Company delivered training courses on Diversity and Inclusion, a contribution supporting access to books, cinema, theatre and training (bonus 'Why culture flourishes'), and a supplementary insurance policy for employees in Italy (SANIMODA and Fondo Est). Actions programmed for 2025 include additional Diversity and Inclusion training and continued benefits. On training and skills, actions include managerial skills development, coaching, interfunctional collaboration, generational integration (Diversity Day) and retail training. On health and safety, shelves are set at 1.50 m to reduce forklift use, and non-mandatory ergonomics and physiotherapy training is provided. On privacy, the DPO and Human Privacy Committee were established. Effectiveness is monitored through qualitative dialogue and structured feedback.

Including results obtained during discussions with its human resources, the Company has defined targets regarding the diversity and inclusion topic, as well as the topic of suitable salaries and health and safety, in order to manage the impacts, risks and opportunities connected to its own workforce. The report directs readers to the section 'MDR-T Targets of the Casa di Moda' for more information. No specific quantified target values are stated within this S1-5 section.

In 2024 the Group's human resources counted 3,326 people, with the majority concentrated in Italy (55%). Women represented 64% and men 36%. By gender there were 1,207 men, 2,116 women, 0 other and 3 not communicated. The full-time equivalent was 3,101.4 as at 31 December 2024. By country, employees numbered 1,816 in Italy, 472 in the USA, 267 in Mainland China, 182 in Japan, 73 in the United Kingdom, 71 in Canada, 66 in France, 66 in Hong Kong, 51 in Russia and 50 in Middle East/Dubai. Some 86% were on permanent contracts and 95% worked full time: 2,867 held permanent contracts, 459 fixed term, 3,165 were full time and 161 part time. By region there were 1,816 employees in Italy, 288 in Europe and 1,222 in Non-Europe. During the year 437 people left, and negative turnover equalled 13.1%.

As concerns workers who are not employees, there were 224 in 2024, of which 10% were self-employed workers and 90% were workers provided by companies performing labour recruitment and provision of personnel services. Specifically, there were 22 self-employed workers (contingent physical persons with a VAT number) and 202 workers provided by third-party companies (temporary employees, trainees, and interns from the School of Contemporary High Craftsmanship and Arts in Solomeo).

With reference to Executives and Managers, there were 148 in 2024 (47% women, 53% men), representing 4% of the Company population. By gender, top management comprised 70 women and 78 men, equal to 3% women and 6% men of the total workforce. As concerns distribution by age, the majority (60%) of the Company population fell within the 30 to 50 age range, followed by human resources below the age of 30 (21%) and those above 50 (19%). In absolute numbers there were 704 employees under 30, 1,992 in the 30 to 50 range and 630 above 50, out of a total of 3,326.

To remunerate its human resources, the Company adopts policies based on meritocracy and fair remuneration according to roles, responsibilities and delegations. In 2024 the Company analysed the salaries paid across all countries in which it operates and mapped countries with a minimum wage, considering remuneration suitable where it complies with local laws. In countries without a minimum wage, it adopted reference parameters in line with those of the Wage Indicator Foundation to compare against the remuneration offered. The analysis showed that all wages applied within the Group exceed the reference parameters, confirming the commitment to guaranteeing fair remuneration to all resources.

The Company states it protects and values different physical and mental abilities, ensuring a supportive working environment for visible or invisible needs. There were 93 people falling into vulnerable categories, of which 66 women and 27 men, representing 3% of employees (3% women and 2% men). Vulnerable categories include employees belonging to protected categories as specified by Law 104/92, and the Company also respects Law 68/1999, which promotes the insertion and integration of persons with disabilities into the working world through targeted support and placement services.

In 2024 the annual performance review process was performed involving almost the entire Company population, with the exception of the production area. Percentages of performance reviews performed by category included Executives and Managers (95% women, 56% men), White Collar no Sales (68% women, 66% men), White Collar Sales (86% women, 83% men) and Blue Collar (54% women, 50% men). As concerns training, 136,403 hours of training were provided in 2024, an average of around 41 training hours per employee at Group level. By gender, women received 96,112 total hours (average 45) and men 40,265 total hours (average 33). By category, average hours were Executives and Managers 36 women and 37 men, White Collar no Sales 108 women and 67 men, White Collar Sales 32 women and 21 men, and Blue Collar 10 women and 19 men.

The Company does not currently have a certified workplace health and safety management system at Group level. In Italy, where 55% of the population is concentrated, hazards are assessed in the periodically updated Risk Assessment Document (RAD). In 2024, 43 injuries took place among employees and 2 among workers who are not employees, with recordable work-related injury rates of 9 and 16 respectively. Employees worked 4,629,149 hours and non-employees 123,881 hours. No deaths occurred within the workforce in 2024, including workers who are not employees. There was only one case of work-related illness in 2024, which occurred at Pinturicchio S.r.l. There were also 367 days lost due to accidents at work and work-related illness for employees, collected only for the Italian sites.

The report shows employees entitled to leave for family reasons, including maternity, paternity, parental leave and leave for caregivers, and those who used it during the year. Employees with entitlement to leave numbered 3,113 (1,983 women, 1,127 men, 3 not communicated), equal to 94% of employees (94% women, 93% men, 100% not communicated). The countries where the right to leave is not guaranteed for 100% of the population are Kuwait, Japan and the USA. Employees who took leave numbered 261 (185 women, 76 men), equal to 8% of employees (9% women, 6% men). Cases of early maternity leave were excluded from the count of employees who used family leave.

The average gender pay gap was calculated considering the average pay difference between men and women for each classification level. For the White Collar no Sales, White Collar Sales and Blue Collar categories there is substantial alignment, with women's base salaries and overall compensation slightly lower than men's, while the gap is larger in the Executive and Managers category. The gender pay gap by professional category was: Executives and Managers 43% gross hourly pay and 40% total annual pay; White Collar no Sales 12% and 4%; White Collar Sales -2% and 2%; Blue Collar 34% and 14%. In 2024 the ratio between the highest fixed remuneration and the median annual remuneration of all Group employees was 51:1.

The Company manages incidents of discrimination and complaints through the formal channels described in S1-3 and through the whistleblowing procedure, with each report handled with maximum confidentiality. No fines or penalties were recorded in 2024 for discrimination, and no serious incidents occurred involving human rights in the workforce, nor any resulting penalties, fines or compensation. The reported figures show 0 total episodes of discrimination, 1 complaint presented using the whistleblowing channel, 0 euros in fines, penalties or compensation, and 0 severe incidents concerning human rights. One report was presented using the whistleblowing procedure; as at 31 December the corrective action plans were being implemented, and the report has since been resolved.

The Casa di Moda reports a broad and structured policy system covering suppliers and small craft enterprises. The relevant policies, detailed in the MDR-P section, are the Diversity and Inclusion Policy, the Human Sustainability Policy "In Harmony with Creation" and the Human Relations Policy, which set out concrete commitments for value chain workers. These policies define commitments related to health and safety, employment and inclusion of people with disabilities, diversity, child labour and forced labour. The Company states that, currently, these policies do not include explicit references to the topic of human trafficking.

Engagement with suppliers and small craft enterprises takes place directly with value chain workers and is regulated by the Human Relations Policy. Involvement normally happens during the phase of evaluating the effectiveness of mitigation measures, analysing and collecting participants' opinions on the actions adopted to reduce negative impacts. This engagement occurs every year. The relationship is developed through individual or collective meetings, including an annual convention to share results and expectations and reinforce Company values and philosophy. The Group has begun a progressive process for mapping raw material suppliers and collecting their qualitative and quantitative data digitally, and carries out annual audits at collaborating artisan laboratories. A dedicated function manages daily supplier activities.

To prevent negative impacts, when the contract is stipulated the Company shares a Framework Agreement setting out rules of conduct, commitments and duties. Social provisions cover proper classification and fair remuneration, compliance with laws on health and safety, social security, insurance, welfare, pay and tax, recognition of freedom of association, protection against discrimination, abuse and harassment, and prohibition of child and forced labour. Suppliers must ensure a healthy and safe work environment. The Framework Agreement also references the Code of Ethics and Model 231, and combating active and passive corruption is included in supplier responsibilities. Partners are subject to the Company's Whistleblowing Procedure for reporting illicit or irregular conduct. Since 2021, the Human Sustainability Policy and Diversity and Inclusion Policy have been added to contract documents.

Management of relations with raw material suppliers and small craft enterprises is attributed internally to Production Management, working closely with the Third-party Manufacturer and Supplier Information Office. Supplier selection is based on very high quality, reliability and innovative ability of materials, in compliance with laws protecting competition and ensuring transparency, equal participation opportunities and impartial assessment. Actions performed in 2024 included sharing the Framework Agreement with new suppliers when stipulating contracts, 399 audits on Group small craft enterprises, and involving 157 raw material suppliers through a dedicated personnel section in the qualitative-quantitative self-assessment questionnaire. Actions planned for 2025 include sharing the framework agreement with new suppliers and studying the implementation of due diligence processes according to the CSDDD directive. These actions contribute towards the CSDDD.

The Company reports that it has defined specific targets for its supply chain. It directs readers to the section "MDR-T Targets of the Casa di Moda" for more information. No specific figures or target values for value chain workers are provided in this section of the text.

The Code of Ethics defines the rules, values and principles underpinning the operations of Brunello Cucinelli S.p.A. and its subsidiaries and guides the behaviour of all relevant stakeholders. It underlines the Group's responsibilities regarding the community and support of the territory, noting that the Company operates with attention to the needs of the community and territories in which it works, contributing to quality of life and economic, social, cultural and civil development and offering constant support to cultural activities and local associations. The Company also refers to the Human Relations Policy and the Human Sustainability Policy "In Harmony with Creation", prepared in accordance with United Nations guiding principles, which contain commitments regarding impacts related to the territory.

Engagement with local communities is developed through periodic meetings with representatives of local associations and moments of discussion that are essential for understanding the real needs of the territory. This process is regulated by the standards established in the Human Relations Policy. The functions involved in the processes and the connected responsibilities are described in the section "SBM-2 Interests and views of stakeholders".

Although the Double Materiality analysis did not indicate any relevant negative impacts for affected communities, the Casa di Moda has provided dedicated channels to remedy any critical issues that could arise in the future or to collect concerns and offer assistance. These channels include the whistleblowing channel and informal communication with Company functions, guaranteed by constant dialogue. All adopted channels allow talking with whistleblowers, including anonymous ones, and any other involved stakeholders. As of today, the Company has not adopted specific training or monitoring initiatives to evaluate knowledge of the whistleblowing channels by the affected communities.

Over more than forty years, business activity has been accompanied by constant dedication to the support, restoration and development of the Hamlet of Solomeo and the Umbrian territory. Actions performed in 2024 included increasing courses and participants at the School of Contemporary High Craftsmanship and Arts and implementing training to support small entrepreneurship, starting the second phase of the Himalayan Regenerative Fashion Living Lab project as part of the Sustainable Markets Initiative Fashion Taskforce, and continuing evaluation of the impact of the "Great Works" using the Social Return on Investment (SROI) methodology. In 2024 the Himalayan project reached a target with the first shipment of pashmina by a local cooperative, presented to King Charles III at St James's Palace in London in November 2024. During 2024, no problems or incidents were reported concerning human rights in relation to local communities or the territory.

The Casa di Moda reports that it has not defined specific targets for local communities and the territory. It refers readers to the paragraph "SBM-1 Strategy, business model and value chain" and the Sustainability Plan "In Harmony with Creation" for more information concerning the Sustainability Plan.

The Company bases its behaviour with customers on principles of transparency, reliability, correctness, integrity, professionalism, legality, impartiality and quality. It is committed to ensuring products meet market expectations and requirements in compliance with laws, with particular attention to safety, and condemns any advertising or communication aimed at deceiving customers about quantity, quality, source and origin, prohibiting misleading or incorrect advertising. The Company observes the Code of Ethics and in-house procedures on customer relations, providing accurate, complete and truthful information on contractual conditions, including the Privacy Statement where necessary. The Human Relations Policy, prepared in compliance with United Nations guidelines, defines commitments regarding privacy, non-discrimination, access to products and services and responsible business practices. Currently, that policy does not contain specific information on health and safety, security of the person and protection of children.

The relationship with end customers is developed through face-to-face meetings in boutiques and "Casa Cucinelli" sales spaces, trunk shows and dedicated events, a digital presence, the user experience such as the corporate and e-commerce website, social media, customised experiences at Solomeo, customer service, the newsletter, instant messages, phone calls and video calls. In addition to email and telephone, new channels allow immediate dialogue between Customer Care and the customer, including live chat within the online boutique and instant messaging via WhatsApp and WeChat. The Company notes a growing customer preference for tools that promote human connection, with customers selecting the boutique and synchronous communication channels. The dialogue process is regulated by the Human Relations Policy.

The Casa di Moda has adopted specific measures to prevent the identified potential negative impact and to mitigate risks from regulatory non-compliance or compromise of personal data through loss, theft, destruction or alteration. In compliance with European data protection standards, the Company safeguards privacy and personal data with the support of a Data Protection Officer (DPO). To report privacy concerns, tools such as the Privacy Policy and the whistleblowing channel are provided. The Company guarantees support to customers worldwide through CRM, Customer Care channels and boutiques. During 2024, induction meetings continued with new CRM resources and boutique staff, and one-to-one talks were conducted with strategic corporate offices; channels were monitored through performance analysis of in-house CRM channels. Customer Care operates in 8 languages from Solomeo, New York and Shanghai. The whistleblowing channel is publicly accessible through the corporate website.

The Casa di Moda has adopted specific measures on privacy and protection of end customers' personal data by implementing a structured model that includes training on privacy, report monitoring and request management. These initiatives involve company operations with a downstream impact on end customers worldwide, contribute to the objectives of the Group Sustainability Plan and are fully compliant with GDPR. The process of managing privacy reports is constantly monitored and, during 2024, no critical issues were identified, confirming the effectiveness of the system. Specific training was developed for offices not directly involved in managing customer personal data. For non-discrimination and access to products and services, measures required by regulation are implemented to ensure an inclusive purchasing experience. The DPO plays a central role in preventing negative impacts. During 2024, no serious problems or incidents were reported concerning human rights connected to end customers.

The Casa di Moda reports that it has not fixed specific targets that concern end customers. It refers readers to the paragraph "SBM-1 Strategy, business model and value chain" and the Sustainability Plan "In Harmony with Creation" for more information concerning the Sustainability Plan.

The Casa di Moda has adopted an Anti-Corruption Policy as a tool for ethical business management, built on compliance with laws, honesty, transparency, correctness and good faith, and aimed at preventing and discouraging unlawful conduct at all levels. All employees were informed of the Policy, and procedures under Art. 154 bis of the Consolidated Law on Finance (TUF), also referenced in Model 231, were published on the company intranet. Specific training on the Anti-Corruption Policy has not yet been provided, though on the job training took place on procedures under Law 262/2005 and Legislative Decree 231/2001. The Anti-Corruption Policy and Model 231 are referenced in contracts with main suppliers and external collaborators, including small craft enterprises. Under Model 231, the functions at greatest risk of corruption and bribery include the Chief Executive Officers, Administration, Finance and Control, Human Resources, Production, Facility Management, and Legal and Corporate Affairs. A Whistleblowing Procedure allows anonymous or named reports through multiple channels, with protection against retaliation. The Internal Audit Manager receives and manages reports and involves the Supervisory Board when required.

For raw material purchases the Company works with reliable partners in long term relationships. External production is a short chain located exclusively in Italy, made up of small to medium sized artisan companies, more than half of which work exclusively for the Casa di Moda. The Group reports growth in business volumes and stability in orders for these laboratories, including during the pandemic. Payments to suppliers are made in compliance with contractual terms. During contract stipulation the Company shares a Framework Agreement setting rules of conduct and commitments on environmental and social issues. A supplier mapping project started in 2023 and continued in 2024 involves 157 suppliers, covering approximately 95% of raw materials, with emission impact checks on a sample of 50 suppliers. During 2024, 399 small craft enterprises were audited, of which 381 (98% of those currently worked with) remained within the audit scope as at 31 December 2024, while 18 audits were interrupted after business relationships ended. In 2024, 19 new non-conformities were found, added to 5 from the prior year, for 24 positions analysed. Remediation plans were agreed with 15 enterprises, 3 relationships were stopped, and 6 cases remain under assessment.

The system for preventing, identifying and managing allegations or cases of corruption and bribery is regulated in the Whistleblowing Procedure, whose reporting mechanism is detailed under G1-1. The Company promotes knowledge of the Whistleblowing Policy by publishing it on the company website, and the Group's Human Resources office ensures wide distribution, including on the company intranet. In 2024, as set out in the Sustainability Plan, the Company designed and started a new training program on Ethical Business Conduct, Privacy and Anti-Corruption, combining face-to-face training with e-learning, with direct participation of the Supervisory Body under Legislative Decree 231/2001. Starting in 2024, a whistleblowing course was made available on the Group's Sympo eLearning platform to make employees aware of ethical conduct, corruption prevention and reporting of illegal acts, and to show how to use the reporting channel with full confidentiality protection. The company reports 687 functions at risk included in the training programs and 100% participation of functions at risk in the training programs.

The Group states that it operates on the national and international market in full compliance with national and EU antitrust regulations. The annual monitoring processes carried out by the Casa di Moda did not identify cases of non-compliance regarding corruption during 2024, also thanks to the controls implemented by the Group. There were no convictions for violations of law, and no confirmed incidents of corruption or bribery for the year. The company refers readers to the MDR-T Targets section for further information.