THE ARMANI GROUP AND SUSTAINABILITY...WATER CONSUMPTION 242 thousand cubic metres 22 PUFFER JACKET MADE FROM RECYCLED PLASTIC The EA7 line was enhanced with a puffer jacket model,

THE ARMANI GROUP AND SUSTAINABILITY

2019

THE ARMANI GROUP AND SUSTAINABILITY

2019

4

Undertaking self-examination about the sustainability of one’s enterprise, measuring the progress made and setting new goals and objectives have become all the more important today, when events urgently call for changes and a new vision of and for the future. The following pages document numerous initiatives that are oriented towards ever more ambitious goals and thus demonstrate our unflinching commitment to continuing on this path. The Armani Group can rely on a system of solid values, complemented by the strong conviction that sustainability is evident above all in the company’s capacity to create products that stand the test of time This results from a model that is respectful of all the people involved and all the elements of which it is composed.

The Chairman

9,064

155

EMPLOYEES WORLDWIDE

7INDUSTRIAL SITES

1,850MILLION EUROS IN ECONOMIC VALUE DISTRIBUTED

CHEMICAL TESTS PERFORMED ON PRODUCTS

598COMPANY-OWNED SALES OUTLETS

2,144MILLION EUROS IN ECONOMIC VALUE GENERATED

100,000HOURS OF TRAINING-EDUCATION PROVIDED DURING THE YEAR

AUDITS PERFORMED AT SUPPLIERS’ FACTORIES

OVER

8,400OVER

2019 IN FIGURES

7

PEOPLE IN THE ARMANI GROUP

AS OF 31 DECEMBER 2019,THE ARMANI GROUP EMPLOYED

9,064PEOPLE

WOMEN

MAN

5,651

3,413

AMERICAS

2,4931,309

1,184

ITALY

3,055

EUROPE

1,022

ASIA - PACIFIC

2,494

2,048

1,661

633

1,007

833

389

98

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THE ARMANI GROUP AND SUSTAINABILITY

The Armani Group’s concept of sustainability has been articulated in

five priority areas, i.e. the “Pillars of Sustainability”, which effectively

inspire and direct the company’s decisions and activities.

In order to guide corporate commitments and activities in the

medium term the Group has drawn up a Sustainability Plan which

identifies, for each pillar, areas for improvement and the objectives

to be achieved.

The Group’s sustainability commitments are aligned with

and actively support some of the United Nations Sustainable

Development Goals (SDGs).

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THE PILLARS OF SUSTAINABILITY

FOCUS ON THE CUSTOMER

ENVIRONMENTAL PROTECTION AND EFFICIENT

USE OF RESOURCES

WELLBEING OF EMPLOYEES AND

TALENT DEVELOPMENT

RESPONSIBLE MANAGEMENT OF THE

SUPPLY CHAIN

SUPPORT AND INVOLVEMENT OF

COMMUNITIES

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A COMMON CAUSE

The Group has decided to involve its stakeholders in the process for

determining and defining the themes deemed of greatest relevance

to be addressed in the Sustainability Report, thus making it a veritable

tool for undertaking active dialogue.

This has made it possible to achieve a major goal: making the

Sustainability Report a real tool for dialogue between the Group

and its stakeholders, thereby further strengthening the already

established relationship of trust and transparency.

EMPLOYEES

NGOs

LICENSEES

MEDIACLIENTS

SUPPLIERS

TRADE ASSOCIATIONS

STAKEHOLDERS OF THE GROUP

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THE GLOBAL COMMITMENT

In 2019 the Armani Group signed on to the Fashion Pact, one of

the most important international initiatives launched to promote

sustainability in fashion.

The Pact brings together more than 250 leading brands and

companies in the fashion and textile industries, all united in the

desire to promote the virtuous development of the sector.

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COMBATTING CLIMATE CHANGEdefining goals and objectives, programmes and actions for the reduction of greenhouse gas emissions

RESTORING BIODIVERSITYadopting strategies and actions for the maintenance and restoration of natural ecosystems and species

PROTECTING THE OCEANSreducing the impacts caused by chemical and microplastic pollution on aquatic environments

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RESPONSIBLE MANAGEMENT OF THE SUPPLY CHAIN

In order to obtain an excellent product, from the standpoint of

quality and sustainability, it is necessary to collaborate closely

with the entire production chain.

The Group’s suppliers are required to comply with precise

environmental, ethical and safety standards, as set out in three

fundamental documents:

• The Environmental Code of Conduct

• The Code of Social Conduct

• The Restricted Substances List (RSL)

In order to continuously monitor and verify compliance by

suppliers with the relevant standards, the Group has implemented

a programme of audits in respect of social and environmental

issues, which provide the means to identify any critical issues

and guide suppliers on a path of continuous improvement.

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RATING

A-B EC-D

Compliant with

standards

Corrective action plan

(CAP)

Immediate corrective

actions

SUPPLIER EVALUATION

On the basis of any non-compliance reported, the suppliers are ranked on a rating scale from A to E. The suppliers whose overall rating is below B, are provided guidance to undertake a process of achieving

improvement through a CORRECTIVE ACTION PLAN (CAP). However, where there appears to be no possibility of implementing the corrective actions requested so as to comply with the standards,

an exit plan is defined.

Documentary verification

of CAP

CAP complete

= Upgrade

CAP incomplete

= Re-audit

CAP incomplete

=Exit plan

CAP complete =

Upgrade

1918

SUPPLIERS AUDITS

During 2019, 155 social and environmental audits were carried out,

covering 37% of the Armani Group’s suppliers,

in terms of 2019 turnover.

201720182019

220

155 147200

100

0

Number of social and environmental audits

SUPPLIERS OF RAW MATERIALS

<1%

SUPPLIERS OF SUBCONTRACT

MANUFACTURING

Geographical distribution of audited suppliers, based on turnover

99%

1%AMERICASASIA PACIFIC

SUPPLIERS OF MARKETED ITEMS

EUROPE

1%

3%96%

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2120

ENVIRONMENTAL PROTECTION

The Group effectively honours its commitment to sustainability by

being actively committed to reducing environmental impacts along

its entire value chain.

Particular attention is paid to the activities over which the Group

can exercise direct control, namely:

the management of operational offices, company-owned

stores and production sites, where initiatives are undertaken

to reduce consumption, encourage and promote recycling,

and raise awareness among employees;

the selection of raw materials, which is undertaken so as to

give priority to innovative materials having low environmental

impact;

the conception and design of packaging, aimed at ensuring

continuous improvement and in particular, at eliminating

single-use plastics, and promoting the use of recycled and

recyclable materials.

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THE OPERATIONAL OFFICES

MANAGEMENTDuring 2019 the scope of reporting was extended to all

of the consolidated companies of the Armani Group.

TOTAL ENERGY CONSUMPTION

11 thousand TOE

GREENHOUSE GAS EMISSIONS

41 thousand tonnes di CO2eq

WASTE PRODUCED

17 thousand tonnes

WATER CONSUMPTION

242 thousand cubic metres

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PUFFER JACKET MADE FROM RECYCLED PLASTICThe EA7 line was enhanced with a puffer jacket model, which is filled using Ecodown® fibres produced from PET bottles, thus avoiding the use of animal feathers.

The filling for a single puffer jacket corresponds to the recycling of about 10 bottles.

SWIMWEAR MADE FROM RECYCLED NYLONEmporio Armani Underwear has launched a capsule collection that includes swimwear/beachwear made with recycled nylon fibre.

The capsule collection was sold on the occasion of the itinerant initiative Eagle Arcade Beach Tour, which was conceived with the purpose of raising public awareness about environmental protection issues.

INNOVATIVE RAW MATERIALS

OLIMPIA TEAM UNIFORM MADE FROM RECYCLED POLYESTERFor official championship and Euroleague matches, the Olimpia Milano players have definitively adopted the team uniform made from recycled plastic (PET) bottles.

ACCESSORIES MADE FROM REGENERATED LEATHER FIBREEmporio Armani introduced a series of accessories made from regenerated leather fibre, obtained through an innovative method that recover the waste from processing natural leather. The entire process occurs without involving water use, thus avoiding the production of toxic substances that are detrimental to the environment.

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CORPORATE PACKAGING

GIORGIO ARMANIIntroduction of shopping bags made entirely out of FSC paper and with handles made of woven paper tubes.

EMPORIO ARMANI• Shopping bags made entirely

of paper for the EA7 line

• Boxes made from 50% recycled plastic for the Underwear line

• Single-material sock hangers made from cardboard

ARMANI EXCHANGE• Adoption of hang tags made

of Soporset paper, derived from responsibly managed forests

• Boxes made from 50% recycled plastic for the Underwear line

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WELLBEING OF THE EMPLOYEES AND TALENT DEVELOPMENT

Being attentive to the well-being and to the personal and

professional growth of employees is one of the Group’s priorities.

The various initiatives adopted include, for example, the

welfare measures featured under the Armani People Care plan,

the special agreements with commercial establishments or

providers of health and related services whereby employees can

avail of discounted rates and free health check-up programmes.

Furthermore, as of its June 2019 opening, the company gym

Armani/Fitness became available for employee use.

Also deemed to be of fundamental importance, professional

development and training programmes are delivered via specific

courses aimed at various functional positions and roles, and on a

range of different topics including: introductory courses for new

hires; health and safety related training dedicated to all staff;

and training for managers and those responsible for managing

complex work teams.

11AVERAGE

HOURS OF TRAINING PER

EMPLOYEEIN 2019

WOMEN

SENIOR EXECS/TOP

MGT

SUPERVISORYMANAGERIAL EMPLOYEES SALESFORCE WORKERS

MEN

11

12

16 17 8 12 6

PROFESSIONAL DEVELOPMENT AND TRAINING

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ARMANI DEVELOPMENT

PROGRAM

Launched in 2018 with the scope and objective of stimulating innovation

and personal proactiveness, this is a professional development program

dedicated to the company’s young talents.

In 2019 the participants, divided into sub-groups and closely supported

by tutors, worked on the development of projects in three different areas:

The resulting deliverables were evaluated and selected by a committee

and subsequently presented to the Presiding Board.

CORPORATE SOCIAL

RESPONSIBILITY

MARKETING DEDICATED

TO THE MILLENNIALS

DIGITAL COMMUNICATION

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3130

FOCUS ON THE CUSTOMERThe fruit of a delicate and complex operation, ensuring customer

satisfaction results from the ongoing commitment to establishing a

relationship of trust and consistently delivering an overall shopping

experience that is exclusive, personalised and satisfying.

Furthermore, it is essential to adopt the appropriate measures

designed to secure the authenticity of the products placed on the

market, so as to protect the brand values and the customers who

identify with them by purchasing the products.

For this reason, the Group dedicates ample resources each year

towards protecting its creations and combatting infringement and

counterfeiting.

THE CERTILOGO® AUTHENTICATION PLATFORM

Starting from 2017, customers of the Armani Group have the ability to contribute to the process of authentication of the Group’s products, using a common smartphone or any other device connected to the internet.

THE FIGHT AGAINST COUNTERFEITING

In 2019 the customs surveillance service and the on-the-ground raid activity produced the following outcomes:

ABOUT 3,000 SEIZURES WORLDWIDE

SHUT DOWN OF OVER 5,000 WEBSITES DEDICATED TO THE MARKETING OF

COUNTERFEIT PRODUCTS

REMOVAL OF ALMOST 50,000 ADS FOR THE MARKETING OF COUNTERFEIT PRODUCTS ON

DIGITAL PLATFORMS

REPORTING OF VIOLATIONS AGAINST ALMOST 4,500 PAGES ON SOCIAL MEDIA

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ARMANI GREEN OUTLETS

The Group’s boutiques and points of sale play a fundamental role

in representing and communicating to customers the values of the

Group, including those related to sustainability.

In 2019 the first two Armani Green Outlets were inaugurated in

Sanremo and Hong Kong, designed with particular attention to

sustainability.

STRUCTURES AND CEILINGSThe essential supporting structures are constructed from materials a portion thereof being recycled and recyclable at the end of life. The ceiling is made of aluminium battens, assembled in a manner such as to minimise the use of resources for management of the systems.

THERMAL INSULATIONThe insulation system comprising natural materials applied to the internal walls, serve to enable reducing energy consumption both during summer and winter.

FURNISHINGSThe panels are made of natural iron, a completely recyclable material. The finishes are made of natural and/or recycled materials.

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SUPPORT AND INVOLVEMENT OF COMMUNITIESOne of the fundamental aspects that characterise the identity of the

Armani Group is indeed the bond that ties it to the communities and

territories within which it operates.

Thanks to the close collaboration with institutions, cultural and

humanitarian associations, the actions undertaken by the Group are

advanced nationally and internationally in areas ranging from culture

to scientific research.

Similarly, another strong feature is the ethical commitment of the

Olimpia Milano Basketball Team, which through various initiatives

strives to promote the healthy principles of sports.

CULTURE AND ENVIRONMENTAL

PROTECTION

WELLBEING OF THE COMMUNITY

MEDICAL AND SCIENTIFIC RESEARCH

ARMANI/SILOSInaugurated in 2015, the Armani/Silos space undertakes to make available the Group’s artistic heritage and creative assets for the purposes of stimulating innovation in the field of fashion and design, while supporting new generations of creative professionals.

FAI - ITALIAN ENVIRONMENTAL FUNDThe Armani Group is part of “I 200 del FAI”, the group of FAI major donors who support the enhancement of Italy’s national artistic heritage.

OPERA SAN FRANCESCOThe Group supports various organisations that are engaged in combatting poverty and in particular Opera San Francesco, which operates in the Milan area to offer support and services to people in disadvantaged conditions.

ACQUA FOR LIFERenewed for the tenth consecutive year, Acqua for Life is an international initiative aimed at securing improved access to water resources in areas of the world where such access proves to be most difficult.

VERONESI FOUNDATION AND HUMANITAS Aid was consistently provided in 2019, to the Fondazione Veronesi/Veronesi Foundation and Humanitas, two major entities specialising in the field of oncological diseases.

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OLIMPIA MILANO BASKETBALL TEAM

AND THE VALUES OF SPORTS

RESPECTING THE RULES

HEALTHY COMPETITION

SOCIAL INCLUSIONTEAM SPIRIT

RESPECTING DIVERSITY

POSITIVE TEAM CHEERING

Biodegradable and recyclable paper from materials sourced from responsibly managed forests, consisting of pure cellulose with at least 25% recovered fibres

and produced in adherence with sustainability criteria during its processing.

2020