Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainability
• Environmental Protection
• Human Rights
• Digital Transformation

Environmental Achievements

• Completed the energy transition of stores in Italy to 100% green energy.
• Opened a highly sustainable store in Florence (GREEN B) with 20% reduced energy consumption compared to a standard store.
• Increased use of recycled materials in products.
• 78% recycled waste.
• 48% sustainable raw materials.

Social Achievements

• Signed a new Company Supplementary Agreement focused on innovation and development, improving work-life balance and employee well-being.
• Launched the Sakhi program in India to empower female employees.
• Continued the Ponzano Children childcare center.
• Implemented the Benetton for You welfare program.
• 25,000 training hours organized in Italy.

Governance Achievements

• Established a Sustainability Committee.
• Adopted the Higg Facility Social and Labor Module (FSLM) to assess supplier social performance.
• Adhered to the International Accord for Health and Safety in the Textile and Garment Industry.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to lockdowns and transportation difficulties.
• Competition from e-tailers.
• Need to adapt collections to global styles in key markets (India, Korea).
• Resistance to change within the company.
• Inadequate management of sustainability issues.
• Covid-19 pandemic impact on consumer behavior.

Mitigation Strategies

• Near-reshoring of production activities.
• Rationalization of sources and materials.
• Omnichannel strategy implementation.
• Investing in employee training and development.
• Adopting the Higg Index and FSLM for supply chain monitoring.
• Continuous improvement in sustainability practices.

Supply Chain Management

Supplier Audits: 235 suppliers assessed based on social impact (Higg FSLM)

Responsible Procurement

• Code of Conduct for Manufacturers
• Higg Index (FEM and FSLM)
• ZDHC MRSL guidance
• Better Cotton Initiative
• Sustainable Apparel Coalition

Climate-Related Risks & Opportunities

Physical Risks

• Climate variations impacting sales

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards (Core option), International Integrated Reporting Council (IIRC) Framework

Certifications: Responsible Down Standard (RDS), FSC (Forest Stewardship Council)

Third-party Assurance: Ernst & Young S.p.A.

UN Sustainable Development Goals

• SDG 5 (Gender Equality)
• SDG 8 (Decent Work and Economic Growth)
• SDG 12 (Responsible Consumption and Production)
• SDG 13 (Climate Action)
• SDG 17 (Partnerships for the Goals)

Benetton's initiatives contribute to these goals through various programs and actions detailed in the report.

Sustainable Products & Innovation

• GREEN B collection
• Eco-Recycle down jacket
• Friulane collection
• Casa Benetton
• Undercolors Econyl® beachwear

Awards & Recognition

• EuroShop Retail Design 2022 award for GREEN B concept store

Environmental Metrics

ESG Focus Areas

• Sustainability
• Climate Change
• Human Rights
• Supply Chain Responsibility

Environmental Achievements

• Increased the level of sustainability of its campus thanks to energy-efficient lighting and 100% certified renewable energy sources.
• Reduced waste in Tunisian factories by 7%.
• Increased use of recycled fibers in collections.
• 56% sustainable cotton used.
• 91% campus waste recovered.

Social Achievements

• Measured the social performance of more than 260 suppliers (12% more than in 2021).
• Implemented remote working on Fridays for all employees.
• Offered internships to 70 young graduates, most of whom were offered permanent contracts.
• Two employee reports of discrimination were received and positively solved.

Governance Achievements

• Established a Sustainability Committee in 2015.
• Implemented a whistleblowing procedure.

Climate Goals & Targets

Environmental Challenges

• Risks connected with the United Colors of Benetton brand repositioning strategy.
• Risks deriving from the failure to meet new store opening goals.
• Meeting expected delivery times for finished goods.
• Entry of international brands in the Indian and Korean markets.
• Risks of losses inherent in the Company’s operations.
• Staff’s resistance to change.
• Inability to identify the tastes of consumers.
• Business interruption of the logistic platform due to natural disasters.
• Cyber threats.
• Adoption of digital technologies requiring new skills.
• Inadequate management of sustainability issues.
• Financial risks connected with exchange rates, interest rates, counterparty and liquidity.
• Increase in prices of raw materials, transportation and energy.
• Reputational risks.
• Social and political instability of some nations.
• Climate variations.
• Natural events affecting suppliers.

Mitigation Strategies

• Near-shoring plan to concentrate in-house and rationalize the activities of the workshops.
• Implementation of an automated warehouse.
• Implementation of Higg FSLM and Higg FEM modules for supplier assessment.
• Continuous dialog with suppliers.
• Collaboration with Sustainable Apparel Coalition (SAC) and Zero Discharge of Hazardous Chemicals (ZDHC).
• Investment in digital transition.
• Investment in environmental and social sustainability.
• Implementation of corrective measures to remedy identified non-conformities.
• Capacity building programs for suppliers.
• Risk analysis adjusted to the changed international scenario.

Supply Chain Management

Supplier Audits: 263 supplier social performance assessments in 2022

Responsible Procurement

• Code of Conduct for Suppliers
• ZDHC Wastewater Guidelines
• Higg FSLM
• Higg FEM
• Better Cotton Initiative
• Organic cotton
• Recycled cotton
• Responsible Down Standard (RDS)

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters impacting logistics platform

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards (2021), International Integrated Reporting Council (IIRC) Framework

Certifications: Responsible Down Standard (RDS), Organic Content Standard (OCS), Global Organic Textile Standard (GOTS), Global Recycled Standard (GRS), Recycled Claim Standard (RCS), Responsible Wool Standard (RWS), Forest Stewardship Council (FSC)

Third-party Assurance: Ernst & Young S.p.A.

UN Sustainable Development Goals

• SDG 5 (Gender Equality)
• SDG 8 (Decent Work and Economic Growth)
• SDG 12 (Responsible Consumption and Production)
• SDG 13 (Climate Action)
• SDG 17 (Partnerships for the Goals)

Benetton's initiatives contribute to these goals through various projects and commitments detailed in the report.

Sustainable Products & Innovation

• GREEN B collection
• Never Out of Stock (NOS) items
• Products made with recycled materials
• ECONYL® regenerated nylon
• Recycled polyester wadding

Awards & Recognition

• 2022 EuroShop RetailDesign Award (GREEN B store concept)
• Special mention at the Innova Retail Awards (Pink Box concept store)

Environmental Metrics

ESG Focus Areas

• People
• Nature
• Circularity

Environmental Achievements

• Obtained approval of short-term greenhouse gas emissions reduction targets from the Science Based Targets initiative (SBTi)
• Reduced Scope 1 and 2 emissions by -12% vs 2019 baseline
• Reduced Scope 3 emissions by -15% vs 2019 baseline
• Achieved 42% renewable energy
• 99% campus waste recovered
• 51% sustainable cotton

Social Achievements

• Launched Be.One platform for internal communication
• 66% conversion rate from internship to apprenticeship
• 66% female managers
• Euro 617,889 invested in prevention
• 9,600 hours of training
• 247 suppliers evaluated on their social performance

Governance Achievements

• Consolidated sustainability strategy based on three pillars: caring for people and communities, reduction of environmental impact and adoption of a business model targeting circularity
• Joined the Science Based Targets initiative (SBTi)

Climate Goals & Targets

Environmental Challenges

• Brand repositioning strategy risks
• Distribution channel risks
• Supply chain and availability of finished products
• Country strategy and market presence in India and South Korea
• Execution risks
• Business organization
• Product and product quality
• Business interruption of the logistic platform
• Cyber threats
• Digitalization
• Sustainability
• Financial risks (exchange risk, inflation and interest rate, legal and compliance risks, company procedures, fiscal compliance, internal control system)
• External risks (increase in prices of raw materials, transportation and energy, reputation, social and political instability of some countries, climate variations, natural events)

Mitigation Strategies

• New 2024-2029 Plan to guide the Group’s economic recovery
• Nearshoring strategy to reduce distance between production facilities and markets
• NOOS (Never Out of Stock) items to improve production, cost control and waste reduction
• Transition to renewable energy
• Energy efficiency program
• Modal shift in transportation (reducing cargo flights in favor of sea freight)
• Saturation of transportation (optimizing loading space)
• Paperless project for e-commerce orders
• Higg FEM for environmental performance assessment of suppliers
• Water management policy
• Biodiversity management policy
• Eco-design principles
• Circular Fashion Partnership
• Responsible purchasing practices
• Strengthening business relationships with strategic partners

Supply Chain Management

Supplier Audits: 247 supplier assessments in 2023 (Higg FSLM)

Responsible Procurement

• Code of Conduct for Manufacturers
• Higg FSLM
• ZDHC Wastewater Guidelines
• Better Buying Institute (BBI) partnership

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, SBTi

Certifications: OCS, RCS, RDS, FSC

Third-party Assurance: Ernst & Young S.p.A. (limited assurance)

UN Sustainable Development Goals

• SDG 5 (Gender equality)
• SDG 8 (Decent work and economic growth)
• SDG 12 (Responsible consumption and production)
• SDG 13 (Climate action)
• SDG 17 (Partnerships for the goals)

Benetton's initiatives contribute to these goals through various programs related to gender equality, fair labor practices, sustainable resource management, climate change mitigation, and collaborations with various stakeholders.

Sustainable Products & Innovation

• Green B collection
• NOOS collection
• Products using recycled materials (cotton, wool, polyester, nylon)

Awards & Recognition

• Greenpeace recognition for environmental sustainability (2013)
• First Italian brand in terms of transparency according to the Fashion Transparency Index (2020)