02/08/2022

To our stakeholders:

I am pleased to confirm that Pattern SpA reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this information with our stakeholders using our primary channels of communication.

Sincerely yours,

Luca Sburlati
CEO

Pattern identified an internationally recognised standard for social aspects that could provide reliable guidelines for measuring its social compliance.
Since 2013, Pattern has therefore decided to adopt and certify a management system compliant with SA8000, a voluntary standard, issued by SAI, verifiable through third-party audits, that defines the requirements to be met by organisations, including the recognition or improvement of workers’ rights, workplace conditions and an effective management system. Social Accountability International (SAI) is a non-profit, multi-stakeholder organisation active globally since 1997. The goal SAI shares
with its stakeholders is decent work everywhere, supported by a widespread understanding that decent work can benefit business while ensuring fundamental human rights. The core elements of this standard are based on the Universal Declaration of Human Rights, ILO conventions, international human rights standards and national labour laws. The purpose of SA8000 is to provide a verifiable standard, with a solid foundation, to value and protect all personnel within the sphere of control and influence of an organisation, who produce products or services for it, including personnel employed by the organisation itself and its suppliers, subcontractors, sub-suppliers and home workers. An organisation is expected to achieve compliance with the Standard through an adequate and effective management system. The 8 requirements provided by SA8000 represent the main KPIs on which the Standard focuses and from whose management results the operational map that allows Pattern to achieve, through continuous improvement, full and sustainable compliance with SA8000, also known as “Social Performance”.

The 8 KPIs that runs the policy issued by the company are the followings and they are included in the policy shared with our supply chain:
1) CHILD LABOUR (NOT PERMITTED)
2) FORCED LABOUR (NOT PERMITTED)
3) HEALTH & SAFETY (WORKING CONDITIONS)
4) FREEDON OF ASSOCIATION
5) DISCRINMINATION
6) DISCIPLINARY PRACTICES
7) WORKING HOURS
8) RETRIBUTION
9) MANAGEMENT SYSTEM: anonymous whistleblowing polices, trainings, Social Performance Team, Internal Auditing, Risk Assessement, third party surveillance.

Pattern's cetralized governance SA8000 has the responsibility to held regularly internal audit, risk assessments and implementation of corrective action plan for any company in the group.
Pattern provides also two dedicated resources to deal with the CSR in the supply chain that are supposed to monitor each sub-contractor in order to authorize cooperation.
The social performance is annually reported in the Sustainability Report published on our web site https://www.pattern.it/pattern-torino-sustainability

In accordance with company goals Pattern has a written Policy that cover:
- Freedom of association & effective recognition of the right to collective bargaining
- The elimination of all forms of forced and compulsory labour
- The elimination of discrimination in respect of employment and recruitment
- The effective abolition of child labour
- Forced Labour
- Migrant Workers

Pattern manages the mapping of all the suppliers and sub-contractors it collaborates with. Each of these sub-suppliers must be approved by the internal auditor team.

Pattern grants the management of the relevant KPIs by a continuous monitoring throught a risk assement evaluation and an Internal auditint checklist.
Results are publushed on the Sustainability report on the site.

In July 2019, Pattern signed the UNFCCC-proposed commitment, the Fashion Industry Charter for Climate Action, containing a commitment to set science-based emission reduction targets approved by SBTi, in Scope 1, 2 and 3 categories within 24 months, and to commit to achieving net zero emissions by 2050.
The commitment also includes quantifying, monitoring and publicly reporting greenhouse gas emissions, on an annual basis, through CDP and consistent with measurement and transparency standards and best practices;
In addition, it requires them to submit relevant reduction pathway plans for 2030 within 12 months and to provide updates every three years.
The targets set in the letter of commitment addressed to textile companies by the UNFCCC echo the ambitions set by the Science Based Target Initiative (SBTi) to which Pattern adhered by choosing the more ambitious level of 1.5°consisting in the implementation of reduction strategies to limit the maximum global average temperature rise to 1.5°. The initiative is a partnership between the Carbon Disclosure Project, UN Global Compact, World Resources Institute and WWF and was created with the intention of providing companies with ambitious, clearly defined and sector-specific pathways to reduce emissions, ensuring that corporate Climate Action is in line with the goals of the Paris Agreement and stimulating companies to support the transition to a zero-emission economy.

A strategy for energy consumption reduction was already outlined in 2018 for the Collegno site and it was subsequently extended to the Spello site as well. In fact, the increase in scope 1 and 2 emissions, recorded by Pattern between 2018 and 2019, is closely related to the acquisition of Roscini Atelier which took place in June 2019.
Pattern's carbon footprint mitigation strategy saw the realization of works to improve the factories energy efficiency, among which the installation of a geothermal system for the Collegno site, as well as the self-production of zero-emission electricity through the photovoltaic systems installed at the Collegno and Spello manufacturing plants. In addition, scope 2 residual emissions related to the production of the purchased electricity were reduced thanks to 100% renewable energy supplies. The Collegno site purchases green energy, certified by guarantees of origin, starting from 2018 and the Spello site starting from 2021.
Pattern SpA has no single processes or atmospheric emissions. For this reason, the environmental management system focuses on defining waste management. The SMT headquarters, on the other hand, having an internal laundry and emissions into the atmosphere, achieved ISO 14001 certification in 2021.

The organisational boundaries considered for conducting the analysis were delineated so as to include in the accounting the GHG emissions associated with the activities carried out at the Collegno, Spello, Correggio and Scandicci sites. Specifically, for Pattern (Collegno and Spello sites) scope 1, 2 and 3 emission categories were calculated, while for SMT and Idee Partners only Scope 1 and 2 emissions were considered. From 2022, the other Group’s locations will also be included in the analysis and reporting of scope 3 emissions. To establish the reporting boundaries, significant GHG emissions related to the company’s activities were identified.
The methodology used in 2021 for the quantification of the Pattern Group’s greenhouse gas emissions is based on the calculation performed through the multiplication of the activity data and the relevant emission factor, resulting in tonnes of CO2 equivalent. All activity data for greenhouse gas emissions in this analysis were modelled using databases such as Ecoinvent, ISPRA, EUROSTAT, ISTAT and US-EPA.

The Company has appointed the Supervisory Board since October 2021, with the aim of ensuring that this body meets the requirements of autonomy, independence, professionalism, and continuity of action in accordance with the provisions of Legislative Decree No. 231 of 2001 (Articles 6 and 7), in order to ensure the effective and efficient implementation of the adopted Model.
The supervisory body has the following tasks:
- periodically check the map of the Areas at Risk of Crime and the adequacy of the control points in order to allow their adaptation to changes in the business and / or corporate structure. For this purpose, the addressee of the Model, must report to the SB any situations that could expose the Company to risk of crime. All Communications must be in writing and transmitted to the appropriate e-mail address activated by the SB;
- periodically carry out, on the basis of the SB activity plan previously established, targeted checks and inspections on certain operations or specific acts, carried out within the Areas at Risk of Crime;
- collect, process and store relevant information regarding compliance with the Model, as well as update the list of information that must be compulsorily transmitted to the SB itself;
- conduct internal investigations to ascertain alleged violations of the provisions of the Model brought to the attention of the SB by specific reports or emerged in the course of its supervisory activity;
- verify that the elements that Model provided for in the different types of offenses (standard clauses, procedures and related controls, system of proxies, etc.) are actually adopted, implemented and comply with the requirements of compliance with Legislative Decree no. 231 of 2001, providing, if not, to propose corrective actions and updates.

Pattern, from October 2021 applies the D.Lgs 231. The Model 231 provides:
- the identification of a Supervisory Body with the task of supervising the operation and compliance with Model 231;
- identifying the areas of company activities in which crimes may be committed (risk assessment);
- the introduction of a disciplinary system suitable for sanctioning non-compliance with the measures indicated in Model 231;
- the provision of specific protocols aimed at regulating the procedures for carrying out and implementing the entity's decisions in relation to the crimes to be prevented;
- the adoption of ethical principles and identification of the primary corporate values ​​which the company intends to inspire its conduct;
- communication and training to personnel and all stakeholderson about Model 231 contents ;
- the definition of a powers system in line with organizational and managerial responsibilities;
- the definition of an updated, formalized and clear organizational system that guarantees an adequate contrast of functions and separation of duties;

The Company has appointed a supervisory body, with the aim of ensuring the compliance of this body with the requirements of autonomy, independence, professionalism and continuity as defined by the decree.