SALVATORE FERRAGAMO GROUPSUSTAINABILITY REPORT 2017CONSOLIDATED NON-FINANCIAL STATEMENTPURSUANT TO ITALIAN LEGISLATIVE DECREE 254/20163LETTER FROMTHE CHAIRMANThis Sustainability Report is dedicated to Settimio, who embraced the world of the Salvatore Ferragamo with his quiet smile. He has always been a point of reference and a byword of commitment, dedication, and reliability.Our Group has been on the path to corporate social responsibility for years now, believing that sustainability is not ancillary, but rather a commitment that must be part of growth strategies and acted on by taking a long-term approach. In 2017, we strengthened our commitment to sustainability by adopting a three-year plan centered on sustainability goals and formalizing a policy that establishes conduct guidelines with the aim of promoting a culture of sustainability. The purpose of this document, which applies to the entire Salvatore Fer-ragamo Group, is to share what we have achieved so far as well as fu-ture challenges and objectives, maintaining a transparent relationship with stakeholders. Thanks to our people and their positive attitude, the value of sustainability has spread throughout the organization and is now at the center of our growth strategies. Our employees represent the essence of our Brand, and this is why we seek to maximize their professional and individual po-tential by offering them opportunities for growing, achieving well-being, and building respect. As evidence of our commitment to the health and safety of our people, in 2017 we obtained the OHSAS 18001 certifi cation for the Osmannoro site and the Italian stores. We plan to expand the scope of the certifi cation over the next few years. We believe in our local community, a byword for history and culture, and its young talents, who are capable of devising solutions to modern problems and rejuvenating Italy's creative heritage. Staying true to Ferragamo's DNA, we want to celebrate the past and future of Italy's tradition by fund-ing the restoration of major artworks such as the Fountain of Neptune in Florence's Piazza della Signoria as well as promoting experiments with sustainable materials, constantly upholding the quality standards of Made in Italy products and in keeping with the innovative spirit of our Founder. For us, also protecting the environment is a priority when setting our goals. In 2017, we invested in limiting consumption and obtaining important envi-ronmental certifi cations for our facilities, in order to minimize the environ-mental impact of our operations. The new Logistics Center currently being built at the Osmannoro site testifi es to this commitment: designed to the highest effi ciency standards, it will receive the LEED Platinum certifi cation “There is always something more beautiful, more perfect, still to be created”. This quote from my father drives us to constantly improve ourselves and raise the standards, promoting a responsible business approach based on the respect for people, the community, and the environment every day. Ferruccio FerragamoSustainability Report 20175TABLE OFCONTENTSMETHODOLOGYANNEXESBOUNDARIES OF THE GROUP'S MATERIAL ASPECTSGRI CONTENT INDEXAUDITOR'S REPORTRESPONSIBLE PASSIONCommitmentSustainability Plan and SDGsStakeholders and materiality16A SHARED HISTORYDiversity and equal opportunityAttracting and developing talentWellbeing of people444SALVATORE FERRAGAMO GROUPNumbersHistory and marketResponsible management216 CULTURE AND PARTICIPATIONLink with the community and the local territorySalvatore Ferragamo MuseumFerragamo Foundation556MADE IN ITALY QUALITYTradition and innovationSuppliers and contract manufacturersCustomer focus326PROTECTING THE ENVIRONMENTResponsible consumptionEmissions monitoringCertifi cations and green initiatives672Sustainability Report 20177CommitmentSustainability Plan and SDGsStakeholders and materialityRESPONSIBLEPASSION8RESPONSIBLEPASSIONCOMMITMENT‘Creativity, innovation and excellent craftsmanship have been the core values of the Salvatore Ferragamo brand since it began, and are tangi-ble elements in the design and production of each and every one of its creations. The Brand’s deep ties to the local area, its culture and commu-nity have instilled in the Salvatore Ferragamo an ever greater awareness of the need for a sincere and significant commitment to protecting the places where it operates and the people who work for it, a commitment that goes beyond mere compliance with the provisions of national and international laws, standards and regulations’.The inspiration driving the business of the Salvatore Ferragamo Group is founded on passion for excellent craftsmanship, creativity and innova-tion, while respecting the values that are part of the Brand's DNA. Among these values has always been sustainability in the sense of a model for how to act without compromise. Understanding and respecting these values translate into ethically correct behaviors, both inside and outside the Group, supporting it in terms of economic growth and credibility. The Salvatore Ferragamo Group decided to embark on its journey towards corporate responsibility by committing to adopt a strategy that puts this concept at the center of the decision-making progress, seeking to grow the business while considering also the positive and negative impact of its operations on society and the environment.THE SALVATORE FERRAGAMO GROUP IN 20176SustainabilityPlanSustainabilityPolicy OF THE GROUPSDGs ADOPTEDOF THE GROUPmore than 81,000‘Identity and Vision’Business InternationalFinance AwardFOR THE GROUP SUSTAINABILITY REPORT 2016PAGES VIEWED ON THE GROUP WEBSITE CSR SECTIONSPECIAL MENTION AWARD RECEIVEDFROM BBS FOR THE GROUP SUSTAINABILITY REPORT 20161011Sustainability Report 2017THE SUSTAINABILITY PATH OF THE SALVATORE FERRAGAMO GROUP2014201520162017Creation of a cross-functional working group called Green Team, dedicated to designing and promoting corporate responsibility initiatives.Identifi cation of stakeholders.Initial defi nition of economic, social and environmental topics which are most important for the Salvatore Ferragamo (materiality analysis).Drafting of the fi rst Sustainability Report 2014 for Salvatore Ferragamo S.p.A. (year zero).Creation of an e-mail address specifi cally dedicated to Corporate Social Responsibility.Addition of a section dedicated to Corporate Social Responsibility on the Company's intranet.Preparation and publication of the Sustainability Report 2015 for Salvatore Ferragamo S.p.A., subject to limited assurance.Creation on the Salvatore Ferragamo Group website of a section dedicated to sustainability, available in English and Italian.Update of mapping of stakeholders. Update of materiality analysis.Preparation and publication of the Sustainability Report 2016 relating, for the fi rst time, to the Salvatore Ferragamo Group, subject to limited assurance.Achievement of the 2017 Business International Finance Award in the category “Financial Statements, Integrated Reporting, and Financial Communication” as well as the “Identity and Vision” Special Mention from Biblioteca Bilancio Sociale for the Group Sustainability Report 2016.Consideration of the Sustainable Development Goals (SDGs) as part of the Group sustainability strategy.Preparation and publication of the Sustainability Report 2017 for the Salvatore Ferragamo Group, subject to limited assurance.Preparation and publication of the Salvatore Ferragamo Group Sustainability Policy, available in English and Italian in the CSR section of the Group's website.Preparation of the Salvatore Ferragamo Group Sustainability Plan, outlining the sustainability goals to be achieved within the next three years.In order to take an integrated ap-proach to managing sustainability-related topics, since 2014 a cross-functional working group called Green Team has been set up, dedi-cated to designing and promoting corporate responsibility initiatives. The team consists of people from several corporate departments, allowing to bring together cross-functional skills in order to pro-mote all-around sustainability. The main responsibility of the Green Team is improving the quality of the workplace and the internal and external impact of the Company's operations, as well as facilitating a direct relationship with the local community in all its environmental and human facets. The particular structure of the Green Team ena-bles the development of sustaina-bility initiatives as part of materials research and development, com-munication, packaging, informa-tion systems, logistics, operations, environment and safety, commu-nity & charity, purchasing of raw materials, human resources, mo-bility and store planning. In 2017, the Merchandising Function joined the Green Team, strengthening the projects focusing on innova-tive and sustainable materials in accordance with the Brand's crea-tive spirit. In addition, since 2016 the Control and Risk Committee has been supervising sustainabili-ty-related issues with the goal of monitoring the inclusion of respon-sible practices into the Group's business strategies. To be trans-parent about its operations, the Group has committed to reporting on its corporate social responsibil-ity initiatives.Since 2014, Salvatore Ferragamo has been preparing the Group Sus-tainability Report in accordance with the international guidelines of the Global Reporting Initiative GRI–G4. Salvatore Ferragamo S.p.A. fi rst Corporate Sustainability Re-port won the Aretè Corporate Social Responsibility Report Award in the “large companies” category and, as a further step on the journey towards corporate social respon-sibility, the Sustainability Report of the Salvatore Ferragamo Group was published and subjected to limited assurance. The Salvatore Ferragamo Group Sustainability Report 2016 won the 2017 Busi-ness International Finance Award in the category “Financial State-ments, Integrated Reporting, and Financial Communication” as well as the “Identity and Vision” Special Mention from Biblioteca Bilancio Sociale.In 2017, to consistently implement sustainability initiatives across all Salvatore Ferragamo Group com-panies, a Sustainability Policy was drafted and published, in order to establish a corporate culture ori-ented to equity and professional expertise, promote honesty, integ-rity and transparency, encourage sustainable growth, stimulate a conversation on business ethics, and make stakeholders more ac-countable. Prepared in accord-ance with the principles and rules of the Group's Code of Ethics as well as the framework of the United Nations Sustainable Devel-opment Goals (SDGs), the Policy seeks to encourage the Group's governance bodies, employees, and collaborators to share ideas and recommendations to imple-ment sustainability in day-to-day operations. In addition, as evidence of its com-mitment to sustainable growth, in November 2017 the Group signed the Manifesto for Circu-lar Economy, which establishes an Alliance to promote innovative and sustainable projects. The Al-liance, spearheaded by Enel and Intesa San Paolo, includes inter-nationally recognized companies from several Italian industries and seeks to develop business models based on the principles of sharing, extending the useful life of prod-ucts, recycling and using renewable energy sources.Moreover, since 2011 the Salva-tore Ferragamo has been a mem-ber of the Working Group on Sus-tainability sponsored by the Ital-ian Chamber of Fashion (CNMI), which aims to fi nd an Italian way to making fashion responsible and sustainable as well as promote the adoption of responsible business models throughout the fashion in-dustry's value chain. To help people connect with the Ferragamo world and strengthen the bond between stakeholders and the Brand, the Group has adopted a strategy that connects the online and offl ine worlds also for the purposes of sustainability-related topics. In 2016, the Salva-tore Ferragamo Group launched a section entirely dedicated to cor-porate responsibility on its web-site, highlighting the most impor-tant social responsibility projects the Group has promoted over the years. In 2017, new content was added to the website to further engage stakeholders: an interac-tive digital version of the Group Sustainability Report 2016 was published, offering a user-friendly experience optimized for mobile devices, later joined by the newly adopted Sustainability Policy. In addition, the Brand's sustainability initiatives were able to drive en-gagement through social channels: in April 2017, the announcement of the publication of the Salvatore Ferragamo Group Sustainability Report on the Brand's LinkedIn profi le was viewed over 130,000 times in the fi rst week.1213SUSTAINABILITY PLAN AND SDGsGood health and wellbeingIn line with its own Charity Policy, the Salvatore Ferragamo Group is committed to promoting and supporting initiatives aimed at protecting the health of women and children.Decent work and economic growthThe Salvatore Ferragamo Group focuses its commitment on facilitating and valorizing the professional development of its peo-ple, while respecting the historic community values, in order to incentivize innovation and creativity, thus also guaranteeing the healthiness of its workplaces.Sustainable cities and communitiesThe Salvatore Ferragamo Group is committed to directing signifi cant attention and resources to artistic and cultural initiatives, in order to guarantee more responsible management of cities and promote culture in all its forms and manifestations.Responsible consumption and productionThe Salvatore Ferragamo Group is committed to guaranteeing responsible management in its processes to produce and consume resources, raw materials and packaging materials, investing in quality in order to reduce environmental impact and extend the life cycle of its products, and reporting on its business on the basis of the principle of transparency.Quality educationThe Salvatore Ferragamo Group, in collaboration with the Ferragamo Foundation, is committed to investing in the education and training of those who intend to work in the fashion and design world and in the highest and most artistic forms of Italian craftsmanship, in line with the stylistic values and canons expressed in the work of its Founder.Affordable and clean energyThe Salvatore Ferragamo Group is committed to protecting and safeguarding the environment through continuous improvement in energy effi ciency in its consumption and by promoting the use of renewable sources.In 2017, in order to create a vision shared by the whole Group, the fi rst Sustainability Plan was draft-ed identifying the main goals to be pursued concerning strategy and governance, people and principles, protection of the environment, and culture and participation. The Sus-tainability Plan is updated annually and prepared on the basis of the Group's sustainable development goals: in 2016, building on the 17 Sustainable Development Goals (SDGs) of the United Nations to promote sustainable growth and minimize negative impacts on the planet, the Company identifi ed the 6 main objectives that will drive its operations. The Sustainabil-ity Plan was born from the need to formalize the commitment to achieving these goals, in keeping with the values that have always driven the Group's business. The Plan was shared with top manage-ment and the Control and Risk Committee, which supervises sus-tainability-related issues, to embed corporate social responsibility values into the Group's growth strategies. The Group's Sustainability Plan identifi es specifi c initiatives to be implemented over three years in or-der to achieve the following goals:• Embedding sustainability into business strategies and making the relationships with internal and external stakeholders more trans-parent;• Increasing the frequency of in-ternal communication on sustaina-bility-related topics and promoting initiatives to engage stakeholders;• Maximizing human capital at the Group level;• Continuously improving occupa-tional health;• Promoting Company Welfare ini-tiatives and strengthening internal communication;• Monitoring the supply chain and collaborating with suppliers on shared projects;• Constantly improving energy and environmental effi ciency;• Reducing the use of resources as part of production and consump-tion processes;• Monitoring chemical substances inside raw materials and fi nished products; • Promoting and using sustainable materials and by-products; • Planning and implementing chari-table initiatives to protect the health of women and children as well as promote Italy's culture around the world; • Leveraging the company's know-how and heritage in the con-text of craftsmanship and Made in Italy products as well as promot-ing relevant training opportunities (initiatives promoted by the Salva-tore Ferragamo Museum and the Ferragamo Foundation).1415STAKEHOLDERS AND MATERIALITYSALVATORE FERRAGAMO GROUP'S MATERIALITY ANALYSISSustainability Report 2017The numerous elements to the sustainability path undertaken by the Salvatore Ferragamo Group are based on an approach fo-cused on transparency, integrity and seriousness, with the aim of involving stakeholders in the eco-nomic, social and environmental objectives of its own business. The Group does not simply pro-mote social responsibility initia-tives, but recognizes the value of sustainability as part of its corpo-rate strategy and puts forward innovative proposals for its stake-holders.Salvatore Ferragamo has identi-fi ed and selected its stakeholders based on the awareness of its so-cial role and deep connection with the local community, which is nec-essarily related to the conduction of its operations, for the purposes of understanding their expecta-tions and translating them into ac-tionable objectives.The following have been identi-fi ed as internal stakeholders: em-ployees, shareholders, investors, distributors, suppliers, and work-shops. External stakeholders have been identifi ed in fi nal customers, schools and universities, regula-tory and governmental bodies and the public administration, lo-cal communities, non-governmental organizations (NGOs), media and infl uencers and trade associations. The Salvatore Ferragamo Group's materiality analysis refl ects the topics material to the Group as well as the concerns and expec-tations of its stakeholders. After conducting it for the fi rst time in 2014 with the participation of the Green Team and top man-agement, the Group updated the materiality analysis in late 2016. Since the fi rst edition, it has been performing this analysis in accord-ance with the Global Reporting Initiatives (GRI-G4) Guidelines as well as the AA1000 Stakeholder Engagement Standard Guidelines on identifying, mapping and de-fi ning stakeholders’ expectations, processing the results of their engagement and prioritizing them. The materiality analysis was up-dated with the input of the Group's Green Team and top management as well as by engaging different categories of stakeholders both within and without the Group, ask-ing them for their opinion as part of the process to defi ne, assess and prioritize material topics. Spe-cifi cally, the update process took into account the opinions of stu-dents from major universities as part of an initiative led by SDA Bocconi School of Management, the Store Managers and Assistant Store Managers of European bou-tiques, and the Group's youngest employees through a web-based survey. All categories of stakehold-ers involved contributed to prioritiz-ing the material topics and provided insights on potential sustainability projects the Group could focus on in the short, medium and long term. The Group sees these opportuni-ties for discussion with its stake-holders as crucial, since they allow to steer the sustainability decision-making process in the direction of the actual expectations of stake-holders. The Group assessed the feasibility of all the ideas gath-ered as part of stakeholder en-gagement initiatives, and some of them became part of the Group Sustainability Plan. As in previous years, future materiality analysis updates will provide increasingly engaging stakeholders, in accord-ance with the Sustainability Plan. To this end, in order to maintain a constant dialog with its stakehold-ers and to promote a culture of sustainability, the Group recently developed a digital platform allow-ing employees to access several videos on sustainability-related topics as well as express their ideas and opinions on the Group's progress in this area. Launched in early February 2018 in Italy and Europe, the platform will be rolled out to employees of the other areas in which the Group operates.SALVATORE FERRAGAMO GROUP'S STAKEHOLDERS' MAPFINAL CUSTOMERSMEDIA AND INFLUENCERS TRADEASSOCIATIONSSHAREHOLDERSINVESTORSDISTRIBUTORSEMPLOYEESSUPPLIERS AND CONTRACT MANUFACTURERSLOCAL COMMUNITIESNGOsSCHOOLS AND UNIVERSITIESREGULATORY AND GOVERNMENTAL BODIES AND PUBLIC ADMINISTRATION1716SALVATORE FERRAGAMOGROUPNumbersHistory and marketResponsible managementNext >