MODERN SLAVERY STATEMENT FOR THE FINANCIAL PERIOD 2021
1

INTRODUCTION
This document, whose content refers to the fiscal year of 12 months ended December 31, 2021, was approved by theBoard of Directors of Prada S.p.A. on May 3, 2022 and describes the measures taken by the Prada Group (hereinafteralso "the Group" or "Prada") to ensure, as required by the UK "Modern Slavery Act 2015 - Section 54", the absence ofany form of “modern slavery, forced labor and human trafficking” within its organization and along its supply chain.
This statement is also made on behalf of the following companies controlled by the Prada Group: Prada Retail UK Ltd andChurch & Co Ltd.

THE PRADA GROUP€3.4 BillionRevenues

at December 31,
2021

13,140
Employees

at December 31,
2021

23
Industrial sites
at December 31,
2021

635
DOS

at December 31,
2021

The Prada Group operates in the luxury goods industry

Stores (DOS) and a select network of luxury depar tment

with the Prada, Miu Miu, Church's and Car Shoe brands instores, independent retailers and franchise stores. Also

the design, production and distribution of luxury handbags,

at December 31, 2021, the Group’s headcount amounted

leather goods, footwear, apparel and accessories. The Groupto 13,140 employees, 39% of which were in Italy wherealso operates in the eyewear and fragrance industries under

20 out of 23 Group’s industrial sites are localized.

specific licensing agreements and, with the acquisition of
Pasticceria Marchesi 1824, has made its entry into thePrada S.p.A., the parent company, is a joint-stock company

food industry, where it is positioned at the highest levels ofwith limited liabilities, domiciled in Italy and listed on thequality. Finally, in 2021, to fully develop its potential, theMain Board of the Hong Kong Stock Exchange. At the date

Luna Rossa brand also becomes par t of the Prada Groupof this repor t, 80% of the share capital of €255,882,400.00

following the acquisition of Luna Rossa Challenge S.r.l..

is owned by Prada Holding S.p.A., a company domiciledin Milan (Italy), while the remaining shares are floating.

As of December 31, 2021, the Group’s products are sold in 70
countries around the world through 635 Directly Operated

ETHICAL PRINCIPLES
The Prada Group’s strategic choices have always been

Sustainability, increasingly rooted in corporate strategy,

guided by a desire for lasting success that benefits all its

together with a continuous and transparent dialogue withstakeholders, be they shareholders, employees, customers

stakeholders, are key factors to reaffirm the identity of theor the communities in which the Group operates. PradaGroup and suppor t the competitive edge of the company,

S.p.A.’s Board of Directors is in fact committed toas well as to face changes and contemporary and future

conducting the business responsibly, to building an inclusive

challenges and grant a long-term sustainable development.

and safe work environment for all, in the conservation ofthe environment and in the protection of the communities

Also for this reason, at the beginning of 2019, Prada S.p.A.

in which the Group operates.

Board of Directors approved the Sustainability Policy, inwhich the Group declares its commitment to operate in full

MODERN SL AVERY STATEMENT FOR THE FINANCIAL PERIOD 20212

respect of the value of the individual and for the humanhas focused on strong ver tical integration of the supply

and workers' rights, enshrined both in the regulations ofchain, progressive insourcing of sensitive phases of thethe countries in which it operates and in the international

production process and the acquisition of key capabilities.

covenants and declarations - such as the United Nations
Universal Declaration of Human Rights, the International

The havoc wreaked by the public health emergency have

Labor Organization (ILO) Declaration on Fundamental

effectively highlighted the benefits of the manufacturing

Principles and Rights at Work, and the Organization

choices made, since competition hinges more and more onfor Economic Co-operation and Development (OECD)the speed of reaction to rapid market changes and on theGuidelines for Multinational Enterprises.

business model's ability to adapt.

The Board of Directors considers respect for ethical

The Prada Group has always used an extensive network

principles to be the foundation of the enterprise’s successof carefully selected external suppliers, with which itand represents an impor tant expression of Prada’s image

works in the long run, to ensure flexibility and access toand reputation. The Prada Group operates in:additional resources. At the same time, the Group relies
on a high degree of autonomy, which is vital for sudden• compliance with legislative and regulatory provisions in
all countries in which it operates;

business slowdowns, as proved to be the case during theinitial phases of the pandemic.

• legitimacy, loyalty, correctness and transparency;• respect of the privacy;

In fact, the Prada Group has created all its prototypes• respect for the value of the person;internally for many years, thanks to investments in the• respect for competition, as a crucial instrument in theexpansion of its facilities and an impor tant hiring plan,development of the economic system;• respect for the environment while raising awarenessabout its protection.

and in the past few years it has gradually insourced its
leather cutting phases followed by the handbag andfootwear assembly processes. Controls over raw materials
and finished products are also handled internally now.

Since 2007, these principles have been given formal

INTERNAL PRODUCTION (%)

expression in the Prada Group’s Code of Ethics. The CodeINTERNAL ACTIVITIES

sets out the guiding principles of the organization, being oneof the main pillars of the Group’s governance model, and is

2015

2021

TargetSamples production

also suppor ted by a set of procedures in order to turn thesevalues into daily actions. The adoption and application ofthe Code of Ethics is essential for the achievement of theLeather goods cutting

Company’s primary objective, consisting in the creation ofvalue for the communities in which it operates.
The Code of Ethics is promoted internally through theTotal internal assembly:
bags + shoes*

publication of the document on the corporate intranet, bysharing it with all new collaborators as well as being thebase of business relationships with all suppliers.

INDUSTRIAL STRATEGYThe Prada Group's competitive advantage also derives fromits distinctive manufacturing tradition, developed throughthe buildup of its production premises, the progressive
expansion of its manufacturing skills and enhanced control
over its supplier network.
In recent years, thanks to investments of more than Euro 80
million since 2019, the Prada Group's industrial strategy

MODERN SL AVERY STATEMENT FOR THE FINANCIAL PERIOD 2021

Quality control
on finished product*Ready to wear and leather goods accessories not included.

Ver tical integration and internalization effectively ensure
more control over value creation, an extremely impor tantaspect even from a sustainability point of view, not justfor the processes but especially in terms of responsible
supply chain management.
Thanks to the acceleration recorded in recent years in theselection process of the industrial supply chain, the Group
works with the best suppliers, in their own right leaders and3reference points in their sectors. In most cases, these arelogistic services, media spaces, and services providers

long-term relationships, initiated and maintained following

linked to the management of stores in the countries wherea rigorous selection process, whose strict parameters are

the Group operates with its retail activities; suppliers that,intended to ensure the highest standards of technical andgenerally, are represented by large and primary companies.

economical, as well as ethical reliability. The Prada Group
has always valued long-term relationships built on steady

The Prada Group believes that the risk of modern slavery

interactions, which are also crucial for mutual growth.

within its organization is non-existent, while it deemed thatsame risk as overall low along its external industrial supply

SUPPLY CHAIN PROFILE

chain. The geographic location of the suppliers selectedby the Group, as well as the profound knowledge of theThe Prada Group's business model is based on a value

same in terms of duration and quality of the establishedchain that combines ar tisanal skills with the industrial

par tnerships, combined with the systematic control of theorganization of production and distribution processes.

quality of the production at the suppliers’ sites, reduces therisk of conditions or pre-conditions such as to constituteAs at December 31, 2021, the production of the Groupcircumstances of modern slavery, forced labor and humanis entrusted to 23 manufacturing facilities located intrafficking.

Europe (20 of them in Italy) and to a network of external
producers carefully selected for their craftsmanship,

SUPPLY CHAIN RESPONSIBLE MANAGEMENT

quality and reliability. All stages of the production process
are controlled by Prada’s technicians in order to ensure,As already anticipated, for the Prada Group, the selectionin addition to quality standards of the products, also theof its suppliers is fundamental not only for reaching thecompliance of the entire supply chain with the principles

highest standards of product excellence, but also forof the Code of Ethics that all suppliers must subscribe.

creating long-term value. In fact, through a collaborative
and transparent approach, the Group has always worked

In 2021, the Group collaborated with about 840 raw

with its suppliers to implement work, health, safety andmaterials and semi-manufactured products direct suppliers.

environmental standards in the workplace and, therefore,

On the whole, approximately 81% of the Group's industrial

to transmit its high ethical standards.

suppliers are located in Italy and about 55% of them havebeen working with the Prada Group for more than 10 years;

This collaboration favors long-term relationships and isfrom the beginning a strategic choice for Prada, which has

based on regular dealings, in order to share mutual growthalways considered a competitive leverage to root its supply

and a common strategic objective, reducing the risk ofchain in those territories where the manufacturing sector

non-compliance with the Group's Code of Ethics and therepresents an excellence appreciated all over the world.

current regulations. Another fundamental factor is theproximity of the supply chain to the Prada Group; theG E O G R A P H I CA L D I S T R I B U T I O N O F T H E S U P P LY C H A I N

vicinity enables Prada to per form a constant monitoring
activity, even daily for the main suppliers, for the purpose

6% euof control and risk management.

13% extra eu
81% i ta ly

The location of the supply chain in Italy is also impor tant

D U R AT I O N O F C O L L A B O R AT I V E R E L AT I O N S H I P S

for the working conditions of the employees, as they are

WITH SUPPLIERS

governed by the collective bargaining agreements currently

2 4 % <5 y e a r sin force. The Italian Collective Bargaining Agreement

21%(CCNL) supplements the law and is stipulated at a national

5-10 years
5 5 % > 10 y e a r slevel between trade unions and associations representingcompanies. The CCNL regulates the rights, guarantees andobligations of all workers in terms of pay and regulatory

The supply chain of the Prada Group is completed withprovisions, such as guaranteed minimum wages, working

operators not related to the production cycle, among whichhours, vacation time, seniority treatment, treatment of– as an example - the suppliers of commercial spaces,

over time, holiday and night-time work (with the related

MODERN SL AVERY STATEMENT FOR THE FINANCIAL PERIOD 2021

4pay increases), the duration of the trial period and noticeGroup set up internally a task force dedicated to tighten theperiod, sick leave, maternity leave, accident leave and thecontrols over the supply chain and respond to the growing

disciplinary code. The CCNL is negotiated and renewed

demand for transparency and accountability in the sourcing

every three years, thus allowing for wage and regulatory

and production practices. The Group formalized then inadjustments in line with economic and legislative changes

2020 the inspecting activity with a dedicated procedure.

in Italy.

The

work

team

consists

ofrepresentatives

oftheadministrative, occupational safety, compliance and humanIn the past few years, Prada has directed effor ts toward

resource functions and assists production division managers

raising awareness in the purchasing structures of morewith controls at supplier and/or sub-supplier premises,

responsible management of the industrial supply chain.

reviewing documents and checking the observance of theTo this end, in early 2017 the Group adopted a "Qualified

Group's ethical principles and proper application of labour,

Vendor List" procedure to define the responsibilities

tax, occupational safety and environmental regulations.

and operational criteria required to evaluate the ethical,

The inspection plan includes a risk assessment, conducted

technical and economical reliability of its suppliers. The

in the first phase by the various managers, also according

list is par t of the controls needed to initiate and continue

to the composition of the industrial supply chain in terms ofwith the supply relationship, as set out in the procurement

supply and subcontracting, and any critical issues detected

policy, which calls for mitigating risks of non-complianceby them or by the functions responsible for the second-through additional checks and accountability.

level controls during the periodic inspections required by
the Qualified Vendor List procedure.

With respect to ethical issues, the accreditation andmaintenance of a supplier 's qualification are confirmed

The analysis per formed during the inspections, which follow

through requested documents, attestations and self-a six-month schedule, completes other controls carriedcer tifications that ensure compliance with the laws on

out in previous phases and those foreseen by the Qualified

remuneration, social security, taxes, occupational health

Vendor List procedure, thus strengthening the control overand safety, the environment, privacy and the governancethe industrial supply chain, ensuring compliance with themodel. Finally, the Code of Ethics must be signed in order

Code of Ethics and current regulations.

to work with Prada.
The results of the inspections are repor ted to the various
This information asset undergoes systematic first-level andmanagers so that a corrective action plan (Remediation

second-level controls, including interim ones, to ensurePlan) can be drawn up in the event of breaches or par tialthat the information is updated, true and consistent. Such

breaches of the criteria standards, and corrective actions

controls, which involve documents and are per formed by

are identified that the supplier must implement over a

the procurement structures or business areas specialized

period of time that varies according to the irregularity

in the various topics, are also conducted upon notification

found. In the event of serious breach, or the supplier 'sof potential situations of crisis, breaches or anomalies;

inability to ensure a positive outcome in the prescribedin these circumstances, the procedure involves additionaltime, termination of the supply relationship is evaluated.

analysis, targeted controls or an immediate encounter
with the par ties involved. The procedure, initially applied

Since 2019, with the aim of bringing the monitoring andto suppliers in the manufacturing area, has now been

management of the supply chain to the Group's levels of

implemented with the engineering and logistics suppliers

excellence, the task force operates in Italy, where the mostand is gradually being extended to the other business areas.

impor tant por tion of the industrial supply chain is rooted,
focusing on both first and second tier suppliers for all three

Although the Prada Group considers the risk of non-industrial divisions: leather goods, footwear and clothing.

compliance throughout its direct supply chain to be low,
thanks to its geographical location and the duration andBoth in 2020 and in 2021, the control activities werequality of the relationships established, it is aware that first-slowed down due to the health emergency but, as soon astier suppliers use subcontracting, and of the reputational

the working conditions allowed it, they continued to coverand legal risks associated with that, including in terms of

the largest number of suppliers. In the three-year period

human rights infringement. For this reason, in 2019 the2019-2021, 175 suppliers were involved and 30 supply

MODERN SL AVERY STATEMENT FOR THE FINANCIAL PERIOD 2021

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relationships were interrupted due to serious irregularities

OUTLOOK

with respect to the ethical standards of the Prada Group.
The Prada Group is committed to identify oppor tunities for
Generally, the inspections effectively confirmed what thecontinuous improvement and to strengthen systems andmanagers of the production divisions had already perceived;

controls for the respect of human rights across the supplymost issues are found at the sub-contracting level, with thechain, regularly assessing the adequacy of the procedural

Leather Goods Division experiencing more than others. Theframework. Fur thermore, Prada under takes a constantcontrols over first-tier suppliers are more encouraging,

review and rationalization of its industrial suppliers toas they confirmed the effectiveness of the Prada Group’s

increasingly minimize its risk profile.

streamlining decisions of recent years.
During 2022, the control activities on suppliers will continue
The breaches found in the sub-contracting relationships

in order to promptly and efficiently monitor and mitigate

regardedaspects,

the risks associated with the supply chain management, as

the workplace, occupational safety and the work force

well as the training activities deemed essential to create aemployed in terms of contractual conditions and actual

corporate culture around sustainability matters. In fact, aworking hours.

mandatory e-learning training, available in five languages,

primarilysocialsecurity

andtaxwill be delivered to all Group’s employees.

TRAINING
The Group will work proactively for the continuous
During 2021, a year still characterized by uncer tainty

enhancement

due to the global trend of the pandemic, Prada Group’s

searching new ways to encourage the respect of humancommitment to environmental and social sustainability

rights, a shared approach with suppliers and businesshas been reinforced and an impor tant course of action has

par tners.

ofresponsible

businesspractices

bybeen under taken aimed at training industrial areas towards
ethical issues more related to the responsible managementof manufacturing supply chains. The goal of the educational
program is to create a corporate culture on sustainability- especially on the risks of human rights infringements

Paolo Zannoni
Chairman of Prada S.p.A.
Milan (Italy), May 3, 2022

and modern slavery, and allow par ticipants to acquire newknowledge and skills, but also the fundamental sensitivity,
to manage relationships with industrial suppliers in an
increasingly responsible way.

MODERN SL AVERY STATEMENT FOR THE FINANCIAL PERIOD 2021

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