In this phase, we defined the criteria and scales to assess the IROs. In particular, we assessed our impact (inside-out perspective) taking into account their severity and likelihood. The severity was assessed using 1 (small) to 5 (extreme) scoring, considering scale, scope and for negative impact irremediability. The likelihood was assessed using 1 (unlikely) to 5 (very likely) scoring. Both negative and positive impacts were evaluated gross (before any mitigating actions). For the financial materiality analysis (outside-in perspective), risks were assessed according to the ERM methodology involving residual evaluation by severity and likelihood. Whereas opportunities were assessed according to criteria and metrics defined on the basis of the ERM methodology, considering residual evaluation by severity and likelihood. For risks, three variables (likelihood, impact and preparedness) are assessed independently on the basis of company metrics; these elements are then multiplied and the product obtained through this operation, defined overall risk exposure, is the input for placing risks on a heat map that has four different risk areas (Tier 1, Tier 2, Watching Area, Residual Area). The severity was assessed using 1 (very low) to 5 (very high) scoring, considering four different drivers of evaluation: strategic/market, economic/financial, operational and reputational. Additionally, the final score of severity resulted also from considering the preparedness, which is the degree of control, protection and readiness that Ferrari ensures thanks to the current actions, processes and levers, and their effectiveness. The likelihood was assessed using 1 (very low) to 5 (very high) scoring considering three different drivers: qualitative (uncertain contexts), quantitative (measurable contexts) and frequency (predictable contexts). During the evaluation process we assessed each IROs within the most relevant time horizon, considering short, medium and long term as described in ESRS 1 and considering the impact related both to our own operations and to our upstream and downstream value chain.

The Double materiality assessment was prepared under the supervision of Ferrari Group’s Chief Financial Officer and the results were approved by the Executive Officers of the Group and by the Audit Committee of the Board of Directors. Based on the materiality assessment, Ferrari has determined the Disclosure Requirements related to each material IROs to be disclosed in this Statement in line with ESRS 1, AR 16 and EFRAG ID 177.

The process to identify risks and to assess which are material is integrated in the Risk Management system (ERM). In particular, sustainability-related risks are identified through a specific classification.

The process to identify risks and to assess which are material is integrated in the Risk Management system (ERM). In particular, sustainability-related risks are identified through a specific classification.

We have analyzed Ferrari’s strategy, targets and ambitions in the field of sustainability. This was followed by a benchmarking analysis that provided us an overview of potential sustainability matters. Additionally, we analyzed risks relevant to the Group in the ESG-related areas and internal policies in the field of sustainability, considering Ferrari’s three dimensions and their value chains considering all our business relationships and geographies. The external context analysis included the identification of our key stakeholders.

Compared to the list of material topics published in 2023, the topics “Product, technology, quality, design and safety” has changed into “Quality and Safety”, the topic “Ethics and human rights” has been divided into “Human Rights” and “Ethics and Business Conduct”. This is due to the rationalization of the material topics according to the new methodology applied in line with the list of topics, sub-topics and sub-sub-topics into the ESRS. The topic “Supply chain responsible management” has been deleted since all value chain-related IROs have been included into the specific topics they refer to. The topic “Natural resources management and biodiversity” has become “Natural resources management” since biodiversity matters have emerged as not relevant. “Raw materials and circular economy” has changed to “Circular Economy”.

The table on page 198 provides a list of Disclosure Requirements and related data points derived from other EU legislation, as specified in Appendix B. It includes references to SFDR, Pillar 3, Benchmark Regulation, and EU Climate Law, along with their respective locations in the sustainability statement. For example, ESRS 2 GOV-1 and ESRS 2 GOV-4 are located in 'ESRS 2 - General disclosures | Governance'. For ESRS 2 SBM-1 related to fossil fuel activities, it is noted that 'Ferrari is not active in fossil fuel, chemicals production, controversial weapons and in the cultivation and production of tobacco'.

The table on page 198 provides a list of Disclosure Requirements and related data points derived from other EU legislation, as specified in Appendix B. It includes references to SFDR, Pillar 3, Benchmark Regulation, and EU Climate Law, along with their respective locations in the sustainability statement. For example, ESRS 2 GOV-1 and ESRS 2 GOV-4 are located in 'ESRS 2 - General disclosures | Governance'. For ESRS 2 SBM-1 related to fossil fuel activities, it is noted that 'Ferrari is not active in fossil fuel, chemicals production, controversial weapons and in the cultivation and production of tobacco'.

Information about the Scenario Analysis was performed taking into consideration climate-related risks and includes consequences in terms of resilience of the strategy are available at 'E1—Climate change—Climate Scenario Analysis' paragraph. No other topic has been covered by a resilience analysis.

Water Management (E3) has been evaluated as not relevant since water consumption in business as usual of Ferrari operations is not significant. Biodiversity (E4) has been evaluated as not relevant since Ferrari sites are not located in or near biodiversity-sensitive areas. The Company has not identified or assessed actual or potential impacts, dependencies, risks, or opportunities related to biodiversity and ecosystems across its own site locations or its upstream and downstream value chain.