Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Responsible Materials
• Ethical Production
• Worker Wellbeing
• Diversity, Equity & Inclusion
• Governance

Environmental Achievements

• Reduced carbon intensity by 24% since 2019 while revenue grew by 40%
• Exceeded 50% responsibly sourced wood goal one year early, reaching >60% in 2020
• 94% of cotton responsibly sourced
• Planted over 1.5 million trees (Pottery Barn's initial goal was 3 million, later doubled to 6 million by 2023)
• Diverted 93 million ocean-bound and landfill-bound plastic bottles through the use of REPREVE recycled polyester

Social Achievements

• Raised minimum wage to $15/hour for U.S.-based hourly associates
• Reached 65,093 workers through HERproject™ training programs
• Paid $3M in Fair Trade Premiums (ahead of target)
• Expanded social compliance audit scope to 89% of order volume
• Increased number of women's promotions and diversity of new hires
• Launched Pottery Barn Renewed program, extending the life of imperfect or returned textiles

Governance Achievements

• Set a Science-Based Target for emissions reduction across the value chain
• 67% of Board members identify as women
• Added new members to the Board of Directors, resulting in the most diverse board to date
• Updated Cybersecurity & Data Privacy Commitment

Climate Goals & Targets

Environmental Challenges

• Meeting 75% landfill diversion goal due to lack of national recycling infrastructure and COVID-19 disruptions
• Supply chain disruptions due to the pandemic
• Data collection and traceability challenges across the supply chain

Mitigation Strategies

• Extended landfill diversion goal to 2025
• Implemented new data collection tools (Sourcemap)
• Created retail taskforce and refined data collection from waste and recycling providers
• Developed risk-based auditing strategy for social compliance
• Implemented a new vendor scorecard system incorporating Higg FEM scores

Supply Chain Management

Supplier Audits: 494 third-party audits in 2021, covering 89% of order volume

Responsible Procurement

• Supply Chain Labor Practices Policy
• Vendor Code of Conduct
• Higg FEM scores incorporated into vendor scorecards
• Environmental engagement initiative focused on GHG emissions reduction

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events, wildfires

Transition Risks

• Regulatory changes, market shifts towards sustainability

Opportunities

• Development of energy-efficient products, growing consumer demand for sustainable products

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC

Certifications: GREENGUARD Gold, STANDARD 100 by OEKO-TEX®, FSC®

Third-party Assurance: Deloitte & Touche LLP (limited assurance on GHG emissions), Optera (limited assurance on Scope 3 GHG emissions)

UN Sustainable Development Goals

• Goal 1
• Goal 2
• Goal 3
• Goal 4
• Goal 5
• Goal 6
• Goal 7
• Goal 8
• Goal 9
• Goal 10
• Goal 11
• Goal 12
• Goal 13
• Goal 14
• Goal 15
• Goal 16
• Goal 17

The report details how various initiatives contribute to each of the UN SDGs.

Sustainable Products & Innovation

• Products made with REPREVE recycled polyester, ECONYL® regenerated nylon, FSC®-certified wood, organic cotton

Awards & Recognition

• Barron's 100 Most Sustainable U.S. Companies
• Great Place to Work® Certified Company
• Forbes Best Employers for Women
• Forbes Best Employers for Diversity
• Bloomberg Gender-Equality Index
• Human Rights Campaign Corporate Equality Index
• CDP North America Supplier Engagement Rating Leaderboard
• Sustainable Furnishings Council Wood Furniture Top Scorer
• St. Jude Thanks and Giving® Partner of the Year Award
• Fast Company’s 2021 Innovation by Design Awards

Environmental Metrics

ESG Focus Areas

• Climate Change
• Social Responsibility
• Governance

Environmental Achievements

• Completed five significant lighting retrofits at distribution centers.
• Significantly scaled renewable energy across operations in 2022 (PPA in Texas, Illinois Community Solar projects, Tennessee Valley Authority Green Flex Program).
• 44% of products represent one or more environmental or social initiatives (excluding drop-ship products).

Social Achievements

• Launched a strategy in 2021 to transition from high-emitting materials to lower-impact options.
• Expanded Fair Trade Certified™ work across all brands, exceeding the 2020 goal of delivering $3M in community development funds to workers.
• Provided factory workers with education programs for health, financial literacy, and gender equality; vision screenings; and adopted the Nest Seal for Ethical Handcraft.

Governance Achievements

• Board-level oversight of climate-related issues through the Nominations, Corporate Governance and Social Responsibility Committee.
• ESG performance included in the individual portion of Management Bonus Plan.
• Science-Based Target for emissions reduction (Scopes 1-2) approved by the Science-Based Target initiative.

Climate Goals & Targets

Environmental Challenges

• Increased cost of raw materials due to scarcity from drought, extreme weather, and disruption in availability.
• Decreased revenues due to reduced production capacity from acute physical risks (storms).
• Decreased revenues due to disruption of product delivery from acute physical risks (storms).

Mitigation Strategies

• Shifting raw materials to lower-impact alternatives.
• Maintaining a balanced global vendor landscape and materials sourcing strategy.
• Investing in long-term partnerships to create a more resilient supply chain.
• Using generators to keep business operations running during power outages.

Supply Chain Management

Supplier Audits: Annual audits of factories in audit scope.

Responsible Procurement

• Responsible raw material procurement and environmental protection policies (outlined in Vendor Code of Conduct and Implementation Standards).

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events disrupting global supply chains.
• Storms disrupting product delivery.
• Drought impacting raw material supply (cotton).

Transition Risks

• Increased cost of raw materials.
• Brand reputation risks related to low-carbon economy.
• Regulatory changes.

Opportunities

• Development of new products or services with sustainability attributes.
• Participation in renewable energy programs and adoption of energy-efficiency measures.

Reporting Standards

Frameworks Used: SASB, TCFD, UNGC

Third-party Assurance: Deloitte & Touche LLP (limited assurance for Scope 1 & 2); Optera (verification for Scope 3 underway)

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

WSI's initiatives contribute to these goals through renewable energy adoption, emissions reduction, responsible sourcing, and waste reduction.

Sustainable Products & Innovation

• Products with sustainability attributes (organic cotton, FSC-certified wood, recycled materials).

Environmental Metrics

ESG Focus Areas

• Climate Change
• Worker Wellbeing
• Responsible Sourcing
• Diversity, Equity & Inclusion
• Product Quality & Safety

Environmental Achievements

• Increased landfill diversion rate from 51% to 55%
• Reached 40% Scope 3 emissions reductions compared to the 2019 baseline
• Maintained 100% responsibly sourced cotton
• Maintained 57% responsibly sourced wood
• Launched GreenRow, a new brand focused on sustainability

Social Achievements

• Paid an additional $9.1M in Fair Trade Premiums
• Invested an additional $33M in Nest Certified Ethically Handcrafted products
• 350+ associates participated in the 2023 Advisor Program cohort
• 30 Fair Trade Certified factories across 5 countries, with 5 newly certified in 2023
• 4.8M trees planted in partnership with the Arbor Day Foundation

Governance Achievements

• 57% of Board members identified as women and 29% identified as diverse in FY23
• Developed a Responsible Recruitment Policy
• Implemented a human rights due diligence framework

Climate Goals & Targets

Environmental Challenges

• Lack of consistent, comparable product use emissions data
• Shifting regulatory and raw material traceability requirements
• High GHG emitting fibers like wool

Mitigation Strategies

• Participating in RILA working group to create a tool for calculating and aligning retail GHG emissions measurement
• Updating Wood & Paper Procurement Policy and enhancing supply chain due diligence process
• Conducting a life cycle assessment of wool to understand regional impacts and establish an accurate baseline for emissions data

Supply Chain Management

Supplier Audits: Annual audits for all Tier 1 supplier factories in high- and medium-risk countries

Responsible Procurement

• Vendor Code of Conduct
• Human Rights Policy
• Supply Chain Labor Practices
• Preferred Materials Framework

Climate-Related Risks & Opportunities

Opportunities

• Renewable energy adoption
• Energy efficiency improvements
• Transition to lower-impact materials

Reporting Standards

Frameworks Used: SASB, TCFD, UN Global Compact, CDP

Third-party Assurance: Deloitte & Touche LLP (limited assurance on Scope 1 & 2 GHG emissions); Optera (verification of Scope 3 emissions)

UN Sustainable Development Goals

• 1
• 2
• 3
• 4
• 5
• 6
• 7
• 8
• 9
• 10
• 11
• 12
• 13
• 14
• 15
• 16
• 17

See Appendix for details on how initiatives contribute to UN SDGs

Sustainable Products & Innovation

• GreenRow products
• Fair Trade Certified products
• Nest Certified Ethically Handcrafted products
• Products with OEKO-TEX® STANDARD 100 and GREENGUARD Gold certifications

Awards & Recognition

• Dow Jones Sustainability North America Index
• REPREVE® Champions of Sustainability
• CDP North America Supplier Engagement Rating Leaderboard
• Sustainable Furnishings Council Wood Furniture Top Scorer
• Barron’s 100 Most Sustainable U.S. Companies
• Bloomberg Gender Equality Index
• Great Place to Work® Certified Company
• Forbes Best Employers for Diversity
• No Kid Hungry Champions