Climate Change Data

Environmental Metrics

ESG Focus Areas

• Workplace safety
• Employee well-being
• Human rights compliance
• Community investment
• Environmental compliance

Environmental Achievements

• All manufacturing facilities in Honduras, El Salvador, and Mexico are WRAP certified.
• Plants generate very small quantities of hazardous waste, which are either recycled or disposed of off-site.

Social Achievements

• Proactive programs to promote workplace safety, personal health, and employee wellness.
• Support for educational institutions and/or charitable organizations in communities where we operate.
• Historically conducted operations without significant labor disruptions; good employee relations.

Governance Achievements

• All employees, including CEO and CFO, required to abide by business conduct policies.
• Adoption of a code of business conduct and ethics (Ethics Policy Statement).

Climate Goals & Targets

Environmental Challenges

• Volatility and uncertainty of cotton and other raw material prices and availability.
• General U.S. and international economic conditions.
• Competitive conditions in the apparel industry.
• Restrictions on borrowing capital or servicing indebtedness.
• Deterioration in the financial condition of customers and suppliers.
• Changes in consumer preferences and trends.
• Political, social, economic, and climate risks in Honduras, El Salvador, and Mexico.
• Disruptions within manufacturing or distribution facilities.
• Changes in international trade regulations.
• Negative publicity from supplier violations of manufacturing standards or labor laws.

Mitigation Strategies

• Supply agreement with Parkdale Mills for yarn requirements.
• Vertically integrated manufacturing operations (90%+ of products sewn in owned/leased facilities).
• Diversified distribution channels and customer base.
• Monitoring and evaluation of portfolio, strategic acquisitions/market exits.
• Product safety and quality programs.
• Supplier compliance requirements.
• Procedures to ensure compliance with FCPA and similar laws.
• Methods to reduce energy used in manufacturing.
• Investments in new manufacturing technologies, distribution strategies, and sales channels.

Supply Chain Management

Responsible Procurement

• Require suppliers and independent contractors to operate in compliance with laws and regulations.

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• environmental impact
• health and safety
• responsible raw material sourcing
• safe chemical management
• responsible corporate governance

Environmental Achievements

• Reduced fuel and electricity consumption at Ceiba Textiles by approximately 17% and 18%, respectively, on an annualized basis since fiscal year 2018.
• Reduced water consumption at Ceiba Textiles by approximately 27% on an annualized basis since fiscal year 2018.
• Reduced total waste generated at offshore manufacturing facilities by about 5%, on an annualized basis since fiscal year 2018.
• Recycled the majority of waste generated from offshore manufacturing operations in fiscal year 2020.

Social Achievements

• Provided more than 123,000 hours of professional development and safety training for employees in fiscal year 2020.
• Maintained a safety record consistently better than OSHA’s benchmarks for the apparel manufacturing sector (1.2% total recordable cases vs. OSHA's 3.4% average in fiscal year 2020).
• Implemented a comprehensive COVID-19 safety protocol across all facilities.
• Annual audits of all internal manufacturing facilities and significant third-party fabric suppliers resulted in no priority non-conformance findings in fiscal year 2020.

Governance Achievements

• ESG disclosures align with SASB standards for the Apparel, Accessories, and Footwear industry and SEC regulations.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacted operations, sales, and financial condition.
• Political, social, economic, and climate risks in Honduras, El Salvador, and Mexico.
• Highly competitive apparel industry.
• Fluctuations in cotton and other raw material prices.
• Interest rate risk due to variable rate debt.

Mitigation Strategies

• Flexed manufacturing and distribution operations to serve customers during the pandemic.
• Implemented cost controls and strategic reductions.
• Focused on improving supply chain and reducing operating capital.
• Used cotton option contracts to hedge against cotton price fluctuations.
• Implemented strategies to reduce energy and water consumption.

Supply Chain Management

Supplier Audits: Annual audits of internal and key external fabric suppliers.

Responsible Procurement

• Sourcing over 90% of cotton from U.S. farmers known for sustainable practices.
• Joined the Cotton LEADS program for sustainable and traceable cotton production.
• Requiring suppliers to provide annual certifications demonstrating compliance with safe chemistry standards.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SASB

Certifications: WRAP

Environmental Metrics

ESG Focus Areas

• environmental impact
• health and safety
• responsible raw material sourcing
• safe chemical management
• responsible corporate governance

Environmental Achievements

• reduced electricity usage by 875,800 kilowatt hours across all manufacturing locations and avoided approximately 621 metric tons of carbon dioxide (CO2) emissions
• produced 7.1% more finished fabric in 2021 while using 14% less fuel and 7% less electricity
• reduced total greenhouse gas emissions by 7.5% and reduced emissions intensity by approximately 14% in 2021
• increased container utilization from 84% in 2019 to 93% in 2021 and resulted in using 153 fewer shipping containers
• reduced water intensity by approximately 9% as compared to our 2018 baseline

Social Achievements

• provided more than 217,000 hours of professional development and safety training for our employees (76% increase from the previous year)
• implemented a comprehensive series of protocols and safety measures across all our facilities to protect the health and safety of our employees and contractors during the COVID-19 pandemic
• Delta Apparel’s 2021 incident rate for total recordable cases dropped to 0.3% compared to OSHA’s average incident rate of 3.4%
• Delta Apparel had no cases involving lost time from work in 2021
• employees were involved in programs to promote environmental responsibility and improve the way of life for nearby communities (e.g., hurricane relief, reforestation, beach cleanups)

Governance Achievements

• ESG disclosures align with SASB standards for the Apparel, Accessories, and Footwear industry and SEC regulations

Climate Goals & Targets

Environmental Challenges

• limited availability of raw materials
• COVID-19 pandemic impacts on operations, financial condition, liquidity, and capital investments
• supply chain disruptions
• potential OSHA vaccine mandate
• political, social, and economic risks in Honduras, El Salvador, and Mexico

Mitigation Strategies

• streamlining organization to remain nimble and adapt to customer needs
• proactive measures to address raw material challenges and grow manufacturing output
• implementation of COVID-19 safety protocols
• monitoring and addressing potential impacts of vaccine mandates
• Western Hemisphere-centered manufacturing platform to diversify sourcing and reduce time to market

Supply Chain Management

Supplier Audits: annual audits of internal manufacturing facilities and significant third-party fabric suppliers

Responsible Procurement

• sourcing over 90% of garments with U.S. cotton; membership in Cotton LEADS program; traceability of cotton fiber back to harvest; use of Parkdale yarn, independently certified to Standard 100 by OEKO-TEX; use of external fabric suppliers certified to Standard 100 by OEKO-TEX

Climate-Related Risks & Opportunities

Physical Risks

• extreme weather conditions, natural disasters

Transition Risks

• regulatory changes, market shifts related to sustainability

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: SASB

Certifications: WRAP

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• environmental impact
• health and safety
• responsible raw material sourcing
• safe chemical management
• responsible corporate governance

Environmental Achievements

• Reduced total greenhouse gas emissions by 3.5 percent and reduced emissions intensity by 12 percent compared to 2018 baseline year.
• Ceiba Textiles began receiving 100 percent clean, renewable energy from a solar power array.
• Produced 9.7 percent more finished fabric in 2022 while using 7.5 percent less fuel and 8.6 percent less electricity compared to 2018 baseline year.
• Reduced water intensity by 7.3 percent in 2022 compared to 2018 baseline.

Social Achievements

• Provided more than 230,400 hours of professional development and safety training for employees (6% increase from previous year).
• Maintained a “Green” status (highest level of compliance) in annual third-party chemical testing.
• 2022 incident rate for total recordable cases dropped to 0.19 percent compared to the apparel industry average incident rate of 1.7 percent.
• Community outreach programs in Mexico, Honduras, and El Salvador including donations, environmental cleanups, and school improvements.

Governance Achievements

• ESG disclosures align with SASB standards for the Apparel, Accessories, and Footwear industry and SEC regulations.

Climate Goals & Targets

Environmental Challenges

• Increased input costs and labor costs negatively impacting gross margins.
• Supply chain and logistic constraints.
• Tight domestic labor market impacting DTG2Go profitability.
• Strong inflationary pressures on input and labor costs.

Mitigation Strategies

• Leveraging the flexibility of our vertical platform and adjusting production levels to manage inventory and mitigate higher input costs.
• Focusing on methods to reduce energy used in manufacturing to mitigate risks of fluctuations in energy costs.
• Investing in digital print equipment and information technology to improve efficiency.

Supply Chain Management

Supplier Audits: Annual audits of internal manufacturing facilities and significant third-party fabric suppliers.

Responsible Procurement

• Sourcing over 90% of cotton from U.S. cotton farmers known for sustainable practices.
• Using yarn from Parkdale Mills, which is independently certified to OEKO-TEX Standard 100.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: SASB

Certifications: WRAP

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed