Climate Change Data

Environmental Metrics

ESG Focus Areas

• Labor Standards
• Employee Well-being
• Community Involvement
• Environment, Health and Safety

Environmental Achievements

• Reduced average store energy consumption by 2.4% from 2003 to 31.56 kWh/ft2
• Reused more than 10 million cardboard boxes and recycled 38,000 tons of cardboard and paper
• Reduced employee injury rate by 9% to 4.43 injuries per 200,000 hours worked

Social Achievements

• Launched Project Swabhiman in Delhi, India, providing shelter, support services, and job training to women victims of domestic violence
• Increased employee volunteer hours from 21,965 to 72,937
• Donated $2.3 million for South Asia tsunami relief efforts
• Introduced a mandatory ethics course for employees
• Launched a program to help employees maximize benefits

Governance Achievements

• Introduced a required training program called “Principles of Integrity” to help employees understand the Code of Business Conduct
• Established a 24-hour confidential hotline for reporting violations of the Code of Business Conduct

Climate Goals & Targets

Environmental Challenges

• Complex and varied root causes of poor working conditions in garment factories (e.g., poor management skills, outdated operations, inefficient purchasing practices, economic underdevelopment, lack of law enforcement)
• Difficulties in enforcing the Code of Vendor Conduct (COVC) due to the fragmented nature of the garment industry and intense competition
• Regional variations in monitoring data due to differences in sourcing base, VCO approaches, and political, economic, and social contexts
• Difficulties in comparing factory performance over time due to lack of standardized monitoring protocols and training
• Challenges in protecting the rights of homeworkers
• Consequences of post-quota consolidation for countries relying on the garment industry

Mitigation Strategies

• Migrating toward a more collaborative, integrated approach involving government, civil society, trade unions, and the commercial sector
• Improving supply chain operations and embedding labor standards directly into business practices
• Developing a formal tool to factor in a garment manufacturer’s compliance record when placing orders
• Working to reduce inefficient purchasing practices such as rush orders and last-minute changes
• Partnering with stakeholders to address systemic problems
• Participating in multi-stakeholder initiatives (MSIs) to develop a uniform code of conduct and consistent enforcement methods
• Working to mitigate the economic consequences of post-quota consolidation through the MFA Forum
• Participating in ETI’s working group to address the challenges of protecting homeworkers
• Increasing transparency around business practices, goals, and challenges

Supply Chain Management

Supplier Audits: Approximately 6,750 inspections in 2,672 garment factories

Responsible Procurement

• Code of Vendor Conduct (COVC)
• Factory approval process
• Integrated sourcing scorecard

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, UN Global Compact

Awards & Recognition

• Honored by the National Association for Female Executives as one of the “Top 30 Companies for Executive Women”

Environmental Metrics

ESG Focus Areas

• Human Rights
• Labor Standards
• Supply Chain Transparency

Social Achievements

• Decreased share of red-rated factories from 18.47% to 16% between 2014 and 2016.
• Resolved 88% of critical issues and 84% of non-critical issues at low-performing factories.
• Conducted approximately 100 Workforce Engagement assessments in partnership with Verité, covering facilities in Bangladesh, China, Guatemala, India, and Vietnam.
• Partnered with The World Bank on a project emphasizing job readiness training and employment placement for Syrian refugees in Jordan.
• Partnered with the Ethical Trade Initiative and other brands to address challenges associated with the integration of refugee and migrant workers from Syria in Turkey.
• Initiated a meeting resulting in the formation of the Tirupur Stakeholders Forum (TSF) to address unacceptable employment practices in Tamil Nadu, India.
• Helped develop the ETI Tamil Nadu Multi-Stakeholder Program (TNMS) to address exploitative labor practices in southern India.

Governance Achievements

• Three members of Gap Inc.’s Board of Directors sit on the Governance and Sustainability Committee.

Climate Goals & Targets

Environmental Challenges

• Unauthorized subcontracting (UAS) posing risks to fair labor practices.
• Risks faced by refugee workers.
• Forced labor in the garment industry, particularly in Tamil Nadu, India and Myanmar.
• Forced labor in Uzbekistan's cotton industry.
• Difficulty in detecting issues in the supply chain.

Mitigation Strategies

• Strengthened Foreign Contract Worker requirements in 2015.
• Added a requirement for vendors to conduct due diligence and regular assessments of employment agencies.
• Conducting worker trainings and participating in multi-stakeholder initiatives.
• Partnering with governments and NGOs to identify high-risk areas.
• Taking extra precautionary measures in high-risk UAS countries.
• Collaborating with stakeholders to address forced labor deeper in the supply chain (e.g., Tamil Nadu, India; Myanmar).
• Signing the Cotton Pledge to avoid Uzbek cotton.
• Engaging Verité to review policies for ensuring foreign contract workers are not exploited.

Supply Chain Management

Responsible Procurement

• Vendor Compliance Agreement (VCA)
• Code of Vendor Conduct (COVC)
• Foreign Contract Worker (FCW) Requirements
• No fees policy for Foreign Contract Workers
• Due diligence on employment agencies

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: California Transparency in Supply Chains Act, UK Modern Slavery Act 2015, UN Universal Declaration of Human Rights, ILO Core Conventions

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• Reduced absolute Scope 1 and 2 GHG emissions by 50% compared to 2015 levels by 2020.
• Achieved 16% renewable energy share by 2021 (towards 100% by 2030 goal).

Social Achievements

• Launched GENERATION GOOD campaign to educate customers about climate change impacts of products.
• Expanded use of Higg FEM to collect data from 89% of cut and sew manufacturers and 80% of strategic fabric mills and dyehouses in 2020.

Governance Achievements

• Board-level oversight of climate-related issues through the Governance and Sustainability Committee.
• Incentives provided for management of climate-related issues through annual performance bonus plans and the Exceed Award.

Climate Goals & Targets

Environmental Challenges

• Increased indirect costs due to enhanced emissions-reporting obligations (e.g., CA AB 802).
• Increased direct costs due to chronic physical climate-related events (e.g., droughts affecting cotton production).
• Decreased revenues due to acute physical climate-related events (e.g., hurricanes causing store closures).

Mitigation Strategies

• Developing an Energy Management System (EMS) and assigning a dedicated team member to monitor climate-related regulations.
• Shifting to more sustainable fibers (recycled polyester, recycled nylon, organic cotton, BCI cotton) to mitigate cotton-related sourcing risks.
• Purchasing insurance and maintaining business continuity plans to manage the cost of extreme weather events.

Supply Chain Management

Supplier Audits: 100% of Tier 1 suppliers and strategic Tier 2 suppliers annually using Higg FEM.

Responsible Procurement

• Higg Index FEM
• Supplier scorecards incorporating environmental performance evaluation
• Code of Vendor Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (floods, droughts, hurricanes)
• Changes in precipitation patterns

Transition Risks

• Increased emissions-reporting obligations
• Emerging climate change regulations

Opportunities

• Reduced direct costs through renewable energy investments
• Reduced indirect costs through improved resource efficiency with suppliers
• Increased revenues through access to new markets with sustainable products

Reporting Standards

Frameworks Used: Greenhouse Gas Protocol, SBTi

Certifications: ISO 14064-3

Third-party Assurance: Third-party verification/assurance underway

Sustainable Products & Innovation

• GENERATION GOOD clothing line