Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainable operations (minimizing fuel, energy, and water usage)
• Circular economy (repair and reuse of garments)
• Social compliance (Corporate Social Compliance Policy and Vendor Code of Conduct)
• Diversity, Equity, and Inclusion

Environmental Achievements

• Enhancements to wash chemistry resulting in electricity, natural gas, and water conservation
• Implementation of telematics technology to reduce fuel usage by limiting idling

Social Achievements

• 75% of Board of Directors from underrepresented groups (63% women)
• 80% of named executive officers from underrepresented groups (40% women)

Governance Achievements

• Board of Directors oversees ESG goals and objectives

Climate Goals & Targets

Environmental Challenges

• Unfavorable economic conditions (inflation, supply chain disruptions)
• Increased fuel and energy costs
• Customer retention and contract renewals
• Natural disasters and global calamities
• Competition
• Supplier risks
• ESG-related stakeholder expectations

Mitigation Strategies

• Pricing actions to offset inflation
• Operating cost reductions
• Investments in technology and customer service
• Proactive supply chain management
• Targeted sales strategies
• Implementation of ESG initiatives

Supply Chain Management

Supplier Audits: Annual third-party social compliance audits for international private label garment manufacturers

Responsible Procurement

• Corporate Social Compliance Policy and Vendor Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters (hurricanes, earthquakes, wildfires)
• Extreme weather events

Transition Risks

• Regulatory changes related to climate change

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Stakeholder expectations relating to environmental, social and governance (“ESG”) considerations which may expose us to liabilities and other adverse effects on our business

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Revenue shortfall
• Short-term challenges impacting fiscal 2024 guidance

Mitigation Strategies

• Logistics optimization
• Customer penetration through cross-selling
• Cost efficiency programs
• Optimal organization structure to accelerate growth
• Disciplined capital allocation with deleveraging as a priority

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Stakeholder expectations relating to environmental, social and governance (“ESG”) considerations which may expose us to liabilities and other adverse effects on our business

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Social Achievements

• 81% positive response in engagement survey from participating teammates

Climate Goals & Targets

Environmental Challenges

• Increased operating costs and obstacles to cost recovery due to the pricing and cancellation terms of Vestis’ support services contracts
• A determination by Vestis’ customers to reduce their outsourcing or use of preferred vendors
• Risks associated with suppliers from whom Vestis’ products are sourced
• Challenge of contracts by Vestis’ customers
• Vestis’ expansion strategy and its ability to successfully integrate the businesses it acquires and costs and timing related thereto
• Currency risks and other risks associated with international operations, including compliance with a broad range of laws and regulations, including the United States Foreign Corrupt Practices Act
• The COVID-19 pandemic’s impact on the United States and global economies, including particularly the customer sectors Vestis serves and governmental responses to the pandemic
• Vestis’ inability to hire and retain key or sufficient qualified personnel or increases in labor costs
• Continued or further unionization of Vestis’ workforce
• Liability resulting from Vestis’ participation in multiemployer-defined benefit pension plans
• Liability associated with noncompliance with applicable law or other governmental regulations
• Laws and governmental regulations including those relating to the environment, wage and hour and government contracting
• Increases or changes in income tax rates or tax-related laws
• New interpretations of or changes in the enforcement of the government regulatory framework
• Cybersecurity incident or other disruptions in the availability of Vestis’ computer systems or privacy breaches

Mitigation Strategies

• Enhance workforce productivity, optimize network | logistics, and strategically manage costs and merchandise inventory
• Launched service manager playbooks underpinned by KPIs
• Enhanced the route check-in process with data that proactively identifies customer needs
• Launched phase 1 of our intuitive customer portal
• Equipped RSRs with handheld technology to streamline customer service experience
• Streamline our operations and deliver operating efficiencies
• Aligning Our Team for Success and Establishing a More Efficient Organizational Structure
• Conducted a comprehensive study that identified significant opportunities to deliver operational efficiencies and better customer service
• Implementing a disciplined and methodical approach to network optimization
• Implement consolidated stockroom footprint across North America
• Implement stockroom management system to consistently track inventory in each storage area across North America
• Opportunity to consolidate physically and/or virtually to create greater access and increase potential for reuse

Supply Chain Management

Climate-Related Risks & Opportunities