CEO’S MESSAGE OUR ESG STRATEGY DASHBOARD PEOPLE SUPPLY CHAIN ENVIRONMENT TRANSPARENCY REFERENCE TABLES Operational Boundaries The Company’s operational facilities are comprised primarily of offices, distribution centers, and retail stores through a combination of ownership and leases across North America, EMEA, and APAC. Scope 1 and 2 Operational Boundaries: The Company includes Scope 1 emissions from the combustion of stationary and transport fuels on-site at its facilities, including natural gas, diesel, and petroleum. Scope 2 includes emissions from the purchase of renewable and nonrenewable electricity used on-site across its global facility portfolio. For both Scope 1 and 2, the Company includes both owned and leased facilities, and owned vehicles and equipment. Emissions associated with company-leased vehicles for business and private usage are included under Scope 3 Category 6, Business Travel. Scope 3 Operational Boundaries: The Company’s Scope 3 operational boundary has been expanded from the prior year. Beyond Category 6 business travel emissions, the Company also estimates emissions associated with Category 1 for purchased merchandise, Category 3 for electricity grid line losses, Category 5 for operational waste, Category 9 for transportation and distribution of merchandise to stores and customers, and Category 14 for the operation of licensed stores in the Middle East. Additional Scope 3 categories will be considered for future reporting. GHG Covered Emissions data is provided in metric tons of carbon dioxide equivalent (CO e) in accordance with the GHG Protocol. Individual emissions sources may measure the relevant GHG separately (e.g., carbon dioxide (CO ), methane (CH ), and nitrous oxide 2 2 4 (N O) prior to conversion to CO e. 2 2 Market-Based Emissions Approach The Company’s Scope 2 market-based emissions calculation approach incorporates the carbon emission reductions associated with the Company’s electricity procurement decisions that include the sourcing of 100% renewables and zero-emissions energy sources, such as nuclear. Details from energy supplier contracts are used to determine appropriate emission factors for these products that are applied to the part-year or full-year electricity consumption of each site under the relevant contract. Global Warming Potentials In accordance with the guidance of the GHG reporting standards under the United Nations Framework Convention on Climate Change (UNFCCC), the Company has opted to calculate GHG emissions using the Global Warming Potentials (GWP) from the International Panel on Climate Change (IPCC) Fourth Assessment Report (AR4 – 100 year), published in 2007. The EPA also recommends that the use of AR4 GWPs can improve the “ability to analyze corporate, national, and sub-national GHG data consistently, enhances communication of GHG information between programs, and gives outside stakeholders a consistent, predictable set of GWPs to avoid confusion and additional burden.” 6868