GAP ESG Report
2021 | 74 pages
2021 ESG REPORT INCLUSIVE, BY DESIGN
2 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE CONTENTS 3 14 25 33 46 THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE About Gap Inc. 3 Gap Inc. P.A.C.E. 16 This Way ONward 27 Water Stewardship 35 ESG Oversight 47 Our Commitment to ESG, Human Rights and Social Dialogue 19 Talent Development 29 Women + Water 36 Responsible Business Practices 49 CEO Message 4 Helping Keep Our Supply Chain Equality & Belonging 31 Resource Efficiency and Stakeholder Engagement 50 2021 Highlights 5 Safe During COVID-19 24 Employees and Community Impact 32 Manufacturing 37 Product Life Cycle 51 Our Approach – Judy Adler, VP ESG 6 Chemicals Management 38 ESG Appendix and Our Purpose-Led Brands 7 Climate Stewardship 39 Forward-Looking Statements 52 Old Navy 8 Raw Materials and Product 42 Global Reporting Initiative Gap 9 Circularity and Waste 44 (GRI) Index 53 Banana Republic 10 Sustainability Accounting Standards Board (SASB) Index 64 Athleta 11 Task Force on Climate-Related Goals and Progress 12 Financial Disclosures (TCFD) Index 72
3 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE THE BIG PICTURE ABOUT THIS REPORT This report covers Gap Inc.’s global operations for fiscal 2021, which ABOUT GAP INC. ended on January 29, 2022, unless otherwise noted. Our last report covered fiscal 2020 and is available with our past sustainability reports Founded in San Francisco in 1969, Gap on our website. This report focuses on developments and actions for our Inc. is a collection of purpose-led lifestyle key programs, progress toward our corporate and brand goals during the 2021 fiscal year, preparations for activities in 2021 and 2022, and an brands offering apparel, accessories, home analysis of trends and business impacts where available. For our many programs, we provide detailed information on objectives, operations and goods, and personal care products for our management approach which can be accessed via links in each section. women, men, and children from Old Navy, Through this report, we define sustainability as a priority that guides our Gap, Banana Republic, and Athleta. efforts to operate responsibly and ensure the future health of the planet and society. Through this report, ESG (Environment, Social, and Governance) is used to refer to the Gap Inc. central team that owns and supports all work related to the ESG issues impacting the company’s performance. We sought to prepare this report in reference to the Global Reporting Initiative (GRI) Standards and in alignment with the Sustainable Accounting Standards Board (SASB) Standards and the Task Force on Climate-Related Financial Disclosures (TCFD). Gap Inc. is committed to the United Nations Global Compact (UNGC) Ten Principles, and this report serves as our Communication on Progress. We have not obtained external assurance for this report, but its contents have been confirmed by an internal quality review. The inclusion of information contained in this report is being made in good faith based on information that is available and is valid to Gap Inc. Our Athleta brand is a certified B Corp, and Gap Inc. is an omni-channel retailer, as of January 29, 2022 (unless otherwise specified). The scope of these we have amended Athleta’s legal charter with sales to customers both in stores disclosures does not include the Gap Home collection. Given the inherent to become a Delaware public benefit and online, through company-operated uncertainty in predicting and modeling future conditions, caution should corporation to further uphold the brand’s and franchise stores, company-owned be exercised when interpreting the information provided in this report. commitment to people and the planet. websites, and third-party arrangements. In addition, the controls, processes, practices, and infrastructures described in this report are not intended to constitute any representation, As of the end of fiscal 2021, we purchase LEARN MORE warranty, or other assurance that such controls, processes, practices and private-label and nonprivate-label > Annual Filings infrastructures will result in any specific outcome, result, or achievement merchandise from about 250 vendors of a stated target or goal. Images of groups of people in this report that have facilities in approximately that do not include face masks were taken either prior to the COVID-19 25 countries. As of January 29, 2022, pandemic or in line with relevant CDC guidance and recommendations. we had a workforce of approximately For questions regarding Gap Inc.’s sustainability efforts or the content of 97,000 employees. this report, please contact [email protected].
4 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE OUR COMMITMENT TO ENVIRONMENT, SOCIAL, AND GOVERNANCE (ESG) “As a global company that reaches millions “We take pride in creating products our customers of people around the world, Gap Inc. has a love while doing right by our customers, our responsibility – and an opportunity – to drive community, and the planet. As founders, a key positive change for our stakeholders. We bring part of Doris and Don Fisher’s vision of success our purpose – Inclusive, by Design – to life through was creating opportunities for the people and the work we do with our partners to create a more communities touched by our business throughout sustainable business and more equitable industry. the world. Today, we’re working harder than ever to make our business more sustainable by “In this report, we demonstrate our progress setting bold goals, designing new programs, and against clear and ambitious goals in three partnering with others to change our industry for focus areas: empowering women, enabling the better. opportunity, and enriching communities. Our partnerships – across industries and “Each of our brands has made strong governments, and alongside other signatories commitments to help us achieve our purpose – of the UN Global Compact – have enabled us to be Inclusive, by Design – and each now has to scale our impact. This year marked major an executive sustainability steering committee milestones: 1 million women and girls have now in place. We recognize that commitments are completed our signature skills-training program, businesses to step up. It’s what our customers not enough, and we are dedicated to showing P.A.C.E.; our partnership with USAID’s Women + and communities expect of us – and it’s what we progress against our goals and impact Water Alliance helped 1.5 million people improve demand of ourselves as a values-led company through use of innovation, collaboration across their access to clean water and sanitation; and, with the power to shape peoples’ ways of life.” the industry, and partnership with expert guided by our robust ESG framework, we set organizations and the communities in which future targets on climate in line with science- Sonia Syngal we operate.” based goals. CEO Sally Gilligan “We know there is more work to do, and we are Chief Growth Transformation Officer committed to growing our business in a way “There has never been a that protects the planet and supports healthy more important moment communities for generations to come. There “Today, we’re working harder has never been a more important moment for for businesses to step up.” than ever to make our business more sustainable...”
5 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE 2021 HIGHLIGHTS EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES 1 MILLION+ 10,600+ A-RATING women and girls reached by P.A.C.E. since 2007, youths hired by This Way ONward since 2007, on received for CDP Climate and Water. achieving our 2022 goal. track to reach the program's goal of 20,000 by 2025. This Way ONward hires represent 3% of Old Navy’s 1.5 MILLION+ 68% entry-level store employees, on track to meet its goal of 5% by 2025. people reached on our journey to empower 2 million of our sourcing went to green-rated* facilities, on track people with improved water access through Women + to reach 80% by 2025. Released first Water (since 2017). 90% EQUALITY & BELONGING 79% Report, found here. of cotton sourced from more sustainable sources. of our factories have completed gender awareness training for middle and top management. SUPPORTING 75% OPPORTUNITY HIRING 92% of our Tier 1 factories are participating In 2021, we engaged with Tent Partnership for of fabrics with a PFC-based finish were successfully in ILO Better Work and/or SLCP (Social Refugees, Second Chance Business Coalition, converted or exited, and we are on track to reach and Labor Convergence Program). and STARs (skilled through alternative routes). 100% by 2023. *Green-rated indicates high-performing facilities with few violations, none of 10% which were critical. Learn more on p. 20. of polyester sourced from recycled sources.
6 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE At Gap Inc., we lead with our values and 3. We enrich communities by aiming OUR APPROACH think holistically about how environmental to create a net positive impact in and social responsibility connects areas disproportionately affected with our business and the world – by environmental issues like climate particularly the lives of people from change and the water crisis. Our 2050 underrepresented groups. environmental goals are ultimately about protecting the world’s natural This intersectional thinking guides our resources for generations to come. approach to each of our three focus areas: We have programs like the USAID Gap Inc. Women + Water Alliance, which 1. We empower women and girls through combines objectives to empower women our Personal Advancement & Career and improve community water resilience Enhancement (P.A.C.E.) program, which in a part of India where water stress establishes a foundation from which and poverty are acute aspects of daily women can reach their full potential life. With the support of our partners and help change the power structures – CARE, Water.org, WaterAid, and the that hold them back at work and in their Institute for Sustainable Communities communities. This program – which – this program already has improved has reached over 1 million women and access to clean water and sanitation for girls since 2007 – supports people from 1.5 million people in Madhya Pradesh communities in our supply chain and and Maharashtra. beyond who face greater risks due to gender discrimination, lack of access Our brands are also leading the way, from JUDY ADLER, VP, ESG to education and healthcare, and the Banana Republic’s collaboration with worsening effects of climate change and Charles Harbison on a more sustainable the water crisis. By tackling these issues clothing line that celebrates Black women together, we can make exponential to Athleta’s investments in renewable At Gap Inc., our ESG team’s vision is to be progress on them all. electricity that now offsets all of its North a driving force in the industry, collectively American retail stores, to Old Navy’s 2. We enable opportunity by fostering commitment to amplify diverse voices from building a more sustainable future for an inclusive culture with our Equality the 15 Percent Pledge network to Gap’s & Belonging team and using the scale more sustainable product assortment, our business, global community, people, of our business to create sustainable Generation Good. and planet. economies accessible to everyone. Through programs like Old Navy’s This By elevating the role of sustainability in our Way ONward, we are providing valuable business, we can deepen our positive impact first-job experience for youths from on people, our communities, and the planet. To do this, we leverage the scale of our business and strength of underrepresented groups. At the same our brands to empower women, enable opportunity, and enrich time, we’re applying what we learn Judy Adler communities. We view our work as a lens through which we can across Gap Inc. to help address systemic imagine and create a thriving business and a better world. barriers to employment.
7 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE OUR PURPOSE- LED BRANDS Our brands are built to have a lasting positive impact on people and the planet. Our approach builds on our rich history of women’s empowerment, unlocking opportunities for people to succeed in the workforce and responsible environmental stewardship. Each of our brands is a leader in empowering women, enabling opportunity, and enriching communities.
8 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE ENRICHING COMMUNITIES A Greener Future In 2021, Old Navy launched the Imagine Mission Fund to support the brand’s WATER values work. The fund comprises As of the end of 2021, 96 percent Old Navy and customer donations, of Old Navy’s denim assortment Navyist rewards points giving, and incorporates water-saving techniques, customer donations at checkout. with over 2 billion liters of water saved since 2019. EMPOWERING WOMEN TEXTILES $3.8M Old Navy is on track toward its goal total raised A More Inclusive Future of having 100 percent of its cotton and donated Old Navy, alongside Gap Inc., made a sustainably sourced in 2022 and is to the Imagine commitment to change for its employees, committed to an increased use of Mission Fund its brand, and its communities. In 2021, recycled cotton in its denim assortment. to support This Old Navy introduced BODEQUALITY Additionally, the brand is committed to Way ONward to redefine size inclusion. Old Navy now converting 60 percent of its traditional offers every one of its women’s styles in polyester into recycled polyester by 2025. every size, with no price difference. Old Navy is the first value retailer to offer sizes PLASTIC 0-30 and XS-4X for all women’s styles at Old Navy is reducing plastic waste across price parity. We reinvented our fit process its supply chain and is on track to eliminate and size standards to create the most all plastic shopping bags in U.S. and democratic, comfortable, and consistent Canadian stores by 2023. size run and fit ever for the brand. LEARN MORE 96% > Old Navy Imagine ENABLING OPPORTUNITY of Old Navy’s Old Navy is a global apparel and denim A Brighter Future accessories brand that makes current assortment This Way ONward fuels the next American essentials accessible to every incorporates generation of leaders with the skills and water-saving confidence they need to succeed in the family. Originated in 1994, the brand techniques workplace. Tasked with providing 20,000 celebrates the democracy of style job opportunities by 2025 to youths and service for all through on-trend, from underrepresented communities, playfully optimistic, affordable, and Old Navy is already halfway to delivering high-quality products. Old Navy is on on its commitment, with over 10,600 a mission to imagine a better future graduates of the program. This past year, Old Navy donated $1.3 million to 1 for future generations. the Imagine Mission Fund to support This Way ONward. 1. The Imagine Mission Fund is a donor-advised fund (DAF) at T. Rowe Price Charitable. A DAF is a giving vehicle: a separately identified fund or account maintained and operated by a section 501(c)(3) organization (i.e. the sponsoring organization).
9 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE GAP’S 100% 100% 100% NEW GOALS Regenerative, organic, in Recycled polyester by Washwell™ Denim2 conversion to organic, or 2030; 50% by 2025 and woven bottoms recycled cotton by 2030 by 2025 EMPOWERING WOMEN Since 2016, the brand has saved approximately 500 million liters of water. Empower@Work In 2021, Gap committed that 100 percent Better Materials of its finished goods factories will be In 2021, Gap began supporting participating in Empower@Work by farmers with training and procurement 2025. Empower@Work (see p. 18) commitments during their three-year focuses on building and deploying transition toward certified organic farming sustainable, systemic, and scalable and away from conventional agricultural “ My dream programs that promote gender equity in practices, which do not use harmful and goal is global supply chains to uplift women and synthetic pesticides and fertilizers. to provide their families for generations to come. clean water Gap signed up to Textile Exchange’s 2025 Water is a Human Right Recycled Polyester Challenge, which asks to those who Through the USAID Gap Inc. Women + apparel brands to collectively commit to don’t have Water Alliance (see p. 36), Gap brand is increasing the percentage of recycled access to it.” working with nonprofit partners in India polyester in the industry to 45 percent by to empower farmers, like Pramila, and 2025. Gap has set an even higher target their communities to improve their access of 50 percent by 2025. Pramila Ahoriya, a farmer and university student in to clean water and sanitation, supporting Karajwani village, India, long-term water resilience in places that Circularity where women on average Gap believes it should be a force for spend 1.5 hours per day are aligned with our supply chain. In 2021, Gap renewed its commitment fetching water for their to the Ellen MacArthur Foundation’s good – for people and our planet. families. Gap’s purpose is to create sustainable Jeans Redesign challenge to design change, enrich communities, and be ENRICHING COMMUNITIES long-lasting, more sustainably produced denim that’s made to be reused and better for this generation and the next. Washwell™ recycled. To help keep products in use for From water to wash, fiber to factory, Compared to conventional wash as long as possible, Gap partners with the clothes you love to live in are made methods, Gap’s Washwell™ program thredUP® and Give Back Box. Customers responsibly and with respect for the uses at least 20 percent less water. can pack up gently used clothing, shoes, planet we all share. and accessories, then print a free shipping label to send products on to their next life. Sustainability is an imperfect journey. GOAL 100% 100% LEARN MORE Gap promises to lead, not react. To use BY 2021 > Gap for good Achieved Washwell™ more sustainable less, not more. Denim2 cotton 2. 100 percent of eligible denim by 2021 (86 percent of all denim).
10 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE ENRICHING COMMUNITIES Current examples include: Our founders traveled the world upcycling clothes to mend, In -Conversion Cotton Farms: The brand modernize, and make their own. That spirit of adventure and made a long-term commitment to source singular vision for sustainability continues today. in-conversion and organic cotton from approximately 1,500 partner farmers in Circular Economy the Madhya Pradesh regions of Alirajpur, Banana Republic is committed to using more sustainable Kundanpur, and Udaigarh (India). Alongside cotton and polyester and designing products constructed with Arvind Limited, Banana Republic is funding recyclability in mind. To work toward this, the brand participated the work of Action for Social Advancement in the Ellen MacArthur Foundation’s Jeans Redesign project to (ASA), a non-governmental organization reimagine organic cotton denim. The brand also launched BR (NGO) that trains farmers on converting to Vintage with two collections of over 200 pieces handpicked from organic practices. archives. The capsule will evolve each season with all-new styles curated by third-party partner vendors. World Wildlife Fund® (WWF): In 2021, Banana Republic chose WWF as its Raw Materials designated charity partner for Gap Inc.’s Banana Republic aligned with The Responsible Wool Standard Do Good loyalty rewards membership program to protect sheep and the land they graze when feature to help build a better world for creating our wool products. The brand also committed to people and the planet. supporting responsible leather manufacturing worldwide and ® is a proud member of the Leather Working Group. Banana thredUP : Banana Republic partnered Republic signed on to become a member of the Good Cashmere with the independent reseller of like-new ® clothing and accessories. Customers can Standard , which aims to improve the welfare of cashmere goats, the lives of farmers and farming communities, and the bring unwanted items to stores for resale environment in which they live. on thredUP®’s platform, providing an easy way to reduce environmental impact by Water extending the life of pre-loved clothing. Banana Republic implemented the Washwell™ program, which has Paravel: Banana Republic debuted a helped the brand save approximately limited edition partnership with the 34 million liters of water since 2020. luggage essentials brand, featuring Banana Republic is committed to The brand also uses conscious dyeing products made with more sustainable making better decisions about its techniques and wash methods that practices and materials. products. Discover more about its ensure cleaner waterways and reduce water usage by including the Banana Republic is building on its legacy of legacy of upcycling, conservation 34 implementation of bio-softeners and upcycling and continuing to make progress efforts, sustainable styles, and foam dye. with sustainable partnerships, initiatives, initiatives to make the world better, million and practices. one garment at a time. Partnerships liters of water Banana Republic is continually LEARN MORE have been saved, exploring associations that help > Banana Republic approximately, support its key sustainability pillars. since 2020
11 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE EMPOWERING WOMEN ENRICHING COMMUNITIES Power of She Fund Renewable Energy 1.1 Through the Power of She Fund, in As of 2021, 100 percent of Athleta’s million partnership with the Women’s Sports company-operated stores in North Foundation, we awarded an additional America are offset by renewable electricity garments 66 grants impacting 43 organizations from Fern Solar, a 7.5-megawatt offsite collected through and more than 25,000 women and girls in solar project in North Carolina. thredUP® since 2021. Since the Fund‘s inception in 2020, 2020 partnership we have awarded 79 grants impacting Recycled Polyester launch over 56 organizations and more than Athleta signed on to the Textile Exchange 30,000 women and girls across areas Recycled Polyester Challenge to use including fostering multi-generational 45 percent recycled polyester by 2025 movement and connections, driving and 90 percent by 2030. access to well-being resources, and ® supporting athlete child care expenses. thredUP The brand celebrated its second year Gap Inc. P.A.C.E. Program of participation, activating 57,000 Clean In 2021, Athleta committed to Out Kits with 897,000 garments in 2021 100% integrate P.A.C.E. and Empower@Work (1.1 million total since 2020 launch). renewable in 100 percent of its factories by 2025 This partnership extends the life of our electricity offset (see more on p. 18). clothes through circular business models. Athleta's North American retail LEARN MORE stores in 2021 ENABLING OPPORTUNITY > Athleta TM Fair Trade Certified Athleta announced the addition of two new fair trade factories in Vietnam, bringing the total to four (with another 30,000 two in Sri Lanka). The brand has contributed $1.3 million to community As a certified B Corp, Athleta is women and girls development since 2016 ($371,000 in committed to using business as a impacted by 79 2021), impacting 6,200 women. force for good toward its mission: grants awarded through the Amplify Artist Series to ignite the limitless potential of Power of She Athleta developed a collection of all women and girls. Athleta seeks Fund since 2020 product collaborations to further its progress through its core values of commitment to empower and amplify inclusion, women supporting women, the voices of Black, indigenous, and and environmental impact. people of color (BIPOC) women and girls. In 2021, Athleta collaborated with four Black female artists to create limited edition products and donated to nonprofits selected by the artists.
12 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE GOALS AND PROGRESS EMPOWERING WOMEN Establishing baseline On track Needs attention New goal Achieved GOALS TARGET YEAR STATUS PROGRESS Reach 1 million women and girls through P.A.C.E. 2022 As of the end of fiscal 2021, over 1 million women and girls had been reached through P.A.C.E. 100% of workers employed in our strategic factories will have 2025 We have developed the following key performance indicators (KPIs): their voices heard through representative, gender-equitable % strategic factories where workplace committees have gender-equitable workplace committees representation % strategic factories where workplace committees are meeting at least 70% of relevant Better Work Academy Social Dialogue Indicators (SDIs) and meet minimum requirement indicators (SDI 9, SDI 17, and SDI 18) 3 2025 % of strategic factories where at least 50% of the factory’s female workers have been 100% of our strategic factories are investing in women’s empowerment through participation in Empower@Work enrolled in P.A.C.E./Empower@Work curriculum % of strategic factories that have institutionalized Empower@Work as part of their HR management systems 100% of our strategic factories will have achieved gender 2025 % of strategic factories have achieved gender parity at the supervisor level parity at the supervisor level % of supervisors in our suppliers’ strategic factories that are women, globally 100% of our factories will have prevention and response 2025 100% of our factories have prevention and response management systems and 70% management systems and trainings in place to address have internal trainers in place to address gender-based violence gender-based violence % of sourcing factories that have a functioning grievance mechanism for encouraging employee complaints and suggestions, including to report incidents of gender-based violence, harassment, and abuse % of sourcing factories where 100% of employees are trained on gender-based violence prevention and response each fiscal year 80% of Gap Inc. sourcing will be allocated to green-rated 2025 68% of our business spend is allocated to green-rated factories factories By 2023, 100% of our Tier 1 facilities will participate in 2023/2025 75% of Tier 1 factories are participating industrywide efforts, including SLCP and/or ILO-IFC Better 40% of Tier 2 strategic mills are participating Work, and 100% of Tier 2 strategic mills will participate by 2025. 100% of vendors comprising 90%* of Gap Inc.’s business spend 2025 * Our previous goal applied to 100% of Gap Inc. vendors. In 2021 we decided to revise the are invited to participate in Better Buying, with scores isolated goal to apply to the vendors comprising the top 90% of our business spend in order to across brands, working toward annual public reporting on focus on the vendors where we have the greatest influence and impact. purchasing practices improvements. 3. “Strategic factories” are those representing 80 percent of our total business spend (defined as: Purchase Order first cost).
13 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE ENABLING OPPORTUNITY Establishing baseline On track Needs attention New goal Achieved GOALS TARGET YEAR STATUS PROGRESS Hire 5% of Old Navy store entry-level employees from This Way 2025 In 2021, 3% of Old Navy entry-level store employees were hired through ONward annually This Way ONward Reach 20,000 youths through This Way ONward 2025 Over 10,600 youths have participated since the program launched in 2007, with 1,170 hired in 2021 ENRICHING COMMUNITIES WATER Support a water-resilient supply chain 2030 Establishing baselines and context-based targets Net-positive 2023 As of the end of fiscal 2021, we have empowered 1.5 million people water impact Empower 2 million people - including 1 million women - in water- with access to improved drinking water and sanitation stressed regions by Work toward zero discharge of hazardous chemicals in 2023 38% of products with water- or stain-repellent finishes were made using 2050. our supply chain: eliminate PFC-based finishes from our non-PFC-based finishes. Gap Inc. successfully converted or exited 92% of fabrics supply chain with a PFC-based finish, and is on track to reach 100% by 2023 CLIMATE Reduce Scope 3 greenhouse gas (GHG) emissions from 2030 2020 Scope 3 data will be available in 2022 Carbon neutral purchased goods and services by 30% from a 2017 baseline across our Reduce Scope 1 and 2 GHG emissions by 90% from a 2030 Our 2020 Scope 1 and 2 emissions were reduced by 39% from a 2017 baseline. value chain 2017 baseline 2021 Scope 1 and 2 data will be available on our website later this year by 2050 Source 100% renewable energy for our company-operated 2030 In 2020, 17% of our energy was produced from renewable sources. 2021 data will be facilities globally available on our website later this year PRODUCT Source 100% of cotton from more sustainable sources4 2025 79% of cotton was sourced from more sustainable sources Source at least 45% of polyester from recycled sources (rPET). 2025 10% of polyester was sourced from recycled sources (Some brands have higher goals) WASTE AND Eliminate unnecessary and problematic plastic 2030 Tracking in progress CIRCULARITY 4. Defined as: Better Cotton (formerly BCI), verified U.S.-grown cotton (USCTP), organic, in conversion (to verified organic), recycled, and regenerative.
14 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE EMPOWERING WOMEN & HUMAN RIGHTS For more than a dozen years, we have led initiatives that unlock new possibilities for women and girls and support workers in our supply chain.
15 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE Our collaborative approach has led to “ The mission of P.A.C.E. is to ignite pioneering programs and innovative a community of active, healthy, partnerships with suppliers, industry confident women and girls who peers, government organizations, empower each other to reach their educational institutions, and NGOs. limitless potential. P.A.C.E. gives women a voice and an opportunity to positively change lives – their families‘, their communities‘, and their own.” Mary Beth Laughton, President and CEO, Athleta HOW WE EMPOWER WOMEN These programs work together to protect Together, these programs provide a AND SUPPORT HUMAN RIGHTS human rights, remove barriers, and enhance comprehensive and holistic engagement women’s empowerment and opportunity. model for facilities to improve labor > Gap Inc. P.A.C.E. 16 They address gender inequality and gender standards, benefit women workers, Empower@Work 18 violence by enhancing industrial relations and support the business continuity > Human Rights and Social Dialogue 19 in facilities and providing opportunities for and resiliency of our supply chain. Assessment and Remediation 20 women workers to gain the skills, agency, Capability Building 21 and confidence needed to advance at Workforce Engagement Program 21 work and live better lives. These are Supervisory Skills Training 22 complementary interventions that can be Gender-Based Violence Prevention and Response 23 implemented alone or in tandem depending Digital Wage Payments 23 on the needs of a given facility’s workforce. > Helping Keep Our Supply Chain Safe During COVID-19 24
16 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE PROGRAM SPOTLIGHT GAP INC. P.A.C.E. Our Gap Inc. Personal Advancement & Career Enhancement (P.A.C.E.) program partners with vendor facilities to give women foundational life skills, technical training, and support to advance at work and in their lives. In 2021, we achieved a milestone in the 14-year history P.A.C.E. SKILLS GOAL of P.A.C.E., reaching 1 million direct program participants IN ACTION ACHIEVED worldwide with foundational life skills and technical training – a year ahead of schedule. P.A.C.E. has helped Reach 1 million change the course of their lives and work. We are now In 2019, P.A.C.E. trainer Seeta Patel women and girls bringing a version of the program to the U.S. while through P.A.C.E. we continue developing new goals to engage with visited Karamthalai, a village in a by 2022. communities and workplaces around the world and remote part of Madhya Pradesh, empower the next generation of women and girls. India. During her visit, she became trapped after the only bridge leading out of the area was washed away in a storm, something that happens every We deliver our P.A.C.E. workplace and We continue to grow P.A.C.E. in year during the rainy season. community programs across multiple the community through strategic industries and settings around the partnerships with governmental, The women in P.A.C.E. training asked world in partnership with local NGOs, educational, and other institutions. Seeta if she could help them petition governments, brands, and schools. Through these collaborations, our the government for a new bridge. In 2021, we celebrated 10 exemplary program now also reaches men and She encouraged the women to use partners and individuals around the boys by providing them access to existing skills they had learned from P.A.C.E. globe as part of our second annual curriculum on topics like finance and new and helped them write a letter to the P.A.C.E. Awards. courses designed to help them better government about the perilous bridge. understand the experiences of women We have expanded P.A.C.E. workplace and girls, cultivating a culture of As a result of the women’s collective programs by integrating P.A.C.E. into our gender equality. action, the government completed a larger Supplier Sustainability program. new bridge in April 2021, improving This puts P.A.C.E. participation and Find more about P.A.C.E. on our website. access in and out of the village and performance on the Gap Inc. vendor ensuring the entire community can scorecard and signals to vendors that take advantage of opportunities for the program is both a strategic priority life-saving healthcare and education and an expectation of our commercial all year round. partnership with them.
17 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE PROGRAM SPOTLIGHT 2021 P.A.C.E. PROGRESS 2021 IMPACT GROWTH PER YEAR WOMEN AND In 2021, we continued our three-year In Indonesia, Gap Inc. and New Balance GIRLS REACHED partnership with India’s Ministry of Rural are funding a program led by CARE 2018 178,000 Development, which we plan to expand International to integrate P.A.C.E. into across all Indian states in 2022. We the junior school counseling curriculum, +77% 2019 279,000 adapted to COVID-19 by using a virtual reaching 50 schools in Badung regency. 2020 199,000 program to train 84 trainers, including We hope to expand into other districts in 46 master trainers who will offer state- the future. 77+23+L 2021 173,7007 level trainings. communications In Bangladesh, CARE International has knowledge Ultimately, all vocational training under led a P.A.C.E. community program that VENDORS India’s flagship DDU-GKY (Deen Dayal has reached 37,198 women in Gazipur Upadhyaya Grameen Kaushalya Yojana) since 2014. An evaluation of this program 119 program will be able to offer P.A.C.E. life revealed that 48 percent of P.A.C.E. 110 skills courses, supporting the employability participants reported having bank +56% and job retention of workers. Through this accounts (non-participants: 26 percent). 68 partnership, we have gained important Moreover, 88 percent of P.A.C.E. program 61 insights about translating P.A.C.E. into participants felt comfortable speaking 56+44+L 2018 2019 2020 2021 different languages – 24 in India alone – up about their needs in the workplace and strengthening government technology after their training (non-participants: 5 execution skills systems to deliver the curriculum. 18 percent). knowledge COMMUNITY PARTNERS Also in India, our partner, the Self- In 2021, we built a learning management 35 Employed Women’s Association (SEWA), system that we plan to launch in 2022 31 achieved its goal of training over 271,000 to continue digitizing the program with 28 women across Gujarat, Bihar, and in-person, virtual, and hybrid training +73% Rajasthan. SEWA will now deliver P.A.C.E. sessions. In 2022, we also plan to use 17 in eight new countries: Ethiopia, Ghana, elements of the P.A.C.E. program to 2018 2019 2020 2021 Haiti, Kenya, Nepal, Nigeria, Sri Lanka, address women’s needs in the U.S. 73+27+L and Tanzania. financial literacy In Cambodia, we continued our programs 4,451 with Kampuchea Action to Promote certified P.A.C.E. Education. The Ministry of Education in PROGRESS SINCE 2007 trainers Cambodia passed an official order to incorporate the P.A.C.E. girls’ curriculum 4.6% into all primary and secondary schools 1 MILLION+ turnover rate for P.A.C.E.- over the next two years, ultimately women and girls reached trained women6 compared reaching 150 schools and almost to 11.3% among their peers 15,000 girls. 5. Execution skills knowledge is defined as the knowledge of how to apply newly learned skills from the P.A.C.E. learning modules in real contexts, particularly in the workplace. Percentage represents increase in proficiency after participating in the P.A.C.E. program. 6. According to a sample of 40 facilities. 7. P.A.C.E. programming and participation were limited in 2020 and 2021 due to COVID-19 in-person gathering restrictions across many of our implementing locations.
18 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE PROGRAM SPOTLIGHT Gap Inc., along with BSR (Business for Social Responsibility), HERproject, CARE International, and ILO-IFC Better Work, founded Empower@Work in 2019. Leveraging our P.A.C.E. program, Empower@Work harnesses the power of collective action to deploy sustainable, systemic, and scalable programs that empower women workers, embed gender equality in business practice, and catalyze policy and systems change by aligning women’s empowerment training and skill-building efforts across the apparel industry. Since its launch, Empower@Work GOALS BY 2025 has published an open-source P.A.C.E. COMMUNITY FACILITATORS VENTURE Worker Training Toolkit that is INTO LOCAL POLITICS recognized as a best-practice curriculum 100% for women’s empowerment training of our strategic Critical skills gained through P.A.C.E. Women in India also used their P.A.C.E. in the apparel supply chain. In 2021, factories8 will gave Florah Magwa the confidence to training to pursue election. In January Empower@Work focused on creating invest in women‘s run for a special position to represent 2021, 167 participants in the program a robust implementation and impact empowerment through women in her local government council were elected to the panchayat (regional model that seeks to drive market change participation in in Tanzania. Initially, Florah didn’t believe assembly) in Maharashtra state, with and influence the wider ecosystem Empower@Work9 that she had the skills or confidence to fourteen elected as sarpanch (decision- to make lasting, positive changes for Establishing baseline stand in front of people and ask for their makers), who are the focal point of women workers. votes. But after P.A.C.E., she decided to contact between government officers run against 25 other women and was and the village community. In 2022, we plan to develop a strategy 100% among seven selected to represent to transition our P.A.C.E. in the Workplace of Athleta and Gap brand women in the Musoma District. “If it program to Empower@Work. factories will participate were not for these interventions, I in Empower@Work probably would not be where I am today and where I aspire to be in the future,” Establishing baseline said Florah. 8. Factories representing 80 percent of our total business spend (defined as: Purchase Order first cost). 9. We will measure performance against our Empower@Work target by assessing the percentage of factories with at least 50 percent enrolled female workers. We will further assess the extent to which factories are institutionalizing Empower@Work as part of their HR management processes, including how they introduce it to workers and demonstrate commitment to the program from the top levels of management.
19 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE HUMAN RIGHTS AND SOCIAL DIALOGUE We are committed to upholding and progressing human rights and cultivating social dialogue to create a resilient supply chain that respects workers. Our goal is to design, collaborate on, and implement industry-leading programs that transform outcomes for workers and enterprises across the sector. Our holistic approach begins with our To uphold these policies and improve supply chain working Human Rights Policy and Code of Vendor conditions, we focus on two areas: Conduct (COVC). Both are based on internationally accepted labor standards Assessment and Remediation OUR KEY HUMAN RIGHTS ISSUES and guidance, including the Universal Through transparency and partnership across our supply chain, Declaration of Human Rights (UDHR), we can improve workers’ well-being, protect human rights, reduce UN Guiding Principles on Business and environmental impacts, and improve business performance. > Child Labor and Young Workers Human Rights, UNGC, Organisation for > Discrimination and Harassment Economic Co-operation and Development Capability Building > Wages and Benefits (OECD) Guidelines for Multinational In partnership with ILO-IFC Better Work, suppliers, NGOs, > Fire, Building and Electrical Safety Enterprises, and the International Labour and others, we have established programs to improve worker > Grievance Mechanisms Organization’s (ILO) Core Conventions. representation and leadership involvement. These cover > Short-Term Contracts Our policies also account for local labor issues such as workplace cooperation, supervisory skills, > Human Trafficking and Forced Labor laws in each country where we do business. and empowering women. We also support our facilities with > Working Hours environmental capability-building programs, which can be found > Humane Treatment in the Resource Efficiency and Manufacturing section (p. 37). > Freedom of Association > Foreign Contract Workers and Recruitment Detailed information on our human rights policies, management > Unauthorized Subcontracting approach, and resolution actions for our key human rights issues is available on our website.
20 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE ASSESSMENT AND REMEDIATION When an issue is reported or found during 2021 Progress our assessments, our global field teams Between 2016 and 2020, we worked SOCIAL & LABOR We use our Assessment and develop a tailored remediation process that toward a goal of sourcing from facilities CONVERGENCE Remediation Program to considers local contextual factors such as rated yellow or green; today, only 1 percent PROGRAM (SLCP) evaluate our suppliers and workers’ education level, cultural norms, and of facilities we work with are rated red, incentivize improvements by ways of communication. For example, we may compared to 16 percent in 2016. In As a signatory to the SLCP, we support conduct interviews in workers’ communities 2021, we raised our ambition to drive ways to improve working conditions in directing more business toward to better understand their needs, enabling us performance improvement by setting global supply chains by encouraging the highest-performing facilities. to more effectively address violations within a goal to source at least 80 percent the wider adoption of the SLCP tool, our global supply chain. of business spend from green-rated which helps assess the social and Our approach begins with assessments factories by 2025; we are on track, with labor performance of manufacturing conducted by Gap Inc. (32 percent of Critical and severe violations have a greater 68 percent at the end of 2021. facilities while reducing the duplication assessments), ILO-IFC Better Work negative impact on a facility’s rating than of industry efforts. (26 percent), and the SLCP (43 percent). noncompliance violations. Our strict approval By the end of 2021, 84 percent of COVC process discourages red-rated facilities issues had been resolved. We resolve In 2021, we used the SLCP tool Through these assessments, we rate from entering our sourcing base. If a red these violations by integrating this work in Better Work assessments in each facility using a color-coded system: rating occurs, we provide corrective action into our sourcing decisions, which drives Indonesia, Bangladesh, and Vietnam. plans and a realistic time frame to resolve increased vendor ownership in resolving We aim to increase this across all > Green for high-performing facilities with any issues. Should a facility or vendor fail issues promptly. Our dedicated Supplier Better Work countries, supporting few violations, none of which were critical. to address persistent noncompliance, we Sustainability team trains global sourcing our goal to have all our Tier 1 facilities > Yellow for average performers. action a responsible exit plan and continue to employees on human rights policies and and Tier 2 strategic mills involved in > Red for those that need to address monitor the facility to address pending issues procedures, building awareness on COVC industrywide efforts by early 2023. one or more serious issues. during and following deactivation. requirements and ways to manage vendor performance. We also train and educate key vendors on how to implement measures that prevent COVC issues from arising. GOAL BY 2023/2025 PROGRESS IN 2021 100% 75% 40% By 2023, 100% of our Tier 1 facilities will of Tier 1 of Tier 2 participate in industrywide efforts, including factories are strategic SLCP and/or ILO-IFC Better Work, and 100% participating mills are of Tier 2 strategic mills will participate by 2025. participating Needs attention GOAL BY 2025 80% 68% of Gap Inc. sourcing will be allocated of our business spend is to green-rated factories allocated to green-rated On track factories
21 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE CAPABILITY BUILDING ILO-IFC Better Work Academy Gap Inc. is a founding member of the To provide safe, fair, and ILO-IFC Better Work program, which is WORKFORCE ENGAGEMENT healthy working conditions in an important partner in our key sourcing PROGRAM (WEP): A DIGITAL TOOL our supply chain, we partner markets. We also helped establish the FOR CAPABILITY BUILDING with our branded-apparel Better Work Academy, which trains staff in global apparel brands on key issues The WEP supports our capability-building suppliers and key stakeholders related to social dialogue. This enables programs in two ways: (1) the mobile through a variety of country- participating companies to deliver technology enables our suppliers to deliver specific capability-building training and consultation to factories important information and training, and programs. These approaches beyond Better Work’s scope. The (2) it provides a platform for workers to share Academy empowers facilities to make 54 feedback with facilities. catalyze improvements in improvements based on participant workers’ grievance mechanisms, feedback, with brands serving as facilities use By the end of 2021, WEP was active in 54 gender equity in leadership, advisors and partners. the Workforce facilities. We share best practices with suppliers Engagment in Vietnam, Cambodia, China, Indonesia, and safety, and well-being. The Academy has reached 441 facilities Program (WEP) Guatemala. In 2022, we plan to use WEP in in 18 countries, with eleven companies pilot programs in Bangladesh, China, and In 2021, we announced several women’s – including Gap Inc. – now participating. Indonesia to test different models for delivering empowerment goals for 2025 regarding We have actively supported its our capability-building programs, including our capability-building programs. While expansion by sharing insights and in-person, fully digital, and hybrid models. We’re the ongoing effects of COVID-19 on our providing training materials that brands also participating in an SLCP pilot to integrate supply chain partners slowed the start can customize for their own programs. worker voices using similar technologies. of this work, we have now developed strategies and key performance indicators Together with Better Work, we have for each goal (p. 12) and are in the process developed our Workplace Cooperation of collecting baseline data, starting with Program, which facilitates dialogue the last quarter of 2021. between workers and management, and our Supervisory Skills Training (SST) We seek to understand and address our program, which improves the skills of workers’ needs in the supply chain by supervisors and middle managers and learning from and sharing resources fosters gender parity in supervisory with our peers to enhance industry positions. To support all our capability- knowledge and practices. For example, building programs, we use our Workforce we have measured worker engagement Engagement Program mobile tools using Nike’s Engagement and Wellbeing (see sidebar). survey since 2019. In 2021, 32 factories collected responses.
22 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE Workplace Cooperation Program (WCP) Supervisory Skills Training (SST) Through elected committees, WCP After scaling back WCP in 2020, we SST is a three-day training program launched in 2018 with facilitates dialogue between workers ramped up the program again in 2021, Better Work that helps supervisors and middle managers and management on a variety of issues using virtual training when appropriate. improve communication skills, build good relationships, and ranging from overtime and well-being to WCP has been implemented in 241 supervise workers effectively. The reach of the program is washroom sanitation and canteen food. facilities across 12 countries since 2016, Since 2017, amplified by facilities delivering the same trainings after This program educates participants on including 65 percent of our strategic 3,361 completing Training of Trainers. Some vendors also have communication and negotiation skills to factories. We now plan to expand the their own equivalent programs, which we vet to ensure help them feel more comfortable voicing program to our strategic vendors’ owned grievances they meet or exceed Gap Inc.’s SST requirements. As a their grievances to senior management. and authorized subcontracted facilities. raised and result, an additional 25 facilities have been covered under 97% the program. resolved We use production-efficiency data and supervisor and (3,261 issues) worker surveys to measure the program’s impact. Together, within the same they help reveal the extent to which participants thought the quarter training was effective, and whether it led to any behavior change or production improvements. In our strategic facilities, women comprise a minority of supervisor positions, even though they represent the majority of our total supply chain workforce. We believe that we can support future women leaders through our 63 SST training. new facilities In 2021, we set a goal to cultivate women’s empowerment for a total of among our strategic facilities and prioritize training 228 facilities opportunities for women. We will measure this target implementing SST by assessing the percentage of factories with gender- (target: 220) equitable representation at the supervisor level, with the gender ratio reflecting that of the factory’s total workforce. Cumulative impact: 7,100 supervisors GOAL BY 2025 trained GOAL BY 2025 2021 active 100% participants: 100% of workers employed in our strategic 182 of our strategic factories will factories will have their voices heard facilities in have achieved gender parity through representative, gender- 9 countries at the supervisor level equitable workplace committees Establishing baseline Establishing baseline
23 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE Gender-Based Violence (GBV) Our GBV Prevention and Response Digital Wage Payments Prevention and Response Program focuses on training managers We work closely with partners and participate in the UN’s Over the years, our regular facility and workers as a key part of our Better Than Cash Alliance to address ongoing regulatory assessments have revealed violations strategy. In 2021, we set a goal of and infrastructure constraints on digital wage payments. related to gender-based discrimination ensuring that all our factories have We continue to prioritize digital wage payments with and harassment. We recognize that it’s GBV training, prevention, and response new Tier 1 suppliers and support financial inclusion more not enough to rely solely on auditing to systems in place by 2025. By 2023, 96% broadly by offering digital financial literacy sessions in our detect and address these issues, which we aim to ensure that all workers P.A.C.E. curriculum. is why we developed our GBV Prevention in factories where our clothes are of our eligible and Response Program with Better produced undergo GBV prevention and Tier 1 suppliers Since starting our Digital Wage Program in 2017, we have Work to help enforce our zero-tolerance response training annually. (that provided increased the share of our eligible Tier 1 suppliers that policy on physical, psychological, and data) offer offer digital wage payment systems from 68 to 96 percent sexual harassment. Looking ahead, we will further assess digital wage (which includes mobile wallets, bank accounts, debit cards, the extent to which factories have a payments and other digitally accessible methods). functioning grievance mechanism for workers to report incidents of GBV, harassment, and abuse. To have an impact beyond the facilities we work with, we are also exploring partnerships to further accelerate this work across the industry with expert organizations and other major apparel brands. GOAL BY 2025 PROGRESS IN 2021 100% 44% of our factories will have prevention of our factories have started and response management training on GBV Prevention and systems and trainings in place to Response, reaching over 231,500 address gender-based violence workers (26% of our supply chain) Establishing baseline 90% of our factories had completed gender awareness training for middle and top management
24 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE HELPING KEEP OUR SUPPLY CHAIN SAFE DURING COVID-19 Since the pandemic hit in 2020, we have taken several steps to support our supply COVID-19 RESILIENCE FUND FOR WOMEN chain partners and prioritize the health and In 2021, the Gap Foundation We became a founding partner of the safety of people working in our supply chain. continued its support of the fund in 2020, which contributes to COVID-19 Resilience Fund for a pool of investments from multiple We continue to distribute COVID-19 guidelines to our Women in Global Value Chains, sources to support local woman-led suppliers and factories and, when needed, we adapt our $250 ,000 a collaborative effort to help with organizations. In 2021, we made social and labor programs, offering virtual options that in COVID-19 resilience pandemic recovery and advance our second investment, this time ensure continuity while keeping everyone safe. funding for women long-term, systemic changes that of $250,000, while our first round build resilience for girls, women, of funding was already supporting We have also continued to enforce important COVC and communities. projects in India and Bangladesh. standards, including the provision of sick leave and other relevant benefits, functioning grievance mechanisms, requirements related to non-discriminatory employment practices and ethical practices around virus-related layoffs and furloughs. We support vaccine distribution and uptake in key sourcing markets as part of the Business Roundtable’s CEO COVID-19 Task Force. This group has mobilized the private sector to urge governments to invest in vaccine funding and get more vaccines into underserved markets. In addition, we have integrated vaccine education into the P.A.C.E. platform.
25 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE ENABLING OPPORTUNITY We believe that enabling opportunity means ensuring employees have the skills they need to build truly fulfilling careers with us. Our purpose to be Inclusive, by Design drives our work on programs that ensure diversity is a major feature of our talent pipeline.
26 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE Gap Inc. prioritizes fostering a culture “ When you shop at a store, you of equality and belonging and want to see the store team reflect developing sustainable economies. the community, and This Way ONward helps create a space where customers feel comfortable. They feel like they are being seen, their needs are being met – it’s someone from their community. They understand what product they are looking for, and that translates to sales because we have people who connect with the community.” Chantal Horton, Senior Recruiter, This Way ONward We use the assets and scale of our We do this by cultivating a workplace business to enable access to opportunities culture that meets our employees‘ HOW WE ENABLE OPPORTUNITY for the people and communities we serve. professional and personal needs. Our programs and partnerships open We also champion initiatives and ideas > This Way ONward 27 doors to underrepresented talent across that encourage volunteering and ensure > Talent Development 29 gender, race, age, and more. that we give something back to the Opportunity Hiring 30 communities and places where we > Equality & Belonging 31 In addition to developing skills, we create work and our employees live. > Employees and Community Impact 32 a sense of belonging for employees, enabling them to be part of a supportive team where they can fulfill their potential.
27 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE PROGRAM SPOTLIGHT THIS WAY ONWARD Old Navy believes that opportunity should be for all, not just the few. Through THIS WAY ONWARD TEACHES This Way ONward, Old Navy RICHARD GREENE ABOUT THE is continuing its journey to POWER OF RELATIONSHIPS become the world’s most A self-described optimist, high school inclusive brand. senior Richard Greene felt discouraged after being rejected for job after job. Old Navy has been expanding This Way He was applying for work so he could ONward since 2007 to create the next save money for college. The director generation of leaders. Through a growing of the Boys & Girls Club he attended network of partners, including Boys & encouraged him to apply for This Way Girls Clubs of America, the program ONward, and with support from his tackles systemic barriers to employment. parents, he was successful. This Way ONward provides young When Richard started work at Old people aged between 16 and 24 with Navy, he found himself surrounded by structured training and valuable a supportive team, including his store first-job experience. The program also leader, a job coach, and a “Big Sib” develops mentors’ leadership skills. coworker. Richard was in his element and enjoyed interacting with customers Research confirms that the program and sharpening his leadership skills. His works. Alumni stay with the company worries about college, and life began to twice as long as their peers, and store drop away. “Having a job you enjoy keeps managers say This Way ONward hires you present,” he said. “It helped me leave are top performers. Our latest evaluation the stress of the world behind. This Way 10 survey revealed that new hires also feel ONward really taught me not to look at a a sense of belonging at Old Navy, feel job as a job, but as an opportunity.” supported by their managers, and are excited about their work. Richard also began to see that the real “ It was satisfying to see the money in impact of work wasn’t the paycheck Find more about This Way ONward on but the people. “It was satisfying to see our website. my bank account continue to climb, the money in my bank account continue but eventually, it was more about the to climb,” he said, “but eventually, it relationships I developed with people.” was more about the relationships I developed with people.” 10. We have moved to a biennial cadence for the evaluation survey due to consistently positive results. The next evaluation is planned for 2022.
28 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE PROGRAM SPOTLIGHT GOALS BY 2025 PROGRESS IN 2021 In 2021, 37 percent (450+) This Way ONward continues to provide Old of Old Navy stores across Navy with a diverse and reliable source of 5% of Old Navy North America hired This Way talent. In 2021, 39 percent of all program 2017 0.9% ONward associates. Old Navy applicants were hired, compared with less store entry-level than 10 percent of applicants from other employees hired 2018 1.4% raised and donated a total of from This Way sources. The program also supports Gap ONward annually 2019 2.1% approximately $3.8 million for Inc.’s Equality & Belonging goal to achieve 2020 2.1% the program. diverse representation in our pipeline. On track More than 1,294 This Way ONward alumni 2021 3% To engage more people to join, Old Navy (14.6% of our total participant population has invested in high-profile storytelling since 2007) are now Gap Inc. employees, campaigns that promote the power of the majority of whom identify as people 13 mentorship. These stories explore the idea of color. that hiring for potential, not credential, is 20,000 youths THIS WAY ONWARD REACH AND GROWTH critical to expanding the talent pipeline Gap Inc. continues to integrate insights reached through and cultivating a talent strategy that and new resource tools from This Way This Way ONward11 10,672 prioritizes diversity, inclusion, equality, ONward into our talent strategy. In 10,000 and belonging. addition to hiring for potential and On track cultivating talent pipelines, we apply In one national ad campaign, basketball lessons learned to ensure we provide the superstar Magic Johnson invited right post-hire support to help entry-level 8,201 communities to “imagine a brighter future retail store employees thrive, particularly 8,000 where every kid gets a foot in the door.” those who are from underrepresented or This Way ONward Influencers have shared marginalized groups. their stories on social media, showing how 6,000 the program improved their confidence, In response to the pandemic, This Way 5,677 taught them new skills, helped them see ONward supports innovative recruitment, their potential, and enabled them to pay it hiring, and training. Tools such as virtual forward by mentoring others. career fairs, interviews, job-readiness 4,000 3,900 workshops, and volunteer and mentorship 24 In 2021, our This Way ONward alumni opportunities have helped make the 5 2,713 , advancement pilot launched. The program program accessible to more people, 2 0 aims to give members access to the including participants, field leaders, 70 2,000 , 8 1 networks, mentoring, and skills that will Old Navy leadership teams, nonprofit 14 70 , 1 1 12 , take them from their first jobs to career partners, and mentors and volunteers. 76 9 1 1 2 74 444 5 47 45 rockets. Select alumni in the U.S. and 2 Canada participated in this program, 0 which we will expand in the coming years. The value of hiring 12 2017 2018 2019 2020 2021 for potential - not Stores Youths Cumulative since 2007 credential 11. The numbers are cumulative since program launch. 12. Numbers for 2020 and 2021 are lower due to the program’s shift to Old Navy stores exclusively, as well as temporary store closures during the COVID-19 pandemic. 13. Excludes those who did not disclose their ethnicity or otherwise have not submitted one.
29 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE TALENT 2021 PROGRESS Our Future of Work model brings us DEVELOPMENT closer to our customers and each other. The model supports employees working in a combination of in-office and virtual By putting people first, we increase employee settings based on where they deliver their engagement and create business value. We best work for the customer – ultimately 2,000+ unlocking creativity, collaboration, and do this by cultivating a workplace culture and agility. We are examining every facet of providing benefits that meet the professional HQ Pulse survey the employee experience – including tools, and personal needs of our employees and participants and policies, ways of working, technology, 23,000+ store and physical workspaces – to support a their families. This includes offering financial Pulse survey culture of performance and connection, 14 incentives and designing work schedules that participants while delivering innovative work, living our give in-store staff greater stability, flexibility, values, and attracting best-in-class talent. and work-life balance. As part of our ongoing commitment to equality and belonging, we continue to With the ongoing pandemic, we continue to listen to our 95% build an inclusive leadership culture, We converted several key training employees through the Pulse survey and offer our Be You, cultivate a sense of belonging for all, programs into virtual experiences, Be Well benefits program. It includes access to counseling and average score for and foster workplace equity (read more including our Rotational Management our Be Well + Stay Connected speaker series, featuring thought “I am proud to work in our Equality & Belonging Report in Program (high-potential entry-level talent), leaders, meditation programs, and fitness classes to support here” and 89% June 2022). Leadership Essentials Program (first-time the physical and mental well-being of our people. “I intend to stay for leaders), and coaching programs for the foreseeable We tailor training programs and mid-level leaders. We continue to see our We are excited about building a better future of work that future” from resources to employees’ levels and Rotational Management Program as a Pulse survey helps Gap Inc. establish a performance culture anchored in participants needs, including investing in first-time pipeline for emerging and diverse talent, excellence, grow our purpose-led brands, and enable our leaders through mid-level leader with 64 percent Black, Latinx, and Asian employees to meet their professional aspirations. coaching and development. We provide and with 82 percent female participation. seven hours of onboarding for all new We have recently embedded ESG training Find more about how we support and develop our exceptional leaders, 44 hours of education and within the Rotational Management people on our website. cohort experience for new leaders in our Program to train our managers on the Distribution Centers; and one to six weeks issues that will define their futures. of training for our Product functions. We 8,000+ also provide individual coaching for more All of our full-time employees receive total learning than 170 of our leaders. We also continue regular performance reviews. To support courses taken to offer access to the LinkedIn Learning individual learning, we implemented the program, which offers free online courses Workday platform, which empowers 6,000+ with topics ranging from technical skills to leaders and employees with access to on LinkedIn professional development. employee and team information they need. Learning 14. A representative sample was obtained for both groups.
30 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE OPPORTUNITY HIRING TENT PARTNERSHIP assessment process. These assessments FOR REFUGEES allow candidates to provide evidence that We think it is important to hire people who we believe will bring a conviction is not related to their ability value to the organization, regardless of their background or Tent is a nonprofit with over 170 member to perform a job and let us determine experience. We see diversifying and supporting the potential companies that was launched in 2016 to whether a criminal record is specifically of our global workforce as a critical part of our 21st century job mobilize the global business community related to the position that a candidate to include refugees in their workforces. has applied for. advancement and corporate talent strategy. In 2021, Gap Inc. signed on to the Tent In April 2021, we joined the Second Chance Coalition for Afghan Refugees, Business Coalition, which promotes AWARDS a commitment to train and hire Afghan the benefits of employment and career refugees as they begin their new lives in advancement for people with criminal the U.S. In 2021, we piloted a refugee hiring records. As part of this, we participated > Bloomberg Gender-Equality Index: program at one of our Distribution Centers, in Dave’s Killer Bread’s Second Chance Included for the fourth consecutive year and we are exploring ways to expand Corporate Cohort, which further informed programs like this across our operations our work in second chance hiring with in the U.S. current leading practices and frameworks > Refinitiv: to support our hiring the best person for Named among the top 100 of the world’s most diverse We have also continued providing life the job, regardless of their conviction and inclusive companies skills education and technical training history. We also launched a pilot in to refugee women through our P.A.C.E. December 2021 with Honest Jobs, the > Corporate Equality Index: program (read more on p. 16). largest fair-chance employment platform Received a perfect score for the 16th year in a row in the U.S., with a goal of hiring and retaining individuals who were previously > Fortune Change the World: SECOND CHANCE incarcerated or justice-involved as part Athleta recognized and ranked 43rd BUSINESS COALITION of our Distribution Centers. We believe every applicant deserves an opportunity at a career with our company. STARS In 2016, Gap Inc. signed a White House In 2021, Gap Foundation, together with pledge (AP Leadership) to commit other funders, supported the development to providing individuals with criminal of workers who are skilled through records, including formerly incarcerated alternative routes (STARs). The campaign, individuals, a fair chance to participate in which will run in 2022, is aimed at helping the American economy. employers perceive STARs as individuals who represent a high-potential talent Our background screening program source with valuable skills and experience. partners with local organizations to help candidates through the individualized
31 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE EQUALITY & BELONGING At Gap Inc., our purpose is to be Inclusive, by Design. With inclusion built into our DNA, we began by hoping to bridge a generation. Today, we believe inclusion is going to change the world. Since publishing our inaugural Equality & Belonging Report in 2021, we have launched a number of initiatives and programs that support a new equality agenda for our employees, customers, and communities. OUR EMPLOYEES OUR CUSTOMERS OUR COMMUNITIES At Gap Inc., we’re committed to making space for candid It is our collective responsibility to We are optimizing our platform conversations where employees feel valued, safe, and a deep ensure that all customers are both to support and advance our most sense of belonging. Fostering an inclusive culture where employees seen and valued across our portfolio of historically marginalized communities feel a deep sense of belonging and community has been our brands. We work to create products and and help end racial inequality. Through priority since the formation of our first Equality & Belonging Group customer experiences that authentically our multi-pronged partnership strategy, 15 more than 15 years ago. reflect the diversity of our customers. we strive to support and elevate years ago we our communities by building critical formed our In 2021, we continued strategic investment in programs and Since we became a founding member awareness of what creates barriers to first Equality partnerships that support the elimination of discrimination and of Open to All in 2018, we have helped access and opportunity. Our established & Belonging harassment and that empower our employees to create an develop industry tools and resources partnerships, with organizations focused Group (EBG) inclusive, equitable, and just environment. Later in 2022, we to ensure the inclusion, safety, and on racial and social equity initiatives, plan to release our annual update on Gap Inc.’s equality and respect of all customers, employees, and work to drive our ambitions forward belonging commitments. communities. In 2021, we supported the and deliver on our commitments to the launch of the groundbreaking Inclusive communities we serve. Retail initiative, which features two new tools: the Customer Action Center, which teaches customers how to be allies and intervene when needed, and the Inclusive Retail Business Toolkit, which equips retail staff with tactics proven to mitigate racial bias.
32 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE 2021 PROGRESS led by employees in our San Francisco EMPLOYEES AND headquarters. Our annual Volunteer Rally In January, we curated a campaign in saw nearly 14,000 employees give over COMMUNITY IMPACT honor of Martin Luther King, Jr., which 60,000 hours of their time and talents included opportunities for employees to to their communities. Some contributed learn more about Dr. King and volunteer in to community projects to beautify local ways that use his legacy to inspire action. parks and beaches, while more than 450 We promote Gap Inc.’s values to This campaign also included a fundraising took part in a “closet cleanout” to highlight be a force for good in the world, element, in which Gap Inc. matched any opportunities to donate and reuse donation of $10 or more (for a total of nearly clothing. In China, 300 of our employees while our legacy of community $2,000) to the Enterprise for Youth, a job- contributed 600 volunteer hours making 30,000+ readiness training program for young gift bags for children with cancer and involvement cultivates a culture employees people in San Francisco. sorting clothes for recycling or donation. of employee engagement and volunteered in 2021 For World Water Day in March, we held Our brands also led their own activations: community impact. another Walk for Water that helped raise Athleta held two sales for employees to awareness and funds to address the shop at a discounted price from the brand’s challenges that women around the globe collection of samples, which raised $157,000 15 We provide opportunities for employees to learn and connect face accessing water. More than 7,941 for the Selvage Fund. For the sixth year with each other and their local communities, and to support social employees from nine countries completed in a row, every Old Navy store logged and environmental issues that are meaningful to them and our 266,000+ a 1.2-mile walk, a distance that represents volunteer hours with the brand, contributing company. This includes company- and employee-led activities, the average distance women around the more than 217,000 hours in 2021. rallies, events to raise awareness and money, opportunities to contributed hours world walk every day for water. For each volunteer, and more. volunteering participant, Gap Inc. pledged $12 to our In addition to these events, our global Women + Water Alliance partner team supported a variety of causes Our exempt, salaried employees are enabled to volunteer for five WaterAid, up to a total of $12,000. through donations to organizations “on the clock” hours per month, which we match through monetary supporting racial justice and equality, donations, empowering our people to support the causes they In honor of our founder Doris Fisher's 90th including $100,000 to Stop AAPI Hate and care about in ways that work best for them. birthday in August, we held the inaugural the National Coalition for Asian Pacific Doris Day of Service, with 11 events American Community Development. We are also creating 3,000+ a new employee engagement and NGOs supported by community impact direct donations DISASTER RELIEF strategy that will further integrate In 2021, The Gap Foundation provided nearly $2 million in grants to nonprofits our company values and NGOs, including $500,000 for disaster relief following the California wildfires, and ESG work to help ice storms, and power outages in Texas, and Hurricane Ida. Additionally, the employees meet foundation donated $150,000 to support team members in India during the our purpose to be More than COVID-19 pandemic. In response to the widespread damage and devastation Inclusive, by Design. $1.3M caused by a series of tornadoes in the Midwest and Southeast U.S., in December 2021, Gap Foundation made a $100,000 donation to the Center for Disaster Learn more on our Gap Inc. funded Philanthropy. This helped support the physical, emotional, and economic recovery website. donations of individuals and families impacted by this natural disaster. 15. Named after the tightly woven edge of a fabric that prevents it from unraveling or fraying, the Selvage Fund was created to support Gap Inc. employees in times of need. In 2021, the fund made over 300 grants for a total of over $250,000 to support employees during COVID-19.
33 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE ENRICHING COMMUNITIES We believe that a clean and healthy planet is a fundamental human right. Climate change and water scarcity are global challenges that transcend boundaries, affecting people and communities everywhere.
34 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE Our environmental approach centers “ We believe water is a human right and it is a on addressing climate, waste and water critical natural resource for our business. Water issues by creating more sustainable is used to cultivate and process raw materials like products. These are the issues where cotton, it is consumed in the mills and laundries we see significant potential to positively that manufacture our products, and it is used by impact people’s lives and enrich the customers to wash their clothes. Water is also critical to the health and well-being of the people world’s communities. who make our products, the majority of whom are women. That is why Gap is taking steps to reduce our water use and ensure that we are contributing to a more sustainable future.” Mark Breitbard, President and CEO of Gap Brand HOW WE ENRICH COMMUNITIES Many of our initiatives, especially around Through our work to achieve our bold water, positively impact the lives of women goals, we take steps every day, including > Water Stewardship 35 by increasing the opportunities available incorporating more sustainable practices Women + Water 36 to them and recognizing the central role into product development and partnering > Resource Efficiency and Manufacturing 37 they play in every step of the production with businesses, nonprofits, governments, Mill Sustainability Program 37 of the garments we sell. Protecting our and community organizations, to do our Water Quality Program 37 planet is fundamental to our sustainable part in building a thriving planet. Washwell™ 37 business strategy and central to our > Chemicals Management 38 company’s future. > Climate Stewardship 39 > Raw Materials and Product 42 > Circularity and Waste 44
35 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE WATER PARTNERSHIPS FOR ADVOCACY STEWARDSHIP AND INDUSTRY CHANGE We collaborate in several initiatives to In recognition of our address water scarcity, improve access efforts to manage the to water and sanitation, and support Water is essential for our business. However, the garment risks and opportunities water-saving innovation in manufacturing, industry often sources from locations where demand for related to water security, such as Water Resilience Coalition, water is high and water stress is often a major issue. we received an A- rating WASH4Work, and Ceres Connect the from CDP Water in 2021. Drops. Highlights of our additional engagements include: For this reason, much of our water Our programs and collaborations are stewardship work focuses on high-volume designed to tackle different water • World Water Day: In March 2021, Mark suppliers operating in areas of water challenges, mobilize broader business Breitbard, President and CEO of Gap risk, where we can partner to introduce action, and raise awareness of these brand, spoke at a UNGC CEO Water innovative local solutions. critical issues. We focus on three Mandate event to highlight the value interconnected areas: of water for business. By engaging with our suppliers, we can help them to implement industry 1. Women + Water (p. 36) • World Water Week: In August 2021, and Gap Inc. programs (such as our 2. Resource Efficiency and we participated in seven SIWI World Mill Sustainability and Water Quality Manufacturing (p. 37) Water Week panels. Among the areas programs) around water quality and 3. Raw Materials and Product (p. 37) covered were the business case for efficiency, so that they can meet our building community water resilience, water-savings targets. As a founding 2021 Progress how water strategy can drive strategic member of the Water Resilience Coalition, In 2021, we embarked on a water business value, partnerships to catalyze we support its ambitious 2050 goals: strategy-setting process with corporate that will serve as the foundation for innovation in water use in apparel water stewardship experts at the long-term science-based targets manufacturing, and how we’re tackling > Positive water impact in water-stressed Water Foundry. We also engaged more (SBTs) for water. the water and climate crises with more regions. than 20 leading stakeholders and water sustainable cotton sourcing. > Water-resilient value chains experts to gather feedback on our Looking forward, we plan to build > Global leadership to raise the ambition preliminary water strategy across raw upon these expert insights, our • Water Innovation Center for of water resilience materials, manufacturing, and customer strong foundation of community Apparel: Together with global textile communities through a roundtable water-resilience work from the USAID manufacturer Arvind Limited, we are We work strategically to use water more discussion facilitated by Ceres. Gap Inc. Women + Water Alliance, building an 18,000-square-foot Water efficiently in our products, especially and our water-saving practices in Innovation Center for Apparel in India. through raw material sourcing and To guide our future strategy, we are manufacturing as we pursue a path The center, due to open in 2022, will manufacturing. We aim to eliminate water working with World Wildlife Fund (WWF) to building a more water-resilient showcase water-management best contamination from chemicals, improve to concentrate our water stewardship value chain. practices and recycling technologies. awareness and access to water and activities in water-stressed regions along sanitation (particularly among women), our value chain and develop a framework Find more about our approach to and invest in opportunities to build for community water resilience. WWF is working with suppliers, our industry community water resilience and catalyze also helping us assess our macro-level partnerships, and the tools we use water innovation. water risk across our supply chain and to enhance water stewardship on set new context-based water goals our website.
36 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE PROGRAM SPOTLIGHT HIGHLIGHTS More than 47,000 women in cotton-growing communities The majority of people who make our clothes are women, and access to and trained on WASH practices 47,000 the affordability of water, sanitation, and hygiene (WASH) services is a major through P.A.C.E. in 2021 (162,000+ women trained since 2017) on WASH challenge for many women in our key sourcing countries. As women in those practices communities are largely responsible for household duties such as cooking, Prepared more than 2,100 village through P.A.C.E. cleaning, and collecting water, they bear a disproportionate burden when it action plans for water access in comes to water stress. India in collaboration with the national government and local governments We have a particular focus on India, an important location for both growing Catalyzed $6.1 million in WASH cotton and making textiles. Through the financing through more than USAID Gap Inc. Women + Water Alliance, a 31,700 micro-loans ($12.7 million public-private partnership, we collaborate in 66,100 loans since 2017) 4,100 with CARE, Water.org, WaterAid, and the Institute for Sustainable Communities More than 4,100 farmers adopted farmers to improve access to WASH services for water-stewardship best practices adopted water women in the water-stressed Ganges, as a result of water training stewardship Godavari, and Narmada river basins in Madhya Pradesh and Maharashtra, India. Following a six-month pause in work due to COVID-19, Women + Water build out the Gap Inc. community water “ From the time we have saved every day by not Alliance partners agreed to extend resilience strategy to support our 2050 walking for water, the women of the village and the initiative for an extra year, until water goals of creating positive impact January 2023. Looking ahead, we will in water-stressed regions and building I can now spend that time with our families and be using insights from this program to water-resilient value chains. take time out for ourselves, too. With the time that we have left, we work in our farms, which GOAL BY 2023 PROGRESS IN 2021 has resulted in a growth in our incomes.” Empower 2 million people - 1.5 million people reached Pooja Doriya, cotton-grower in Jamgod village in Madhya Pradesh, India including 1 million women - with with improved water access to improved drinking access since 2017, including water and sanitation 938,000+ people in 2021 On track
37 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE By the end of 2021, 99 percent of our Total savings reached 13.8 billion liters in RESOURCE Tier 1 and 91 percent of our strategic 2021 thanks to continued partnerships with Tier 2 suppliers used the Sustainable fabric mill and wet-processing partners. EFFICIENCY AND Apparel Coalition’s Higg Index 3.0 Facility For example, we’ve saved 1.7 billion liters Environmental Module self-assessment of water since 2019 through a partnership to communicate their water and energy with Arvind Limited’s Naroda denim mill, MANUFACTURING use from 2020, along with chemicals which uses reclaimed wastewater from the and waste management; 64 percent city of Ahmedabad, India. (463 facilities) verified their responses. Across our manufacturing, we aim to use all In 2021, wastewater quality tests revealed RAW MATERIALS AND PRODUCT resources in a sustainable way, ultimately that out of 53 priority denim laundries, creating more while using less. 94 percent achieved Foundational level As our brands continue to reduce or better for all Conventional parameters their individual impacts, they are also We are working to map our supply chain further upstream to better and had no detections of ZDHC MRSL contributing to Gap Inc.’s overall water understand our water impacts at the beginning of our product life (Zero Discharge of Hazardous Chemicals strategy and long-term business goals. cycle. This enables us to connect our manufacturing footprint with Manufacturing Restricted Substances For instance, they are reducing their the geographical areas where raw materials are grown. 13.8B List) parameters. water impacts through the expansion of programs such as Washwell™ for denim, Many water issues are based on local context, and with better liters of In total, 89 facilities have participated and which reduces the water used in garment visibility, we aim to enhance transparency, set more ambitious water saved completed our resource efficiency programs. finishing by at least 20 percent compared targets, and improve water impacts across our supply chain. since 2014 As COVID-19 continued to affect our supply to conventional wash methods. Gap We have mapped all preferred wet-processing facilities — chain partners, we offered flexible and brand pioneered this technology in 2016 representing 100 percent of our business for Tier 1 and about lower-cost ways to join our programs and and all Gap jeans featured in the Fall and 65 percent for Tier 2 — against the WWF Water Basin Risk report their results. Find more about our Holiday 2021 lines were made through the Assessment to help us prioritize areas of focus. partnerships to help suppliers address Washwell™ program. emissions in our Scope 3 Emissions section. Through our Mill Sustainability Program, we engage our strategic For more information on our approach to mills using key industry tools and initiatives to help us meet our In 2020, we surpassed our goal to save water-saving materials selection, see p. 42. long-term commitments. All our strategic mills must participate, 10 billion liters of water from a 2014 baseline. enabling us to align our approach with industry standards, increase transparency, and drive innovation. WATER SAVINGS PROGRAMS IN KEY SOURCING COUNTRIES We also work with the Apparel Impact Institute (Aii) on platforms and Country Programs pilots that have helped facilities reduce water use. And through Natural Resources Defense Council Clean by Design our Water Quality Program (WQP), we actively monitor and improve 1 China wastewater quality at denim laundries. The program has evolved China Mill Efficiency Program to include chemicals management, a key component of water quality Arvind Water Partnership 1 (see p. 38). 2 India 4 India Water Partnership Vietnam Improvement Program 2 5 2021 PROGRESS 3 Vietnam 3 Race to the Top In 2021, we began working with WWF and our preferred wet- 4 Pakistan IFC Partnership for Cleaner Textile (PaCT) processing suppliers to set context-based water targets and 5 Bangladesh PaCT develop water-reduction strategies for their facilities.
38 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE CHEMICALS HOW WE MANAGE CHEMICALS 1 INPUT 2 PROCESS 3 OUTPUT MANAGEMENT MANAGEMENT MANAGEMENT MANAGEMENT The selection of Adherence The outputs of better chemical to chemical apparel and footwear The retail industry is a contributor to In addition to continuing to drive implementation of the inputs and starting management best manufacturing global industrial water pollution. To reduce ZDHC MRSL and ZDHC Wastewater Guidelines, we laid materials is essential practices during include finished to reducing the use manufacturing is products and environmental impact and improve access the groundwork to increase training and capability- and discharge of critical for reducing wastewater. to clean, safe water, we aim to eliminate building opportunities for our suppliers. hazardous chemicals. both human and the discharge of hazardous chemicals environmental risks. within our supply chain. We also recognize Chemicals and Circularity the importance of safely managing and To support our circularity efforts in 2020 we joined a handling chemicals, and of identifying and study convened by Inter IKEA and H&M Group to improve scaling the use of inherently safe chemicals understanding of the chemical content of recycled textile in manufacturing. materials. We and other participating brands collected samples of post-consumer recycled fibers and tested We expect our suppliers to comply them for chemicals on the AFIRM Group RSL. The study with industry guidelines including the organizers communicated high-level findings in October Apparel and Footwear International RSL 2021. More research and work is needed to understand Management (AFIRM) Group Restricted the role of chemicals in a circular economy, but this Substances List (RSL), the ZDHC study illustrated how industry collaboration can Manufacturing Restricted Substances contribute to solutions. List (MRSL), and the ZDHC Wastewater Guidelines. Additionally, we expect priority Learn more about the study on Sustainable Brands. 16 suppliers to complete the Higg Index 1. 2. 3. 3.0 Facility Environmental Module, which, Elimination of PFC-Based Finishes among other aspects of environmental We are working to phase out chemicals of particular management, evaluates chemical inventory, concern and are on track to eliminate all PFC-based usage data and management practices. finishes from our supply chain by 2023. Our Brand R&D, Product Quality, and Mill Management teams set a Find more about our approach to baseline of fabrics with PFC-based finishes that needed chemicals management on our website. to be converted to a non-PFC-based finish or retired GOAL BY 2023 PROGRESS BY 2021 from use. These teams worked cross-functionally to define best practices, create internal procedures for ELIMINATE 2021 PROGRESS fabric conversion, and connect with chemical suppliers PFC-based <2% 38% 92% for technical support. We also maintain an internal list finishes of fabrics used of products Gap Inc. Supply Chain of acceptable non-PFC-based finishes, which we share from our across our with water- or fabrics with For more than 15 years, we have required with our suppliers. supply chain brands had stain-repellent a PFC-based our denim laundries to participate in our potentially finishes were finish were Water Quality Program, which allows On track PFC-based made using successfully us to actively monitor and improve finishes. non-PFC converted wastewater quality. based finishes or exited. compared to 7% in 2020. 16. “Priority suppliers” are all Tier 1 suppliers as well as fabric suppliers comprising at least 70 percent of fabric production.
39 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE As a member of the Science Based Targets initiative (SBTi), our CLIMATE comprehensive SBTs for reducing emissions across Scope 1 (direct emissions from company facilities from the use of natural gas, jet STEWARDSHIP fuel, etc.), Scope 2 (primarily purchased electricity), and Scope 3 (supply chain emissions from products) were approved in 2017. We have a responsibility to address climate change by To meet these targets, we have built a strategy to address In recognition emissions and invest in renewable energy projects to reduce our aligning our goals and strategies with the best science and of our efforts to Scope 1 and 2 footprint. For Scope 3 emissions, we focus on robust industry practices. At the foundation of our approach are manage the risks data collection from manufacturing facilities, product impact goals that align with the scientific consensus of the Paris and opportunities modeling, and enhanced transparency to understand and pursue related to opportunities for emissions reductions. We also work closely Agreement to pursue efforts to limit global temperature climate change, with our suppliers on programs to enhance energy efficiency and rise to less than 1.5 degrees Celsius. we received an strategy- and goal-setting around climate change, and provide A- rating from education and resources that help them set their own SBTs. CDP Climate in 2021. Find more about our approach to climate and energy stewardship on our website. GOALS BY 2030 PROGRESS IN 2021 100% renewable energy 17% of energy usage in 2020 was sourced for our company- purchased from renewable sources. operated facilities globally 2021 data will be available on our from a 2017 baseline website later this year. On track 90% reduction in Scope 1 39% reduction in Scope 1 and Scope 2 and 2 GHG emissions from emissions in 2020 from a 2017 baseline. a 2017 baseline 2021 Scope 1 and Scope 2 data will be On track available on our website later this year. 30% reduction in Scope 3 GHG 2021 Scope 3 data will be available emissions from purchased goods later this year. ATHLETA: POWERED BY RENEWABLES and services from a 2017 baseline On track As of 2021, 100 percent of Athleta’s company-operated stores in North America are offset by renewable electricity from Fern Solar, a 7.5-megawatt offsite solar project GOAL BY 2050 in North Carolina. This project began in 2018 with an agreement between Salesforce, Bloomberg, Workday, and Cox Enterprises to combine buying power and collectively act as the anchor tenant for the renewable energy project. This innovative project garnered Carbon neutral two awards: Smart Energy Decisions’ Innovation Award and the Center for Resource across our value chain Solutions’ Green Power Leadership Award.
40 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE 2021 PROGRESS Addressing Emissions: Scope 1 and 2 Apparel Impact Institute (Aii): Our Retail stores generate approximately partnership with Aii and its predecessor We are exploring climate adaptation strategies 85 percent of Gap Inc.’s direct (Scope 1 (Clean By Design) has resulted in an that mitigate the financial and physical impacts and 2) GHG emissions and are the focus emissions reduction of 56,368 metric of climate change while building business and of our operational energy program. We tons of carbon dioxide equivalents, community resilience. These include renewable continue to invest in energy-efficiency helping support our Scope 3 SBTs. programs, and have rated all stores to In 2020, Gap Inc. joined Aii’s new Carbon energy projects within our supply chain and prioritize retrofit projects and established Leadership Program, through which five accelerating the transition to raw materials protocols for new buildings. of our facilities have completed a pilot with a lower carbon footprint, such as recycled Generated over to understand their emissions reduction polyester (see more on p. 42). Our renewable energy projects, power targets and plans. 80,000 purchase agreements, and onsite The ongoing effects of COVID-19 have slowed progress on installations generated over 80,000 We also work with Aii, IDH (The megawatt hours of megawatt hours of clean energy in 2020. Sustainable Trade Initiative), and CEIA our Scope 3 supply chain energy-efficiency programs, as clean energy in 2020. These projects make us one of the largest (Clean Energy Investment Accelerator) we paused them to reduce the cost burden to our suppliers. purchasers of clean energy in the U.S. alongside other brands to identify However, our ongoing partnerships are driving meaningful retail industry. rooftop solar opportunities for facilities reductions across our Asia-based Tier 1 and Tier 2 facilities and identifying future areas of action. in Vietnam Addressing Emissions: Scope 3 Our 2021 GHG data and progress toward our 2030 goals will be The majority of our climate impacts cKinetics: We have been working with available later this year and shared on our website (ESG Resources). lie within our supply chain emissions, cKinetics to identify top mills and vendors which are directly tied to our production. to get clarity on their emissions reduction We work closely with our Product targets and strategies. We aim to collect Development teams and suppliers to more accurate facility-level data so that address material and facility emissions. we can create more robust strategies to In addition to implementing energy- help our suppliers set SBTs and support efficiency programming across our our own goals. supplier base, we are also engaging our strategic suppliers to commit to Schneider Electric: We worked with emissions reduction strategies and Schneider Electric in 2021 to conduct explore renewable energy opportunities. renewable energy opportunity assessments in key supply chain markets A strong part of our approach to reducing to identify strategies for collaboration Scope 3 emissions is partnerships with with our vendors in those regions. industry organizations that work in our key supplier markets:
41 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE TASK FORCE ON OUR EXTERNAL • UN Fashion Industry Charter for COMMITMENTS Climate Action: We are signatories We engage in advocacy with industry to the charter, which has a vision to CLIMATE-RELATED organizations to encourage policy- achieve net-zero emissions in the makers to raise their ambitions. All fashion industry by 2050. FINANCIAL of our work is driven by ambitious • Textile Exchange: We signed on to goals, public commitments, strong a letter asking global governments partnerships, and leadership from to use trade policy to incentivize DISCLOSURES (TCFD) our purpose-led brands. the fashion industry to use more • Arctic Corporate Shipping Pledge: environmentally preferred In 2019, we signed the Ocean materials, including low-carbon Conservancy’s pledge and fibers. We were also one of 50 The TCFD outlines how This year we are aligning our report to committed to never intentionally organizations that signed on to companies should report on TCFD and have outlined our governance, send ships through the Arctic’s support emissions reductions strategy, risk management, and metrics fragile ecosystem. through the sourcing of more climate-related risks and and targets for Gap Inc.’s climate-related sustainable materials. mitigation strategies. risks. See the TCFD index at the back of • EPA SmartWay Partner: In 2011, • UNGC’s Business Ambition for 1.5oC: this report for our disclosures in full; we we became a Partner of the EPA’s In 2021, we joined this campaign to also share information in our latest CDP SmartWay program, which helps ensure our current and future goals Climate Change Disclosure Response and companies advance supply chain align to a 1.5°C scenario. sustainability by measuring, the ESG Oversight section of this report. benchmarking, and improving • National Oceanic and Atmospheric freight transportation efficiency. Administration (NOAA): We • Fashion Pact: This coalition of attended a NOAA meeting in 2021 leading apparel and textile to discuss possible climate impacts companies has established a on our business, from droughts common agenda to reach 100 impacting cotton to the effect of percent renewable energy use, snowstorms on logistics. See more reduce GHG emissions, increase about our advocacy work in our biodiversity, and focus on resilient Public Policy section. development by 2050. Additionally, • We also partner on advocacy our CEO Sonia Syngal was on the for climate policy in key sourcing Pact’s steering committee in 2021. markets. For instance, together • UNFCCC: Gap Inc. has committed to with more than 20 other brands, carbon neutrality by 2050 as part we signed a call to the government of the United Nations Framework of Vietnam to simplify and expand Convention on Climate Change. access to renewable energy.
42 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE RAW MATERIALS AND PRODUCT We are committed to selecting fibers that have a lower carbon footprint, use less water, create less waste, and support PREFERRED FIBERS STRATEGY via the Open Apparel Registry on all efforts to protect biodiversity. Tier 1 suppliers, and we have more than Our preferred fibers strategy aims for 65 percent visibility into Tier 2. We focus on the materials that account for nearly all resilient supply chains that have a lower (approximately 97 percent) of our fiber consumption: impact on the environment and support In addition, our Product Development natural fibers (cotton, linen, etc.), synthetics (polyester, social well-being. We support this work teams depend on resources that allow nylon, elastane, etc.), and manufactured cellulosics by developing impact measurements them to make informed decisions (viscose, rayon, modal, etc.). that allow better decision-making about low-impact raw materials. These by our Product Development teams, resources include recorded training collaborating with our supply chain sessions, regularly updated fiber PROTECTING BIODIVERSITY 97% partners, and participating in industry consumption reports, an extensive initiatives. This strategy enables our internal Product Claims Toolkit, and a new of our fiber brands to make decisions to source more calculator that enables them to estimate A number of our environmental goals support our commitment consumption preferred fibers, especially cotton and how the selection of different fibers will to biodiversity. We also partner with nearly a dozen different is from recycled polyester. affect a product’s footprint. coalitions that are committed to protecting nature, including natural fibers, the World Resources Institute, WWF, and Textile Exchange. synthetics, and To identify preferred fibers, we use life Our brands are empowered to set their We are committed to supporting the development of SBTs manufactured on nature, and looking ahead, we plan to develop a Gap Inc. cellulosics - this cycle assessment data on indicators own raw materials goals and integrate biodiversity strategy that will help us meet them. is where we focus including global warming potential, sustainable solutions into product our preferred water use, and eutrophication, as well development, where more than 80 percent fibers strategy as evaluating biodiversity, potential for of impact decisions are made. This has circularity, chemistry, land-use change, resulted in new 2021 product lines with more and social conditions within production. sustainable product attributes, including To support this, we use industry tools such Gap Teen, Gap’s Generation Good, and as the Sustainable Apparel Coalition’s the Yeezy Gap Round Jacket; Athleta’s Higg Materials Sustainability Index (MSI) featherweight stretch with recycled poly; and Textile Exchange’s Preferred Fiber Old Navy’s sugarcane-derived EVA-foam and Material Matrix. flip flop; and Banana Republic’s recycled materials travel collection with Paravel. A critical component of our work is collaboration with our suppliers to develop Find more about our approach to sustainable fabric and manufacturing sustainable materials sourcing on processes. We report transparently our website.
43 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE 2021 PROGRESS Synthetics All our brands have committed to increasing To help streamline industry approaches and expand best practices in their sourcing of recycled polyester to at raw materials sourcing, Textile Exchange made a beta version of the least 45 percent of polyester used by 2025, Preferred Fiber and Material Matrix (based on the Gap Inc. Preferred with some brands, such as Old Navy, setting Fiber Toolkit, which we donated to Textile Exchange in 2020). an even higher target. We are also an active member of Textile Exchange’s rPET Round We also piloted the SAC’s Higg Product Environmental Module to Table and Biosynthetics Working Group, understand the impacts of selected products and sought to create which help drive industry innovation on robust estimates of environmental impacts where possible. As well more sustainable fibers. We are especially as this, we developed an internal calculator for all our brands that interested in advancing opportunities uses MSI data to provide a more holistic picture of a raw material’s around lower-impact nylon and elastane, climate and water impact for baselining and goal tracking. two critical performance fibers with few existing alternative options. As R&D evolves Natural Fibers on microfiber and microplastics shedding To achieve our goals, we take a portfolio approach to sourcing in garments, we will incorporate the latest materials in order to scale multiple options and develop fiber insights into our preferred fiber strategies. security. In addition, we work with industry partners to increase the traceability of the sustainable cotton options available to our Manufactured Cellulosics brands. For example, the Hong Kong Research Institute of Textiles We have worked closely with our fiber and Apparel Limited (HKRITA) is studying the desired hydroponic suppliers to eliminate production that farming conditions for growing extra long staple (ELS) cotton in Award at the 2022 International Exhibition of Inventions of Geneva, uses wood-derived fibers from ancient, an urban environment to enable a consistent, stable, transparent which recognizes inventions and research around the world under endangered, high conservation value, and supply of cotton in an urban environment, supporting our goals the patronage of the World Intellectual Property Organization high carbon stock forests. We continue for fiber security and traceability. This 2021 project won the Silver (WIPO), the Swiss Government, and the City of Geneva. to work with the CanopyStyle initiative to encourage global suppliers to set policies We were the first brand to sign up to the new U.S. Cotton Trust and complete audits to guarantee they are Protocol (USCTP), in 2020, and are now leading a pilot to deploy not sourcing from ancient and endangered USCTP’s platform for tracing products with U.S.-grown cotton forests in their production. We are GOALS BY 2025 PROGRESS IN 2021 through the supply chain. In partnership with technology provider also partnering with Canopy on next- TextileGenesis™, we successfully traced over 140,000 garments generation fiber sourcing, which prioritizes and will expand on this pilot in 2022. We also joined nine other alternative inputs such as recycled 17 100% of cotton sourced 79% brands on a panel dedicated to advancing traceability with textiles and waste materials. Our aim is to from more sustainable Better Cotton. consolidate our business to only work with sources of cotton was sourced suppliers that receive Canopy’s highest from more sustainable On track sources Our brands are leading the way on natural fibers. Gap has set an “green shirt” ranking, which indicates they ambitious new 2030 goal to source 100% regenerative, organic, meet the criteria for best practices in in conversion to organic, or recycled cotton and Banana Republic protecting forests. At least 45% of polyester has partnered with Arvind Limited in a multi-year investment to sourced from recycled 10% support a farm in India that is transitioning to growing certified We will continue to explore ways to sources (rPET). of polyester was organic cotton. In 2021, Banana Republic also joined the Good develop definitions and a validated ® sourced from recycled Cashmere Standard and Leather Working Group to source approach to adopting regenerative Some Gap Inc. brands have higher goals. sources responsible animal-derived materials. In addition, Banana agriculture and alternatives to fossil On track Republic also partners with the Responsible Wool Standard, while fuel-derived raw materials. Find out Athleta uses the Responsible Down Standard. more in our 2021 SASB Index. 17. Defined as: Better Cotton (formerly BCI), verified U.S.-grown cotton (USCTP), organic, in conversion (to verified organic), recycled, and regenerative.
44 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE CIRCULARITY 1. Design for Circularity 3. Advanced Resource Recovery Our brands are leading the way on We are on the steering committee of AND WASTE circularity. In 2021, Gap and Banana Accelerating Circularity, a collaborative Republic launched denim lines created for industry project. The group uses research, the Ellen MacArthur Foundation (EMF) mapping, supply chain modeling, pilot We recognize that we must address the full life cycle Jeans Redesign project. The denim projects, and more to jumpstart circular of our garments, from raw materials to end of life – was produced according to EMF’s three solutions for apparel. In 2021, Banana principles of circularity, which state Republic and Old Navy began testing and back again. that the jeans should be used more, ways to recycle fiber from the textile made to be made again, and made from waste stream into new products. We’re safe and recycled or renewable inputs. also working with Accelerating Circularity Since defining our strategy in 2020, we Insights from our experience designing to develop knowledge on textile-to-textile have been working with our partners and Four pillars form the foundation of for durability, recyclability, and circular recycling, anticipating the transition to brand teams on circularity initiatives and our work on circularity: materials were included in EMF’s Circular advanced chemical recycling techniques. goals, and all our brands have embraced Design For Fashion book, published in work that aligns with at least one pillar of December 2021. We co-founded a collaborative initiative the strategy. 1. D esign for Circularity: Giving our focused on building the circular economy design teams the tools to make for fashion in California that is planned to As part of our circularity efforts, we also choices that can positively impact 2. Materials and Manufacturing be launched in 2022. tackle different waste streams. We continue product longevity, reuse, and Together with the HKRITA, we are to reduce, eliminate, and recycle packaging recyclability (read about our developing more sustainable production waste, and have signed The Fashion Pact’s sourcing approach on p. 42). processes and technology solutions 4. Circular Business Models ® commitment on single-use plastics. that enable the industry to advance Through our partnerships with thredUP , 2. Materials and Manufacturing: circular models across the life cycle of Give Back Box, and How2Recycle, we Read more about our circularity and waste Increasing the use of safe, textiles. Firstly, HKRITA is partnering with engage customers in reselling old clothes efforts on our website. renewable, and recycled Artistic Milliners, one of our key suppliers, and donating clothes to people in need. materials, and supporting to develop an environmentally safe Gap brand customers have donated innovation in circular dissolution method to remove spandex 2,616 pounds through the Give Back Box manufacturing. from used garments. Secondly, HKRITA program since March 2021. Working with ® is working with Arvind Limited, another thredUP , which gives used clothes a 3. Advanced Resource Recovery: key supplier, to create a new method of second life, our Gap, Athleta, and Banana Supporting systems for collecting, removing indigo dye from cotton so that Republic customers sent in over 80,000 sorting, and recycling worn textiles denim waste can be more easily reused Clean Out Kits, resulting in 1.25 million into new materials for the fashion or re-dyed. items listed for resale in 2021. industry. In 2021, we signed on to the Microfibre Also in 2021, Athleta held two sample 4. Circular Business Models: Roadmap as part of our commitment sales to reduce waste and raised more Decoupling profits from the use to The Microfibre Consortium (TMC). than $157,000 for the Gap Inc. Selvage of natural resources, resulting in We are also contributing fiber samples Fund (see more on p. 9). Banana Republic new value propositions for the for a research collaboration between Vintage launched in June 2021 as a customer. TMC and the University of Leeds (U.K.) platform to resell 200+ sought-after to improve understanding of techniques heritage pieces from past collections. that reduce shedding of microplastics and microfibers in garment production.
45 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE PACKAGING WASTE AND SINGLE-USE PLASTICS We prioritize addressing plastic waste in the critical areas that account for 70 percent of our single-use plastic: hangers, polybags, shopping bags, and e-commerce mailers. Our cross-functional task force is working to find solutions for these high-impact categories, and we also invest in innovative packaging design, product labeling, and recycling systems. We continue to test solutions that take into account the fact that only a handful of U.S. municipalities are able to recycle soft plastics. These include better communication with store employees about current recycling opportunities at their location, creating in-store marketing materials with recyclability in mind, and collaboration across our vendors to reduce the size of polybags shipped to stores. GOALS BY 2030 Eliminate unnecessary and problematic After rolling out new polymailers that One of our biggest plastic-reduction plastic by 2030 contain 50 percent recycled content initiatives has been spearheaded by Old (compared to 35 percent in 2020), the Navy, which expanded its hanger-recycling Needs attention team decided to commission a life cycle program to 789 stores – about 65 percent assessment to compare the impacts and of stores – enabling the brand to divert Fashion Pact Commitments: performance of three alternatives to our 2.5 million pounds of plastic from landfill Elimination of unnecessary or problematic current mailer: paper, bio-based, and between June 2019 and November 2021. plastics in packaging to consumers by 2025, reusable. This will ensure a data-backed Old Navy has also removed all apparel and in packaging to businesses by 2030 strategy going forward. hang tags, saving approximately 190 tons of paper, and the brand saved 105 tons In 2021, we joined The Fashion Pact’s of plastic by using recycled yarns and Ensure at least half of all plastic packaging cross-brand working group to help fund label tape instead of virgin plastic. is 100% recycled content, for packaging to their research and development of paper- In addition, the brand published a goal consumers by 2025, and in packaging to based alternatives to polybags. to eliminate plastic shopping bags in U.S. businesses by 2030 and Canadaian stores by 2023.
46 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE GOVERNANCE Operating as a sustainable business today By ensuring that our business operates as ethically means creating resilience for tomorrow – and transparently as possible, we can in turn enrich communities, enable the further empowerment of for Gap Inc., and our planet and women, and create opportunity in the world around us. communities. Good governance is at the IN THIS SECTION center of how we evolve, keep pace, and ESG Oversight 47 Responsible Business Practices 49 push ourselves for change while always Stakeholder Engagement 50 Product Life Cycle 51 acting with the highest ethical values. ESG Appendix and Forward-Looking Statements 52
47 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE ESG OVERSIGHT As we integrate sustainability throughout our business, we hold ourselves accountable with our strong governance structure and management oversight approach. INTEGRATING ESG INTO OUR Bringing ESG into the SGO was designed CORPORATE STRATEGY to maximize cross-departmental collaboration, a crucial part of our ESG Our policies and sustainability frameworks team’s work. The ESG team engages a guide as as we strive to meet the broad spectrum of teams across Gap company's social and environmental goals. Inc., including our brands’ Product and We take a forward-looking approach Marketing teams and our Equality & to governance, prioritizing a structure Belonging, Human Resources, Supply that includes Board oversight facilitated Chain Strategy, Government Affairs, and enabled by the Strategic Growth Legal, and Gap Foundation teams. Office (SGO). Our robust management processes and policies are the foundation of a responsible, future-fit business. OUR OVERSIGHT STRUCTURE In 2021, Gap Inc. transformed our At Gap Inc., good governance begins GOVERNANCE AND SUSTAINABILITY COMMITTEE OF 18 GAP INC.’S BOARD OF DIRECTORS organizational structure to place the with a strong Board of Directors ESG team within Gap Inc.’s SGO, a unit that has delegated its oversight of our of the company charged with thinking Sustainability Program to its Governance beyond its core business to meet the and Sustainability Committee, which Board of Directors consumer and industry demands of the comprises independent directors. The future. The SGO brings together Gap Governance and Sustainability Committee Oversight of Gap Inc.’s ESG Program is overseen by the Governance and Sustainability Inc.’s Strategy, Environment, Social provides an independent perspective Committee of the Board of Directors, which provides regular updates to the Board & Governance, Government Affairs, on our Sustainability Program in concert of Directors regarding Gap Inc.’s sustainability programs. To assist in its oversight Corporate Development, and New with our overarching strategic objective responsibilities, the Governance and Sustainability Committee receives updates Business functions to drive sustainable and oversees our internal ESG team’s from our Chief Growth Transformation Officer. growth aligned with the company’s mission management of the Program. and values. We have established an ESG steering committee of leaders from Learn more on our website. Sally Gilligan, Chief Growth Transformation Officer critical functions across our organization. Meets with leaders across the company from Sourcing, Production, Brand and Operations, and the ESG team. 18. As of the date of this report, Gap Inc.’s Board of Directors which comprises 12 members 10 of whom are independent under NYSE rules. Five are women, and three are people of color.
48 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE MANAGEMENT APPROACH Risk Management To create long-term value for all our Each year, management and Internal Audit work together ENTERPRISE stakeholders and enable our business and to identify and assess the greatest existing and emerging RISK MANAGEMENT society to thrive for generations to come, risks that could impact the company’s operations or ability PROCESS we apply the following approach to all to achieve its objectives. our environmental and social activities: The Risk Committee, made up of leaders that represent the Internal Audit team Senior Leadership team, provides oversight of the annual conducts ERA Enterprise Risk Assessment (ERA) process: Integrate into our To ensure sustainability is a business • Senior executives and VPs provide input on risks and business imperative at Gap Inc., we have mitigations via an online questionnaire or an interview. Risk Committee embedded it into our business analyzes ERA strategy. Our ESG team works across • The Risk Committee reviews results, identifies any our brands and operations. other key risks, and prioritizes them in the appropriate quadrants based on risk exposure and mitigation Set ambitious We have set annual KPIs and long- maturity. CEO, Board of Directors and goals term goals for the company to drive Senior Leadership team our work forward, measure our • The CEO, Board of Directors, and Senior Leadership review results to monitor and progress, and ensure accountability. team use the ERA to monitor and mitigate risks, as well mitigate risks as to update policies and include in Business Continuity Measure progress We strive to always move forward Planning where required. toward our in creating long-term, sustainable ERA informs annual Internal commitments progress and delivering real benefits We also develop country-specific strategies that take into Audit Plan and ongoing to the people and communities we consideration local context, and we are setting up a new Risk Board oversight rely on for our business, which also Intelligence Office to focus on supply chain-related risks. helps our company succeed. Our approach to data and measurement Learn more on our website. ensures we capture this progress and are able to report to our stakeholders transparently in alignment with reporting frameworks such as GRI and SASB. Form partnerships By partnering with organizations with civil society, from the local to the global level, we governments, and fuel sustainable solutions, create other sectors to greater equality, and scale impact increase collective throughout our business, across our impact industry, and beyond.
50 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE HUMAN RIGHTS ENGAGEMENT STAKEHOLDER IN OUR SUPPLY CHAIN PUBLIC POLICY INVOLVEMENT ENGAGEMENT Our Supplier Sustainability and Human We believe that it is important to Rights and Labor teams are responsible participate in political and regulatory for managing and implementing our processes on issues that affect our Talking to stakeholders and establishing partnerships with human rights and labor stakeholder business and community interests. expert organizations at both global and local levels is critical engagement strategy. We work proactively to enable Gap Inc.’s strategies through public policy to our ESG strategy – as is maximizing our positive impact Supplier Relationships and government advocacy. through our programs. We regularly engage with our suppliers to advocate for human rights and drive better We also participate in political practices. To enable a clear understanding activities and advocate for legislation We regularly partner with a broad set 1. Convening industry and stakeholder of our Human Rights Policy, practices, and when there is a connection to our of stakeholders to better understand partners on systemic issues that grievance channels, we provide all relevant business and our ability to grow the the complex issues that affect them, our require collaboration. information in local languages through an business in a way that is consistent industry landscape, and society. This online platform and offer in-person and with our values, our legal obligations, dialogue helps us improve our strategies, 2. Implementing formal and virtual support wherever needed. and our Codes of Business Conduct set goals, focus our action, and scale up informal consultations with expert and Vendor Conduct. For example, industry solutions. organizations on material issues. Gap Inc. CEO Mark Breitbard met COMMUNICATING WITH WORKERS Vice President Kamala Harris at Find more about our initiatives and 3. Contributing our voice to ESG-related the White House in 2021 to discuss partner organizations on our website. policy issues through government We routinely engage with workers in policies to boost the care economy engagement. our Tier 1 supply chain through our and its impact on workers in the post- To capture feedback, respond accordingly, assessments, including formal interviews, pandemic environment. and drive improvements across our Find more about our approach and through the informal relationships business, we use several methods for to stakeholder engagement on that our teams have created with worker Additionally, in the past we have been stakeholder engagement, including: our website. representatives. We also encourage the active in policy discussions and have people who work in our supply chain to lobbied on issues related to trade, share their thoughts and experiences, tax policy, ports/infrastructure, and and we use digital technology to make environmental issues. Gap Inc. only the feedback process as easy as possible. takes positions on ballot measures, These regular check-ins enable us to learn initiatives, or propositions that have a about specific human rights issues or to direct impact on our business. mitigate any risks proactively. READ MORE In addition, we interview workers as we > Climate advocacy work in partnership develop and improve our programs focused with NOAA on workers’ rights and empowering women. > Gap Inc.’s Political Contributions disclosure in our appendix LEARN MORE > Public Engagement Policy > Human Rights > Empower@Work
51 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE 1 DESIGN AND DEVELOPMENT 7 CONSUMER USE AND CIRCULARITY Our Product Development teams are 7 We use product labeling, catalogs, C D O social media, and blog posts to educate N N trained to design and manufacture more A S A U N M N D T our customers on how they can wear, G C E I N I sustainable products, and have significant S E R R M C E P U U D L S care for, and discard their clothes to influence over who makes our clothes. O A L R E E I 1 V T reduce our products’ total environmental This enables us to address our wider E Y environmental footprint and improve working D footprint. We also engage in and conditions in facilities. See more about our contribute to industrywide solutions to assessment, water, chemicals management, reduce end-of-life impacts. See more materials, and circularity practices in our S PRODUCT 6 about our circularity in our Enriching L G Communities section. Enriching Communities and Empowering A N S R I I T Women & Human Rights sections. R S LIFE CYCLE O E E S R T T E E A A C S IL M O R Through product design, we seek W P A D to reduce our environmental footprint RAW MATERIALS AND R RETAIL STORES 2 N 6 PROCESSING (TIER 3 SUPPLIERS) 2 A and improve the human impact of our We are working to reduce our To minimize the impacts of the fibers business at every stage of a product’s environmental impact at our company- we use in our products, we place a life – from the very first design operated stores. We also run This Way special focus on cotton, and we are also ONward at our Old Navy stores, helping taking steps to source more sustainable concepts through materials young people experiencing barriers to synthetic and manufactured cellulosic sourcing, manufacture, and S N employment obtain their first jobs. See fibers. See more about our water and IC IO more about Equality & Belonging, M 3 T T climate practices in our Enriching A distribution to sale, use, IS U This Way ONward, climate, circularity, and N IB Communities section. U TE and end of life. OG R materials in our Enriching Communities F X L T A T S C I I and Enabling Opportunities sections. T LE 5 D U D R N I A N G 4 PRODUCT G N A I N H S D I N I F 3 TEXTILE MANUFACTURING 5 LOGISTICS AND DISTRIBUTION (TIER 2 SUPPLIERS) We use an optimal mix of Fabric mills use large quantities of transportation methods via sea, air, truck, energy and water, as well as chemicals and rail to move products from suppliers that may impact local watersheds if 4 PRODUCT AND FINISHING to our distribution centers, and then to not treated properly. Through our Mill (TIER 1 SUPPLIERS) stores and customers. We are working to Sustainability Program, we integrate Our comprehensive approach for conserve energy and reduce waste at our clear environmental standards into our improving working conditions in our supply distribution centers, the largest facilities sourcing decisions. See more about our chain combines facility-monitoring and we own and operate. See more about our assessment, P.A.C.E., water, chemical, capability-building programs that engage circularity and climate practices in our and climate practices in our Enriching our vendors to measure and address their Enriching Communities section. Communities and Empowering Women & environmental and social impacts. See Human Rights sections. more about our assessment, capability building, P.A.C.E., water, chemical, and climate practices in our Enriching Communities and Empowering Women & Human Rights sections.
53 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE GAP INC. 2021 GRI INDEX – 2016 UNIVERSAL STANDARDS We sought to prepare the report in reference with the Global Reporting Initiative (GRI) Standards. Note: ESG Report refers to Gap Inc.’s 2021 ESG Report; Sustainability Webpages refer to our Global Website, which hosts our Environment, Social, and Governance (ESG) Hub and Equality & Belonging Report; Annual Report refers to Gap Inc.’s Annual Report on Form 10-K for the fiscal year ended January 29, 2022; and Proxy Statement refers to the Notice of Annual Meeting of Gap Inc. Shareholders 2021 and 2022 Proxy Statements. Please find more information on our Investor Relations Webpages. GRI Indicator Description Disclosure Source Section(s) Page(s) GENERAL DISCLOSURES Organization Profile 102-1 Name of the Organization Annual Report Part I, Item 1. Business 1 102-2 Description of the organization’s activities; primary brands, Annual Report Part I, Item 1. Business 1 products, and services, including an explanation of any products or services that are banned in certain markets 102-3 Location of organization’s headquarters Annual Report Part I, Item 2. Properties 23 102-4 Location of operations: Number of countries where the Annual Report Part I, Item 2. Properties 23 organization operates, and names of countries where it has significant operations and/or that are relevant to the topics covered in the report 102-5 Nature of ownership and legal form Annual Report Part II, Item 5. Market for Registrant’s Common Equity, Related 24 Stockholder Matters and Issuer Purchases of Equity Securities 102-6 Markets served, including geographic breakdown, sectors Annual Report Part I, Item 1. Business, and Item 2. Properties 1, 23 served, and types of customers/beneficiaries 102-7 Scale of the reporting organization Annual Report Part I, Item 1. Business, and Part II, Item 7. Management’s Discussion 1, 26 and Analysis of Financial Condition and Results of Operations 102-8 Information on employees and other workers Annual Report Part I, Item 1. Business 1 Sustainability Measuring Our Progress: Employees Webpages What We’re Made Of 102-9 Describe the organization’s supply chain ESG Report Governance: Product Life Cycle 51 102-10 Significant changes regarding the organization’s size, structure, ESG Report Governance: ESG Oversight 47 ownership, or its supply chain
54 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE GRI Indicator Description Disclosure Source Section(s) Page(s) 102-11 Whether and how the organization applies the precautionary Sustainability Gap Inc. applies the precautionary principle to its use of chemicals approach or principle Webpages through testing of its products and its commitment to the elimination of PFC-based finishes. For more information, please see Chemicals Management and Responsible Business Practices. 102-12 List externally developed economic, environmental, and social Sustainability ESG Resources charters, principles, or other initiatives to which the organization Webpages Memberships and Partner Organizations. We support and base subscribes or endorses our policies on the principles outlined in the Universal Declaration of Human Rights (UDHR), the UN Global Compact (UNGC), the OECD Guidelines for Multinational Enterprises and the International Labour Organization’s (ILO) Core Conventions. 102-13 Memberships in industry or other associations, and national or Sustainability Memberships and Partner Organizations international advocacy organizations Webpages Strategy 102-14 Statement from the most senior decision-maker of the organization ESG Report The Big Picture: Our Commitment to Environmental, Social, and 4 Governance (ESG) 6 The Big Picture: Our Approach 102-15 Description of key impacts, risks, and opportunities ESG Report Governance: ESG Appendix and Forward-Looking Statements 52 Sustainability Responsible Business Practices Webpages Materiality CDP Climate Disclosure 2021 (C2.2a, C2.3a C2.4a) Ethics and Integrity 102-16 Describe the organization´s values, principles, standards and ESG Report Governance: Responsible Business Practices 49 norms of behavior Sustainability Responsible Business Practices Webpages Governance 102-18 Report the governance structure of the organization, including ESG Report Governance: ESG Oversight 47 committees of the highest governance body and committees Investor Relations Corporate Governance Fact Sheet responsible for decision-making on economic, environmental and Webpages Committee Composition social impacts 102-21 Report the processes for consultation between stakeholders and ESG Report Governance: Stakeholder Engagement 50 the highest governance body on economic, environmental, and Sustainability Responsible Business Practices social topics Webpages
55 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE GRI Indicator Description Disclosure Source Section(s) Page(s) 102-26 Report the highest governance body’s and senior executives’ roles Sustainability Management Approach in the development, approval, and updating of the organization’s Webpages purpose, value or mission statements, strategies, policies, and Investor Relations Corporate Governance Guidelines goals related to economic, environmental, and social topics Webpages 102-29 Report the highest governance body’s role in identifying and ESG Report Governance: Risk Management 48 managing economic, environmental, and social topics and Governance: ESG Oversight 47 their impacts, risks, and opportunities – including its role in the Sustainability Responsible Business Practices implementation of due diligence processes Webpages Report whether stakeholder consultation is used to support the Management Approach highest governance body’s identification and management of economic, environmental, and social topics and their impacts, risks, and opportunities 102-30 Report the highest governance body’s role in reviewing the ESG Report Governance: Risk Management 48 effectiveness of the organization’s risk management processes Sustainability Responsible Business Practices for economic, environmental, and social topics Webpages 102-32 The highest committee or position that formally reviews and ESG Report Governance: ESG Oversight 47 approves the organization’s sustainability report and ensures that all material topics are covered 102-33 Process for communicating critical concerns to the highest ESG Report Governance: ESG Oversight 47 governance body 102-38 Annual total compensation ratio Proxy Statement 2021 CEO Pay Ratio 75 Stakeholder Engagement 102-40 List of stakeholder groups engaged by the organization ESG Report Governance: Stakeholder Engagement 50 Sustainability Memberships and Partner Organizations Webpages 102-42 Basis for identification and selection of stakeholders with ESG Report Governance: Stakeholder Engagement 50 whom to engage 102-43 Approaches to stakeholder engagement, including frequency ESG Report Governance: Stakeholder Engagement 50 of engagement by type and by stakeholder group Sustainability Responsible Business Practices Webpages 102-44 Key topics and concerns that have been raised through stakeholder ESG Report Governance: Stakeholder Engagement 50 engagement, and how the organization has responded to those key Governance: ESG Appendix and Forward-Looking Statements 52 topics and concerns, including through its reporting Sustainability Materiality Webpages 102-45 List all entities included in the organization´s consolidated financial Annual Report Part I, Item 1. Business 1 statement; report whether any entity is not covered in the report Exhibit 21 'Subsidiaries of Registrant' 102-46 Process for defining report content and topic boundaries; explain ESG Report The Big Picture: About This Report 3 how the organization has implemented the Reporting Principles for defining report content
56 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE GRI Indicator Description Disclosure Source Section(s) Page(s) 102-47 List the material topics identified in the process for defining report ESG Report Governance: ESG Appendix and Forward-Looking Statements 52 content Sustainability Materiality Webpages 102-48 The effect of any restatements of information given in the previous N/A There are no restatements from the previous report. reports, and the reasons for such restatements 102-49 Significant changes from previous reporting periods in the list of ESG Report Governance: ESG Appendix and Forward-Looking Statements 52 material topics and topic Boundaries 102-50 Reporting period for information provided ESG Report The Big Picture: About This Report 3 102-51 Date of most recent previous report ESG Report The Big Picture: About This Report 3 102-52 Reporting cycle (annual, biennial, etc.) ESG Report The Big Picture: About This Report 3 102-53 Contact point for questions regarding the report or its contents ESG Report The Big Picture: About This Report 3 102-55 The GRI content index Sustainability GRI Content Index Webpages ECONOMIC Economic Performance 103-1 Management and approach Annual Report Part II, Item 7. Management’s Discussion and Analysis of Financial 26 103-2 Condition and Results of Operations 103-3 Part II, Item 7A. Quantitative and Qualitative Disclosures About 40 Market Risk 201-1 Direct economic value generated and distributed Annual Report Part II, Item 7. Management’s Discussion and Analysis of Financial 40 Condition and Results of Operations 201-2 Financial implications and other risks and opportunities due to Sustainability CDP Climate Disclosure 2021 (C2.1b, C2.2, C2.2a, C2.3, C2.3a, climate change Webpages C2.4, C2.4a, C3.1, C3.4) CDP Water Security Disclosure 2021 (W3.3b, W3.3c, W3.3d, W4.1, W4.1a, W4.2b, W4.2c, W4.3, W4.3a) Aspect: Market Presence 103-1 Management and approach Sustainability Perks & Benefits 103-2 Webpages Management Approach 103-3 Aspect: Indirect Economic Impacts 103-1 Management and approach Sustainability Materiality 103-2 Webpages 103-3 ESG Report Enabling Opportunity: Employees and Community Impact 32 Gap Inc. performs an assessment for the This Way ONward program biennally, so please refer to the 2020 Global Sustainability Report p. 25 for program participant percentage increase in skills/knowledge.
57 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE GRI Indicator Description Disclosure Source Section(s) Page(s) 203-2 Significant indirect economic impacts, including the extent of ESG Report Empowering Women: Gap Inc. P.A.C.E. 16 impacts Enabling Opportunity: This Way ONward 27 Procurement Practices 103-1 Management and approach Sustainability Materiality 103-2 Webpages Purchasing Practices 103-3 Anti-Corruption 103-1 Management and approach Sustainability Responsible Business Practices 103-2 Webpages 103-3 ESG Report Governance: Responsible Business Practices 49 To evaluate the effectiveness of Gap Inc.’s anti-corruption program, questions related to anti-corruption/anti-bribery are featured in Gap Inc.’s Code of Business Conduct (COBC) Assessments. COBC Assessments are conducted each year, with different markets/ functions identified to assess. The objective of the COBC Assessments is to gain an understanding of the impact of the COBC program. 205-1 Operations assessed for risks related to corruption We conduct Anti-Corruption Due Diligence (ACDD) in high-risk markets. Within these markets, our policy requires that any third party that interacts with government officials on behalf of Gap Inc., and/or third-party distributors, have an ACDD report. 205-2 Communication and training about anti-corruption policies Sustainability Responsible Business Practices and procedures Webpages ESG Report Governance: Responsible Business Practices 49 Gap Inc. has two internal-facing anti-corruption policies: 1) a global policy, and 2) a China Retail policy (high-risk market). Gap Inc. also has an anti-corruption training program, delivered to global directors and above, managers and above in high-risk functions, and all levels of HQ in high-risk markets (China, Mexico, and Italy). There is a separate course for the China employees, with content specific to the risks in China. This course is delivered at hire or promotion into role, and is required annually in high-risk markets and every two years globally. At times, Gap Inc. also delivers ad hoc anti-corruption training when there is opportunity (e.g. when we are traveling in market). Anti-corruption training is available to 100 percent of employees at Gap Inc.
58 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE GRI Indicator Description Disclosure Source Section(s) Page(s) ENVIRONMENTAL Materials 103 -1 Management and approach Sustainability Raw Materials and Product 103-2 Webpages Enriching Communities: Sustainable Materials Sourcing 42 103-3 ESG Report 301-1 Materials used by weight or volume 2019 2020 2021 Natural fibers Percentage of cotton: 60 54 79 more sustainable cotton* Percentage of wool: 16 11 14 recycled wool Synthetics Percentage of nylon: 7 10 10 recycled nylon Percentage of 1 6 10 polyester: recycled polyester Manufactured Percentage of 8 9 13 cellulosics cellulosics: more sustainable viscose, modal, lyocell, TENCEL™, lenzing 301-2 Recycled input materials used Gap Inc. Sustainable Fiber Sourcing: Synthetics 2019 2020 2021 Recycled nylon 7% 10% 10% Recycled polyester 1% 6% 10% 301-3 Reclaimed products and their packaging materials ESG Report Enriching Communities: Circularity and Waste 44 Sustainability Circularity and Waste Webpages Energy 103-1 Management and approach Sustainability Climate 103-2 Webpages CDP Climate Disclosure 2021 (C1.3a, C2.2, C2.2a, C2.3a, C2.4a, 103-3 ESG Report C3.2b, C3.3, C3.4, C4.3c) Enriching Communities: Climate Stewardship 39 302-1 Energy consumption within the organization Sustainability Measuring Our Progress: Environment Webpages 302-2 Energy consumption outside of the organization Sustainability Measuring Our Progress: Environment Webpages *Defined as: Better Cotton (formerly BCI), verified US-grown cotton (USCTP), organic, in-conversion (to verified organic), recycled and regenerative.
59 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE GRI Indicator Description Disclosure Source Section(s) Page(s) 302-3 Energy intensity Sustainability Measuring Our Progress: Environment Webpages 302-4 Reduction of energy consumption Sustainability Measuring Our Progress: Environment Webpages Aspect: Water 303-2 Water sources significantly affected by withdrawal of water Sustainability Water Stewardship Webpages CDP Water Security Disclosure 2021 (W3.3b, W3.3d) 303-5 Water consumption Water Consumption from Supply Chain Facilities (does not include company-operated locations such as stores, offices, or distribution centers) Sum of Gap - Total Water WWF (overall risk) ** (FEM2020) (in cubic meters) x<2.5 620,371 (2%) 2.5<=x<3.5 19,428,941 (75%) 3.5<=x<4.5 4,829,301 (19%) New facility included on Higg 1,020,027 (4%) - no data for (yet to conduct risk assessment) most of the new facilities Grand total 25,898,640 **We consider High Risk to be above 3.5, which includes sourcing countries: China, Egypt, India, Jordan, and Pakistan. Emissions 103 -1 Management and approach Sustainability Climate 103-2 Webpages CDP Climate Disclosure 2021 (C1.3a, C2.2, C2.2a, C2.3a, C2.4a, 103-3 C3.2b, C3.3, C3.4, C4.3c) ESG Report Enriching Communities: Climate Stewardship 39 305-1 Direct (Scope 1) GHG emissions Sustainability Scope 1 and 2 emissions data for fiscal 2021 will be available on Webpages our website in 2022. Our GHG data for previous years is currently available at the ESG Resources. 305-2 Energy indirect (Scope 2) greenhouse gas emissions Sustainability Scope 1 and 2 emissions data for fiscal 2021 will be available on Webpages our website in 2022. Our GHG data for previous years is currently available at the ESG Resources. 305-3 Other indirect (Scope 3) greenhouse gas emissions Sustainability Scope 3 emissions data for fiscal 2020 will be available on our Webpages website in 2022 at the ESG Resources. 305-4 GHG emissions intensity Sustainability Measuring Our Progress: Environment Webpages 305-5 Reduction of GHG emissions Sustainability CDP Climate Disclosure 2021 (C2.4a, C4.1a, C4.2a, C4.3a, C4.3b) Webpages
60 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE GRI Indicator Description Disclosure Source Section(s) Page(s) Waste 103 -1 Management and approach Sustainability Circularity and Waste 103-2 Webpages 103-3 ESG Report Enriching Communities: Circularity and Waste 44 306-2 Management of significant waste-related impacts ESG Report Enriching Communities: Circularity and Waste 44 306-3 Waste generated ESG Report Enriching Communities: Circularity and Waste 44 Gap Inc. is currently developing a data collection strategy for our waste management with the help of our waste management partner and Distribution Center Operations team, which will detail our waste generated data. 306-4 Waste diverted from disposal ESG Report Enriching Communities: Circularity and Waste 44 Gap Inc. is currently developing a data collection strategy for our waste management with the help of our waste management partner and Distribution Center Operations team, which will detail our waste diverted from disposal data. 306-5 Waste directed to disposal ESG Report Gap Inc. is currently developing a data collection strategy for our waste management with the help of our waste management partner and Distribution Center Operations team, which will detail our waste directed to disposal data. Supplier Environmental Assessment 103 -1 Management and approach Sustainability Management Approach 103-2 Webpages Assessment and Remediation 103-3 ESG Report Empowering Women: Human Rights and Social Dialogue 19 308-1 New suppliers that were screened using environmental criteria Sustainability SASB Reference Table (CG-AA-430a.2) Webpages Assessment and Remediation 308-2 Negative environmental impacts in the supply chain and Sustainability Water Stewardship actions taken Webpages Chemicals Management ESG Report Empowering Women: Assessment and Remediation 20
61 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE GRI Indicator Description Disclosure Source Section(s) Page(s) SOCIAL Employment 103-1 Management and approach Sustainability Talent Development 103-2 Webpages 103-3 ESG Report Enabling Opportunity: Talent Development 29 401-1 New employee hires and employee turnover Proxy Statement Proxy Statement 2022 401-2 Benefits provided to full-time employees that are not provided to Sustainability Talent Development temporary or part-time employees Webpages Measuring Our Progress: Employees 401-3 Parental leave Sustainability Talent Development Webpages Occupational Health and Safety 103-1 Management and approach Sustainability Talent Development 103-2 Webpages 103-3 Training and Education 103-1 Management and approach Sustainability Talent Development 103-2 Webpages This Way ONward 103-3 Enabling Opportunity: Talent Development 29 ESG Report Enabling Opportunity: This Way ONward 27 404-3 Percentage of employees receiving regular performance and Sustainability Talent Development career development reviews Webpages Measuring Our Progress: Employees 2021 Equality & Please see Gap Inc.’s 2021 Equality & Belonging Report, which Belonging Report will be made available later in 2022. Aspect: Diversity & Equal Opportunity 103-1 Management and approach Sustainability Equality & Belonging 103-2 Webpages 103-3 2021 Equality & Please see Gap Inc.’s 2021 Equality & Belonging Report, which Belonging Report will be made available later in 2022. ESG Report Enabling Opportunity: Equality & Belonging 31 405-1 Diversity of governance bodies and employees Proxy Statement 2022 Key Director Attributes 10 Sustainability Measuring Our Progress: Employees Webpages What We’re Made Of 2021 Equality & Please see Gap Inc.’s 2021 Equality & Belonging Report, which Belonging Report will be made available later in 2022.
62 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE GRI Indicator Description Disclosure Source Section(s) Page(s) 405-2 Ratio of basic salary and remuneration of women to men Sustainability Gender Equality & Empowerment Webpages ESG Report Enabling Opportunity: Talent Development 29 Non-discrimination 103-1 Management and approach Sustainability Discrimination and Harassment 103-2 Webpages 103-3 406-1 Total number of incidents of discrimination and corrective Sustainability Discrimination and Harassment actions taken Webpages Assessment and Remediation Supplier Capability Building Programs ESG Report Empowering Women: Human Rights and Social Dialogue 19 Aspect: Freedom of Association and Collective Bargaining 407-1 Operations and suppliers in which workers’ rights to exercise Sustainability Freedom of Association freedom of association or collective bargaining may be violated Webpages Policies and Approaches for Human Rights or at significant risk Child Labor 103-1 Management and approach Sustainability Assessment and Remediation 103-2 Webpages Child Labor and Young Workers 103-3 Policies and Approaches for Human Rights ESG Report Empowering Women: Human Rights and Social Dialogue 19 408-1 Operations and suppliers at significant risk for incidents of Sustainability Child Labor and Young Workers child labor Webpages Assessment and Remediation Forced or Compulsory Labor 103-1 Management and approach Sustainability Assessment and Remediation 103-2 Webpages Human Trafficking and Forced Labor 103-3 Policies and Approaches for Human Rights California Transparency In Supply Chains Act & UK Modern Slavery Act Statement ESG Report Empowering Women: Human Rights and Social Dialogue 19 409-1 Operations and suppliers identified as having significant risk for Sustainability Human Trafficking and Forced Labor incidents of forced or compulsory labor Webpages Assessment and Remediation COVC Issues at Assessed Factories
63 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE GRI Indicator Description Disclosure Source Section(s) Page(s) Human Rights Assessments 103-1 Management and approach Sustainability Assessment and Remediation 103-2 Webpages Policies and Approaches for Human Rights 103-3 ESG Report Empowering Women: Human Rights and Social Dialogue 19 Local Communities 103-1 Management and approach Sustainability Employees and Community Impact 103-2 Webpages P.A.C.E. and Empower@Work 103-3 ESG Report Enabling Opportunity: Employees and Community Impact 32 413-1 Percentage of operations with implemented local community Sustainability Measuring Our Progress: Community engagement, impact assessments and/or development programs Webpages Supplier Social Assessments 103-1 Management and approach Sustainability Assessment and Remediation 103-2 Webpages Policies and Approaches for Human Rights 103-3 ESG Report Empowering Women: Human Rights and Social Dialogue 19 414-1 Percentage of new suppliers that were screened using human Sustainability SASB Reference Table (CG-AA-430b.1) rights criteria Webpages Assessment and Remediation Gap Inc. screens 100 percent of new suppliers using human rights criteria. Learn more about our process on the above sustainability webpages. 414-2 Negative social impacts in the supply chain and actions taken Sustainability Assessment and Remediation Webpages COVC Issues at Assessed Factories ESG Report Empowering Women: Human Rights and Social Dialogue 19 Public Policy 103-1 Management and approach Sustainability Political Engagement Policy 103-2 Webpages 103-3 415-1 Political contributions Sustainability Political Engagement Policy Webpages
64 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE SUSTAINABILITY ACCOUNTING STANDARDS BOARD (SASB) INDEX The Value Reporting Foundation is an independent, private-sector standards-setting organization dedicated to enhancing the efficiency of capital markets by fostering high-quality disclosure of material sustainability information that meets investor needs. This table references the Standard for the Apparel, Accessories & Footwear industry, and select relevant disclosures from the E-Commerce and Multiline and Specialty Retailers & Distributors industries, as defined by SASB’s Sustainable Industry Classification System (SICS), with the location of that information in Gap Inc.’s 2021 ESG Report and our website. Unit of Topic Accounting Metric Category Measure Code Data Reference Apparel, Accessories & Footwear Management Description of Discussion N/A CG-AA-250a.1 Gap Inc. chemical restrictions are informed by global regulations, as well ESG Report: Chemicals of Chemicals in processes to maintain and Analysis as hazard- and risk-based considerations. They include our Restricted Management p. 38 Product compliance with Substances List (RSL) and our Manufacturing Restricted Substances List Sustainability restricted substances (MRSL). Since 2008, Gap Inc. suppliers have been expected to comply with Webpages: Chemicals regulations our RSL. Since 2015, we have asked all of our suppliers to comply with the Zero Management Discharge of Hazardous Chemicals (ZDHC) MRSL, and we are aligned with the AFIRM Group RSL. 1. Industry partnerships and standards: We partner with industry groups, including the Apparel and Footwear International RSL Management (AFIRM) Group and the Sustainable Apparel Coalition (SAC) to implement a consistent set of tools and processes to support best practices, monitor supplier performance, and encourage use of safer chemicals. 2. Supplier engagement: We communicate chemical safety and usage requirements to our suppliers in our Code of Vendor Conduct (COVC) and Mill Minimum Expectations, and we require our suppliers to acknowledge and comply with these conditions. 3. Compliance and monitoring: Through third-party testing of products, product components and wastewater effluent, as well as the use of industry data platforms, we monitor the performance of our supply chain and verify compliance with global chemical regulations and Gap Inc. chemical restrictions. Gap Inc. aligns with the AFIRM Group RSL. To learn more about this process, please see the Chemicals Management page. Discussion of Discussion N/A CG-AA-250a.2 Gap Inc. uses the following processes to assess and manage potential risks and ESG Report: Chemicals processes to assess and Analysis hazards associated with their product materials and chemicals. Management p. 38 and manage risks and/ Input Management: The selection of better chemical inputs and starting materials Sustainability or hazards associated is an essential part of reducing the use and discharge of hazardous chemicals. Webpages: Chemicals with chemicals in Process Management: Adherence to chemicals management best practices Management products during manufacturing is critical for reducing both human and environmental risks. Output Management: The outputs of apparel and footwear manufacturing include finished products as well as wastewater.
65 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE Unit of Topic Accounting Metric Category Measure Code Data Reference Environmental Percentage of (1) Quantitative Percentage CG-AA-430a.1 For more than 15 years, we have required our denim laundries to participate ESG Report: Water Impacts in the Tier 1 supplier facilities (%) in our Water Quality Program, which allows us to actively monitor and improve Stewardship p. 35 Supply Chain and (2) supplier wastewater quality. Sustainability facilities beyond In 2021, out of 53 priority denim laundries that conducted wastewater testing Webpages: Chemicals Tier 1 in compliance per the ZDHC Wastewater Guidelines, 100 percent achieved Foundational level Management with wastewater or better for all Conventional parameters and 94 percent met all ZDHC MRSL Water Stewardship discharge permits parameters. and/or contractual agreements Total % facilities meeting % meeting ZDHC Year participants Conventional parameters MRSL parameters 2020 54 94 89 2021 53 100 94 Percentage of (1) Tier 1 Quantitative Percentage CG-AA-430a.2 By the end of 2022, 99 percent of our Tier 1 and 91 percent of our strategic ESG Report: Resource supplier facilities and (%) Tier 2 suppliers completed the Sustainable Apparel Coalition’s Higg Index 3.0 Efficiency and (2) supplier facilities Facility Environmental Module (FEM) self-assessment to communicate their Manufacturing p. 37 beyond Tier 1 that water and energy use, along with chemicals and waste management from Sustainability have completed the 2020. 64 percent of facilities verified their responses. In total, 89 percent of Webpages: Chemicals Sustainable Apparel facilities participated in our resource efficiency programs. Management Coalition’s Higg Index % Tier 1 branded Water Stewardship Facility Module (Higg suppliers using % Tier 2 suppliers # verified FEM) assessment Year Higg Index FEM using Higg Index FEM responses or an equivalent environmental data 2019 97 91 n/a assessment 2020 100 70 280 2021 99 (558) 91 (147) 463 (64%) (351 Tier 1, 112 Tier 2)
66 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE Unit of Topic Accounting Metric Category Measure Code Data Reference Labor Conditions Percentage of (1) Tier 1 Quantitative Percentage CG-AA-430b.1 * 83 percent of Tier 1 branded apparel suppliers that were active for the in the Supply supplier facilities and (%) full year were audited to our COVC during the fiscal year. Chain (2) supplier facilities • 68 percent of audits were conducted by a third-party assessor, ILO-IFC beyond Tier 1 that have Better Work and SLCP. been audited to a labor • Facilities with a consistently low non-conformance rate may be assessed on code of conduct, a biennial basis; all facilities are audited prior to initial production. (3) percentage of total audits conducted by a Suppliers beyond Tier 1 audited to COVC third-party auditor • N/A As part of our Mill Sustainability Program, we communicated to our entire mill base our expectations of their social and environmental performance, which are requirements of doing business with us. % of audits conducted by third-party % Tier 1 branded assessor (ILO-IFC % of suppliers suppliers audited Better Work and beyond Tier 1 Year to COVC SLCP) audited to COVC 2019 91 34 N/A 2020 81 71 N/A 2021 83 68 N/A Priority non- Quantitative Rate CG-AA-430b.2 We use a color-coded system to rate each facility’s performance. High- Sustainability conformance rate and performing facilities with few violations, none of which were critical, are rated Webpages: associated corrective green, average performers are yellow, and those that need to address one or Assessment and action rate for more serious issues are red. As of fiscal 2021, fewer than 1 percent of facilities Remediation suppliers’ labor code of received red ratings during assessments against our COVC. conduct audits For issues open as of 2/1/2021, 84 percent of corrective action plans were resolved by 2/1/2022. 2/1/2021 5/1/2021 (3 months) 8/1/2021 (6 months) 2/1/2022 (1 year) Sourcing # of open # of open % # of open % # of open % Country issues issues resolution issues resolution issues resolution Bangladesh 231 200 13 170 26 45 81 Cambodia 309 177 43 127 59 40 87 China 209 103 51 44 79 13 94 Guatemala 52 0 100 0 100 0 100 India 550 509 7 383 30 113 79 Indonesia 155 87 44 72 54 50 68 Pakistan 78 78 0 62 21 6 92 Sri Lanka 69 68 1 59 14 10 86 United States 0 0 - 0 - 0 - Vietnam 694 560 19 284 59 90 87 Other 133 114 14 110 17 36 83 Grand Total 2480 1896 24 1311 47 403 84
67 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE Unit of Topic Accounting Metric Category Measure Code Data Reference Labor Conditions Discussion of greatest Discussion N/A CG-AA-430b.3 1. The labor practices and working conditions at the third-party suppliers that Sustainability in the Supply (1) labor and and Analysis make apparel for Gap Inc. brands can affect reputation, business continuity, Webpages: Policies Chain (2) environmental, and operating costs for our brands and the company overall. Most workers and Approaches for (continued) health, and safety risks in our supply chain are women, which is why in addition to labor practices, Human Rights in the supply chain we have strong focus on empowering women to create lasting impact. 2. Excessive overtime, fire and structural safety, and gender-based violence are high-risk supply chain issues that we have specific programs in place to address. The human rights impact of these risks can be severe, while these issues can also present operational risk to our supply chain and reputational risk to our portfolio of brands. Raw Material Discussion of Discussion N/A CG-AA-440a.1 Gap Inc. uses industry tools such as the Higg Materials Sustainability Index Sustainability Sourcing environmental and and Analysis (MSI) and Textile Exchange’s Preferred Fibers Matrix. Our holistic preferred Webpages: Raw social risks associated fibers strategy uses life cycle assessment (LCA) data on indicators including Materials and Product with sourcing priority global warming potential, water use and eutrophication, as well as evaluations ESG Report: raw materials for biodiversity, potential for circularity, chemistry, land use change, and social Sustainable Materials conditions within production. We focus our raw materials strategy on the top Sourcing p. 42 fibers that account for approximately 97 percent of our fiber consumption: CDP Water Security cotton, polyester, nylon, and manufactured cellulosic fibers. Disclosure 2021 Fabric mills and laundries use a great deal of water to dye and finish fabric, (W3.3b) which may cause issues with both water quality and quantity; these issues also affect workers and their communities. India faces a high level of water stress for some of our preferred mills and the people who work there. In addition, most of our products include some cotton, and its production affects both the environment and people. Farming and processing cotton typically involves the use of large quantities of water and chemicals, and often takes place in regions facing water and climate risks. Changes in water access and water-related events such as drought or flooding could affect the cost of cotton, which is used in the majority of Gap Inc.’s products, and other raw materials. Gap Inc.’s Supply Chain and Sourcing team monitors and responds to risks for key raw materials using a multi-factor model that includes cotton prices. The team’s work to develop and maintain a diverse supplier base across several countries reduces risk on an ongoing basis. For more information on how we evaluate water and other environmental risks in key sourcing countries, please see our CDP Water response (W3.3b). Percentage of raw Quantitative Percentage CG-AA-440a.2 2019 2020 2021 ESG Report: materials third- (%) by Sustainable Materials party certified to an weight Natural fibers Percentage of cotton: more 60 54 79 Sourcing p. 42 environmental and/ sustainable cotton* or social sustainability Percentage of wool: recycled wool 16 11 14 standard, by standard Synthetics Percentage of nylon: recycled 7 10 10 nylon Percentage of polyester: recycled 1 6 10 polyester Manufactured Percentage of cellulosics: more 8 9 13 cellulosics sustainable viscose, modal, lyocell, TENCEL™, lenzing *Defined as: Better Cotton (formerly BCI), verified US-grown cotton (USCTP), organic, in-conversion (to verified organic), recycled, and regenerative.
68 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE Unit of Topic Accounting Metric Category Measure Code Data Reference Activity Metric Number of (1) Tier Quantitative Number CG-AA-000.A As of January 29, 2022 we sourced from 705 Tier 1 branded-apparel ESG Report: Human 1 suppliers and supplier facilities, defined as direct-relationship cut-and-sew facilities and Rights and Social (2) suppliers beyond their associated embroidery, laundry and screen-printing facilities. We have Dialogue p. 19 Tier 1 mapped out 231 mill facilities (Tier 2) that represent about 65 percent of our business. # of Tier 1 branded- # of mill % of business apparel supplier facilities from mill facilities Year factories (Tier 2) (Tier 2) 2019 737 191 75 2020 659 168 66 2021 705 231 65
69 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE Unit of Topic Activity Metric Category Measure Code Data Reference E-Commerce Data Security Description of Discussion N/A CG-EC-230a.1 We do our best to provide our customers with a safe and convenient shopping Sustainability approach to identifying and Analysis experience. We have put in place a wide variety of technical and organizational Webpages: Privacy and addressing data security measures to help protect the personal information we collect about Policy security risks our customers. 2021 Proxy Statement The Board’s Audit and Finance Committee oversees data privacy and cybersecurity programs and regularly briefs the Board on material concerns. To respond to the threat of security breaches and cyberattacks, the company maintains a program designed to protect and preserve the confidentiality, integrity, and continued availability of all information owned by, or in the care of, the company. This program also includes a cyber incident response plan that provides controls and procedures for timely and accurate reporting of any material cybersecurity incident. For further information, please see Gap Inc.’s Code of Business Conduct. Employee Employee engagement Quantitative Percentage CG-EC-330a.1 2,000+ HQ Pulse survey participants and 23,000+ store Pulse survey ESG Report: Talent Recruitment, as a percentage (%) participants; 95 percent average score for “I am proud to work here” and Development p. 29 Inclusion, & 89 percent “I intend to stay for the foreseeable future” from Pulse survey Performance participants. A representative sample was obtained for both groups. This is Gap Inc.’s own survey, conducted internally. Answers are often scored on a Likert scale of 1–5 (strongly disagree -> strongly agree). Examples of questions asked in the Pulse survey include: On a scale of 1–5, to what extent do you agree with the following statements: - I am proud to work here - I believe this company operates with integrity - My manager seeks out and values my perspective How important are the following to you, and how well does Gap Inc. do this: - I am able to have flexibility in my work schedule - I work for a company with strong reputation and purpose - My company employs inspiring and effective leaders
70 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE Unit of Topic Activity Metric Category Measure Code Data Reference Product Total greenhouse gas Quantitative Metric tons CG-EC-410a.1 Upstream transportation and distribution: CDP Climate Disclosure Packaging & (GHG) footprint of (t) CO -e 2021 (C6.5) 2 2019 2020 2021 Distribution product shipments 527,081 Available later in 2022 Available in 2023 Emissions calculated using primary metric ton/km information at a haul level from Gap internal systems, multiplied by The U.K. Department for Environment, Food & Rural Affairs product transportation emission factors. This represents emissions from our suppliers to our distribution centers. Downstream transportation and distribution: 2019 2020 2021 39,413 130,604 Available later in 2022 Emissions calculated using primary metric ton/km information at a haul level from Gap internal systems, multiplied by The U.K. Department for Environment, Food & Rural Affairs product transportation emission factors. In 2020, we also began to receive additional emissions information from UPS, which represents emissions from online shipments from distribution centers to customers or from Ship-From-Store methods. The UPS data is verified by SGS. Discussion of Discussion N/A CG-EC-410a.2 Gap Inc. is a signatory of the Arctic Corporate Shipping Pledge, created in ESG Report: Climate strategies to reduce and Analysis partnership with the Ocean Conservancy; the pledge is a commitment to never Stewardship p. 27 the environmental intentionally send ships through the Arctic’s fragile ecosystem. impact of product Gap Inc. is also a member of the Environmental Protection Agency’s (EPA) delivery SmartWay Transport Partnership, an initiative which empowers businesses to move goods in the cleanest, most energy-efficient way possible to protect public health and reduce emissions. Gap Inc. was recognized by the EPA with the 2020 SmartWay Freight Partner Excellence Award. Activity Metrics Entity-defined Quantitative Number CG-EC-000.A Total Global Online Orders (excluding Franchise) measure of user FY 2019 55,872,090 activity FY 2020 86,261,667 FY 2021 83,997,807 This data includes orders placed in the United States Specialty (web and app), U.S. Factory, Canada, Japan, European Union, and United Kingdom. It does not include franchises, cancellations, or returns. Number of shipments Quantitative Number CG-EC-000.C Total Packages FY 2019 77,625,502 FY 2020 145,512,653 FY 2021 124,463,015 This data includes packages transported in the United States, Canada, European Union, and Japan.
71 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE Unit of Topic Activity Metric Category Measure Code Data Reference Multiline and Specialty Retailers & Distributors Product Discussion of Discussion N/A CG-MR-410a.3 In 2021, Gap Inc. joined a cross-brand working group initiated by The Fashion ESG Report: Circularity Sourcing, strategies to reduce and Analysis Pact to research and develop paper-based alternatives to polybags. and Waste p. 44 Packaging & the environmental After rolling out new polymailers that contain 50 percent recycled content Sustainability Marketing impact of packaging (compared to 35 percent in 2020), the team decided to commission a life cycle Webpages: Circularity assessment, assessing the impacts and performance of three alternatives and Waste to Gap Inc.’s current mailer: paper, bio-based, and reusable. This will ensure a data-backed strategy going forward. Activity Metrics Number of: (1) retail Quantitative Number CG-MR-000.A Data references end-of-year numbers FY21 10-K p. 30 locations and Retail Locations 2019 2020 2021 (2) distribution centers Company- 3,345 3,100 2,835 operated stores Franchises 574 615 564 Total area of: Quantitative Square CG-MR-000.B 2019 2020 2021 FY21 10-K p. 30 2 (1) retail space and meters (m ) Retail space FY20 10-K p. 30 (2) distribution centers (square footage) 37 million 34.6 million 33.3 million Distribution centers 3.4 million 3.2 million 3.1 million (square meters)
72 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) INDEX The inclusion of information contained in this disclosure should not be construed as a characterization regarding the materiality or financial impact of that information to investors in Gap Inc. For a discussion of risks that are material to investors in Gap Inc., please see our Annual Report on Form 10-K for the year ended January 29, 2022 filed with the Securities and Exchange Commission (SEC), and subsequent SEC filings. Given the inherent uncertainty in predicting and modeling future conditions, caution should be exercised when interpreting the information provided below. In addition, the controls, processes, practices, and infrastructures described in this disclosure are not intended to constitute any representation, warranty, or other assurance that such controls, processes, practices, and infrastructures will result in any specific outcome or result. TCFD Metrics Company Response GOVERNANCE a) Describe the board’s oversight of climate-related risks and 2021 CDP Climate Change Disclosure: (C1.1, C1.1a, C1.1b, C1.2, C1.2a) opportunities. ESG Report: Governance > Risk Management (p. 48) b) Describe management’s role in assessing and managing 2021 CDP Climate Change Disclosure: (C1.2, C1.2a, C2.2) climate-related risks and opportunities. ESG Report: Governance > Oversight Structure (p. 47) > Management Approach STRATEGY a) Describe the climate-related risks and opportunities the 2021 CDP Climate Change Disclosure: (C2.1a, C2.1b, C2.2, C2.2a, C2.3, C2.3a, C2.4a) organization has identified over the short, medium, and long term. > Materiality > Responsible Business Practices b) Describe the impact of climate-related risks and opportunities on 2021 CDP Climate Change Disclosure: (C2.3a, C2.4a, C3.1, C3.2, C3.2b, C3.3, C3.4) the organization’s businesses, strategy, and financial planning. c) Describe the resilience of the organization’s strategy, taking into 2021 CDP Climate Change Disclosure: (C2, C3.2b, C3.3) consideration different climate-related scenarios, including a Gap Inc. is planning to conduct a climate-related scenario analysis in 2022. 2°C or lower scenario.
73 2021 ESG REPORT THE BIG PICTURE EMPOWERING WOMEN ENABLING OPPORTUNITY ENRICHING COMMUNITIES GOVERNANCE TCFD Metrics Company Response RISK MANAGEMENT a) Describe the organization’s processes for identifying and 2021 CDP Climate Change Disclosure: (C2.1, C2.2, C2.2a) assessing climate-related risks. > Responsible Business Practices b) Describe the organization’s processes for managing 2021 CDP Climate Change Disclosure: (C2.1, C2.2, C2.3a, C12.1a, C12.1b) climate-related risks. > Responsible Business Practices > Materiality c) Describe how processes for identifying, assessing, and 2021 CDP Climate Change Disclosure: (C1.1b, C2.2, C2.3a) managing climate-related risks are integrated into the > Responsible Business Practices organization’s overall risk management. METRICS a) Disclose the metrics used by the organization to assess 2021 CDP Climate Change Disclosure: (C1.3a, C2.3a, C2.4a, C4.1a, C4.2a, C4.3b, C5, C6, C7, C8, C11) climate-related risks and opportunities in line with its strategy 2021 CDP Climate Change Disclosure: (W8.1a, W8.1b) and risk management process. b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 2021 CDP Climate Change Disclosure: (C4.1a, C5.1, C5.2, C6.1, C6.2, C6.3, C6.5, C.7) greenhouse gas (GHG) emissions, and the related risks. c) Describe the targets used by the organization to manage climate- 2021 CDP Climate Change Disclosure: (C4.1, C4.1a, C4.2, C4.2a) related risks and opportunities and performance against targets. 2021 CDP Climate Change Disclosure: (W8.1a, W8.1b) ESG Report: Enriching Communities > Climate Stewardship (p. 39)
2021 ESG REPORT INCLUSIVE BY DESIGN