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.