issues (e.g., supply disruption caused by weather events) and our position and progress toward cleaner energy production and consumption. Risk Related to Resource Use: There is increasing scrutiny on the use of resources—particularly energy sources and energy use. Pressure from regulators, consumers and other stakeholders to find alternatives and/or green solutions, to sharply reduce our use of natural resources are escalating. We continue to look for ways to address these issues and continue to explore developing best practices within the industry. Through memberships in industry groups such as the Sustainable Apparel Coalition (SAC), we are working to reduce the environmental and social impact of apparel and footwear products around the world. The use of recycled material textiles emits fewer GHG emissions and conserves water and energy as compared to making virgin fiber. Additionally, we have rolled out a framework to measure the social and environmental performance of over 500 facilities, benchmarking by facility type to allow comparison of performance against that of peers. Extreme Weather Events and Natural Disasters: The risk of extreme weather events is integrated into our climate change–related Enterprise Risk Management assessment. Our business could be affected by extreme weather conditions, regional or global health pandemics or natural disasters. Extreme weather conditions, such as frequent or unusually heavy snowfall, ice storms, rainstorms or natural disasters such as wildfire over a prolonged period could make it difficult for our customers to travel to our stores and thereby reduce our sales and profitability. Our business is also susceptible to unseasonable weather conditions, which could reduce demand for a portion of our inventory and reduce sales and profitability or could result in disruption or delay of materials in our supply chain or impact staffing in our stores. Risk Management Our senior leadership team and Board of Directors are focused on managing and mitigating various risks to our business and financial performance, including climate change and other environmental risks. There are several channels through which managing climate-related risks and opportunities occur internally. The Corporate Business Resiliency Group is responsible for the development, implementation and management of the enterprise Business Continuity Program and provides direction, support and related subject matter expertise to Macy’s management teams worldwide. Macy’s also has an Enterprise Risk Management program to identify and prioritize risks as substantive to the business. At committee and Board meetings throughout the year, management discusses the risk exposures identified as being most significant to the company and the related actions that management may take to monitor such exposures. The program utilizes a network of functional experts with managerial responsibility for various aspects of enterprise risk management. The Audit Committee of the Board, in particular, discusses with management the risk assessments and risk management policies relating to a variety of risks. Metrics We track our operational energy use and related Scope 1 and Scope 2 emissions. Additionally, we calculate certain Scope 3 emissions, including from our Private Brand’s upstream product transportation and distribution. FY 2020 Energy use (MWh) Greenhouse gas emissions (mt CO 2 e) Direct energy use (Scope 1) 208,277 36,870 Purchased electricity, heat and steam (Scope 2) 1,044,130 3 6 7, 6 0 1 Private Brands upstream transportation and distribution (Scope 3) 16, 390 Scope 1 and 2 GHG Emissions (metric ton CO 2 e) 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 2016 2017 2018 2019 2020 | Sustainability Report 2020 Return to Table of Contents 20