Operating context and strategy

Key Takeaways:

-        We believe the long-term viability of companies will depend on their ability to successfully operate in a world of finite natural resources.

-        We are working to measure and reduce our environmental impacts to protect natural resources, lessen risk, spur competitive advantage, and help drive innovation.

-        We are strengthening our environmental strategy to focus more comprehensively on our supply chain to ensure that our company thrives in a rapidly evolving business environment.

 

The landscape has changed

Our environmental initiatives are founded on the premise that we live in a world of constrained, finite natural resources, and that the long-term viability of companies will depend on the ability to do more with less.

Climate change and water scarcity have become significant risks for many industries, and they are increasingly affecting companies’ ability to operate. We recognize that in order to meet the environmental challenges of the 21st century, innovations will be required across all sectors.

As we continue to expand into new and emerging markets, environmental issues are presenting both new risks and opportunities, making our focus on environmental impacts all the more critical. These issues are global in nature; climate change and water scarcity do not observe national borders. Nor do environmental issues exist in a vacuum – environmental sustainability and human rights are deeply intertwined. In order to meet these global and systemic challenges, companies such as ours must enact programs that address the comprehensive and interconnected nature of sustainability issues.

Many trends are shaping the way companies mitigate risks and address opportunities:

–        Innovations in product development and operational efficiency.

–        Changes in the availability of the resources needed for companies to make their products.

–        Increased investor and consumer demand for sustainable practices and products.

–        Measurement and awareness of environmental impacts that can help drive innovation and efficiency.

–        Changes in the regulatory environment that require companies to mitigate their environmental impacts.

–        Increasing transparency in the global marketplace, and the ability of technology to highlight impacts that were not previously clear.

At Gap Inc., our objective is to measure and reduce our impacts on the environment in order to protect natural resources, lessen risk, spur competitive advantage, and help drive innovation. We seek to do so in a way that creates value for a wide range of stakeholders – from communities in the developing world to customers, employees, shareholders, and others affected by our business. Over the last ten years, we have made companywide advances in the following areas:

–        Supporting public policies that address the causes and effects of climate change.

–        Measuring our environmental footprint in our owned and operated facilities, as well as our supply chain.

–        Reducing our energy and water use, and working with our supplier partners to reduce their own.

–        Reducing the waste we generate in our own operations, and diverting more of it from landfill.

–        Advancing water quality and conservation initiatives in our supply chain.

–        Collaborating with stakeholders and experts to make progress toward our goals.

While we are proud of the progress we have made through our portfolio of environmental initiatives, we feel a sense of urgency to do much more. Today’s environmental challenges demand collaboration and smart risk-taking, two central principles of our approach.

Our environmental strategy to date has stemmed from carefully analyzing our environmental challenges as a global apparel retailer and taking action in the areas where we have the greatest opportunity and influence to create change. For example, while we have more direct control over our store and facility construction and our product and packaging design, we have less control over suppliers in our supply chain.

Our environmental strategy continues to be informed by the Gap Inc. Environmental Council, which is comprised of senior executives across our company. Established in 2008, the Council acts as an internal think tank with the mission to improve how our company uses resources and to reduce our environmental impacts. The Council meets quarterly to:

-        Identify and prioritize opportunities with our brands to support our environmental initiatives.

-        Engage and influence senior leadership to make decisions and execute on environmental priorities.

-        Share best practices across our brands and functions, and inform and involve employees on priorities and activities.

DAT_ENV_OurImpactontheEnvironment

Now, with more advanced tools and experience to guide us, we are bolstering our environmental strategy to focus more comprehensively on our supply chain and ensure that our company thrives in this evolving context.

"Companies are now operating in a world where the climate is changing, the global population is growing and the demands for energy, water and other natural resources are greater than ever before. We need businesses to accelerate their actions to address these constraints.  Gap Inc. is starting on this journey by acknowledging the interconnectedness of environmental, social and business sustainability, and how critical these issues are for its business success. The expectations are high for Gap Inc. to demonstrate results." – Ceres


Our strategy starts with a new vision

Our evolving strategy is based on our new vision for social and environmental responsibility at Gap Inc. to “Raise the bar by creating value for all.” This means we will seek to reduce our environmental impact and spur sustainable innovation in a way that benefits a broad group of stakeholders, including workers, communities, consumers, employees, and our company.

To learn how we assess the “materiality” of environmental issues at Gap Inc., please visit the Reporting and Materiality section of this report.

Our evolving environmental strategy leverages our strengths and requires partnership with stakeholders to address the issues most important to our company and society. It allows us to more closely measure our environmental impacts and the return on investment of our initiatives. We will continue to align our environmental initiatives with new opportunities for our business, and to build on the steps we have taken so far.

As we move forward, we are building on our longstanding commitment to human rights through our efforts to minimize and improve our environmental impact.

We are also working to more deeply integrate our human rights programs and our environmental initiatives. For example, we recognize that access to clean water is a fundamental human right as outlined in the United Nations’ Resolution 64/292, which recognizes “the human right to water and sanitation, and [acknowledges] that clean drinking water and sanitation are essential to the realization of all human rights.”  As we move forward, we will be building on our longstanding commitment to human rights through our efforts to minimize and improve our environmental impact.
As we evolve our environmental strategy, we continue to implement key initiatives to reduce our impacts on the environment. Please see the following sections of this report for more information on each:

-        Our Footprint: Learn how we measure and analyze our environmental footprint – both within our owned and operated facilities and across our supply chain.

-        Energy and Climate: We have sought to reduce our GHG emissions since 2003, and are on our way to meeting our ambitious GHG reduction goal by 2015.

-        Water: Water quality and usage are significant issues for Gap Inc., which is why we are partnering with expert stakeholders such as Conservation International and the Natural Resource Defense Council to address them.

-        Waste: Business units across Gap Inc. are working together to reduce waste in our headquarters offices, stores, and distribution centers.

-        Product: We are a founding member of the Sustainable Apparel Coalition. Having piloted the Higg Index, we are now exploring how we can integrate sustainability standards, programs, and policies throughout the design and production process.