Gap Inc.

August 9, 2019

In his role on the Global Sustainability team, Wilson is driving Gap Inc.'s strategy to increase the use of renewable energy and reduce waste across the company. 

When we publicly announced our target to reduce greenhouse gas emissions (GHG) 50% from all owned and operated facilities globally by 2020 from a 2015 baseline, it was an ambitious goal that was designed to push us well beyond our previous climate efforts. And today’s announcement that we have secured a path to achieve our 2020 goal is not the end of this work. We also introduced the next step: that Gap Inc. will reach 100% renewable energy across its global owned and operated facilities by 2030. But what did it take to get there and what does it mean for an apparel retailer like us?  

Behind the scenes and across the business we have been hard at work to achieve our target. Our 90-megawatt wind power contract, which covers the equivalent electricity use of approximately 1,500 Gap Inc. stores, is the final piece to the puzzle that will allow us to halve the emissions impact of our stores, headquarter offices, and distribution centers from our 2015 baseline. 

As we charted our path toward our 2020 target, it was intimidating. We began by incorporating LED lighting and energy management systems in all new store buildouts, and working with our store teams on ways to use less energy. These efforts are good practice, but we knew they wouldn’t be enough. Our 2020 target would force us not just to use less energy, but also to buy clean energy, and over the past 18 months, we have been doing just that. 

We’ve approached our renewable energy strategy in three parts, starting with an exploration of onsite clean energy within our distribution center network. In recent years, advancements in technology have made solar an attractive way to generate clean energy. Our distribution center (DC) in sunny Fresno, California made for an ideal location to install a 3-megawatt solar array. This project will generate over half of the facility’s energy needs. Not only will this directly reduce emissions from our DC, we also anticipate that the solar energy will significantly decrease annual electricity costs.  

While our Fresno DC project is exciting, Gap Inc. has a unique challenge to scale onsite renewable energy across a fleet of leased stores. The fact that we don’t own our sites means we lack access and control of rooftops or parking lots – the spaces most commonly used for renewable energy installations. 

To overcome this obstacle, we turned to a solution that had been pioneered by the tech industry. This structure, called a Virtual Power Purchase Agreement (VPPA), allows corporations to bring large volumes of clean energy onto the electric grid even if the facilities aren’t physically connected to a company’s operations. These projects power the electric grid with renewable energy and the contracting companies claim the emissions reduction impact of displacing dirtier power with green energy generation.  

In early 2017, we piloted the VPPA structure by joining a group of like-minded companies to sign a first-of-its-kind agreement with a North Carolina solar farm. We partnered with renewable energy leaders including Salesforce, Bloomberg, Workday, and Cox  Enterprises to combine our buying power and bring an innovative new contract structure to market. The resulting collaboration will yield 7.5 megawatts of solar energy annually for Athleta – enough to balance over 100% of the brand’s retail energy usage. The facility is under construction and will begin generating power in late 2020. 

And, today we announced the third and most impactful phase of our strategy – leveraging our size to commit to a utility scale offsite VPPA. Our 90-megawatt wind farm contract in North Dakota, called Aurora, will generate enough clean power to address nearly 50% of our North American energy usage across Gap Inc. That is equivalent to eliminating 60,000 passenger cars from the road every year, or the carbon sequestered by over 300,000 acres of forest. The construction of the project was dependent on Gap Inc.’s assurance to purchase the power from the project for the next 12 years, power that will help green the electricity grid and contribute to our national transition to a low carbon economy.  

Setting ambitious goals makes us work and think differently. In the end, our 2020 GHG emissions reduction target pushed us toward bold action to make Gap Inc. one of the largest retail apparel purchasers of clean energy in the country. Our renewable energy portfolio will place us firmly amongst the climate leaders of our industry. With achievement of our 2020 goal secured, we are proud to raise the bar again – and commit to addressing 100% of our global stores, headquarters, and distribution centers with renewable energy by 2030.  

We also recognize that the work and advocacy to transition to a low carbon economy is urgent, and we need to expand our efforts beyond our own operations. That’s why we’ve already begun the work of exploring what’s next, and you’ll be hearing from us soon about additional climate efforts focused on reducing impact in our supply chain. It’s only through commitment to bold action and innovation that we can play a role in the transition to a low carbon future.

Photo Credit: Enel Green Power’s Wind Farm

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