2018
GlobalSustainability
ReportOVERVIEW

STRATEGYSOCIALENVIRONMENTPRODUCT

APPENDIX

2018 Global
Sustainability Report
OVERVIEW

SOCIAL

4
5
6
7
8
8

Operations

Letter from Our CEO
2018 Highlights
Gap Inc. Goals + Progress
Brand Goals + Progress
About Gap Inc.
About this Report

19
21
25
27

TalentEquality + Belonging
Employee Engagement
This Way Ahead: First Jobs

Supply Chain

STRATEGY
10
11
12
13
14
15
16
16
16
17

Sustainability Strategy
Value Chain
Materiality
Core Sustainability Focus Areas
Management Approach
Sustainable Development Goals
Code of Business Conduct
GovernanceRisk Management
Stakeholder Engagement

29
30
36
40

Supplier Sustainability
Assessment + Remediation
Capability Building
P.A.C.E.: Empowering WomenENVIRONMENT
Supply Chain
44
52

Water Stewardship
Chemicals Management

Operations
54
55

EnergyWaste

PRODUCT
57
58
61
63

Product Sustainability
Brand Goals
Raw Materials
Circularity + End of LifeAPPENDIX
65
67

Goals + Progress Detail
SASB Reference Table

2018 GLOBAL SUSTAINABILITY REPORT

2

Overview
4

Letter from Our CEO

52018 Highlights

6

Gap Inc. Goals + Progress

7

Brand Goals + Progress

8

About Gap Inc.

8

About this ReportOVERVIEW

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APPENDIX

Letter from
Our CEO
AUGUST 2019

I’m proud to share the progress we madelast year, presented here in our 2018
Global Sustainability Report.
The report represents a tremendous
amount of dedication by our employees
and collaboration with our partners aroundthe globe. Together, we’re united by a belief
that our business can and should be aforce for good.
More than a measure of accomplishments,
this update serves as a diagnostic
inventory of the critical work ahead andtargets where we can most effect change.
We’re continually striving to protect
those who make our products, limit
our environmental impact, and foster
inclusive workplaces where everyone iswelcome – from our global offices to our
suppliers’ facilities to thousands of stores incommunities around the world.
Addressing the dire impacts of climatechange is one of our priorities. We areaccelerating work to transition our businessto a low-carbon economy. We will meet our2020 goal to halve the carbon footprintof our global owned and operated storesand offices since 2015, and are committed
to 100 percent renewable energy for thesefacilities by 2030. In addition, we’ll bemoving aggressively to partner across theindustry to respond to emissions, waste
and pollution in our supply chains.
Last year our brands expanded efforts toembed sustainability into product design
and raw materials selection. In addition toleveraging customer insights and analytics,
designers are making informed decisions
with the help of new toolkits and coursesthat deliver the products our customers
love, with less impact on the environment.
With these resources, teams can create
truly sustainable fashion with an unfetteredview into the life cycle of our garments, fromraw materials to end of life. One example
that demonstrates these design decisions
at scale is our commitment to sourcing
more sustainable cotton. Gap Inc. wasrecently named one of the “fastest moversof 2018” and ranked third on the Better
Cotton Initiative’s global ranking of top
companies sourcing by volume.
Connecting our most pressing sustainability
efforts is water, a precious natural
resource that is essential to our business.
From cotton fields to fabric production to
manufacturing, the apparel industry is anintense user of water globally. Above all,access to clean, safe water is a vital humanright. We’re partnering with organizations
to help people who are disproportionately
impacted by water insecurity and areinnovating with our suppliers to reduce theamount of water used in manufacturing.
We remain focused on advancing humanrights, addressing labor issues andsupporting the communities globally thatare affected by our business. For example,
we continue to support the advancementof women in our supply chain throughour P.A.C.E. program. In partnership with
our suppliers, we’re scaling our trainings
on worker-management dialogue andprevention of sexual harassment, expanding
our approach to fire, building and electricalsafety, and launching a three-year initiativewith the International Labour Organization
focused on improving social dialogue
and industrial relations in Bangladesh.
Underpinning all of these efforts are thecontinued gains we are making against
our goal of only sourcing product fromfactories that earn a green or yellow rating
against our Code of Vendor Conduct.
As we issue this report, we’re alsocelebrating Gap’s 50th anniversary andundergoing a significant transformation at
our company. As we work to separate into
two companies, one thing is for certain: thevalues that shape who we are and what westand for will not change.

ART PECK
CEO, GAP INC.

"The report represents
a tremendous amountof dedication by
our employees andcollaboration with ourpartners around theglobe. Together, we’reunited by a belief thatour business can andshould be a force forgood."
2018 GLOBAL SUSTAINABILITY REPORT

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APPENDIX

2018
Highlights
Expanded ourWorked with
our suppliers toDigitize
Wage
Payments

Mill
Sustainability
Program
to amplify our socialand environmental
assessments deeper
into our supply chain

3mw

Read More
p.48

Entered a

7.5mw

Solar
PPA

Solar
Virtual PPA,

(power purchasing
agreement) at our Fresno
distribution centerto source 100%
renewable energy for
Athleta's store footprint
Read More p.54

Increased our sourcingof Better Cotton,
making Gap Inc. the3RD

Largest Buyer
of BCI Cotton
Globally

Read More
p.62

80%

for garment workers,
reaching 80 percent
of facilities

Sourced almost
exclusively fromFacilities
Rated Greenor Yellow,

Read More
p.39

98%

as evaluated against our
COVC, making progess toward
our goal to eliminate sourcing
from red-rated facilities

Read More
p.30

Scaled our P.A.C.E.
program to reach

280K+
Women +
Girls

through 201817

inCountries
Read Morep.41

Saved acumulative

5.7B
Liters of
Water

in productmanufacturing
through 2018

Read More
p.46

EarnedB-CorpCertification
for Athleta +Hill City,
our newly launchedhigh-performancemenswear brandRead More
p.59

Expanded our
first-jobs program,This Way Ahead, to53

Citiesin the U.S., Canada,
UK and Japan

Read Morep.28

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APPENDIX

Gap Inc.
Goals + Progress
Holding ourselves accountable is fundamental to our approach to sustainability.
Below are key goals, our progress to date and where we are heading in the future. Alltarget years are fiscal year end. Report data is through fiscal 2018 (February 2, 2019)
unless otherwise noted. Additional detail is available in the Goals + Progress Detail (p.65).

GOAL

2018 PROGRESS% ACHIEVED

GOAL

SOCIALENVIRONMENTOPERATIONSSUPPLY CHAIN

Support $15 million in
employee-driven community
investment per year

$15.6 in employee-driven
community investment

Reach 10,000 youth throughThis Way Ahead by 2020

5,677 youth have participated inThis Way Ahead through 2018

Hire 5% of entry-level
employees from This Way
Ahead annually by 2025

1,107 entry-level hires werefrom This Way Ahead

106%

57%

28%

98% of supplier facilities
were rated yellow or green

100% of Tier 1 suppliers
transition to digital wage
payments by 2020

80% of suppliers are using digital
wage-payment mechanisms

Reach 1 million women
through P.A.C.E. by 2022

Over 280,000 women haveparticipated in P.A.C.E. through 2018

ON TRACKPROGRESSING% ACHIEVED

Save 10 billion liters of waterin manufacturing by 2020,
from a 2014 baseline

5.7 billion liters of water have beensaved by Gap Inc. suppliers through2018, from a 2014 baseline

Work toward zero dischargeof hazardous chemicals inour supply chain by 2020

Strategic facilities must comply with the ZDHC Manufacturing
Restricted Substances List (MRSL) and verify throughwastewater testing.

57%

OPERATIONSSUPPLY CHAIN
100% of supplier facilities
producing branded apparel are
rated yellow or green by 20202018 PROGRESS

Reduce GHG emissions by 50%
in our owned and operated
facilities globally by 2020,
from a 2015 baseline

18% reduction in emissions to date;signed a 3.5MW PPA and a 7.5MW
VPPA to source renewable energy

Divert 80% of waste fromlandfill across our U.S.
facilities by 2020

47% of waste was diverted fromlandfill across our U.S. facilities

18%

98%

80%

47%

PRODUCT SUSTAINABILITY (GAP INC.)
28%

Eliminate the use of woodderived fibers sourced fromancient and endangered
forests by 2020

Verified that 77% of cellulosic
fiber volume is compliant with ourcommitment; work is underway toverify the remainder

77%

NEEDS ATTENTION

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APPENDIX

Brand
Goals + Progress
GOAL2018 PROGRESS

Source 100% of cotton from
more sustainable sourcesby 202153% of cotton was from
more sustainable sources

Make 75% of qualifying products
using Washwell™ water-saving
techniques by 2021

22% of denim was made using
Washwell™ water-saving
techniques

Make 80% of materials withsustainable fibers by 2020

46% of products were madewith 30% or more sustainable
content

Make 25% of products using
water-saving techniques by
2020

4% of products were madeusing water-saving techniques

Divert 80% of store wastefrom landfill by 2020

70% of store waste wasdiverted from landfill

Empower 10,000 women
through P.A.C.E. and Fair
Trade by 2020

3,212 women participatedin P.A.C.E. or received Fair
Trade premiums

ON TRACKPROGRESSING% ACHIEVED

53%

22%

GOAL

2018 PROGRESS% ACHIEVED

Source 100% of cotton from
more sustainable sourcesby 2023

45% of cotton was from
more sustainable sources

45%

Make 50% of products withsustainable fibers by 2023

28% of products were madewith sustainable fibers

Make 50% of products using
water-saving techniques andcleaner chemistry practices inour supply chain by 2025

Reporting in progress

Source 100% of cotton from
more sustainable sourcesby 202240% of cotton was from
more sustainable sources

Make 100% of denim products
using water-saving techniquesby 202260% of Spring 2019 denim
was made using water-saving
techniques

28%

46%

4%

70%

32%

40%

60%

Banana Republic and Old Navy goals were set in 2019.
Progress is based on 2018 benchmarks.

NEEDS ATTENTION

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APPENDIXAbout
ABOUT GAP INC.

ABOUT THIS REPORTFounded in San Francisco in 1969, Gap Inc.
is a leading global retailer offering clothing,accessories and personal care products formen, women and children under the Gap,
Banana Republic, Old Navy, Athleta, Intermix,
Janie and Jack, and Hill City brands.

This report covers Gap Inc.’s global
operations for the fiscal year ending
February 2, 2019.

We have approximately 135,000 part-time andfull-time employees. Our products are available
for purchase in more than 90 countries through3,194 Company-operated stores, 472 franchise
stores and e-commerce sites (as of fiscal 2018).
Gap Inc., on February 28, 2019, announcedplans to create two independent publicly
traded companies: Old Navy, a category
leader in family apparel, and Gap Inc., which
will consist of the iconic Gap brand, Banana
Republic, Athleta, Intermix, Janie and Jack,and Hill City brands. In early 2019, Gap Inc.
purchased Janie and Jack, a leader in premiumchildren’s fashion. Gap Inc. expects to effect the
separation through a spin-off in early 2020.
Our Athleta and Hill City brands are certified
B-Corp brands, demonstrating theircommitment to using business as a force forgood by meeting rigorous standards acrosssocial and environmental performance,accountability and transparency. We haveamended Athleta's legal charter to become aDelaware Public Benefit Corporation to further
uphold the brand’s commitment to people andthe planet.

Data within covers fiscal 2018, unlessotherwise noted. Our last report covered
fiscal 2017 and is available with our otherpast sustainability reports.
This report focuses on developments
and actions for our key programs,
progress toward our corporate
and brand goals during fiscal 2018,
preparations for activities in 2019, andan analysis of trends and business
impacts where available. For ourmany programs, we provide detailed
information on objectives, operations
and our management approach at
gapincsustainability.com, which can beaccessed via links in each section.
We sought to prepare this report inaccordance with the Global Reporting
Initiative (GRI) Standards: Core option.
Gap Inc. is committed to the United
Nations (UN) Global Compact Ten
Principles and this report serves as our
Communication on Progress (CoP). We
have not obtained external assurance forthis report.
Please direct questions tosustainability@gap.com

We purchase private label and non-private
label merchandise from about 700 vendors. Our
vendors have factories in about 40 countries.
Learn More
Annual Filings
2018 GLOBAL SUSTAINABILITY REPORT

8

Strategy
10

Sustainability Strategy

11

Value Chain

12

Materiality

13Core Sustainability Focus Areas

14

Management Approach

15

Sustainable Development Goals

16

Code of Business Conduct

16

Governance16

Risk Management

17

Stakeholder Engagement

OVERVIEW

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APPENDIX

Sustainability
Strategy
We are reimagining how business can change the world.
As one of the world's leading apparel retailers, werecognize that we contribute to and have the opportunity
to address systemic social and environmental challenges.
We continue to be committed to contributing tobusiness value; enabling safe, fair working conditions
for the people who make our products; minimizing ourenvironmental impact; and working with our industry
to achieve progress on global goals. We do this byaddressing impacts in our owned and operated facilities
and collaborating throughout our value chain and acrossgovernment, business and civil society. Recognizing theimportance of engaging customers and employees, weare also communicating through our brands in our effort
to build a more sustainable world.
We have aligned our sustainability strategy with theUnited Nations (UN) Global Sustainable Development
agenda. Guided by frameworks such as the UN Guiding
Principles on Business and Human Rights, the UN
Sustainable Development Goals (SDGs) and the Paris
Agreement on climate change, we have identified theissues that are most material to our business and where
we have the most influence.

“Our commitment to sustainability benefits
our company and the communities in which
we operate. It also reduces our risk and builds
resiliency into our supply chain. When we lookholistically at the impact of our priorities, we cansee real returns on our investments in renewableenergy and GHG reductions, in building a diverse
and equitable work force, and in engaging withindustrywide initiatives.”
TERI LIST-STOLL
CHIEF FINANCIAL OFFICER, GAP INC.
2018 GLOBAL SUSTAINABILITY REPORT

10OVERVIEW

STRATEGY

Value
Chain
A garment has a whole life — both
before it reaches our stores and after
it leaves our hands and is worn by ourcustomers.
Each stage, from the first design
sketches to end of life, presents
opportunities and risks for our business,the environment and everyone who is
touched by our brands.

SOCIALENVIRONMENT

Design +Development

PRODUCT

APPENDIX

Tier 3 Suppliers

Tier 2 Suppliers

Raw Materials +Processing

TextileManufacturing

Because most of a product’s environmental
impacts are determined at the concept
phase, our designers’ creative vision
ultimately impacts people and theenvironment. As our production and sourcing
teams bring this vision to life by placing
orders with independent suppliers, they havesignificant influence over who makes ourclothes. This affords Gap Inc. the ability to
improve working conditions in facilities andaddress our larger environmental footprint.

Our products use many types of fibers —natural cellulosic fibers, like cotton and linen,
synthetic fibers, like polyester and spandex,
and pulp-based man-made cellulosic fibers,
like rayon and modal. We work to minimize thesocial and environmental impacts unique toeach fiber. We place a special focus on cotton,
given its importance to many of our products
and water-intensive production process. We
are also taking steps to ensure that we source
more sustainable synthetic and man-madecellulosic fibers.

Fabric mills use large quantities of energy
and water, and the chemicals used to dye
and finish fabrics may pose a risk to local
waterways if not treated properly. Our
Mill Sustainability Program establishes
clear environmental standards, and weare integrating those standards into oursourcing decisions. We also aim to scale
improvements across the industry by working
with our peers to identify and share bestpractices for improving the use of water,
chemicals and energy.

Our Programs• Water Stewardship (p.44)• Product Sustainability (p.57)

Our Programs• Water Stewardship (p.44)• Chemicals Management (p.52)• Product Sustainability (p.57)

Our Programs• Assessment + Remediation (p.30)• P.A.C.E.: Empowering Women (p.40)• Water Stewardship (p.44)• Chemicals Management (p.52)

Tier 1 Suppliers

Product +Finishing

Logistics +Distribution

RetailStoresWe believe in a comprehensive approach
for improving working conditions in
our supply chain, combining facility
monitoring and capability building
programs to help our suppliers
continuously improve. We also engage
closely with all of our vendors to measure
and address their environmental impact.

We ship products through a combination ofsea, air, truck and rail from supplier facilities
to our distribution centers and then on to
stores or directly to customers. We use theoptimal mix of shipping options based on
speed, cost and sustainability and havetaken steps to conserve energy and reduce
waste at our distribution centers, the largest
facilities we own and operate.

Our stores express who we are — from our style
to our commitment to operating in a way thatcares for both people and the environment.
They are where we sell our products andcommunicate directly with our employees andcustomers. As part of our owned and operated
footprint, they offer an opportunity to reduce
our environmental impact. We also run ourThis Way Ahead program at our stores to help
young people with barriers to employment
obtain their first jobs.

Our Programs• Assessment + Remediation (p.30)• Capability Building (p.36)• P.A.C.E.: Empowering Women (p.40)• Water Stewardship (p.44)• Chemicals Management (p.52)• Product Sustainability (p.57)

Our Programs• Energy (p.54)• Waste (p.55)

Our Programs• This Way Ahead: First Jobs (p.27)• Energy (p.54)• Waste (p.55)• Product Sustainability (p.57)

Consumer Use +End of Life
How our customers wear, care for and discard
their clothes accounts for a portion of our
products’ total environmental footprint. We
use product labeling, catalogs, social media
and blog posts to share our efforts to improvesustainability. This informs customers about
our work, inspires them to consider water
use in their daily lives, and communicatesthe urgency of our environmental and social
initiatives. Recognizing that we have an
opportunity to improve circularity, we joined
the Ellen MacArthur Foundation in early 2018
to explore and contribute to industrywide
solutions to end-of-life impacts.

Our Programs• Circularity + End of Life (p.63)

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APPENDIX

Materiality
We integrate sustainability deeply into
our business to create greater impact
across our value chain.
Within sustainability, materiality refers
to the areas of heightened concern
from internal and external stakeholders
compared to relevant environmental,social and governance issues. Our material
issues, viewed alongside our value chain,demonstrate focus areas where we candevelop programs more directly targetedto the areas of greatest impact.
We prioritize the opportunities andchallenges in sustainability that mattermost to our stakeholders and business.
We periodically refresh our materiality
assessment in order to:•

Identify the most material sustainability
issues for Gap Inc. in terms of businessvalue, risks and opportunities for longterm planning•

Understand how sustainability and key
business issues intersect•

Inform future sustainability
commitments and resource allocation•

Support Gap Inc.’s engagement withexternal stakeholders

MATERIAL ISSUES

Governance +Operating Context

Human Rights +Social Impact

Resource Use,
Scarcity + Impacts

Corporate GovernanceWorker Rights + Well-being

Water

Radical Transparency

Income, Wages + Inequality

Chemicals Management + ComplianceTechnology + Product Innovation

Human Capital + Development

Energy + Climate StewardshipResiliency

Diversity + Inclusion

Waste + End of LifeCountry/Regional
Legal + Economic Conditions

Reputation + Consumer Engagement

Sustainable Materials Sourcing

Our material issues fall into three
categories — governance and operating
context, human rights and social impact,
and resource use, scarcity and impacts —with 15 sustainability-related aspects thatguide our strategy.
Learn MoreMateriality

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APPENDIX

Core Sustainability
Focus Areas
We recognize that we cannot leadon every issue. Given our business
operations and strengths, weprioritize our greatest opportunities
for leadership to maximize impact.

SOCIALENVIRONMENTPRODUCT

Advancing People +Communities

Water
Stewardship

Product
Sustainability

We aim to create opportunities for the
exceptional people who support ourbusiness — employees in our stores,
workers in supplier facilities andcommunities near our operations.

Water is essential for our business andthe people and communities where we
operate. We look for ways to address
water impacts throughout our value
chain and in communities.

We are working with our productdesigners and developers to balance
the needs of getting great productinto our customers’ hands moreconsistently and faster than everbefore, while also reducing our impact
on the environment.

Improving
Supply Chain
Working Conditions

Operational
Eco-Efficiency

Gap Inc.’s sustainability materiality
assessment set our overarchingsustainability agenda and helped
establish our five core focus areas:

By partnering with our suppliers, we
strive to provide safe, fair and healthy
working conditions for the individuals
who create our clothes.

We are reducing our operational
greenhouse gas (GHG) emissions
and waste, and working with our
logistics and procurement partners to
improve efficiency and environmental
performance.

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APPENDIXManagement
ApproachGiven our company's size, we feel agreat responsibility to the planet andto the people who make our clothes.

1. Integrate sustainability
into our businessOur global scale also provides anopportunity to make a real difference.
We are doing this by supporting
long-term business performance
while creating greater equality andopportunity, developing social andenvironmental innovations that allow
people to fulfill their potential, andscaling these innovations by integratingthem into our business and products.

We create broader accountability forour sustainability strategy by creating
shared goals and targets across Gap Inc.

In addition to aligning our goals with the
UN Global Sustainable Development
agenda, we take an intentional
approach for all of our social andenvironmental programs.

2. Set ambitious goals
We focus on key indicators across thecompany so that we can measure ourprogress on delivering real benefits tothe people and communities we serve.

3. Make progress toward
our commitments
We contribute in a meaningful way tothe people and places we rely on for ourbusiness — which also helps our company
succeed.

4. Form partnerships withcivil society, governments
and other sectors toincrease collective impact
By partnering with organizations fromthe local to the global level, we deliver
impact on a bigger scale and create
long-term, sustainable progress.

“Business is undergoing a huge shift in
expectations; we have to act with integrity inall we do. It’s our job to step forward with big
ambitions, set transformative goals and prepare
for the future of retail. Sustainability is not just a
buzzword; it’s built into our business and helps us
ask the right questions as we look ahead.”
KEITH WHITEEXECUTIVE VICE PRESIDENT,GLOBAL SUSTAINABILITY, GAP FOUNDATION, AND LOSS PREVENTION, GAP INC.

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APPENDIX

Sustainable
Development Goals
The Sustainable Development Goals(SDGs) developed by the United
Nations are a blueprint to achieve a
better and more sustainable future
for all.
To meet these goals, everyone — frombusiness to government to civil society— must do their part.
After the SDGs were adopted, we
assessed Gap Inc.’s opportunities toadvance progress on the individual
targets. This assessment revealed that
our company’s sustainability effortsalign most closely with six of the goals.
While some of our programs may
contribute to other goals, we havemapped Gap Inc. initiatives and goals
against these six SDGs to demonstrate
how we are contributing to achieving
global targets.

Ensure inclusive andequitable quality
education and promote
lifelong learning

Achieve gender equality
and empower all womenand girls

Ensure access to waterand sanitation for all

Our Work• Talent• P.A.C.E.: Empowering Women• This Way Ahead: First Jobs

Our Work• Equality + Belonging• P.A.C.E.: Empowering Women• Women + Water

Our Work• Women + Water• Mill Sustainability Program• Chemicals Management

Our Goal
Hire 5% of entry-level employees
through This Way Ahead by 2025

Our Goal
Reach 1 million women through P.A.C.E.
by 2022

Our Goal
Save 10 billion liters of water inmanufacturing by 2020, from a 2014baseline

Promote inclusive andsustainable economic
growth, employment anddecent work for all

Ensure sustainableconsumption andproduction patterns

Take urgent action tocombat climate change
and its impacts

Our Work• Talent• Equality + Belonging• This Way Ahead: First Jobs
• Supplier Sustainability

Our Work• Sustainability Reporting• Waste• Chemicals Management• Product Sustainability

Our Work• Energy

Our Goal
100% of supplier facilities producing
branded apparel are rated yellow or
green by 2020

Our Goal
Source 100% of cotton from moresustainable sources by 2025

Our Goal
Reduce GHG emissions by 50% in ourowned and operated facilities globally by
2020, from a 2015 baseline
2018 GLOBAL SUSTAINABILITY REPORT

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APPENDIX

Code of Business Conduct,
Governance + Risk Management
CODE OF BUSINESS CONDUCTOur Global Code of Business Conduct(COBC) serves as our ethical compass,articulating our commitment to highstandards.
We encourage our employees to use our
open-door process for discussing concernswith their supervisor, next-level manager
or human resources representative.
Employees may also contact our Global
Integrity team, which oversees our COBC
program. We also provide a confidential
COBC hotline, email box and web portal— all of which are available 24 hours aday, seven days a week to employees andanyone who conducts business with Gap
Inc. or is affected by our business. We haveinvestigative teams that log, process andaddress complaints received through any
channel, including our COBC hotlines.
Key aspects of how we implement our
COBC:•

All employees globally are required totake a COBC overview course within 30
days of their initial hire date.

•

We provide ongoing compliancetraining to appropriate employees
on topics of nondiscriminationand harassment, wage andhour compliance, workplaceaccommodations, anti-corruption,competition law compliance, anddata privacy and security. Our Global
Integrity team also conducts generalin-person training sessions throughout
the year.

•

We provide a variety of online selfhelp tools for compliance educationand communication, including leader

tools (which guide leaders on how
to have effective conversations with
their teams), FAQs, policy links andcontacts.
••

Our Global Integrity team conducts
annual interviews with employees
in various business units or offices
and selected suppliers. These
interviews allow us to gauge how
well our employees understandour COBC, remind employees andsuppliers of their responsibilities andour expectations of how we engage
with one another, and ensure that
employees know how to report COBC
violations.
Senior-level employees must certify
their COBC compliance annually andare briefed on relevant complianceand integrity topics to raiseawareness.

We are diligent about addressing
corruption risks, particularly indeveloping countries with limited ruleof law. We have a company-wide
program for monitoring, enforcing andaddressing any issues related to our
Anti-Corruption Policy, which combines
elements from our COBC with antibribery requirements under the Foreign
Corrupt Practices Act (FCPA) and othersimilar laws around the world. The policy
and related training programs help
employees recognize and avoid corrupt
business practices in all aspects of Gap
Inc.’s business.
Learn More
Code of Business Conduct (COBC)
Policies

GOVERNANCERISK MANAGEMENTOur governance structure ensuresthat our Global Sustainability program
both meets our company’s social andenvironmental goals and supports ourbusiness.

Gap Inc. has developed systems andprocedures focused on identifying andmanaging risks, including those related tosustainability.

Gap Inc.’s Board of Directors,
particularly the Governance andSustainability Committee, oversees
our Global Sustainability program.
The board receives regular updates
from Keith White, Executive Vice
President, Global Sustainability, Gap
Foundation and Loss Prevention. He
reports directly to Gap Inc. CEO, Art
Peck, and meets regularly with our
Executive Vice President of Global
Supply Chain and Product Operations,
Shawn Curran.

Our Global Sustainability team works withbusiness partners and experts to assess
the importance of potential social andenvironmental risks and opportunities forour business and external stakeholders,
including suppliers and the people who
make our products. These include therisks that climate and environmental
impacts could pose to our business. The
team uses tools to help prioritize risks andopportunities, including a sustainability
materiality assessment, an assessment ofrepresentative products and a stakeholder
engagement process.

Our organizational structure allows
collaboration across key departments.
Our Global Sustainability team works
closely with our brands’ Productand Marketing teams, Supply Chain,
Government Affairs, Public Affairs,
Legal and Gap Foundation teams,
among others.

For these materiality and other risk
assessments, we consider such factors as
the magnitude, likelihood and time horizonof potential impacts on our business andstakeholders. We also develop countryspecific strategies that take local context
into consideration while developing ourprogram and addressing key issues.

Gap Inc.'s Environmental Council is
integral to building this alignment. The
Council is responsible for evaluating
new initiatives and reviewing progresson our existing environmental goals andprograms, particularly those related to
Gap Inc.'s overall climate-change
strategy and waste-reduction efforts.

Learn MoreOur risk management process

Learn
GovernanceMore

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APPENDIX

Stakeholder
Engagement
Advancing progress on systemic
issues in the apparel sector — suchas water access and climate change,
women’s empowerment, and safe andfair working conditions — demands
collaboration and jointly developed
solutions.
We engage stakeholders and establish
partnerships with diverse groups ofexperts and organizations to gain aclearer understanding of complex issues
and understand local conditions in the
countries where we do business. Thisdialogue helps us improve our programs,
refine strategies, reveal unexploredissues and scale industry solutions.
We have many key stakeholders: thepeople who make our clothes, ourcustomers, suppliers and factories,
employees, unions, governments,
multilateral institutions, NGOs, industry
associations, investors, communities andothers. We also belong to a number oforganizations that enable us to more
effectively collaborate with and learn
from stakeholders. Multistakeholder
initiatives bring together organizations
and people from different sectors thatplay a key role in finding new approaches
and creating collective action.

“To create the change
we’re after, we can’t
do this work alone.
We partner withorganizations large
and small to makethis work happen. The
United Nations is one ofthem. For years, we’ve
supported the UN
Global Compact and its
guiding principles.”ART PECK
CEO, GAP INC.

Learn MoreOur stakeholder-engagement approach
A full list of our initiatives and theorganizations we partner with2018 GLOBAL SUSTAINABILITY REPORT

17

SocialOperations
19

Talent21

Equality + Belonging

25 Employee Engagement
27 This Way Ahead: First Jobs
Supply Chain
29 Supplier Sustainability
30

Assessment + Remediation

36

Capability Building

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APPENDIX

TalentOur business success depends on our people.
We cultivate a culture that attracts and engages
talented employees and gives them opportunities
to achieve their work and life goals, and we provide
programs and customized experiences to help our
people achieve their full potential.
Our talent practices are aimed at developing adiverse pipeline of employees, giving individuals newchallenges to help them grow into new roles withgreater responsibility, and cultivating great leaders who
can build great teams. We believe in our employees’
potential and provide myriad career opportunities for
those who want to learn and grow with us.
Learn More
How we help our employees realize their potential

OUR APPROACH
Our workplace culture and benefits aredesigned to meet the professional andpersonal needs of our employees andtheir families.
Over the years, we have built on our
foundation of putting people first. This
includes improving wages and schedulingpractices so that the people who work in
our stores experience greater stability andflexibility, as well as financial incentives,
work-life integration and benefits that
help employees make the most of theirprofessional and personal lives. This
supports employees and increases their
engagement at work, which contributes
value to our business.
In 2018, we invested in a few critical areas
to develop talent, understand employee
engagement and enhance flexibility forour people.

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APPENDIX

Talent
BUILDING TALENT
In 2018, we expanded the Gap Inc. talent
map to help provide all of our employees– professionals, managers, directors
and executives – with opportunities fordevelopment. These tiered focuses meet
individual contributors and leaders where
they are on their professional journey,
providing development programs tailoredto their needs.
Our learning and development programs
reach the following employees:
•
•

•
•

•

Individuals: helping them to be leaders
at any level, even if they are not directly
managing other people
New Managers: helping newly hired or
promoted managers understand theprinciples of sound leadership as they
begin to manage others for the firsttime
Managers: helping existing managers
deliver ongoing results througheffective leadership and management
Directors: helping people who havemultiple years of leadership experience
improve how they “lead leaders” anddrive results for their teams
Executives: helping experienced
leaders enhance their skills in leading
multifunctional, diverse global teams todrive results at the enterprise level

Our enterprise learning efforts are open to
all HQ employees and combine classroombased experiences with virtual learning,
homework, hands-on workshops andcontinual learning opportunities.

The company offers over 12,000 coursesthat we create, manage or have access to,covering a range of subjects, including goal
setting, how to be a great boss, situational
leadership, unconscious bias and inclusive
leadership, how to have powerfulconversations, and many more.
By delivering best-in-class training, ouraim is to inspire and engage Gap Inc.
talent through a consistent framework thatempowers employees to drive their work
forward while building strong relationships.

GREAT BOSSES
We know that one of the primary reasonspeople stay in their jobs is because they
have great bosses. Great bosses build
great teams, and great teams contribute
great value to the company. We focus ondeveloping our leaders’ ability to connect,
listen to feedback and continuously
improve.
As part of our talent development
investments in 2018, we rolled out aprogram dedicated to creating andcelebrating great-boss moments. This
campaign focused on 10 practical ways ourpeople can “boss better,” from rewarding
successes to being honest, curious, andopen-minded to understanding that
progress is better than perfection.
Additionally, we launched the Great Boss
Survey, a vehicle for managers to getactionable feedback directly from thepeople they lead. In the spirit of continuous
improvement, we conduct this survey
twice a year and the results go directly to
managers.

EMPLOYEE OPINION SURVEY
To understand the needs of ouremployees, Gap Inc. conducted acompany-wide opinion survey in 2018 tomeasure our employees’ sentiments andengagement across the entire talent life
cycle. This survey is a critical componentof our continuous listening strategy:
We use the insights to understandwhat’s important to our employees andto indicate where we should focus ourinvestments and build new programs andstrategies that help us create a thriving,productive work environment.

62%
of Employees
Responded(approximately 84,000)

EXPANDED PARENTAL-LEAVEPOLICYWe are proud that Gap Inc. has become
one of the top employers in the U.S; we’vebeen recognized as one of Businessof Fashion’s Best Companies to WorkFor. One of the ways we have achieved
this status is by continually making
investments in programs and benefits
that will have a positive impact on our
employees’ well-being.

In 2018, we expanded our parental leave
benefits to allow parents more time forbonding: We provide 12 weeks of leave (sixweeks at 100 percent of pay and six weeks
at 50 percent of pay) to support employeeswith new family members, regardless of
how those families are formed. This benefit
is now available to a broad section of our
U.S. employees, including our hourly store
associates who have worked at least 24
hours a week for the past year.
This program builds on other important
steps we have taken to invest in ourpeople, including our leadership as the first
Fortune 500 company to have our global
pay data independently verified to confirm
that we pay women and men equallyaround the world.

FIELD TO HQ
Fueling our entry-level headquarters roles
with incredible talent is important to our
success, and field employees are a key
source of talent for these roles.
Our diverse field employees work withcustomers every day and understand what
they need and want. Their connection tocustomers and understanding of how ourstores work is invaluable at headquarters.
We have always encouraged bringing store
employees to headquarters and, in 2017,
formalized a program in which we actively
market opportunities to store employees,
support candidates through the recruiting
process, and provide a custom onboarding
experience to ensure a successfultransition. By 2020, our goal is to fill 20
percent of entry-level headquarters roles
with field employees.

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APPENDIX

Equality +BelongingSince our founding, we’ve embraced core company
values that include celebrating individuality, diversity
and treating all people equally — with respect, dignity
and fairness.
We see an opportunity to stand alongside our
employees and other industry leaders to work
toward greater equality and a sense of belonging foreveryone. This helps our company attract and retain
the best employees, create great products for all of
our customers, foster creativity and innovation, andcontribute to a more inclusive and just world.
Our empowerment, employee and workforce programs
support the rights and well-being of the people who
embody and drive our business, ensuring that they haveequal opportunity and support to develop personallyand professionally.
Learn MoreOur commitment to equality and opportunity

OUR APPROACH
We expanded our approach todeveloping a workplace that supports
our core values of equality andcreating a sense of belonging.
Our Equality and Belonging strategy
focuses on three areas:
1. STORYTELLING
Telling stories about who we are andwhat we stand for helps us create acompany culture that values equality,
opportunity and connection for all
people. To attract and retain talent, weseek to be more vocal about our public
commitments, awards and efforts.
2. EXPERIMENTATION
To drive innovation, we encouragetrying new and different approaches todiscover what works and what doesn’t
to recruit talent, develop leaders andcreate programs that promote an
inclusive work culture.
3. PROGRAMS THAT MATTERTo set the foundation for our inclusivity
work, we invest in programs across Gap
Inc. that support mentorship, learning,
creating inclusive products andpromoting equal access for all.

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APPENDIX

Equality +Belonging
EMPLOYEE NETWORK GROUPSCOLOR PROUD COUNCIL

Over the years, Gap Inc. employees fromdiverse backgrounds have developed
Equality and Belonging Network
Groups, which provide opportunities
for cross-cultural learning, mentoring
and relationship building. These groups
organize development, networking
and volunteering events to encourage
belonging; foster awareness ofunderrepresented groups; and provide
personal and professional development.

In 2018, a group of employees formed
Color Proud Council, a cross-enterprise
body to challenge industry norms andtoo-often accepted biases by ensuring
we know the importance of putting an
inclusive lens on fundamental aspects ofour business, including: product design,
merchandising and marketing, as well as
expanding efforts to recruit, develop andretain diverse talent.
Fostering a thriving, inclusive workforce
starts with talent acquisition andretention. During the year, Color ProudCouncil partnered with the businessto revamp recruiting pipelines, took acritical look at existing training programs,
and spearheaded a new line of inclusive
apparel products.

In January 2019, Gap Inc. employees
announced two new Equality andBelonging Network Groups:•

Gap Parents: Building on Gap Inc.’srecord as a family-friendly company,
we formed Gap Parents to help working
parents thrive at Gap Inc. The group’s
goal is to provide opportunities forparents to learn from one another,create connections with mentors, andaccess tools and resources.
Gap Parents plans to contributeinsights and provide feedback tosupport our business functions,
including our benefits team and ourkid and baby design teams. The groupalso plans to lead discussion forums
to support our employees throughdifferent stages of parenthood,including expecting a first child,returning to work, adding a sibling,navigating school decisions, same-sex
parenting, adoption and more.

•

Gap V.E.T.S.: This new group –Veterans, Enablement, Transition
and Support – is intended to build

an inclusive culture across Gap Inc.
and advocate for the military veterancommunity. The group is providing
community outreach and organizing
philanthropy and education opportunities
to support veterans and those withmilitary heritage across Gap Inc.
These new groups join Gap Inc.’s existing
Equality and Belonging Network Groups,
which include:
•
•
•
•
•

AANG: African American Networking
Group
ASIA: Asians Supporting Inclusion andAwareness
GEAR: Gay Employees, Allies andResources, an LGBTQ employee andallies groupGAPWIL: Women in Leadership
HOLA: Honoring Our Latino Ancestry

TRAINING + RESOURCESINCLUSION TRAINING

matching systems and formalized reports.
In 2018, we launched our Be One. Get One.
program to empower employees to take anactive role in both their own development
and the development of others.

SUPPLIER INCLUSIONPROGRAMWe are committed to increasing thediversity of suppliers we use, helping
diverse businesses become competitive
industry leaders and enhancing the
economic vibrancy of the communities weserve. The launch of our supplier inclusion
program in January 2018 provides aframework to increase our work withcompanies that are owned by or employ alarge percentage of minorities, veterans,
women and people with disabilities.
Through this program, we are forming
new partnerships to expand our networks
to connect with a more diverse set ofcompanies in 2018 and beyond.

In 2017, we launched a series of
unconscious-bias trainings to employees,
which expanded to our global workforce
in 2018. We also created curricula andaccessible resources that support equality
and belonging. We want our leaders andemployees to identify how unconscious
bias and other issues come to life in theireveryday work.
BE ONE. GET ONE.
At Gap Inc., we value mentorship as adevelopmental process that helps build
incredible careers. We view it as a personal
journey that works best when people
connect organically, instead of relying on
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APPENDIX

Equality +Belonging
PUBLIC COMMITMENTS

AWARDSUN HUMAN RIGHTS LGBTICORPORATE STANDARDS OFCONDUCT FOR BUSINESSAs the first and only global apparelretail company to sign on to thestandards, Gap Inc. bolstered ourefforts to support and lead on issues
that impact our lesbian, gay, bisexual,
transgender and intersex (LGBTI)
community around the world.

BLOOMBERG
GENDER-EQUALITY INDEXAs a company working for a more equal,
diverse and inclusive future for all,
we’re proud to be included in the 2019
Bloomberg Gender-Equality Index for thesecond consecutive year. Bloomberg listed
Gap Inc. as one of 230 global companies
committed to transparency in genderreporting and advancing women’s equality.

THOMSON REUTERSDIVERSITY & INCLUSION INDEXCEO ACTION FOR
DIVERSITY & INCLUSION
In August 2017, our CEO, Art Peck,alongside other CEOs, pledged his
commitment to advance diversity andinclusion in the workplace. The pledge
aims to rally the business community towork collectively toward that goal andoutlines a specific set of actions, such as
unconscious-bias education. Companies
are encouraged to share practices forcultivating a trusting environment where
all ideas are welcome and employees feel
comfortable and empowered to discuss
diversity and inclusion.

OPEN TO ALL
On Oct, 4, 2018, Gap Inc. and our family ofbrands announced that we joined a coalitionof advocacy organizations and companies bysigning the Open to All Business Pledge. The
pledge reaffirms that our workplaces and storesare welcoming spaces for everyone, and each
U.S. store displayed the Open to All sticker.
For us, this is nothing new, and is in line with
our Code of Business Conduct and Zero Means
Zero policy. We are proud to join with otherbusinesses and national social justice groups likethe NAACP, HRC, ACLU and Anti-Defamation
League to show that we are open to all.

Gap Inc. was named one of the world's
most diverse and inclusive companies
for the second consecutive year. In
the third annual Thomson Reuters
Diversity & Inclusion Index which scorescompanies using environmental, socialand governance metrics, Gap Inc. wasranked fifth out of 7,000 international
corporations.

HUMAN RIGHTS CAMPAIGNCORPORATE EQUALITY INDEX (CEI)
For the 13th year in a row, in 2018, Gap
Inc. received a perfect score on the CEI, anannual benchmarking survey and reporton corporate policies and practices related
to lesbian, gay, bisexual, transgender andqueer (LGBTQ) workplace equality.

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APPENDIX

Equality +Belonging
WORKPLACE DATA
We believe diversity increases
creativity and innovation, promotes
high-quality decisions and enhances
economic growth.
We track and disclose data on
comparable workplace information to
enable us to monitor trends and theeffectiveness of our strategy.
Learn more
Workplace DataETHNIC DIVERSITY
United States*		 201520162017 2018

White
All		
Management		
New Hires		

48%
72%
44%

47%
71%
41%

50%
73%
46%

Asian
All		 7%
Management		
9%
New Hires		
6%

7%
10%
6%

7%
10%
6%

45%
69%
41%

7%
10%
6%

Black
All		 19%
Management		
7%
New Hires		
24%

19%
6%
24%

20%
6%
25%

19%
7%
24%

Hispanic
All		 20%
Management		
10%
New Hires		
18%

21%
10%
19%

22%
11%
21%

24%
12%
22%

Other Minority
All		 4%
Management		
1%
New Hires		
6%

5%
2%
6%

5%
2%
6%

5%
2%
7%

All Minorities
All		 50%
Management		
27%
New Hires		
54%

52%
28%
56%

54%
29%
58%

55%
31%
59%

GENDER REPRESENTATION
GlobalPROMOTION RATES
United States		2015 20162017 2018

		20152016

VP + Above
Women		
Men		

49%
51%

51%
49%

50%
50%

54%
46%

VP + Above
Women		10%Men		13%

3%
7%

4%
11%

3%
8%

Sr. / Director
Women		
Men		

59%
41%

61%
39%

61%
39%

62%
38%

Sr. / Director
Women		12%Men		10%

10%
12%

9%
6%

7%
6%

Sr. / Manager
Women		
Men		

60%
40%

61%
39%

61%
39%

59%
41%

Sr. / Manager
Women		16%Men		15%

16%
14%

13%
13%

11%
7%

Store Management
Women		
69%
Men		
31%

68%
32%

68%
32%

70%
30%

Professional
Women		6%Men		7%

7%
8%

8%
8%

8%
8%

New Hires
Women		
Men		

73%
27%

74%
26%

74%
26%

74%
26%

Overall
Women		7%Men		8%

7%
8%

8%
8%

8%
8%

Overall
Women		
Men		

74%
26%

75%
25%

76%
24%

76%
24%

2017 2018*Promotions are defined as movement to a higher
grade level. Promotion rate is the number ofpromotions during the year, divided by the average
headcount for that year.

*U.S. full-time and part-time, non-seasonal
employees. Data on ethnic diversity is not available
outside the U.S.

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APPENDIX

Employee
Engagement
We empower Gap Inc. employees to support thepotential of people in their communities throughdonations of time, talent and money.
Every year, we work to ensure that our legacy ofcommunity involvement remains strong, and we areproud that this spirit is ingrained in our company culture.
Encouraging our employees to volunteer or donate helps
build strong communities as well as attract and retain
talented, engaged people for Gap Inc. Getting involved in
the community is easy for our employees, as we build intime for them to volunteer – all salaried employees canvolunteer five hours per month “on the clock.” In addition,
we match donations of both time and money, so that
employees can support the causes they care about inthe way that works best for them. We measure the dollar
value of employee donations of time and money, and thecompany match to both; we refer to this as “employeedriven community investment.”
Learn More
How we invest in others and ourselves

OUR APPROACH
In 2018, we reached or exceeded all of
our employee-engagement goals tied to
employee-driven community investment.
We are especially proud of our strong
network of 2,900 Community Leaders, who
serve as Gap Foundation ambassadorsand drive volunteerism for teams in ourstores, corporate offices and distribution
centers around the world. These
Community Leaders build partnerships
with local nonprofits that frequently span
many years and are designed to movebeyond good intentions to deliver true
impact by leveraging the expertise of ourworldwide teams.
In recent years, we have evolved ourapproach to integrate giving back evenmore deeply into our culture. Today,
each Gap Inc. function has at least
one representative on our Employee
Engagement Committee. These
representatives are responsible for setting
goals for volunteer hours, employee
participation and total employee-driven
community investment. We share monthly
reports with these representatives to help
keep teams accountable for their goals.

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APPENDIX

Employee
Engagement
GOAL

Support $15 million in
annual employee-driven
community investment

2018 EMPLOYEE-DRIVENCOMMUNITY INVESTMENTKEY METRIC

25% of Gap Inc. employees
volunteer annually
PERFORMANCE% Employees Volunteered

PERFORMANCE
Employee-Driven Community Investment$15.6M

2017 / $14.8M

2017
23%
2018
25%

2018 / $15.6M
ONGOINGGOAL

ONGOING
GOAL

25%

$15M
$10.6M
in Volunteer Hours
the financial equivalent of
431,534 volunteer hours$2M
in Employee
Financial Donations

KEY METRIC

Gap Inc. employees log
430,000 volunteer hours
annually
PERFORMANCE
Volunteer Hours

2017 / 421K

$3M
in Gap Inc. Matchingof employee volunteer hours
and financial donations

2018 / 431K
ONGOING
GOAL

430K
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APPENDIX

This Way Ahead:First Jobs
This Way Ahead is opening doors for the next
generation with first jobs, providing the mentoring andconfidence to make dreams a reality.
Through structured training and paid work experienceat Old Navy, Gap, Banana Republic, Athleta and our
distribution centers, This Way Ahead helps youth
between ages 16 to 24 who are facing barriers to
employment land their first job. The program builds
leadership skills among the Gap Inc. employees who
mentor This Way Ahead youth. It also helps Gap Inc. build
a valuable pipeline of future employees while developing
best practices for managing talent that we can apply
across the company.
Learn More
How we developed our program + how we approach implementation

5,677
Youth
have participatedthrough 20182018 GLOBAL SUSTAINABILITY REPORT27

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APPENDIX

This Way Ahead:First Jobs
2018 PROGRESS

GOAL

Reach 10,000 youth
through This Way Ahead
by 2020PERFORMANCEThis Way Ahead Participants
2007

2016
2,713

2017 2018
3,900 5,677

2020
GOAL

10K

GOAL

Hire 5% of entry-level
employees from This Way
Ahead annually by 2025
PERFORMANCE
Entry-Level Hires from This Way Ahead(Progress to Goal)2017 / 668 (17%)
2018 / 1,107 (28%)
2025
GOAL

5%

In 2018, we greatly expanded This Way
Ahead. With more than 1,700 young people
participating, we grew the number of hiresby 60 percent compared to 2017. We also
initiated a new national partnership with
the Boys & Girls Clubs of America, growing
the number of cities where the programruns from 15 to 53.
As we work toward our near-term goal ofreaching 10,000 youth by 2020, we arefocusing our expansion in large markets in
the U.S. and Canada while also looking toestablish a presence in smaller markets.
We have invested resources in making
the program easier to implement andcustomize. In 2018, we created a playbook
distilling five key ingredients for teams touse when launching This Way Ahead. At asmall number of Athleta stores, Gap storesin Japan and distribution centers, we led
a pilot program that empowers teams tocustomize the playbook based on their
specific business needs.
In 2018, we also continued our efforts
to apply talent management practices
from This Way Ahead to support existing
employees across the company. Based on
analysis showing that 38 percent of ourrecent hires have characteristics similar to
those of This Way Ahead participants, This
Way Ahead partnered with an internal,
enterprise-wide initiative to apply the
program’s proven strategies to improve
retention rates and increase employee
engagement across the company.
In recognition of This Way Ahead
accomplishments, Fortune named Gap Inc.
to its “Change the World” list in 2018.

REACH + GROWTH

IMPACT

Youth70%

2017 / 1,148
2018 / 1,700+

of youth reported "a lot" ofIncreased ConfidenceStores2017 / 274

82%
of mentors reported
Improved Skills

2018 / 444

in creative thinking + problem-solving

Cities2017 / 1572%2018 / 53of alumni have secured
Stable Employment
compared to 55% of their peers,
according to a study of 10 years of alumni
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APPENDIX

Supplier
Sustainability
We partner with all of our branded-apparel suppliers and other key stakeholders
to help provide safe, fair and healthy working conditions for the women and men
who create our clothes.
Using a holistic approach, we implement a variety of programs for monitoring
facilities and building supplier capabilities for improved working conditions, taking
country-specific approaches where appropriate. Our Human Rights Policy guides
our programmatic response to develop a supply chain that is resilient, responsive
and respectful of the workers who make our products.
Gap Inc. has worked to develop and implement a dedicated program for assessing
and remediating issues in sourcing facilities, and in recent years has developed asuite of capability building programs. Having in-country field teams enables us toclosely monitor facilities according to our Code of Vendor Conduct (COVC), allowing
us to have thorough, on-the-ground insight into how our suppliers perform andwhat salient issues workers in our supply chain face. Given the need for industrywide
collaboration, in some cases we partner with other brands to improve results forgarment workers.
Our goal is to design and implement industry-leading programs that can help
drive innovation that transforms the apparel manufacturing sector. In partnershipwith our suppliers, NGOs, multilateral organizations and other stakeholders, we’reestablishing initiatives that are multifaceted and focus on a range of interventions:improving worker and management relations, innovating how we assess andimprove working conditions, and using technology to directly engage with andrespond to workers’ needs.
Learn More
How we're improving working conditions

OUR APPROACH
We believe in a comprehensive approachto improving working conditions in
our supply chain, combining facility
monitoring and capability building
programs to help our suppliers
continuously improve.
1. ASSESSMENT + REMEDIATION
Our approach to improving working
conditions is based on transparency,
partnership and innovation. We believethat by working together, we can achieve
our commitments to improve workers’
well-being, protect human rights, reduce
environmental impacts and improvebusiness performance.
Read More p.30
2. CAPABILITY BUILDING
In partnership with our suppliers, wedeveloped a suite of programs that aim
to develop facilities’ capabilities for worker
representation and leadership involvement.
By coordinating with external partners,
NGOs and our suppliers, initiatives suchas our Workplace Cooperation Programand Workforce Engagement Program
mature industrial relations in facilities andprovide functioning grievance mechanisms
while also measuring and improving thedegree to which garment workers feelvalued and engaged at work. In addition to
our cornerstone programs, we manage orparticipate in a broad set of initiatives that
address country-specific labor issues. Our
life-skills program, P.A.C.E., gives womentraining and support to advance in theirprofessional and personal lives.
Read More p.36
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APPENDIX

Supplier
Sustainability
ASSESSMENT + REMEDIATIONASSESSMENT + REMEDIATION

GOAL

100% of supplier facilities
producing branded
apparel are rated yellow
or green by 2020
PERFORMANCE% Supplier Facilities Rated Yellow or Green2016 / 84%2017 / 95%2018 / 98%
2020
GOAL

100%
2018 FACILITY RATINGS

774

Facilities

39% Green-Rated Facilities
59% Yellow-Rated Facilities
2% Red-Rated Facilities

We monitor the adherence of the facilities
operated by our suppliers to the Gap Inc.
Code of Vendor Conduct (COVC) before
initial approval and then annually. This
is in conjunction with our efforts tobuild innovative programs that create
supportive, empowering workplaces.
Our Assessment and Remediation programis the foundation on which we evaluate our
suppliers’ abilities to meet our sustainability
expectations; the program provides insighton what issues workers may be facing
and what additional programs would be
beneficial. We primarily evaluate factories
through our own field team’s assessments,
though we do work with third parties, suchas Elevate, for assessments in Pakistan,
and with International Labour Organization
Better Work (p.32) in countries where they
operate. Our global field team is locatedprimarily in the countries from which wesource, giving us a direct, on-the-groundunderstanding of worker needs and facility
performance.
We use a color-coded system torate facilities’ performance based on
assessments. High-performing facilities
with no critical and few violations are
rated green. Average performers are
rated yellow, while facilities that need
improvement on one or more serious issues
are rated red. Critical, severe and key
violations have a greater negative impact
on a facilities’ rating than more technical“noncompliance” violations do.
In 2017, Gap Inc. set a goal to not workwith any red-rated facilities by 2020. We
have made significant strides toward thisgoal, moving from 16 percent red-rated

facilities in 2016 to less than 2 percent
by the end of fiscal 2018. By integrating
this work more deeply into our sourcing
decisions and concentrating our businesswith preferred vendors, we were able toincrease our investment to help facilities
close out COVC violations in a sustainable,
responsible way. In addition to a dedicatedSupplier Sustainability team that engages
directly with facilities on these issues andtargets, we train global sourcing employees
on human rights policies and procedures,
building company-wide awareness on
COVC requirements, and collaboratinginternally to manage vendor performanceand drive sustained performance. Throughtraining and education, we also work
closely with key vendors to build theircapacity for continuous improvement andhelp them implement proactive measuresthat will prevent COVC issues from arisingin the first place.
We have created internal systems todevelop a close partnership between our
Supplier Sustainability, Global Supply Chain
and Data Insights teams. This integration
with sourcing and data analysis allows
us to track and analyze major trends aswell as the effectiveness of our programs.
When we identify concerning trends or
hotspots, we develop specific action plansto build awareness with our suppliers,
collaborate with all affected stakeholders
and formalize systems to address the issue.
Beginning in 2017, we raised the bar for
our facility approval process and no longer
allow red-rated facilities (based on theirpreproduction assessment) to be approved
by Gap Inc. for production. In the past,
we approved red-rated facilities if they
resolved the issues in question within acertain time frame.

We also changed our approach to assessing
red-rated facilities. Rather than waiting one
year after our full assessment to reassess
red-rated facilities, we work with them todevelop a time-bound corrective action
plan and evaluate them again at the end of
the agreed-upon time frame to determine
whether they have successfully achieved
the required remediation. This approachallows us to work more closely with facility
management to ensure that they are making
the necessary investments and adjustments
to their practices.
In 2018, we saw encouraging success with
our efforts towards our goal of 100 percent
green- and yellow-rated facilities. We also
recognize that at any given point in time,some facilities may slip below our COVC
standards; we are committed to continuing
to monitor and working closely with our
suppliers to remediate issues. Achievinga baseline performance level allows us
to keep a closer eye on concerning issues
and focus on capability building programs
such as enhancing bipartite committees(our Workplace Cooperation Program) andsoliciting direct worker engagement (ourWorkforce Engagement Program).
As we strive toward our goal, we also
recognize that the best way to address mostserious issues is to partner with our vendor
or their facility to remediate. However, inthe event that a facility or vendor fails to
address persistent noncompliance or otheregregious issues over an extended period oftime, we will create a responsible exit plan.
In that case, we give notice to the facility
that orders will not be re-placed, in orderto minimize disruption to workers. In thesesituations, we will continue to monitor thefacility and work on pending issues throughand following deactivation.
2018 GLOBAL SUSTAINABILITY REPORT

30

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STRATEGYSOCIALENVIRONMENTPRODUCT

APPENDIX

Supplier
Sustainability
ASSESSMENT + REMEDIATION

SUPPLIER PERFORMANCE
We analyze our suppliers’ performanceagainst our Code of Vendor Conduct(COVC) and use the consolidated,country-level results to track andanalyze progress or areas of concern
for these issues. Our analysis showedthat we resolved 88 percent of issues
within 12 months, for ones that wereopen as of Feb. 2, 2018. As we monitor
areas of concern for emerging issues ortrends, we partner with our suppliers to
implement changes to our systems ordevelop new policies or programs.

88%
Code of
Vendor Conduct
Issues Resolved
within 12 months

RESOLUTION OF FACILITY COVC ISSUES OPEN AS OF 2/1/2018

2/1/2018
Open
Issues

5/1/2018(3 months)

8/1/2018(6 months)

1/31/2019(12 months)

Open
Issues%Resolved

Open
Issues%Resolved

Open
Issues%Resolved
83%

Bangladesh

457

375

18%

201

56%

79

Cambodia		

281

238

15%

178

37%

70

75%

China		

602

293

51%

156

74%

60

90%
100%

Guatemala

1

0

100%

0

100%

0

India		

371

303

18%

185

50%

90

76%

Indonesia		

462

286

38%

98

79%

21

95%

Pakistan		

177

80

55%

63

64%

10

94%

Sri Lanka		

104

95

9%

48

54%

19

82%

Vietnam		

743

538

28%

320

57%

43

94%

191
3,389

152
2,360

20%
30%

91
1,340

52%
60%

11
403

94%
88%

Others		Total		

2018 GLOBAL SUSTAINABILITY REPORT

31

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STRATEGYSOCIALENVIRONMENTPRODUCT

APPENDIX

Supplier
Sustainability
ASSESSMENT + REMEDIATIONINTERNATIONAL LABOURORGANIZATION (ILO) BETTER
WORK
As part of our efforts to go above andbeyond assessment and remediation
and work more collaboratively with our
suppliers and other stakeholders, we haveplayed a leading role in multi-stakeholder
collaborations such as the ILO Better Workprogram. As a founding member of thisprogram, we view the ILO team as our
key partner in every country where they
operate, representing several of our key
sourcing markets. Better Work takes anadvisory approach to monitoring facilities,
with an emphasis on protecting worker
rights and well-being by helping companies
and governments uphold the ILO’s corelabor standards and national labor laws.
Better Work leads facility assessments
and helps address and remediate
issues in Vietnam, Cambodia, Indonesia,
Bangladesh, Jordan, Haiti and Nicaragua.

We also worked closely with Better
Work to help found the Better Work
Academy, which provides training andadvisory services to global assessment
staff. Their approach looks to movebeyond “assessment only” facility
monitoring and develop comprehensive
solutions to improving industrial
relations in facilities. The Academy has
been operating for several years, and in
2018 several other brands joined.
We believe that it’s important toinclude leadership in capability building
programs, as having mechanisms toprovide worker feedback does nothelp if management is not preparedenough to take feedback and make
improvements.
Read MoreILO Better Work and Supervisory Skills
Training (p.38)

2018 ASSESSMENTS IN ILO BETTER WORK MARKETS
Facilities Assessedby ILO Better Work

Facilities Assessed
by Gap Inc.

Total

Bangladesh

24

62%

15

38%

39

Cambodia

47

90%

5

10%

52

Haiti

5

71%

2

29%

7

Indonesia

56

70%

24

30%

80

Jordan

9

100%

0

0%

9

Nicaragua

6

100%

0

0%

6

Vietnam

91

61%

59

39%

150

238

69%

105

31%

343

Total

SOCIAL & LABORCONVERGENCE PROGRAM(SLCP)As a signatory to this collaboration
among apparel and footwear brands,
retailers, industry groups and civil society
organizations, we support a new shareddata-collection tool that can assess
the social and labor performance of
manufacturing facilities across the appareland footwear supply chain. In 2017 and2018, Gap Inc. chaired both the SLCP
Tool Development Working Group and the
Verification Working Group in which wehelped facilitate the creation of the first
SLCP tool and verification process. In 2019,
we joined the SLCP Council.
We also enrolled some of the facilities wesource from in the pilot and supported thebroader pilot covering over 123 facilities
in two countries. The final version wasdeveloped and launched in China and
Sri Lanka in late 2018, with 15 of ourapproved facilities and mills encouraged
to participate. We aim to support the
expansion and sectoral adoption of
the SLCP and are investing significant
resources to institutionalize it acrossour supply chain to promote supplierownership of social performance.

MILL SUSTAINABILITY PROGRAM
Our supply chain is complex andreaches far beyond our Tier 1 suppliers– the cut-and-sew facilities from which
we directly source, as well as theirsupporting embroidery, screen printing
and laundry facilities. Beginning in2017 and expanding in 2018, we’ve
begun monitoring the social andenvironmental performance of our Tier
2 suppliers – the mills that provide our
fabric – through our Mill Sustainability
Program. The program integrates key
industry programs and puts supplierownership at its center and we willleverage SLCP tools to improve ourmills’ social performance.
Our first step on this journey was tocomprehensively map the mills fromwhich we source raw materials andgroup them into three categories:
preferred mills (which represent the
majority of our business volume),secondary mills, and niche and newmills. While we have yet to finish
identifying all of the niche mills,
2018 marked a comprehensive
understanding of our Tier 2 supplierbase, mapping over 200 facilities
that represent a significant portionof our business volume. After wecommunicated to our entire millbase our expectations of their socialand environmental performance –conditions of doing business with
us – we began implementing ourcomprehensive program at theidentified mills.
Read MoreMill Sustainability Program (p.48)
2018 GLOBAL SUSTAINABILITY REPORT32

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APPENDIX

Supplier
Sustainability
ASSESSMENT + REMEDIATIONKEY ISSUES
We are proud to support the principles
outlined in the Universal Declaration of
Human Rights (UDHR), the UN Global
Compact, the Organisation for Economic
Co-operation and Development (OECD)
Guidelines for Multinational Enterprises,
and the ILO's Core Conventions.
These principles form the foundation of
our Human Rights Policy, which defines ourapproach and activities to respect humanrights and prohibit human-rights abuses.
In addition to the programmatic updates
in this report, detailed information on
our human-rights policies, management
approach and resolution actions for key
issues is available at the links below.
Learn More
•
•
•
•
•
•
•
•
•
•
•
•

Child Labor and Young Workers
Discrimination and Harassment
Wages and Benefits
Fire, Building and Electrical Safety
Grievance Mechanisms
Short-Term Contracts
Human Trafficking and Forced Labor
Working Hours
Humane Treatment
Freedom of Association
Foreign Contract Workers +Recruitment
Unauthorized Subcontracting

FIRE, BUILDING AND ELECTRICAL
SAFETY PROGRAM
In 2017, we expanded our approach
to fire, building and electrical safety(FB+ES) beyond Bangladesh, where we
continued to collaborate with the Alliancefor Bangladesh Worker Safety throughthe end of 2018. At that point, we joined
Nirapon, a locally-managed organization
created to carry forward the important
FB+ES improvements that have beenachieved so far.
Based on the work we did with theAlliance, we recognized that some ofour key sourcing countries – Cambodia,
Indonesia and Pakistan – may also have
FB+ES risks and we want to play ourrole to reduce those risks and provide
safety for workers in those countries.
Reducing the risk of catastrophic eventsis paramount, and we also see anopportunity to avoid supply disruptions
from smaller scale incidents that could
result in lost working days, worker injury
or displacement and product damage.
As part of a pilot, we partnered with anexpert third party to assess facilities on
structural, fire and electrical safety –three in Cambodia, 16 in Indonesia andnine in Pakistan. We are now working withthese facilities on remediation against
their improvement plans.
Our assessment also provided analysis
on the unique challenges that contribute
to FB+ES risk in key countries. For
instance, Cambodia lags far behindin fire-safety regulations and mostbuildings do not have adequate fire
protection. In Indonesia, we found thatup to 70 percent of fires in the capital cityof Jakarta are caused by electric shortcircuits. It also revealed that fires spreadquickly when access to water is scarceand fire trucks face heavy traffic andpoor road conditions. In Karachi, Pakistan,
the assessment revealed a number ofissues, including code violations, lack ofawareness about safety measures, anda shortage of firefighting infrastructure
and resources. In 2018, we identified threeservice providers that will help us conduct
FB+ES assessments in 28 of our top
strategic facilities. In 2019, we will bring thisprogram to Vietnam and India; Pakistan
and Cambodia will follow by 2020. Also
beginning in 2019, we are joining the Life
and Building Safety Initiative (LABS) toaddress these issues in multiple regions.

KEY METRIC

100% of supplier facilities
in Bangladesh complete
fire and building safety
remediation by 2018
PERFORMANCE
Supplier Facilities That Have Achieved
Full Remediation from the Alliance for
Bangladesh Worker Safety

ACHIEVED2017 2018
42
50
2018
GOAL

100%
2018 GLOBAL SUSTAINABILITY REPORT33

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STRATEGYSOCIALENVIRONMENTPRODUCT

APPENDIX

Supplier
Sustainability
ASSESSMENT + REMEDIATIONKEY ISSUES, CONTINUEDGRIEVANCE MECHANISMS
Being able to raise concerns to facility
management or to Gap Inc. is essential
to ensuring workers have a voice intheir workplace. We have developed acomprehensive suite of programs thatprovide myriad workplace benefits and also
provide channels where workers are able
to effectively raise grievances. Within eachprogram, workers are given a voice to raise
concerns with facility management andoutside parties, via varied channels:••

Our Workforce Engagement Program(p.38) – based on worker surveys,
interviews and messaging applications– offers one approach in which
individuals can confidentially report
workplace-related grievances tofacility management. We are currently
working in China and Vietnam to provide
resources through a smartphone app
and developing an updated scaling
strategy to bring the app to othersourcing markets such as India and Sri
Lanka, where we launched our Workforce
Engagement Program in 2018, with
implementation in early 2019.
Our Workplace Cooperation Program(p.37) provides training for workers
and management on how to improveindustrial relations, with an emphasis
on how to develop and implement
grievance mechanisms. Our goal is todeliver this program to 200 facilities by
2020. We assess grievances raised via
this program, including time taken to
remediate, channels used and outcomes.

•

Our Assessment and Remediation
program (p.30) evaluates the efficacy
and use of grievance mechanisms. Our
Supplier Sustainability team provides
contact information to workers in thefacilities from which we source, sothey are able to reach out to Gap Inc.
directly if there are issues that require
our attention.

We believe that context-specificapproaches to grievance mechanisms will
increase the likelihood that workers will use
them. We are in the midst of evaluating
additional service providers that can help
implement technology based solutions inother sourcing markets. Additionally, we
are responsive to external third parties
that raise grievances with us via any of ourcommunication channels.
FREEDOM OF ASSOCIATIONOur Code of Vendor Conduct (COVC) andHuman Rights Policy explicitly support
freedom of association and the rights
of workers to lawfully and peacefully
associate, organize and bargain
collectively.
We use a wide range of approaches
in seeking to ensure that freedom of
association rights are respected, fromsupporting open dialogue between facility
workers and managers to partnering withworkers’ rights groups and trade unions
when appropriate.
In January 2018, we joined with The
Arbitration Council and ILO Better Facilities
Cambodia to lead a workshop on freedomof association for our Cambodian suppliers
and the unions represented in theirfacilities. The purpose was to improve
employee-employer relationships througha mutual understanding of freedomof association, workplace cooperation,and dispute-prevention and resolution
mechanisms in the workplace.
In the workshop, we provided guidanceon how facilities should respect andaddress freedom of association anddispute-prevention and resolution
regulations, including those enshrined in
ILO Conventions No. 87 and No. 98 andCambodian labor law. We also discussed
the rights, roles and responsibilities
of employers and employees, andprovided practical information on how to
improve workplace cooperation, prevent
disputes and effectively use resolution
mechanisms. The workshop also included
an overview of Gap Inc.’s Workplace
Cooperation Program (p.37), which aims
to improve worker-management dialogue
at facilities.

the capability of factory management,compliance staff, union members andworkplace committee members throughtraining sessions on a range of topics
including: freedom of association, collective
bargaining, international labor standards,
communications and negotiation techniques,as well as increase the understanding of the
Bangladesh Labour Act.

Through the workshop, we reached facility
managers, union leaders and workers.
To complement this training, we also
required all of our Cambodian suppliers toenroll in ILO Better Facilities Cambodia’s
advisory services by the end of 2018.
This will help to ensure that the voice ofworkers will be heard and issues will be
resolved fairly through the establishmentof workplace committees.
Additionally, in 2019 we launched a newpartnership with the ILO and Better Work
Bangladesh. This three year initiative– the ILO Bangladesh Social Dialogue
Project to be implemented by the ILO
in all factories that Gap Inc. sourcesfrom in Bangladesh – will help build2018 GLOBAL SUSTAINABILITY REPORT34

OVERVIEW

STRATEGYSOCIALENVIRONMENTPRODUCT

APPENDIX

Supplier
Sustainability
ASSESSMENT + REMEDIATIONKEY ISSUES, CONTINUED
WORKING HOURS
One of the compliance issues we frequently
encounter relates to worker overtime,
which fluctuates but remains an issueof concern year after year. Overtime
is a complex challenge to address as
many workers want to request overtime
because they seek hours in order to earnpremium overtime pay, while facilities
seek to optimize their production capacity
across multiple buyers. In addition,buyers themselves, including Gap Inc.,
can negatively impact work hours whenrequiring changes to orders that either
increase or reduce the size of an order.
We will continue to address the role thatour buying practices have on overtime
hours, including a new initiative tounderstand the impact of our businessplanning, the Better Buying pilot. After we
received our results, we shared our findings
with our sourcing teams, enabling them to
examine how their planning affects leadtimes and our visibility into our supplier’s
capacity to fulfill orders. Gap Inc. sourcing
teams are working to develop systems that
can appropriately place orders depending
on our suppliers’ capabilities to fulfill them;these learnings are helping us implement
improvements while we continue to solicit
supplier feedback.
GENDER-BASED DISCRIMINATION
AND HARASSMENT
Women constitute between 60 and 80
percent of India's apparel workforce.
We recognize that women face uniquechallenges in the workplace, especiallyregarding harassment. During regularassessments of the facilities we work within India, we have found serious violations
related to gender-based discriminationand harassment, which are known to besystemic issues in India. We recognize
this as an urgent issue that all relevant
stakeholders must invest more time andresources into addressing.
To do our part, Gap Inc.’s Supplier
Sustainability team is working with
our suppliers in India – covering over
118,000 workers – to help them build anenvironment where they clearly define
and implement policies on Prevention of
Sexual Harassment (POSH) and create an
Internal Complaints Committee, both ofwhich are required under Indian law, though
inadequately enforced. We aim to help our
suppliers raise awareness among both maleand female employees about this issue,
and about their rights and responsibilities
under the Sexual Harassment of Women at
the Workplace (Prevention, Prohibition andRedressal) Act of 2013.
As a first step, we conducted sensitization
programs with all of our suppliers in India
and provided guidance on the relevant
legal requirements. We also defined timebound goals, such as commitments fromour vendors to train 100 percent of theiremployees on this issue and identified
expert organizations for them to partnerwith in implementing this work. As a result,these suppliers provide regular training
and awareness to all of their employees
to enhance understanding of the issues,the various forms it can take, its root
causes, and their roles and responsibilities.
Regular trainings are provided to Internal
Complaints Committees to strengthen theirunderstanding and capabilities to address
sexual harassment cases.
To review progress, Gap Inc. assessments
include components on POSH anddetermining areas for improvement, if
needed, within a remediation plan. Given
the urgency and importance of this issue, we
are now implementing regional strategies
to address this issue in other key sourcing
countries. A common thread across theseregional approaches are the one-day
workshops we are hosting for our suppliersin China, Bangladesh, Guatemala, Haiti,
Indonesia, Jordan and Vietnam. These
workshops provide an overview of theissue itself, our expectations for how our
suppliers can proactively mitigate it, andour requirements for our suppliers pursuing
additional, more in-depth trainings at thefactory level, to help ensure all appropriate
staff are subsequently trained.
CHILD AND FORCED LABOR
We continue to maintain a strong focus onprotecting human rights, including issues
such as forced and child labor. Under nocircumstance is it acceptable for child,forced or trafficked labor to be employedwithin our operations or used in the
production of any Gap Inc. product. Recent
legislation has supported global awarenessand we annually report our actions touncover and protect against these issues
within our 2018 U.K. Modern Slavery Act andCalifornia Transparency in Supply Chain Act
disclosures. While we have not discovered
instances of forced or child labor in our
supply chain in recent years, we remain
vigilant about these issues and detail ourcomprehensive management approaches
to both.
2018 GLOBAL SUSTAINABILITY REPORT35

OVERVIEW

STRATEGYSOCIALENVIRONMENTPRODUCT

APPENDIX

Supplier
Sustainability
CAPABILITY BUILDINGCAPABILITY BUILDING
We work with our manufacturing
partners to implement a suite ofprograms aimed at providing the tools
and resources to improve industrial
relations, worker engagement andfacility compliance on an ongoing basis.
When we approach our sourcing suppliers
about human rights and working
conditions, we are sharing our conviction
in enabling safe, productive andresponsive workplaces. We are looking towork with facilities that are places where
workers feel valued and engaged at work,that they have a voice to express concernsand see their grievances addressed,
and where workers and managers cancommunicate effectively.
By coordinating with external partners,
including NGOs, unions, multilateralagencies, competitors and our suppliers,
these programs – including our Workplace
Cooperation Program, Workforce
Engagement Program and Supervisory
Skills Training – can help enhanceindustrial relations in facilities, provide
functioning grievance mechanisms,
stabilize our sourcing operations, andcreate platforms for measuring andimproving the degree to which garment
workers feel valued and engaged atwork. These complementary interventions
can be implemented alone or together,
depending on the needs of the facility.
In addition, we participate in broader
initiatives that support the individual
programs, including the Better Work
Academy and the Better Than CashAlliance’s digital-wage program, that canbe implemented in available markets toheighten our suppliers’ abilities to adapt to
the needs of their workforce.
Together, these programs provide acomprehensive and holistic engagement
model for facilities to improve labor
standards, benefit workers, and support
the business continuity and resiliency of
our supply chain.
Learn More
How we're working with suppliers

Workplace Cooperation Program, India

Workplace Cooperation Program, Vietnam

2018 GLOBAL SUSTAINABILITY REPORT36

OVERVIEW

STRATEGYSOCIALENVIRONMENTPRODUCT

APPENDIX

Supplier
Sustainability
CAPABILITY BUILDINGWORKPLACE COOPERATIONPROGRAM
Our Workplace Cooperation Program(WCP) facilitates dialogue between
workers and management to address
workplace issues, from overtime andworker well-being, to washroom sanitation
and better quality of food in the canteen.
This training program works with electedbipartite committees comprising both
workers and management representatives
who collaborate to build good industrial
relations. Inherent in this training programis a recognition that workers in many
facilities do not feel comfortable voicing
their grievances in the presence of
upper-level management. Our approach,designed in partnership with ILO Better
Work, seeks to address those relations
by developing the skills of committee
members and guiding effective meetings.
We also provide guidance on how to best
respect and abide by workers’ fundamental
rights at work, as defined in the ILO’s Core
Conventions.
In 2018, we focused on expanding andrefining this program, as well as analyzing
data that we collect quarterly. Since
launching the program in 2016, we havereached 129 facilities – 67 in 2018 – in
10 countries. We continue to expand
to our strategic vendors’ owned andsub-contracted facilities, expanding thepossible locations to bring wider impact.
Our goal is to reach 200 facilities by 2020.
One of the ways we refined the program in2018 was to offer an abbreviated training
period, moving from two years to 12 to 16
months. Now facilities have more flexibility
in offering the training modules, as teams

have the option to combine two half-day
training modules into a one-day training
to reduce time for program completion.
In addition to revising the training
duration, we continued our use of thedata assessments we launched in 2017
to examine how many grievances havebeen received and addressed, whichchannels were used for grievances,and how long it took to address
the issues. Our preliminary analysis
shows that once functioning bipartite
committees are in place, workers feel
more empowered to raise concerns andthat these concerns are more quickly
addressed. In addition, our data showthat once these committees have been
trained, grievances rise for a period andthen diminish in frequency, illustrating
the comfort workers feel in voicing
complaints and the subsequent actions
taken to address their concerns.
Since part of our aim with this programis to help improve our suppliers’ businessperformance, we have begun collecting
data to analyze whether the WCP
is impacting productivity, efficiency
and quality. We created a quarterly
data-collection tool and are asking
participating facilities to track andshare their data on different businessindicators, such as absenteeism, numberof grievances, productivity and more. We
are working with Better Work to conduct
an independent impact assessment of
the program, examining whether there
is a correlation between the programand business benefits, and hope to have
impact results that will allow us to refine
and expand the program.

9,218

Grievances
Received
by facilities participating in
our WCP from 2017-2018

KEY METRIC

Reach 200 supplierfacilities with our
Workplace Cooperation
Program (WCP) by 2020
PERFORMANCE
Supplier Facilities Reached with WCP

92%

2016 / 312017 / 692018 / 129

Issues Resolved
within the same quarter

2020
GOAL

200

9%
Repeat Issues
This data is self-reported by factories on aquarterly basis. It includes grievances reported
through any mechanism (i.e. suggestion box,
bipartite committee, union, hotline/helpline,
mobile app, HR or a supervisor, an external
party or any other mechanism).

Workplace Cooperation Program, India

2018 GLOBAL SUSTAINABILITY REPORT37

OVERVIEW

STRATEGYSOCIALENVIRONMENTPRODUCT

APPENDIX

Supplier
Sustainability
CAPABILITY BUILDING

SUPERVISORY SKILLSTRAINING
In 2018, we partnered with ILO Better
Work to introduce Supervisory Skills
Training (SST), to reach a key group of
employees we have not yet engaged:
mid-level managers. This programaims to help facility managers improvetheir communication with workers, whotypically contact middle management firstto discuss problems or make suggestions
to improve facility working conditions.
SST is designed to give supervisorsand middle managers a deeper
understanding of important leadershipand supervisory concepts. Participants
are trained to avoid a passive or
authoritarian style of leadership, and to
strike a fair balance between the interestsof the company and the interests of staff.
As a result of this training, we expect
the participating supervisors to change
their management style from ‘timid’ or‘domineering’ to ‘professional,’ which will
result in better production efficiencies due
to higher worker motivation and retention.
SST is a three-day (24 hours total)
training program that covers areas likebeing a professional supervisor, building
good relationships, influencing, andmanaging workers.
During 2018, our team trained 439
supervisors from 31 facilities in sevencountries. We continue to expand thetrainings to more supervisors andfacilities, with a target to reach 50 more
facilities in 2019. In Better Work countries,
we also encourage our facilities tonominate their supervisors in SST.

A program evaluation methodology has
been designed and tested and will be
implemented starting in 2019. Throughsupervisor and worker surveys andproduction-efficiency data from thefacilities, this program evaluation will
help us to measure the extent to which
participants reported the trainings tobe effective; the extent to which theylearned new concepts; if this learning led
to any behavior change; if the change inbehavior was also acknowledged by theworkers; and if behavior changes impacted
production efficiency. Data will be tracked
over 12 months and initial results will beavailable by the end of 2019.

WORKFORCE ENGAGEMENTPROGRAM
By engaging workers to amplify their voice
and understand how they feel at work, theWorkforce Engagement Program (WEP)
seeks to increase worker engagement andempower facilities to make worker-centric
improvements. By the end of 2018, wereached 18 facilities by supporting mobileengagement tools, building on lessons
from our 2017 technology-enabled pilots.
This builds on the 100 facilities that we hadreached previously.
Throughout the years, we have learned
from our experiences engaging workers,
and have adjusted our approach tobetter fit the needs of individuals, theirworkplaces and our business. We havetested a variety of approaches, including
worker discussion groups, pen-and-paper
surveys and various mobile technologies.
We’ve now focused in on a vendor-led
model that leverages scalable mobile
technology, allowing workers’ voices to beheard directly by those able to respond.
We are also sharing best practices
across vendors, from Vietnam to China toIndonesia to Guatemala, to sustainably
expand the program.
Gap Inc. hosts WEP vendor workshops ineach region to bring together our vendors
and WEP service providers offering
services in the region. During theseworkshops, our Supplier Sustainability
team shares the importance of worker
engagement and how it can help ourvendors’ business. Research on worker
engagement supports supplier adoption.
Improved engagement has beencorrelated with business outcomes like
reduced absenteeism and turnover, andvendors can learn from their workforce
to make improvements that are goodfor business, whether that’s identifying aproblem before it escalates or becomes alarge risk, or hearing workers’ ideas about
opportunities to improve efficiency, safety
and more.
We are currently working with otherbrands and BSR in the Maximizing Worker
Engagement Working Group to develop
an enabling environment for a supplierowned model of worker engagement thatcan be adopted and promoted acrossthe industry. The working group’s goal
is to bring together like-minded brands
across the apparel and footwear sector
to adopt guiding principles to establish asystem that puts workers at the center ofengagement and well-being.
In August 2018, we co-released a paperwith Verité highlighting the program’s
return on investment, lessons learned,
and case studies to drive broader

industry awareness of supply-chain worker
engagement. The insights and lessons
from that report continue to drive thetechnology based approach that we are
pursuing today.
Workforce Engagement Program

BETTER WORK ACADEMYAs a founding member of the Better
Work Academy, we are dedicatedto moving beyond “assessment
only” facility monitoring to support
comprehensive solutions that improveindustrial relations in facilities. The
Academy has been operating forseveral years, and in 2018 and 2019,several new brands joined. Gap Inc. isa proud ambassador for the program,and to help support effective expansion,
we have onboarded new partners as
the Academy delivers training.
In the next year, Better Work Academy
is developing a leadership skills
program, as well as curriculum for
top management in the supply chain.
We believe it’s important to include
leadership in capability-building
programs, which enables facilities totake action to address worker feedback
provided through new grievancemechanisms.
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APPENDIX

Supplier
Sustainability
CAPABILITY BUILDINGDIGITAL WAGE PAYMENTS

GOAL

100% of Tier 1 suppliers
transition to digital wage
payments by 2020
PERFORMANCE% Tier 1 Suppliers Paying Digital Wages

2017 / 68%2018 / 80%
2020
GOAL

100%

In 2018, we set a goal for all of our Tier 1
suppliers to transition from a cash-based
wage-payment system to a digital wagepayment system by 2020. As of the end of
the year, 80 percent of our suppliers wereusing digital wage payments.
To support our commitment, we joined theUN’s Better Than Cash Alliance (BTCA)
in 2018. BTCA works with the private
sector, governments and internationalorganizations to accelerate the transition
to digital payments, which can help reducepoverty and support inclusive growth. We
define digital wage payments as mobile
wallets, bank accounts, debit cards andother methods that are digitally accessible.
20 percent of our suppliers still use cash
payments, which can present a variety of
security risks to workers and contributeto financial exclusion. Globally, more than
30 percent of working-age adults lackaccess to formal financial services. Ratesof financial exclusion are higher among
women, who comprise about 80 percent of
the garment-industry workforce.
By committing to work with our suppliers
to use digital wage-payment methods,
we hope to increase the number of peoplein our supply chain – particularly women– who have access to formal financial
products and services, including bank andsavings accounts, credit and insurance.
This will give workers greater control overtheir finances and offer them a safer way
to save, spend and invest their money. Our
suppliers will benefit from cost savings via
a faster, more efficient payment system.
Digital wages will also help increaseaccountability and transparency across thegarment sector.

We are also evaluating how we can tie ourdigital wage-payment work to financial
literacy training programs, which our
P.A.C.E. program (p.40) provides. We
recognize that providing financial access toindividuals in developing countries is only
one piece of the puzzle; another crucial
piece is helping to ensure that workers caneffectively use those resources.
Further, we are working with a broad setof actors to develop country-level working
groups in countries that presently lackthe infrastructure or capital investment
required to make digital wages a scalable,
cost-effective model for garment workers.
We have begun an initial partnership with
the Bill & Melinda Gates Foundation and
BSR in Bangladesh, in tandem with otherinternational buyers, to identify solutions
that can help us address some of the key
systemic barriers to digitization in the years
ahead.

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APPENDIX

P.A.C.E.:
Empowering Women
Our P.A.C.E. (Personal Advancement & Career
Enhancement) program gives women the foundational
life skills, technical training and support they need toadvance in the workplace and in their personal lives.
We launched P.A.C.E. globally in vendor facilities
in 2007, and have since expanded the program tocommunity settings and in more countries to unlock new
possibilities for women and adolescent girls around theworld. Our goal is to reach 1 million women and girls
through vendor and community partnerships by 2022.
LEARN MORE
How we're supporting women2018 REACH

158K

Women + Girls2018 ACTIVE
COMMUNITY PARTNERS

Apparel Training & Design Centre
Beijing Social Work Development Center for
Facilitators

17Countries

CARE
China Women's University
Fujian Hwa Nan Women's College
Gram Tarang Employability Training Services
Heifer International

61

Vendors

ILO Better Work
Inno Community Development Organisation
International Center for Research on Women
Jordanian Hashemite Fund for Human
Development (JOHUD)

17

Community
Partners

Kampuchean Action for Primary Education (KAPE)
MAMTA Health Institute for Mother and ChildMaria Elena Cuadra (MEC)
Martha Tilaar Group
Project Concern International (PCI)
Foundation SAE-A
Self-Employed Women's Association (SEWA)
ShareHope72%

UNHCR Jordan
TechnoServe
Want Want Group
Women WinXi'an Peihua Universityof Sourcing Dollars
are spent with
P.A.C.E. vendors
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APPENDIX

P.A.C.E.:
Empowering Women2018 PROGRESS

GOAL

Reach 1 million women
through P.A.C.E. by 2022
PERFORMANCE
P.A.C.E. Participants
2007

2016 2017 2018
68K 122K 280K

2022
GOAL

1M
REACH SINCE 2007

280K+
Women +
Girls

1,500
Trainers

67%
of Vendors
made 2022
commitments

For P.A.C.E., 2018 was a year of significant
growth and increased reach. Not only did
the program reach a record number ofwomen and girls – giving them the skills
and confidence they need to advance atwork and in life – we elevated the profile of
P.A.C.E. through new partnerships and thelaunch of a company-wide marketing effort
that engages customers in an importantconversation about empowering womenand girls.
During 2018, P.A.C.E. reached at least
158,000 women and girls in 17 countries,
which represents 56 percent of the total
women and girls the program has reachedsince P.A.C.E. launched in 2007. Looking
forward, P.A.C.E. is on track to reach
300,000 women by April 2019. Thesegains came as the result of momentum
with existing partners and the addition of
new partners with the potential to greatly
expand the program.
In Cambodia, we partnered with Heifer
International to deliver the program towomen smallholder farmers. In India, we
worked with the play and entertainment
company Hasbro and India’s Self Employed
Women’s Association (SEWA) union topilot P.A.C.E. in the workplace (Hasbro)
and in communities (SEWA). In China, wepartnered with the food and beveragecompany Want Want Group and China
Women’s University to bring P.A.C.E. tothe university setting for the first time.
These partnerships allowed us to scaleand expand the program, while theexpansion into academia enables us toempower students and women and sustain
programs that are adaptable to the formal
education system.

In addition to these partners, a third of
the total women reached in 2018 camethrough our sourcing vendors, who run
their own implementation programs,
supporting the resiliency of our supply
chain and improving their own businessoutcomes. We also launched new P.A.C.E.
programs in community settings inEthiopia and Tanzania, two non-sourcing
countries where we are working withCARE and Project Concern International,
respectively, to build the capabilities
of women economically and socially. In
early 2019, we began discussions with
the United Nations High Commissioner
for Refugees (UNHCR) to expand on our
training in Jordan, begun in 2018, to
nearby countries such as Turkey.
Also in 2018, we expanded our
focus on adolescent girls throughcommunity programs in Cambodia
with Kampuchean Action for Primary
Education (KAPE), in India with MAMTA
Health Institute for Mother and Child,in Indonesia with CARE, and in China
with INNO Community Development
Organisation.
In addition to the expansion of P.A.C.E.,
we elevated the program’s profile
through a marketing campaign, Raise
Every Voice, led by our Gap, Banana
Republic and Athleta brands. This
campaign – which included a pageon the brands’ e-commerce sites toraise customer awareness and shareinspiring stories about P.A.C.E. graduates– engaged Gap Inc. customers in aconversation about the P.A.C.E. mission.
In 2019, we will tie this campaign to afundraising initiative, empowering ourcustomers to support women and girls incommunities near and far.

IMPACT

100% +

Improvementin Skills
Participants' 2018 assessment scores, on
average, show improvement in a range ofskills, including a:•••

134% increase in communication skills
113% increase in execution skills
138% increase in problem-solving anddecision-making skills*According to assessments that participants are
asked to complete before and after each P.A.C.E.
module

4.7%

Promotion Rate
for P.A.C.E.-trained womencompared to 1 percent among
their peers, according to asample set of 90 facilities

250%

ROI
for vendors
after nine months
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APPENDIX

P.A.C.E.:
Empowering Women
MAINTAINING QUALITY
AS P.A.C.E. GROWSThe expansion of P.A.C.E. gives us
the opportunity to reach a diversityof women and girls far beyond thefacility environment. This also creates
the potential for challenges: How can
we ensure the quality of the programas P.A.C.E. grows? And how can we
make sure the curriculum is relevant
to women and girls in different regions
and settings?
Two of the things that distinguish
P.A.C.E. are our focus on trainers andour robust curriculum, designed toengage people with diverse needs.
As P.A.C.E. grows, we want to makesure our NGO and facility partners
can continue to run an effective
program after the partnership withGap Inc. ends. To do this, we invest in
the people who deliver the programand continually refine the curriculum
to make sure it can be adapted for
different settings and learning styles.

Every year, we gather P.A.C.E. trainers
from around the world to participate ina professional development program.
Looking forward, we are exploring
opportunities to collaborate with otherleaders in women’s empowerment
to create a standard program forthe apparel industry to provide life
and work training for women. In a
discussion facilitated by the advisory
practice of the International Center for
Research on Women (ICRW Advisors),
we are working with representatives
from the International Labour
Organization’s Better Work programand BSR’s HERproject on concrete
ways we can collaborate to accelerate
progress toward the change we all
seek. In particular, we are exploring
how to increase the effectiveness of
our training programs by harmonizing
curriculum and coordinating
implementation. We are also looking atways to collectively influence policy andstrategy conversations on workplace
women’s empowerment programs.

2018 GLOBAL SUSTAINABILITY REPORT

42

Environment
Supply Chain
44

Water Stewardship

52

Chemicals Management

Operations
54

Energy55

Waste

OVERVIEW

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APPENDIX

Water
StewardshipFew resources are as essential to human health andwell-being as water.
Our water stewardship strategy is built on the principlethat clean, safe water is an environmental concern, abasic human right and a business imperative. We have a
responsibility and an opportunity to address water issues.
Water is also a critical natural resource for our business– used to cultivate raw materials like cotton, consumed
in the mills and laundries that manufacture our products,
and used by customers to wash their clothes. It’s also
critical to the health and well-being of the people who
make our products, a majority of whom are women.
To help build the resilience of our company, our supply
chain and the people who make our clothes, we areworking strategically to use water more efficiently in
product design and manufacturing, eliminate watercontamination, and promote education about water andsanitation among women in particular.
Learn More
How we create solutions for women + water2018 GLOBAL SUSTAINABILITY REPORT44

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APPENDIX

Water
Stewardship
OUR APPROACH
Our water stewardship strategy isfocused on the intersection between
our industry’s significant use ofwater and our belief that access toclean, safe water is a basic right.
The strategy is focused on three
key areas: water stewardship inmanufacturing; access to water,
sanitation and hygiene (WASH) for
women; and designing products thatuse less water to create.

MANUFACTURINGWOMEN

PRODUCT

We partner with strategic fabricmills, cut-and-sew facilities andlaundries to reduce manufacturing
impacts through programs focusedon energy and water efficiency, andwater quality.

We partner with organizations to
support women’s access to water,
sanitation and hygiene (WASH)
services and products in key
sourcing countries.

We look for opportunities to expand
the use of water-saving innovations
across all of our brands, and, where
possible, we are shifting to waterefficient raw materials.

20K

322M

1.3B

Liters ofWater Saved
at denim laundries,
mills + cut-and-sew
facilities in 2018
In 2018, we worked with 14 denim
laundries, 40 mills and four cutand-sew facilities through various
sustainability programs, which
continue through 2019.
This reduced the amount of waterused in manufacturing by 1.3 billion
liters, supporting our goal to save 10
billion liters of water by 2020.

Read More
Manufacturing (p.47)

Women Trainedon WASH practices
in 2018

Liters ofWater Saved
through Washwell™
since 2016

We also educate the women who
make our clothes about safe waterhandling practices through our
P.A.C.E. (Personal Advancement &Career Enhancement) program andkey local organizations.

Our program to reduce the water usedin finishing denim saves at least 20
percent of water used in the laundry stageof production. Since it began in 2016,
Washwell™ (p.58) has saved more than
322 million liters of water.

In partnership with CARE, wereached 20,000 women witheducation on WASH practices
through P.A.C.E. in 2018.

We are also designing products that use
more sustainable raw materials that savewater, with a designer-focused PreferredFibers Toolkit (p.57), and by sourcing Better
Cotton Initiative (BCI) cotton (p.62), which
can reduce water impacts.

Read More
Women (p.50)

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APPENDIX

Water
StewardshipGOAL

2018 PROGRESS

CEO WATER MANDATE

Save 10 billion liters ofwater in manufacturing by
2020, from a 2014 baseline

In 2018, we set an ambitious goal toconserve 10 billion liters of water by
the end of 2020 through sustainable
manufacturing practices.

We are a signatory to the CEO Water
Mandate, a UN Global Compact
initiative, joining with other companies,
governments, civil society and others
to address challenges related to water
scarcity, quality and governance, andaccess to water and sanitation.

PERFORMANCE

10B = 5B

Liters of Water Saved (billions)
2014

2016
668M

2017
3.3B

2018
5.7B

2020
GOAL

10B

Liters ofWater Saved(our goal)

Peoples'
Daily
Drinking
Water

This volume is equivalent to providing
daily drinking water for 5 billion people.
Our primary strategy to achieve this goal
is to engage with the mills and laundries
in our supply chain and use water-saving
methods in the production of our clothing.
We achieved 5.7 billion liters of watersavings by the end of 2018, from a 2014baseline.
During the year, we also expanded andamplified our efforts to deliver water,
sanitation and hygiene (WASH) education
to women via the United States Agency forInternational Development (USAID) and
Gap Inc. Women + Water Alliance, and two
partnerships with WaterAid, alongside ourcontinual work to reach women via our
P.A.C.E. program.
Through our brands, Washwell™ andother programs help connect ourdesign decisions with manufacturing
improvements, enabling us to save waterin our supply chain while also educating
our customers about water impacts andreductions.

In 2018, we helped to create“Businesses for Water Security in
the Noyyal Bhavani River Basin,”focused on improving the long-termsustainability of India’s Cauvery
River Basin, a critical watershed
in one of our key sourcing regions.
The project looks beyond individual
facility or single-company initiatives
to holistically address risks in the river
basin where our, and other brands’,
value chains operate. It aims to help
address the root causes of water risks
that threaten businesses, communities
and ecosystems.
Through this project, we will be working
with regional and local stakeholders toaddress water risks and ensure water
security in this basin by prioritizing
solutions that consider both the river
basin and apparel facility conditions.

As a result of our continuing efforts on
disclosure, ambitious goal setting andthorough risk assessment, we wereawarded CDP’s A-ranking.
Learn More
Detailed disclosures about our water
programs
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APPENDIX

Water
Stewardship
MANUFACTURING

MANUFACTURING

CHINA MILL EFFICIENCY PROGRAM

Our partnerships with suppliers support
our water goal through improvements
in resource efficiency, water quality andoverall mill sustainability.

Additionally, we developed our own Mill
Efficiency Program in China in 2017,
in which we partnered with a Chinese
environmental engineering firm in a yearlong assessment of energy and watersavings opportunities at six mill facilities.
Together, these facilities achieved morethan 1.4 billion liters of water savings andmore than 37,000 tons of carbon dioxide
equivalent per year. We are expanding the
program with additional facilities in 2019.

RESOURCE EFFICIENCY
Through our resource-efficiency programs,
we collaborate with strategic mills andlaundries to significantly reduce their water
impacts. In 2018, we worked with a totalof 40 mills and 14 laundries. The facilities
saw average water-use reductions of
20 percent through their implemented
efficiency programs. As many water issues
are based on local context and needs, we
map water risks to help prioritize areasof focus and drive countrywide or basinspecific approaches.
Our resource-efficiency efforts comprisethe following programs:
CLEAN BY DESIGN
We have been collaborating with the
Natural Resources Defense Council (NRDC)
on its Clean by Design program since2014, and in 2018, we helped to create
the Apparel Impact Institute (AII), which
will serve as the program’s new home. This
program helps mills in China improve theiroperational efficiency to reduce water,energy and chemicals use. To date, wehave engaged 20 mills in the Clean by
Design program that, together, saved morethan 650 million liters of water. In 2018,
we worked with 14 mills that represent anadditional potential water savings of 1.2
billion liters.

INDIA WATER PARTNERSHIPIn India, we embarked on a partnershipin 2017 and 2018 with cKinetics, 11 mills
and three denim laundries that is saving
an estimated 1.2 billion liters of water
annually, as well as more than 21,000 tonsof carbon-dioxide equivalent per year. The
program worked on the ground with ourfacilities to identify cost-effective as wellas ambitious opportunities to improve
efficiency. Over the course of a year anda half, the facilities implemented 103
projects, ranging from recovery and reuseof process water, replacement of boilers
and dyeing machines to more efficientmodels, and overall process optimization.
The work resulted in the publication of abest practices handbook that our teams
can use with other wet-processing units toencourage improvements.
PARTNERSHIP FOR CLEANER TEXTILE(PaCT)In Bangladesh and Pakistan, we workwith PaCT to improve the environmental
performance of the textile wetprocessing sector. In 2018, we nominatedsix additional denim laundries in
Bangladesh to complete in-depth
assessments of their operations thathighlighted improvement opportunities(we worked with three denim laundries in2016 and 2017 through PaCT as well). In
Pakistan, we nominated and completed
in-depth assessments for five mills andtwo denim laundries, and are in theprocess of completing assessments forfour additional cut-and-sew units.
RACE TO THE TOP
In Vietnam, our largest sourcing country,
we partner with IDH-led Race to the
Top to work with other global appareland footwear brands, government, local
industry and civil society on programs
that support sustainability, cost savingsand opportunities for innovation in
our sector. In 2018, we signed on an
additional two mills and three laundries,
completing an on-site assessment foreach that demonstrates improvement
opportunities. These facilities are
currently implementing water- andenergy-improvement projects and willvalidate their savings in 2019.

WATER QUALITY PROGRAM
We are also actively monitoring andhelping improve wastewater quality
at denim laundries through our Water
Quality Program (WQP), which has beena requirement for over 15 years. All thedenim laundries from which we source
have achieved our WQP standard, which
requires complete compliance with
wastewater guidelines.
In 2018, we enhanced the program byadopting Zero Discharge of Hazardous
Chemicals (ZDHC) (p.52) Wastewater
Guidelines as WQP requirements for
wastewater sampling and testing – 47
denim laundries participated, with
90 percent meeting all conventionalparameters and 78 percent meeting all
ZDHC MRSL parameters.

TAIWAN MILL EFFICIENCY PROGRAMIn Taiwan, we started a new millefficiency program in June 2018 as anextension of our engagement with Clean
by Design in China. We completed onsite assessments of four mills that joined
the program, and we plan to calculate
water-improvement results in 2019,
which we estimate may reach over 300
million liters. We also estimate potential
GHG reductions of over 7,000 tons.

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APPENDIX

Water
Stewardship
MANUFACTURINGMILL SUSTAINABILITYPROGRAM
Our Mill Sustainability Program,which we began through pilots in
2013, drives transparency, reducescompliance risks and contributes toour sustainability goals.
In 2018, we completed the transitionof our Mill Sustainability Program
into a strategic initiative to align our
approach with industry standards that
help us increase transparency, drive
innovation and meet our sustainability
goals. By leveraging partnerships,
we can analyze and improve theenvironmental performance of
our supply chain. Our suppliers’
involvement is key to our ability to
calculate our energy, greenhouse gas
and water baselines, which support
our setting of a Science Based Target
for our Scope 3 GHG emissions andmitigate water risks. The program isalso helping drive improvements insocial performance at mills.
Read MoreOur climate and energy programs(p.54)
Our social programs (p.32)

Three key industrywide efforts that weleverage to support our Mill Sustainability
Program include:
SUSTAINABLE APPAREL COALITION(SAC)
As a founding member of the SAC, we
use the Higg Index to evaluate suppliers’
environmental performance and engage
them to meet our goals. Since 2017, wehave expanded our use of the Higg Facility
Environmental Module (FEM) 3.0 tocollect data from mills’ self-assessments.
Increasingly, these self-assessments areverified by a third party. In 2018, the Higg
FEM 3.0 completion rate of our supplying
mills was more than 90 percent. We now
ask our strategic mills (which represent
more than 75 percent of our total business)to complete the Higg FEM 3.0 annually.

SOCIAL & LABOR CONVERGENCEPROGRAM (SLCP)As a signatory to this collaboration
among apparel and footwear brands,
retailers, industry groups and civil society
organizations, we are supporting a newshared data-collection tool that canassess the social and labor performanceof manufacturing facilities across theapparel and footwear supply chain.
Read more
Our involvement with SLCP (p.32)
By 2020, we will require 90 percent of
Gap Inc.-approved strategic mill facilities
to participate in and report using the
Higg Index FEM 3.0, ZDHC Roadmap to
Zero Programme, and SLCP social andlabor assessment.

ZERO DISCHARGE OF HAZARDOUS
CHEMICALS (ZDHC)
We joined ZDHC’s Roadmap to Zerocommitment in 2014 to work toward theelimination of hazardous chemicals inour supply chain. We integrated ZDHC
Roadmap to Zero Programme tools
and resources, such as the Manufacturing
Restricted Substances List (MRSL) and
Wastewater Guidelines, into our Mill
Sustainability Program. In 2018, we beganrequiring our strategic mills to test theirwastewater twice a year and publish theresults through the ZDHC Gateway.

KEY METRIC

90% of strategic mill facilities
participate in and reportusing the Higg Index FEM
3.0, the ZDHC Roadmap to
Zero Programme, and SLCP
social and labor assessment
by 20202018 PROGRESSIn 2018, we sharpened our understandingof the environmental impact of our mill
suppliers through our use of Higg FEM
3.0. Today, 93 percent of our cut-and-sew
manufacturers and 91 percent of fabricmills and dyehouses used Higg FEM 3.0,
the highest response rate of any brand
SAC members. We have mapped out 203
mill facilities that represent 75 percent ofour business in 2018.
Another part of our investment was tojoin the Open Apparel Registry (OAR),
a pilot initiative that assigns a unique
identification number to each facility.
This registry will allow us to map our
suppliers’ facilities and contribute toward
transparency across the apparel supply
chain. In the future, we hope to use theunique IDs generated by the OAR to map
our supplier facilities’ Higg Index, ZDHC,and SLCP modules to ease the burdenof supply chain mapping across multiple
sustainability initiatives.
By deepening our engagement with
suppliers through these programs, we aim
to spur innovation so that our suppliers
contribute additional ideas and pilot
new technologies to reduce social andenvironmental impacts.

Read more
Our involvement with ZDHC (p.52)

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APPENDIX

Water
Stewardship
MANUFACTURING

WATER SAVINGS
By the end of 2018, we saved 5.7
billion liters of water in manufacturing
through the combined efforts of ourresource efficiency, Mill Sustainability
and Water Quality Programs.

WATER QUALITYPROGRAMRESOURCEEFFICIENCYMILL SUSTAINABILITYPROGRAM

Sustainable
Apparel Coalition
We require strategic mills tocomplete the Higg Index FEM 3.0
annually.

Zero Discharge ofHazardous Chemicals

India Water
Partnership
1.2B liters
annual savings

Clean by
Design

650M liters
saved to date
(China)We require denim
laundries to achieve
our Water Quality
Program standard.

China Mill
Efficiency
Program
1.4B liters
annual savings

We require strategic mills to follow
the ZDHC MRSL and test theirwastewater discharge twice ayear per the ZDHC Wastewater
Guidelines.

5.7B

Liters ofWater Saved
at denim laundries,
mills + cut-and-sew
facilities through2018

Taiwan Mill
Efficiency
ProgramRace tothe Top

Social & Labor
Convergence Program
By 2020, we will require strategic
mills to use the SLCP social andlabor assessment.

(Vietnam)

300M liters
projected
savings

Partnership for
Cleaner Textile(Bangladesh + Pakistan)

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APPENDIX

Water
Stewardship
WOMEN

SUPPORTING WOMENWITH ACCESS TO WATER,SANITATION + HYGIENE

2018 PROGRESS•

We seek to improve access to water,
sanitation and hygiene (WASH) for
women and communities touched byour business.

••

Roughly 80 percent of the people who
make our clothes are women, andaccess and affordability to WASH isa major challenge in many of our key
sourcing countries. In many parts of theworld, women are largely responsible
for household duties such as cooking
and cleaning; they shoulder adisproportionate burden when it comesto water stress.
Alongside our strategic implementation
partners, we lead a suite of programs
to provide education, access toservices and financing to womenand communities to address their
WASH needs. Through water-risk
assessments, we have identified India
as a critical location for WASH services,making it a strategic location for manyof our programs.
Within Gap Inc. partner facilities, ourCode of Vendor Conduct requiresthat key WASH needs of garment
workers are met. In addition, our
P.A.C.E. (Personal Advancement &Career Enhancement) program aimed
at workers within our supply chain as
well as global communities, provides
additional capability to bring WASH
education to women globally withinboth manufacturing facilities andcommunities.

Through the USAID and Gap Inc.
Women + Water Alliance we:

•

•

•
•

Reached 20,000 women withGap Inc.’s P.A.C.E. program, inpartnership with CARE
Catalyzed over USD $1 million
in financing, benefiting 5,800
households (27,800 individuals) toaddress their WASH needs throughWater.org’s financing model
Identified two pilot opportunities
to address water stewardship in
cotton-cultivating communities
and where fabric is produced, andassessed over 100 global bestpractices on water stewardship in
partnership with the Institute for
Sustainable Communities (ISC)

Reached over 20,000 people withsupport to improve their access to
WASH services in India through ourpartnership with WaterAid
Partnered with the WASH4Work
initiative to catalyze private-sector
investment and engagement in WASH
Partnered with the CEO Water
Mandate to advance collective action
on water stewardship in the Cauvery
River Basin in India, with other apparelsector brands

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APPENDIX

Water
Stewardship
WOMEN

USAID AND GAP INC.
WOMEN + WATER ALLIANCE
In 2017, we launched the Women+Water(W+W) Global Development Alliance with
the United States Agency for International
Development (USAID) to improve andsustain the health and well-being of
women and communities touched by theapparel industry.

programs that support their well-being.
To catalyze progress, we are also learningand sharing best practices for WASH andwater stewardship across the apparelindustry and beyond.
2018 PROGRESS

1.

The Alliance made significant strides
in 2018, the second year of program
implementation. One of our majorachievements was completing a baseline
assessment of water and sanitation
challenges in Madhya Pradesh. The
assessment, which was carried out in
partnership with Institute for Development
Impact (I4DI), looked at 1,000 households
across 90 villages, and revealed that threequarters of the assessed households musttravel to access clean, safe water, spending
up to one and a half hours a day collecting
water. Moreover, most households could
use improved water-treatment andstorage practices, and many households
would benefit from caregivers improving
handwashing techniques.

This pioneering public-private partnershipaligns closely to our goals related
to sustainable water stewardshipand empowering women with WASH
education, services and products. The
program is primarily being implemented
in communities where cotton is grown andwhere fabric mills are located. Throughrigorous monitoring and evaluation, we are
deepening our understanding of the WASH
needs of women and girls in communities
while improving our ability to deliver

Progress in 2018 also included our partner
CARE delivering the Gap Inc. P.A.C.E.
program together with WASH training
to women in Madhya Pradesh. During
the year, 16,893 women graduatedfrom the Gap Inc. P.A.C.E. program.
Water.org supported CARE’s training
by developing additional water andsanitation financing training material
to help P.A.C.E. participants better
understand their options for addressing
key WASH needs for themselves and theirfamilies. Water.org also established key
partnerships with microfinance institutionsin India to catalyze funding for WASH
needs such as retrofitting of toilets, andOver the course of this five-year program,
Gap Inc. is serving as the co-funderand primary program manager. The
W+W Alliance operates in two Indianstates critical to the apparel industry –Maharashtra, a key cotton-growing state,
and Madhya Pradesh, a textile industry
hub. Three implementing partners – CARE,
Water.org and Institute for Sustainability
Communities (ISC) – are helping the
program work toward two objectives,
where women’s self-efficacy and agency
plays a critical role to:
Encourage communities to adopt key
WASH practices
2. Build access to and sustainably
manage quality water resources andsanitation services

water filters. Further, ISC developed acomprehensive set of best practices forapparel-industry water stewardshipand identified opportunities to address
water stewardship in cotton-growing
communities and textile-milling
communities through two pilots.
Gap Inc. also engaged the Governmentof India to build awareness and seek
support to strengthen programs andactivities. Finally, we enhanced our datacollection system with key performanceindicators.
Looking ahead, the W+W Alliance aims
to reach even more women with WASH
education via the Gap Inc. P.A.C.E.
program in Madhya Pradesh and in
Maharashtra. A key component of thesuccess of these activities is CARE’s work
to engage men to support the WASH
needs of women. Two pilots on waterstewardship best practices in cotton andmill communities will be implemented.
The W+W Alliance will also conduct abaseline assessment in Maharashtrawith Institute for Development Impact(I4DI) and assess P.A.C.E.’s impact tofoster women’s behavior change on
WASH practices through an extensive
study conducted by the International
Center for the Research on Women(ICRW). Finally, the W+W Alliance will
welcome WaterAid, a new partner, tocomplement the ongoing activities by
supporting governance for water accessand quality.

WATERAID
Gap Inc. has partnered on several water
initiatives with WaterAid, an NGO that
supports people with access to clean waterand sanitation. Alongside other companies
and consultants, we have developed a
new guide to help companies understandand measure the economic benefits ofinvesting in WASH to make the case forfurther investment while also encouraging
their supply chains to take action:“Strengthening the business case for water,
sanitation and hygiene: How to measurevalue for your business.”
Further, we are supporting WaterAid todeliver a comprehensive WASH programfor 20,000 people living in marginalized
areas of Madhya Pradesh.

WASH4WORK
Gap Inc. is a partner in WASH4Work,a diverse group of stakeholders fromthe public and private sectors thataims to mobilize businesses that are
working together to strengthen business
contributions to achieving Sustainable
Development Goal (SDG) 6. It aims to
improve access to WASH in the workplace,in the communities where workers live andacross supply chains.

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APPENDIX

ChemicalsManagement
We aim to eliminate the discharge of hazardous
chemicals within our supply chain to reduce ourenvironmental impact and improve access to clean,safe water in the communities where our suppliers
factories and mills operate.
The global apparel industry accounts for high amounts
of use of chemicals in manufacturing, and the dischargeof these chemicals can threaten local water sources andaffect people working with them and living nearby.
Learn More
How we're reducing the impact of chemicals

OUR APPROACH
Our approach to chemicals management
includes three key components:

Gap Inc. suppliers have been expected
to comply with our RSL; and in 2016, we
adopted the AFIRM Group RSL. Since 2015,
we have required all of our suppliers tocomply with the ZDHC MRSL.

1. WORK WITH SUPPLIERS
We communicate chemical safety
requirements to our suppliers throughour Code of Vendor Conduct (COVC) andrequire them to acknowledge and comply
with these requirements.
2. COMPLIANCE AND MONITORING
We use third-party testing of products
and components of products to ensurecompliance with global chemical
regulations and Gap Inc. chemical
restrictions.

GOAL

Work toward zero
discharge of hazardous
chemicals in our supply
chain by 2020

3. INDUSTRY PARTNERSHIPS
We partner with industry groups,
including Zero Discharge of Hazardous
Chemicals (ZDHC), the Apparel andFootwear International RSL Management(AFIRM) Group, and the Sustainable
Apparel Coalition (SAC), to implement a
consistent set of tools and processes tosupport best practices, monitor supplierperformance and encourage use ofsafer chemicals. In addition to helping
us achieve our water and sustainability
commitments, these partnerships help
advance the industry as a whole.
Gap Inc. chemical restrictions are
informed by global regulations as well as
hazard- and risk-based considerations.
They include our Restricted Substances
List (RSL) and Manufacturing Restricted
Substances List (MRSL). Since 2008,2018 GLOBAL SUSTAINABILITY REPORT52

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APPENDIX

ChemicalsManagement
2018 PROGRESS + INDUSTRY INITIATIVESINPUT MANAGEMENTPROCESS MANAGEMENT

Our suppliers' input chemicals
must comply with the

Our suppliersmust respond to the

ZDHC MRSL

Higg Index FEM 3.0

Selection of better chemical inputs andstarting materials is an essential partof reducing the use and discharge ofhazardous chemicals.

Adherence to chemicals management
best practices during manufacturing
is critical for reducing human andenvironmental risks.

•

To support best practices in our supply
chain, our COVC outlines a numberof expectations for chemical use andhandling. We require all Tier 1 cutand-sew suppliers and strategic Tier
2 fabric mill suppliers to respond to
the Higg Index FEM 3.0, which enables
us to evaluate suppliers based onwhether they follow specific chemicals
management practices. We also use thisdata to inform the evolution of Gap Inc.’schemicals-management strategy.

•

As a ZDHC Signatory Brand, we
require our suppliers to follow theZDHC Roadmap to Zero Programme,
which includes registering with
the ZDHC Gateway, maintaining achemical inventory list and using
input chemicals that comply with the
ZDHC MRSL.
We are also working to go beyond
MRSL conformance by identifying
and increasing our use of “preferred”
chemicals. In 2018 we initiated pilotsof two different programs developedby and for the apparel industry to
proactively identify and increase
the use of safer chemicals. As well
as checking for MRSL conformance,these programs provide additional
information about input chemicals(such as a third-party chemicalhazard assessment) to help identify“best-available” formulations.

OUTPUT MANAGEMENT

Finished products
must comply with the

AFIRM RSL

Our suppliers must comply with the

ZDHC
Wastewater Guidelines

Outputs of apparel and footwear manufacturing include finished products as well as
wastewater and air emissions. Managing these outputs is a foundational componentof reducing discharge of hazardous chemicals.
•

Finished products manufactured for our brands should comply with the AFIRM RSL;
we test products in order to ensure they meet regulatory standards established by
the countries where we sell products.

•

To address emissions, we have integrated ZDHC tools and resources for output
management into Gap Inc. policies and systems for managing our supplier
relationships. In 2018, we formally adopted the ZDHC Wastewater Guidelines into
existing supply-chain programs, including our Water Quality Program (WQP) for all
denim laundries – Tier 1 facilities that generate significant amounts of wastewater– and our Mill Sustainability Program. Our strategic mills and laundries are required
to test their wastewater twice per year to ZDHC standards and publish the results
through the ZDHC Gateway, a data-sharing platform that allows brands to monitor
supplier wastewater data.

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APPENDIX

EnergyClimate change is a global challenge that transcends
boundaries, affecting people and communities
everywhere.
Climate risk is the key sustainability issue of our time,and is both a human and an environmental challenge.
Managing this risk is critical for the long-term success ofour business. We feel an ethical responsibility to address
climate change by aligning our goals and strategies withthe best science and industry practices.
Learn More
How we're doing our part on climate

2018 PROGRESSGOAL

Reduce greenhouse gas
emissions by 50% in ourowned and operated
facilities globally by 2020,
from a 2015 baseline
PERFORMANCE

471,301
405,503400

387,644

350

2020
GOAL

300
250

↓50%

200

2015
BASELINE••

447,687

450••

Metric Tons CO2e, Scope 1 and 2,
Global Market-Based500

In 2018, we continued our efforts to
reduce our climate impacts in four ways:

2016 2017 2018↓7% ↓16% ↓18%

Improving energy efficiency at ourstores, offices, and distribution
networks
Expanding our investments inrenewable energy
Collecting and analyzing data fromour supply chain to set a Science
Based Target for Scope 3 GHG
emissions beyond 2020
Signed on to the UN Fashion Charterfor Climate Action

ENERGY EFFICIENCYIn 2018, we achieved an 18 percent
cumulative reduction of GHG emissions in
our owned and operated facilities, putting
us over a quarter of the way towardmeeting our 2020 goal to reduce GHG
emissions by 50 percent against a 2015baseline. In absolute terms, we reduced our
GHG emissions by 83,657 metric tons ofcarbon-dioxide equivalents.

share best practices with other companies
that wish to replicate this innovative model.
Each company will receive approximately
the same amount of energy from the
project. Gap Inc. has contracted for 7.5
megawatts of solar energy, which willoffset 100 percent of the energy load for
our Athleta brand’s headquarters andstores. The project is targeted to begin
generating electricity in 2020.

RENEWABLE ENERGYSCIENCE BASED TARGETS
INITIATIVE

In June 2018, we finalized an agreement todevelop a 3-megawatt solar array at ourFresno, California, distribution center. The
project, which will result in the equivalentof removing 254 passenger cars fromthe road annually, will offset more thanhalf of the energy load at our Fresno
facility and is projected to reduce energy
expenses. We expect the array to begin
generating power by the end of 2019. We
are continuing to explore the possibility of
combined renewable energy and storage
opportunities in our distribution-center
network.

In 2017, Gap Inc. signed on to the Science
Based Targets initiative (SBTi) to align our
climate goals with the scientific consensus
and core commitment of the Paris
Agreement to limit global warming to lessthan 2 degrees Celsius. We establishedour 2020 Scope 1 and 2 GHG emissionsreduction goal using a science-based
methodology. To meet the standards of the
SBTi protocol, we are also establishing a
Scope 3 goal to cover the major impacts ofour enterprise activities. We plan to submit
Gap Inc.’s science-based target for Scope 3
emissions and finalize a target in 2019.

Looking forward to 2019, together withfour other companies – Bloomberg, Cox
Enterprises, Salesforce and Workday – weformed a first-of-its-kind Virtual Power
Purchasing Agreement (VPPA) partnershipthat is enabling us to procure a total of
42.5 megawatts of a 100-megawatt solar
project in North Carolina. Historically, it has
been difficult for individual companies withsmaller energy needs to procure solar fromlarge projects due to high transaction costs
and complicated contract processes. By
joining forces, however, we have expanded
our buying power, and we will be able to

CDP CLIMATE CHANGE
Our CDP Climate Change response
includes detailed information on our
strategy and performance, which
incorporates recommendations from theTask Force on Climate-related Financial
Disclosures (TCFD).

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APPENDIX

Waste
We have a responsibility to help prevent waste in
our operations, which can negatively impact theenvironment and add unnecessary cost to our business.
In North America, 90 percent of our waste is discarded
by our stores, and we are exploring ways to reduce anddivert our packaging waste. By innovating to optimize
packaging and reduce volume, lower business costs andsupport industrywide change, we aim to divert more than
30 million pounds of material from landfill every year.

2018 PROGRESSGOAL

Divert 80% of waste fromlandfill across our U.S.
facilities by 2020
PERFORMANCE% Waste Diverted from Landfill

2017 / 47%
2018 / 47%

Learn More
How we're diverting waste

2020
GOAL

80%

In 2018, we continued the approach wedeveloped in 2017 to meet our 2020
waste-diversion goal, by focusing on steps
we can take as a company to innovate our
packaging design and recycling systems.
We are also continuing to explore solutions
for polybags. Only a portion of our store
locations are able to recycle these typesof soft plastics, so we are testing a suiteof solutions: better communication
with store employees about current
recycling opportunities at their location,
collaboration with our brands to reduce thequantity of polybags shipped to stores, andstricter packing standards with our vendors
to reduce polybag volume through better
design and packing practices. We are also
creating and selecting in-store marketing
materials with recyclability in mind.
In addition to work within our company
and with our brands, we are continuing
to engage the industry and our landlords
to develop longer-term solutions that
reduce waste and expand opportunities forrecycling across the retail industry.

70%of Athleta
store waste
was diverted
from landfill
in 20182018 GLOBAL SUSTAINABILITY REPORT

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57

Product Sustainability

58

Brand Goals

61

Raw Materials

63

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APPENDIX

Product
Sustainability
We aim to design great products with sustainability
in mind while collaborating across our business toimprove the performance of our brands.
Our brands approach impact reduction throughout the
product life cycle, examining the materials they source,
the products they design and the suppliers they workwith. Each brand uses its unique voice to communicate
directly with customers on the importance and impact of
producing responsibly.
Learn MoreOur work on product sustainability

85%

of Athleta 2019 swim
was made withrecycled nylon

2018 PROGRESSIn 2018, all of our brands expanded theirefforts to embed sustainability into productdesign and raw-materials selection, andthey increased customer communication toemphasize the importance of environmental
and social awareness to the people who buy
and wear our clothes.

1,500+

Product Design +Development Employees
Trained on
Sustainable Practices
through 2018

PREFERRED FIBER + MATERIALSTOOLKIT AND TRAINING
In 2018, we completed and rolled out ourPreferred Fiber & Materials Toolkit, which
we created alongside third-party industry
partners, Textile Exchange and MADE-BY.
The tool empowers product teams to selectthe best fibers based on sustainability
impacts such as water, chemicals, energy
and emissions, land use and biodiversity,
social conditions, animal welfare, potential
for circularity, and improved conditions
for women. The toolkit also allows productdesign and development teams to evaluate
fibers based on commercial factors, such as
quality, cost, availability and traceability.
To complement the launch of this toolkit, wedeveloped and incorporated sustainability
workshops and a training curriculum into ourcompany-wide learning and development
program. In 2018, we trained approximately
400 additional Product Design andDevelopment employees through ourworkshops: Sustainability 101, Sustainability
Claims, Fiber Sustainability, Sustainable
Wet Processing and Sustainable Denim. To
date, we’ve reached over 1,500 employeeswith these workshops. We also continued
publishing our monthly newsletter on productsustainability, which now reaches more than
600 Product Development employees.

CUSTOMER COMMUNICATION
We have continued to communicate
our product sustainability efforts tocustomers through store displays, productdescriptions, product labeling, social media
and other channels. We also engage
in educational campaigns and media
around events such as World Water Day,and through our strategy to source moresustainable cotton, including the Better
Cotton Initiative (BCI).
Looking ahead, many of 2018’s efforts
laid the foundation for comprehensive
initiatives launching in early 2019. In a
campaign that launched on Earth Day
2019, we partnered with other apparelbrands, the Ellen MacArthur Foundation’s
Make Fashion Circular initiative, and thecity of New York to tackle clothing waste.
Through the #WearNext campaign,
Athleta, Banana Republic and Gap
stores in New York City host recycling
bins for customers to drop off unwanted
clothing for recycling or repurposing. The
New York City Department of Sanitation
has published an online guide to theselocations.
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APPENDIX

Brand
Goals
GOAL

For every brand within Gap Inc.,sustainability is considered a businesspriority.
Beginning with Athleta and Gap brandtesting and scaling innovations fromrecycled fibers to water-saving denim
washes, we learned a lot from our firstbrand-level goals in 2017. By 2018, allof our brands established executive
sustainability steering committees,defined their own priorities andgoals, and led sustainability-strategy
workshops with cross-functional
teams. This empowers each brandto build a strategy that is true to its
identity while also pursuing meaningfulenvironmental and social impact.

GAP FOR GOOD
Gap brand launched its consumerfacing Gap for Good platform in 2017
to highlight more sustainable fashion.
The platform builds on Gap’s Earth
Day 2017 commitment to source
100 percent of its cotton from moresustainable sources by 2021.
WASHWELL™

In honor of Earth Day 2019, ourBanana Republic and Old Navy brands
established their sustainability-focusedgoals, incorporating sustainable
materials and water savings into
design, raw materials sourcing, andmanufacturing and processing.

Since 2016, when our Gap brandpioneered Washwell™ – a denim wash
program that conserves water in thelaundry stage of production – we haverefined the process and made it easier
to adopt across our other brands. In
2018, we expanded Washwell™ so thatthe program is now used across ourbrands.

Hill City, our newest men’s performanceand lifestyle brand, launched in 2018 asa B Corp. The brand is being built fromthe ground up with a commitment tosustainability.

In 2018, 19 vendors participated in
Washwell™, up from 16 vendors in 2017.
We saved 98.9 million liters of water
through Washwell™ in 2018, up from76.6 million liters in 2017.

99M

Liters ofWater Saved
through Washwell™
in 2018

Source 100% of cotton
from more sustainablesources* by 2021
PERFORMANCE% Cotton from More Sustainable Sources

2018 / 53%
2021
GOAL

*Includes Better Cotton
Initiative (BCI), organicand recycled cotton

In 2018, Gap Inc. launched Hill City, a highperformance men’s apparel brand thatoffers technical clothing that transitions
seamlessly through the day – fromworkout to work to weekend. Incubatedalongside the highly successful Athleta
business, Hill City has been designateda B-Corp certified brand by integrating
sustainability throughout its operations
and using high-quality renewable,
recycled fibers to create performance
fabrics for many of its products.

100%

GOAL

Make 75% of qualifying
products* using
Washwell™ water-saving
techniques by 2021
PERFORMANCE% Products Made Using Washwell™
Water-Saving Techniques
2018 / 22%*Qualifying products
include denim jeans,jackets and shorts.

2021
GOAL

75%
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APPENDIX

Brand
Goals
•
Athleta has a strong commitment toenvironmentally conscious products andsustainable practices. The brand believes
in protecting the Earth as a natural
playground, positively contributing to thedirection of the apparel industry, offering
customers responsible options, driving
demand for sustainable goods, andsupporting the potential of women and girls.
2018 HIGHLIGHTS
2018 was a significant year for Athleta,
beginning with achievements of its
B-Corp certification, which means thatthe brand is meeting rigorous standardsof social and environmental performance,accountability and transparency. As part ofthis certification, Athleta formed an internal
governance committee to support its
sustainability efforts.
••

Protect Resources: Progress was madeon environmental efforts, especiallyaround sourcing more sustainablefibers. Over the past two years, thebrand has been working to use morerecycled synthetics, organic cottonand more efficient fabric-dyeing andfinishing techniques. These materials– as demonstrated by life-cycle
assessments – conserve water, use lessenergy, and emit less greenhouse gases
and hazardous chemicals than theirconventional counterparts.
Conserve Water: The brand isinvestigating new technologies andexpanding existing programs that use
less water.

Empower Women: The brand also
invested in social-impact efforts,
including enrolling more supplierfacilities in the P.A.C.E. programand onboarding and certifying one
new Fair Trade facility in Sri Lanka.

CUSTOMER ENGAGEMENT
Athleta promotes its sustainability
initiatives among customers by using
simple, clear symbols in catalogs andonline to indicate which products are
Fair Trade and which are sourced fromfacilities that participate in our P.A.C.E.
(Personal Advancement & Career
Enhancement) program. The brandalso shares its sustainability efforts
on athleta.com, including its five corevalues and progress toward its 2020
sustainability goals.

17

Facilities
enrolled in P.A.C.E.

2

Facilities
certified Fair Tradesince 2017

GOAL: PROTECT RESOURCES

GOAL: DIVERT WASTE

Make 80% of materials
with sustainable fibers
by 2020

Divert 80% of store wastefrom landfill by 2020

PERFORMANCEPERFORMANCE% Materials Made with 30% or more
Sustainable Fibers% Waste Diverted from Landfill

2017 / 35%2017 / 70%2018 / 46%

2018 / 70%
2020
GOAL

2020
GOAL

80%

80%

GOAL: CONSERVE WATERGOAL: EMPOWER WOMEN

Make 25% of products
using water-saving
techniques by 2020

Impact 10,000 women
through P.A.C.E. andFair Trade by 2020

PERFORMANCEPERFORMANCE% Products Made Using
Water-Saving Techniques

Women Who Participated in P.A.C.E. or
Received Fair Trade Premiums

2017
1%
2018
4%

2017
2,503

2020
GOAL

2018
3,212

2020
GOAL

10K

25%
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APPENDIX

Brand
Goals

Banana Republic will continue tointegrate sustainability into design
and manufacturing decisions to
reduce the environmental impacts ofeach garment.

GOAL

Make 50% of products
using water-saving
techniques* and cleaner
chemistry practices** inour supply chain by 2025
*Techniques that save at least 20 percent ofwater compared to conventional methods at
mill facilities; includes Washwell™
**Through Gap Inc.’s Zero Discharge ofHazardous Chemicals (ZDHC) commitment
and ongoing efforts to select preferredchemistry options

KEY METRIC

Make more eco-friendly*
denim by 2023
*Includes Washwell™; sustainable cotton
primarily through BCI, as well as recycled
and organic sources; more sustainable dyemethods, such as foam dye; eco-friendly
finishes such as bio-softeners and laser
technology; and trims made with recycledmaterials

GOAL

GOAL

Source 100% of cotton
from more sustainablesources* by 2023

Source 100% of cotton
from more sustainablesources* by 2022

PERFORMANCE% Cotton from More Sustainable Sources
2018 / 45%*Primarily through BCI, as well
as recycled and organic sources

2023
GOAL

100%

GOAL

Make 50% of productswith sustainable fibers*
by 2023
PERFORMANCE% Products Made with Sustainable Fibers

Old Navy’s targets are focused in
two areas of critical importance tothe brand and Gap Inc. Old Navy
will help scale and drive impactfulimprovement in water-savings efforts
and sustainable-cotton sourcing,while helping to educate the brand’s
customers on the importance of moresustainable apparel production.

PERFORMANCE% Cotton from More Sustainable Sources

2018 / 40%*Primarily through BCI as wellas verified, responsibly grown
and recycled cotton

2022
GOAL

100%

GOAL

Make 100% of denim
products using watersaving techniques* by 2022
PERFORMANCE% Denim Products Made Using
Water-Saving Techniques

2018 / 28%
2023
GOAL

2018 / 60%
2022
GOAL

50%
*Includes cotton through BCI, as well as
recycled and organic sources; partneringwith Canopy-compliant suppliers to source
preferred man-made cellulosics; recycled
and responsible wool from vendors thatare compliant under the Responsible Wool
Standard; and linen and recycled polyester*Includes proven wash processes

100%

60 percent of Old Navy’s denim purchased
for Spring 2019 was made using watersaving techniques, saving 20 percent ormore water in the garment wash stage
compared to conventional methods.
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APPENDIX

Raw
Materials
We believe great products are created withsustainability at their core — which means going all theway down to our raw materials to integrate responsible
sourcing into our product life cycle.
Our brands are empowered to improve the sustainabilityof their products by selecting the best raw materials thatmeet the performance requirements of their products,
while also meeting Gap Inc. standards for social andenvironmental sustainability. We continue to refine andevolve our strategy and engage in industry partnershipsthat focus on sustainable raw materials and circularapproaches to materials use and end of life.
Learn More
How we source more sustainable raw materials

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APPENDIX

Raw
Materials
GOAL2018 PROGRESSSYNTHETICS

Eliminate the use of woodderived fibers sourced fromancient and endangered
forests by 2020

In 2018, we continued our strategy to focus
on the fibers that account for approximately
97 percent of our fiber consumption: cotton,polyester, nylon and man-made cellulosics,
such as rayon and modal.

The synthetic materials in our products– including polyester, spandex and nylon –provide essential performance properties.
However, since they are generally derived
from nonrenewable, petroleum-basedsources, there are concerns about theirproduction and processing, and they do notbiodegrade like natural fibers, providing
limited end-of-life options. We’re taking
steps to source more sustainable synthetic
fibers, including recycled polyester andrecycled nylon. However, converting
recycled polyester into fabric can be costly
and there are challenges with sourcing asufficient supply. In 2018, we conducted alife-cycle assessment of recycled polyesterand have been slowly increasing our useof recycled polyester where possible.
We are also an active member of the
Textile Exchange Recycled Polyester
and Biosynthetics Working Groups,
investigating industry innovations toward
more sustainable fibers.

PERFORMANCE% Products Compliant with Commitment
2018 / 77%

2020
GOAL

100%

2018 SUSTAINABLE FIBER
SOURCING
Fiber Type% of Fiber Type

Natural Fibers
Organic Cotton
BCI Cotton
Recycled Wool
RWS Wool		

0.2% of cotton
40% of cotton
3.5% of wool
0.1% of wool

Synthetics
Recycled Nylon
Recycled Polyester

0.3% of nylon
0.7% of polyester

Man-Made Cellulosics
Lenzing Modal
3.9% of rayon
TENCEL		
6.1% of rayon

Over the year, we focused on further
improving our fabric-management systems
to provide detailed data on our fiber
consumption and volumes and to increase
the awareness of our teams throughtraining programs and shared tools.
COTTON
Cotton is one of the most importantfibers for Gap Inc. We focus our cotton
strategy around building fiber security andmaintaining a comprehensive evaluationof cotton-sourcing risks, as well as building
a more sustainable source of cotton thatis better for people and the planet. As acrop that is primarily grown in high waterstress locations such as India, China andPakistan, cotton is especially vulnerable towater-related impacts. We also endeavor
to use more sustainable cotton across allof our brands, and Gap brand, Banana
Republic and Old Navy have committed
to using 100 percent sustainable cotton.
This includes organic, recycled and Better
Cotton Initiative (BCI) cotton. We joined BCI
in 2016, and we are proud that Gap Inc. is
now the world’s third-largest user of BCI
cotton. Across all of our brands, more than
40 percent of the cotton Gap Inc. sourced in2018 was through BCI.

MAN-MADE CELLULOSICS
We are working closely with our top
suppliers to support our company-wide
policy to eliminate our use of wood-derived
fibers from ancient and endangered
forests by 2020. This commitment helps
protect critical forests and also supports
our efforts to tackle climate change,
as forest ecosystems are vital natural
resources that promote biodiversity,
protect watersheds and help mitigate
the release of carbon dioxide into theatmosphere. Our policy – which wedeveloped in partnership with Canopy’s
sustainable fashion and forestry initiative,
CanopyStyle – aims to ensure that our

suppliers do not use ancient, endangered,high-conservation or high-carbon-value
forest areas to make cellulose-based
textiles, including rayon, modal, viscose andlyocell.
To achieve our commitment, we arepartnering with mills on the following:
identifying our raw-material suppliersin order to eliminate sourcing ofwood-derived fibers from ancientand endangered forests; leveraging
CanopyStyle’s audit and remediation
plan; and encouraging the developmentof innovative fabrics. In partnership with
our major suppliers, we are also exploring
ways to integrate recycled cellulosics into
our products. In 2018, we gathered data on
our supply chain representing more than
80 percent of our cellulosic fiber volume
through an internal survey and multiple
conversations with suppliers. Throughthis data, we show that 77 percent of ourcellulosic volume is compliant with ourcommitment. We still have work to do toengage additional suppliers to take theCanopy audit and have some engaged
suppliers commit to a remediation plan.

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APPENDIX

Circularity +End of Life
In order to create truly sustainable fashion, we
recognize that we must address the full life cycle ofour garments, from raw materials to end of life —and back again.
We are addressing product end of life because theenvironmental impact of textiles – the majority ofwhich end up in landfills or incinerated – is large. Our
programs and partnerships to address product endof life and create circular design systems are aimed
at reducing waste and increasing recycling, upcycling
and reuse.
Learn More
How we map the product life cycle

INDUSTRY COLLABORATION
There are opportunities for industrywide
collaboration to find innovative solutions tomany outstanding issues.
We are collaborating with leaders in
the circular economy, including as acore partner in the Ellen MacArthur
Foundation’s Make Fashion Circular
initiative. Through Make Fashion Circular,
we have made a three-year commitment
to focus on safe and reusable inputs,
sustainable-fiber models and recycling
old clothing. Through our involvement, welaunched a textile-collection effort in New
York City in early 2019 that encourages
customers to bring their spent garments
to select Banana Republic, Gap brand andAthleta stores for recycling. Their aim is todevelop safe and reusable inputs that feed
into sustainable-fiber models in order toturn old clothes into new.

In addition to these partnerships, we
continued our engagement with Global
Fashion Agenda (GFA) and Fashion
Positive, to explore circularity opportunities.
As part of our 2020 Circular Fashion
Commitment with GFA, we have set threecommitments to achieve by 2020:
1.

We will train our cross-functional
product teams for each of our brands
on circular design techniques and bestpractices.
2. We will help to increase the volumeof used garments collected globally
through participation in precompetitive, industry-led collection
pilots.
3. We will identify the most promising
recycling technologies for postconsumer materials across multiple
product categories and start scaling
them in our supply chain.
These partnerships are supporting ourstrategy and setting the stage for largescale industry-level innovation.

2018 GLOBAL SUSTAINABILITY REPORT

63

Appendix
65

Goals + Progress Detail

67

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APPENDIX

Goals + Progress Detail
Holding ourselves accountable is fundamental to our approach to sustainability.
Below are key goals, our progress to date and where we are heading in the future.
Goal

TargetYear

Employee
Engagement

Support $15 million in employee-driven community investment per year

Ongoing$15.6 million in employee-driven community investment in 2018, comprising
volunteer hours, employee financial donations and Gap Inc. matching of timeand money

This Way Ahead:First Jobs

Reach 10,000 youth participate in This Way Ahead

2020

5,677 youth have participated in the program through 2018;
expansion from 15 to 53 cities broadened our reach

Hire 5% of entry-level employees from This Way Ahead

2025

1,107 entry-level hires were from This Way Ahead in 2018

100% of supplier facilities producing branded apparel are rated yellow or green

2020

98% of supplier facilities were rated yellow or green in 2018

100% of Tier 1 suppliers transition to digital wage payments

2020

80% of suppliers are using checks or bank transfers in 2018

Reach 1 million women through P.A.C.E.

2022

More than 280,000 women and girls have participated in P.A.C.E. through 2018

Water
Stewardship

Save 10 billion liters of water in manufacturing, from a 2014 baseline

2020

Gap Inc. suppliers have saved over 5.7 billion liters of water through 2018,from a 2014 baseline

ChemicalsManagement

Work toward zero discharge of hazardous chemicals in our supply chain

2020

Strategic facilities must comply with the ZDHC Manufacturing Restricted
Substances List (MRSL) and verify through wastewater testing.

EnergyReduce GHG emissions by 50% in our owned and operated facilities globally,
from a 2015 baseline

2020

18% reduction in emissions in 2018, from a 2015 baseline;
signed a 3.5MW PPA and a 7.5MW VPPA

Waste

Divert 80% of waste from landfill across our U.S. facilities

2020

47% of waste was diverted from landfill in 20182020

Verified that 77% of cellulosic fiber volume is compliance with our commitment;
work is underway to verify the remainder

Category

Status

Details

SOCIAL

Supplier
Sustainability

P.A.C.E.

ENVIRONMENTPRODUCT SUSTAINABILITY (GAP INC.)
Raw Materials

ON TRACK

Eliminate the use of wood-derived fibers sourced from ancient andendangered forests
PROGRESSING

NEEDS ATTENTION

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APPENDIX

Goals + Progress Detail
Category

Goal

TargetYear

Source 100% of cotton from more sustainable sources

2021

53% of cotton was from more sustainable sources in 2018

Make 75% of qualifying products using Washwell™ water-saving techniques2021

22% of denim was made using Washwell™ water-saving techniques in 2018

Make 80% of materials with sustainable fibers

2020

46% of products were made with 30% or more sustainable content in 2018

Make 25% of products using water-saving techniques

2020

4% of products were made using water-saving techniques in 2018

Divert 80% of store waste from landfill

2020

70% of store waste was diverted from landfill in 2018

Empower 10,000 women through P.A.C.E. and Fair Trade

2020

3,212 women participated in P.A.C.E. or received Fair Trade premiums in 2018

Source 100% of cotton from more sustainable sources2023

45% of cotton was from more sustainable sources in 2018

Make 50% of products with sustainable fibers

2023

28% of products were made with sustainable fibers in 2018

Make 50% of products using water-saving techniques andcleaner chemistry practices in our supply chain

2025

Reporting in progress

Source 100% of cotton from more sustainable sources2022

40% of cotton was from more sustainable sources in 2018

Make 100% of denim products using water-saving techniques2022

60% of Spring 2019 denim was made using water-saving techniques

Status

Details

BRAND GOALS
Gap brand

AthletaBananaRepublic

Old Navy

Banana Republic and Old Navy goals were set in 2019.
Progress is based on 2018 benchmarks.
ON TRACKPROGRESSING

NEEDS ATTENTION

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STRATEGYSOCIALENVIRONMENTSASB Reference Table
Topic

PRODUCT

APPENDIXThe Sustainability Accounting Standards Board (SASB) is an independent, private-sector standards-settingorganization dedicated to enhancing the efficiency of the capital markets by fostering high-quality disclosure ofmaterial sustainability information that meets investor needs. This table references the Standard for the Apparel,
Accessories & Footwear industry as defined by SASB’s Sustainable Industry Classification System (SICS) with thelocation of that information in Gap Inc.’s 2018 Global Sustainability Report (GSR) and gapincsustainability.com.

Activity Metric

Category

Unit of Measure

Code

Data

Reference

Number of (1) Tier 1 suppliers and (2)suppliers beyond Tier 1

Quantitative

NumberCG-AA000.A

As of 2/1/2018 (FY’18), we sourced from 774 Tier 1
branded apparel supplier facilities, defined as directrelationship cut-and-sew facilities and their associatedembroidery, laundry and screen-printing facilities.

•••

Social: Supply Chain
GSR: Supplier Sustainability(p.29)
GSR: Mill Sustainability Program(p.48)We have mapped out 203 mill facilities that represent
about 75% of our business in 2018.
Managementof Chemicals in
Product

Environmental
Impacts in the
Supply Chain

Description of processes to maintaincompliance with restricted substances
regulations

Discussion
and Analysis

N/A

CG-AA250a.1••

Environment: Chemicals
GSR: Chemicals Management(p.52)

Discussion of processes to assess andmanage risks and/or hazards associatedwith chemicals in products

Discussion
and Analysis

N/A

CG-AA250a.2••

Environment: Chemicals
GSR: Chemicals Management(p.52)

Percentage of (1) Tier 1 supplier facilitiesand (2) supplier facilities beyond Tier 1 incompliance with wastewater discharge
permits and/or contractual agreements

Quantitative

Percentage (%)

CG-AA430a.1••

Environment: Mills + Laundries
GSR: Water Stewardship (p.48)•

Measuring Our Progress:
Environmental
GSR: Water Stewardship (p.48)

100% of Tier 1 supplier denim laundries are expected
to have wastewater meeting or exceeding legal
requirements, in accordance with our Water Quality
Program (WQP). In 2018, we enhanced the programby adopting Zero Discharge of Hazardous Chemicals(ZDHC) Wastewater Guidelines as WQP requirements
for wastewater sampling and testing; 47 denim
laundries participated, with 90% meeting conventionalparameters and 78% meeting ZDHC parameters.
Supplier Facilities beyond Tier 1• N/A
By 2020, we expect strategic Gap Inc.-approved
mill facilities to participate in and report for the
Sustainable Apparel Coalition (SAC) Higg FEM 3.0 and
Zero Discharge of Hazardous Chemicals (ZDHC) MRSL
and Wastewater Guidelines.

Percentage of (1) Tier 1 supplier facilitiesand (2) supplier facilities beyond Tier 1that have completed the Sustainable
Apparel Coalition’s Higg Index Facility
Module (Higg FEM) assessment oran equivalent environmental dataassessment

Quantitative

Percentage (%)

CG-AA430a.2

100% of Tier 1 suppliers were requested to complete
the SAC’s Higg Index Facility Environmental Module.
• 95% of active Tier 1 branded apparel suppliers
completed the 2018 data request.
Suppliers beyond Tier 1 were requested to complete
the Higg Index FEM.
• 169 out of 194 Tier 2 mills have completed the Higg
Index FEM (87% of strategic mills).

•

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APPENDIXSASB Reference Table
Topic

Activity Metric

Category

Unit of Measure

Code

Data

Reference

Labor Conditionsin the Supply
Chain (continued)

Percentage of (1) Tier 1 supplier facilitiesand (2) supplier facilities beyond Tier 1that have been audited to a labor codeof conduct, (3) percentage of total audits
conducted by a third-party auditor

Quantitative

Percentage (%)

CG-AA430b.1

92.6% of Tier 1 branded apparel suppliers that wereactive for the full year were audited to our Code ofVendor Conduct (COVC) during the fiscal year.
• 30% of audits were conducted by a third-party
assessor, primarily through ILO Better Work.
• Facilities with a consistently low non-conformance
rate may be assessed on a biannual basis; allfacilities are audited prior to initial production.
Suppliers beyond Tier 1 audited to COVC
• N/A
In March 2017, as part of our Mill Sustainability
Program, we communicated to our entire mill baseour expectations of their social and environmental
performance, which are requirements of doing
business with us.

•

As of fiscal year 2018, 2% of facilities received red
ratings during assessments against our Code ofVendor Conduct.

•

Priority non-conformance rate andassociated corrective action rate forsuppliers’ labor code of conduct audits

Quantitative

Rate

CG-AA430b.2

•
•
•
•
•

•

Measuring Our Progress:
Working Conditions
Social: Working Conditions
Gap Inc. Code of Vendor
Conduct (COVC)
Gap Inc. Supplier Facility List
Environment: Mills + Laundries
GSR: Assessment + Remediation(p.30)

Measuring Our Progress:
Working Conditions
GSR: Assessment + Remediation(p.30)For issues open as of 2/1/2018, 88% of corrective
action plans were resolved by 1/31/2019.

Raw Material
Sourcing

Discussion of greatest (1) labor and (2)environmental, health, and safety risks inthe supply chain

Discussion
and Analysis

N/A

CG-AA430b.3

Discussion of environmental and social
risks associated with sourcing priority
raw materials

Discussion
and Analysis

N/A

CG-AA440a.1

Percentage of raw materials third-party
certified to an environmental and/or social sustainability standard, bystandard

Quantitative

Percentage (%)
by weight

CG-AA440a.2•••

Environment: Supply Chain
GSR: Water Stewardship (p.44)
GSR: Chemicals Management (p.52)

Fiber Type% of Fiber Type

Natural Fibers
Organic Cotton
BCI Cotton
Recycled Wool
RWS Wool		

0.2% of cotton
40% of cotton
3.5% of wool
01.% of wool

Synthetics
Recycled Nylon
Recycled Polyester

0.3% of nylon
0.7% of polyester••

Social: Working Conditions
GSR: Supplier Sustainability(p.29)••

Environment: Raw Materials
GSR: Raw Materials (p.62)••

Environment: Raw Materials
GSR: Raw Materials (p.62)

Man-Made Cellulosics
Lenzing Modal
3.9% of rayon
TENCEL		
6.1% of rayon

2018 GLOBAL SUSTAINABILITY REPORT68