Global Sustainability Report Home Overview Strategy Social Environment Product Appendix

About

ABOUT GAP INC. ABOUT THIS REPORT

Founded in San Francisco in 1969, Gap Inc. This report covers Gap Inc.’s global is a leading global retailer offering clothing, operations for fiscal 2019, which ended on accessories and personal care products for February 1, 2020. men, women and children under the Old Navy, Gap, Banana Republic, Athleta, Intermix, Janie Our last report covered fiscal 2018 and is and Jack and Hill City brands. available with our other past sustainability reports. Our Athleta brand is a certified B Corp, demonstrating our commitment to using This report focuses on developments and business as a force for good by meeting actions for our key programs, progress rigorous standards across social and toward our corporate and brand goals environmental performance, accountability during the 2019 fiscal year, preparations and transparency. We have amended Athleta's for activities in 2020, and an analysis legal charter to become a Delaware Public of trends and business impacts where Benefit Corporation to further uphold the available. For our many programs, we brand’s commitment to people and the planet. provide detailed information on objectives, Our Hill City brand was also a certified B Corp, operations and our management approach but we made the difficult decision to wind at gapincsustainability.com, which can be down operations by the end of 2020. accessed via links in each section.

We purchase private-label and non-private- We sought to prepare this report in label merchandise from about 800 vendors. accordance with the Global Reporting Our vendors have facilities in about 30 Initiative (GRI) Standards: Core option. countries. Gap Inc. is committed to the United Nations (UN) Global Compact Ten Principles and At the end of fiscal 2019, we had this report serves as our Communication approximately 129,000 part-time and full-time on Progress (CoP). We have not obtained employees. Our products were available for external assurance for this report. purchase in more than 90 countries through 3,345 Company-operated stores, 574 franchise stores, and e-commerce sites.

Learn more > Annual Filings

2019 Global Sustainability Report 2 Home Overview Strategy Social Environment Product Appendix

CEO Letter

If 2020 has taught us anything, it’s that crisis to our business. Over the years, their vision communities. We look forward to sharing our has the potential to create opportunities has guided our company to imagine how we progress on this journey. to unlock necessary change. We’re facing can do more to support sustainable societies the worst crisis in our history – one that and a resilient planet. Our foundational values Not only do we have an enormous opportunity has been destabilizing for not only our are more important than ever and they fuel our to build on our legacy of doing more than industry, but for our employees, customers, commitment to being a force for good – to help selling clothes, our brands are leading the way partners and communities around the world. people, planet and communities. by amplifying our values and connecting with This global health crisis has magnified the consumers in creative, compelling and relevant severity and complexity of other social and ways. Through designing sustainability into our cultural imperatives, including addressing "Our foundational values products, reducing water use in manufacturing, ongoing impacts of climate change and and developing climate strategies for our systemic racism. Yet, the enormous are more important than business, our sustainability work matters – to challenges brought on by COVID-19 have ever and they fuel our us and to our stakeholders. also accelerated the pace of much-needed transformation – both within our company commitment to being a Enclosed in this report is a detailed account of and in society on a global scale. our progress. As a company co-founded by a force for good — to help woman and led by women at every level of the While we can’t ignore that this global people, planet and company, I am especially proud of the ways pandemic will have lasting consequences in which our company continues to support on all of us, it’s also true that this has been communities." the women who create the world’s clothes. a time of greater collaboration, clarity and We have greatly expanded our P.A.C.E. including our ongoing engagement with other unity. I have witnessed untold kindness program, which has reached over half a million signatories of the UN Global Compact, who’ve Earlier this year, Gap Inc. took necessary and intrepidness, and experienced bold women and girls, and I’m excited the program defined the path for the industry to contribute actions to survive and emerge from this period innovation and creativity. I am seeing that will potentially reach even more, including to sustainable change. show up in countless ways as we design for even stronger, including temporarily closing through a new initiative whose members stores to protect the health of employees and the future – one we can all be proud of. collectively engage 4.5 million women in The experiences of 2020 have been customers. We didn’t make decisions lightly the global supply chain. From achieving our generation-defining and, in the face of still so because so many depend on our business. In reflecting on Gap Inc.’s role in creating goal to save 10 billion liters of water through much uncertainty, I know what we’re made of: Guided by our values, we worked quickly to re- positive change, the very premise of our sustainable manufacturing processes ahead resilient teams and a company of powerful, open stores safely, bring our teams back, and company is what we look to. Our founders, of schedule, to developing major renewable purpose-led lifestyle brands. Now, more than mitigate impacts to our supplier partners and Doris and Don Fisher, built this company in energy projects, to hiring young people who ever, we have the opportunity to leverage garment workers. 1969 on a single need: fit. When Don could will become our future leaders for their first our size and scale to win and position us for not find a pair of jeans that fit him, they job from our This Way Ahead program, to growth in the future. I believe in our ability to Another critical lesson of 2020 has been opened a store as an equal partnership that establishing Gap Inc.’s first science-based be a force for good. became a company of purpose-led brands the need to create space to learn and to targets, we accomplished a great deal in 2019. that shape people's way of life, guided by the help break down the centuries-old systems belief that we can not only bridge the gaps that have held back our Black and Brown We have achieved progress thanks to the between us, but future generations. They communities. In June, we outlined a new set dedication of our employees, partners and believed Gap Inc. would achieve success by of commitments to drive systemic change both industrywide collaboration. We cannot do being open to all, and creating opportunities in and outside our walls, and enable a culture this work alone, and we are grateful for those Sonia Syngal of belonging for our teams, customers and for the people and communities connected who guide us, stand behind us and beside us, CEO, Gap Inc.

2019 Global Sustainability Report 3 Home Overview Strategy Social Environment Product Appendix

Contents

OVERVIEW SOCIAL ENVIRONMENT

Highlights 6 Our Employees: Water Stewardship Strategy 47 Our Purpose-Led Brands 7 Talent 20 Women + Water 50 Goals + Progress 8 Equality + Belonging 22 Resource Efficiency + Manufacturing 52 Employee Engagement 27 Chemicals Management 56

STRATEGY This Way Ahead: First Jobs 29 Climate 59

Sustainability Strategy 12 Waste 62 Supply Chain + Communities: Core Focus Areas 13 Circularity 63 Supplier Sustainability 32 Materiality 14 Assessment + Remediation 33 Product Life Cycle 15 PRODUCT Capability Building 39 Management Approach 16 Product Sustainability 66 P.A.C.E.: Empowering Women 43 Governance 17 Raw Materials 67 Stakeholder Engagement 18 Brand Goals 69

APPENDIX

Sustainable Development Goals 75 SASB Reference Table 76

2019 Global Sustainability Report 4 Home Overview Strategy Social Environment Product Appendix Overview

Highlights 6 Our Purpose-Led Brands 7 Goals + Progress 8 Home Overview Strategy Social Environment Product Appendix

Highlights

PEOPLE ENVIRONMENT PRODUCT Advancing people + communities A healthy planet is a human right Great product designed with sustainability in mind Our Employees Water Chemicals Management 1,600+ 11.2B 0 youth hired liters of water saved PFC-based in manufacturing finishes by 2023 We hired over 1,600 youth facing barriers to employment through This Way Ahead In early 2020, we achieved our goal to save 10 billion We committed to eliminate PFC-based (p.29), our first-jobs program. liters of water (p.55) in manufacturing since 2014. finishes (p.57) from our products by 2023.

Supply Chain Workers Climate Circularity 98% 90MW 1X1 sourcing facilities renewable-energy textile circularity rated green or yellow generation collaboration

We sourced almost exclusively from facilities We signed a 90-megawatt wind project Our collaboration with the Hong Kong Research rated green or yellow (p.33) as evaluated (p.61), which will generate enough clean energy Institute of Textiles and Apparel (HKRITA) will against our Code of Vendor Conduct (COVC). to power half of our stores starting in late 2020. accelerate circularity (p.63) models for textiles.

Communities Waste Raw Materials 580K+ 0 100% women + girls single-use plastics sustainable cotton empowered by 2030 by 2025

We continued our commitment to scale our P.A.C.E. We committed to eliminate single-use plastics We committed to source all of our cotton from program (p.43), empowering over 580,000 women (p.62) by 2030 as part of our efforts to reduce more sustainable sources (p.68) including Better and girls since the program launched in 2007. plastic packaging across our brands. Cotton Initiative (BCI), recycled and organic cotton.

2019 Global Sustainability Report 6 Home Overview Strategy Social Environment Product Appendix

Our Purpose-Led Brands

We grow purpose-led, billion-dollar brands that have lasting impact on people and the planet.

For every brand within Gap Inc., sustainability is a business priority and a critical way to express each brand’s values. All of our brands have established executive sustainability steering committees, defined their own priorities and goals, and led sustainability-strategy workshops with cross-functional teams. This work has empowered each brand to build a strategy true to its identity while pursuing meaningful environmental and social impact.

Modern We believe in the American WILL WORK FOR A POWER OF SHE democracy of style. Optimism BETTER REPUBLIC

2019 Global Sustainability Report 7 Home Overview Strategy Social Environment Product Appendix

On track Needs attention Goals + Progress New goal since last report

Holding ourselves accountable is fundamental to our approach to sustainability.

Below is a snapshot of key goals, our progress to date and where we are heading in the future. All target years are fiscal year end. Report data is through fiscal 2019 (February 1, 2020) unless otherwise noted. Additional detail can be found in respective sections of this report.

Target SOCIAL Year Status FY2019 Progress (unless otherwise noted)

Our Double the representation of Black and Latinx employees at 2025 NEW New goal. Progress to date: Employees our U.S. headquarters offices 14% of employees at our U.S. headquarters offices are Black or Latinx

Increase the representation of Black employees in U.S. store 2025 NEW New goal. Progress to date: leader roles by 50% 9% of U.S. store leaders are Black (2019 baseline)

Support $15 million in annual employee-driven community Ongoing $12.2 million in employee-driven community investment (volunteer hours, investment employee financial donations and Gap Inc. matching of time and money)

Reach 20,000 youth through This Way Ahead 2025 8,201 youth have participated since the program launched in 2007 (Previous goal: Reach 10,000 youth by 2020)

Hire 5% of entry-level employees from This Way Ahead 2025 2.3% of entry-level employees were hired from This Way Ahead annually

Supply Chain + 100% of supplier facilities producing branded apparel are 2020 98% of supplier facilities were rated yellow or green Community rated yellow or green

100% of Tier 1 suppliers transition to digital wage payments 2020 92% of suppliers paid wages via mobile wallet, bank account or debit card

Reach 1 million women through P.A.C.E. 2022 Over 580,000 women and girls have participated in P.A.C.E. since the program launched in 2007

2019 Global Sustainability Report 8 Home Overview Strategy Social Environment Product Appendix

On track Needs attention Goals + Progress New goal since last report

Target ENVIRONMENT Year Status FY2019 Progress (unless otherwise noted)

Water Save 10 billion liters of water in manufacturing, from a 2020 11.2 billion liters of water saved since 2014 (achieved in early 2020) 2014 baseline

Water-resilient value chain 2030 NEW New commitment. Establishing baselines and context-based targets

Net-positive water impact in water-stressed regions 2050 NEW New commitment. Establishing baselines and context-based targets

Work toward zero discharge of hazardous chemicals in our 2020 Strategic facilities must comply with the ZDHC MRSL and verify through supply chain wastewater testing.

Eliminate all PFC-based finishes from our supply chain 2023 NEW New goal. Tracking in progress

Climate Carbon neutral across our value chain 2050 New commitment. Tracking in progress

Reduce GHG emissions by 50% in our owned and operated 2020 23% cumulative GHG emissions reduction (363,586 metric tons CO2e) facilities globally, from a 2015 baseline since 2015; 100.5 megawatts of energy secured through renewable-energy contracts or Virtual Power Purchase Agreements (VPPAs)

Source 100% renewable electricity for our owned and 2030 NEW New goal. Progress to date: operated facilities globally, from a 2017 baseline The VPPAs mentioned above will help us meet this goal.

Reduce absolute Scope 1 and 2 GHG emissions by 90%, 2030 NEW New goal. Progress to date: from a 2017 baseline 10.3% GHG emissions reduction (2017 baseline)

Reduce Scope 3 GHG emissions from purchased goods and 2030 NEW New goal. Progress to date:

services by 30%, from a 2017 baseline 5.18 million metric tons CO2e in Scope 3 GHG emissions (2017 baseline)

Waste Divert 80% of waste from landfill across our U.S. facilities 2020 65% of waste diverted from landfill; On track to meet goal FY2021

Eliminate single-use plastics 2030 NEW New commitment. Tracking in progress

PRODUCT Eliminate the use of wood-derived fibers sourced from 2025 86% of our cellulosic-fiber volume was compliant with our commitment ancient and endangered forests

Source 100% of cotton from more sustainable sources 2025 New goal. Progress to date: 57% of cotton was sourced from more sustainable sources in Q1 2020

2019 Global Sustainability Report 9 Home Overview Strategy Social Environment Product Appendix

On track Needs attention Goals + Progress New goal since last report

Target OUR PURPOSE-LED BRANDS Year Status FY2019 Progress (unless otherwise noted)

Source 100% of cotton from more sustainable sources 2022 NEW New goal. Progress to date: 56% of cotton was sourced from more sustainable sources

Make 100% of denim products using water-saving 2022 NEW New goal. Progress to date: techniques 88% of denim products were made using water-saving techniques

Source 100% of cotton from more sustainable sources 2021 67% of cotton was sourced from more sustainable sources

Make 75% of qualifying products using Washwell™ water- 2021 42% of qualifying denim products were made using Washwell™ saving techniques

Source 100% of cotton from more sustainable sources 2023 NEW New goal. Progress to date: 75% of cotton was sourced from more sustainable sources

Make 50% of products with more sustainable fibers 2023 NEW New goal. Progress to date: 55% of products were made with sustainable fibers

Make 50% of products using water-saving techniques and 2025 NEW New goal. Progress to date: 1.4% of Spring 2020 products were made with cleaner chemistry practices in our supply chain techniques that save water or preserve water quality

Make more eco-friendly denim 2023 NEW New goal. Progress to date: 68% of denim was eco-friendly in Q2 2020

Make 80% of materials with sustainable fibers 2020 70% of materials used in product were made with more sustainable fibers

Make 25% of products using water-saving techniques 2020 4% of products were made using water-saving techniques

Divert 80% of store waste from landfill 2020 72% of store waste was diverted from landfill

Empower 10,000 women through P.A.C.E. and Fair Trade 2020 16,555 women have participated in P.A.C.E. or received premiums from Fair Trade USA since 2007

2019 Global Sustainability Report 10 Home Overview Strategy Social Environment Product Appendix

Strategy

Sustainability Strategy 12 Core Focus Areas 13 Materiality 14 Product Life Cycle 15 Management Approach 16 Governance 17 Stakeholder Engagement 18 Home Overview Strategy Social Environment Product Appendix

Sustainability Strategy

As one of the world's leading apparel retailers, we recognize that we contribute to and have the opportunity to address systemic social and environmental challenges.

We continue to be committed to contributing to our business; enabling safe, fair working conditions for the people who make our products; minimizing our environmental impact; and working with our industry to achieve progress on global goals. We do this by addressing impacts in our owned and operated facilities and collaborating throughout our value chain and across government, business and civil society. Recognizing the importance of engaging customers and employees, we are also communicating through our brands in our effort to build a more sustainable world.

We align our strategy with the international sustainability agenda. Guided by frameworks including but not limited to 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 the issues that are most important to our “The health of our business and the business and where we have the most influence. health of our planet are undeniably connected. We are investing in Gap Inc. for the future – a portfolio of brands that is resilient, sustainable and reflective of our diverse customer base.”

Katrina O’Connell Chief Financial Officer, Gap Inc.

2019 Global Sustainability Report 12 Home Overview Strategy Social Environment Product Appendix

Core Focus Areas

We recognize that we SOCIAL ENVIRONMENT PRODUCT cannot lead on every issue. Given our business operations and strengths, we prioritize our greatest opportunities for Our Employees Water Product Sustainability leadership to maximize We aim to create opportunities for the Water is essential for our business and We work with our Product Designers impact. employees who support our business in the people and communities where we and Developers to balance the needs of our stores and headquarters offices. operate. We look for ways to address getting great product into our customers’ Gap Inc.’s sustainability water impacts throughout our value chain hands, with efforts to reduce our impact and in communities. on the environment. materiality assessment sets our overarching sustainability agenda and helped to establish our core focus areas. Communities Climate Raw Materials

Our P.A.C.E. (Personal Advancement We are reducing our greenhouse gas We believe great products are created & Career Enhancement) program gives (GHG) emissions through renewable- with sustainability at their core, which women and girls the foundational life energy projects; and we work with our means going all the way down to the skills, technical training and support they logistics and procurement partners to earliest stages of the product life cycle need to advance in the workplace and in improve efficiency and environmental to reduce impacts. their communities. performance.

Supply Chain Waste

By partnering with our suppliers, we strive We are reducing waste throughout our value to provide safe, fair and healthy working chain and building circularity programs to conditions for the individuals who create redefine the life cycle of our products in our clothes. order to reduce resource consumption.

2019 Global Sustainability Report 13 Home Overview Strategy Social Environment Product Appendix

Materiality

We integrate sustainability deeply into our business to MATERIAL ISSUES create greater impact across our value chain. Governance + Operating Context

Within sustainability, materiality* refers to the areas • Corporate Governance of heightened concern from our internal and external • Transparency stakeholders compared to relevant environmental, social • Technology + Product Innovation • Resiliency and governance issues. Our material issues, viewed • Country / Regional Legal + Economic alongside our value chain, demonstrate focus areas Conditions where we can develop programs more directly targeted to the areas of greatest impact. Human Rights + Social Impact We prioritize the sustainability opportunities and • Worker Rights + Well-being challenges that matter most to our stakeholders and • Income, Wages + Inequality business. • Human Capital + Development • Diversity + Inclusion We periodically refresh our materiality assessment in • Reputation + Consumer Engagement order to: • Identify the most material sustainability issues for Gap Inc. in terms of business value, risks and Resource Use, Scarcity + Impacts opportunities for long-term planning • Water • Understand how sustainability and key business issues • Chemicals Management + Compliance intersect • Energy + Climate Stewardship • Inform future sustainability commitments and • Waste + Circularity • Sustainable Materials Sourcing resource allocation • Support Gap Inc.’s engagement with external Learn more stakeholders > Materiality

Our material issues fall into three categories: governance *Materiality in this report refers to the definition from and operating context; human rights and social the Global Reporting Initiative (GRI) Standards, and is not the definition of materiality used for filings impact; and resource use, scarcity and impacts. Fifteen with the U.S. Securities and Exchange Commission sustainability-related aspects guide our strategy. (SEC). Issues deemed material in this report may not be considered material for SEC reporting purposes.

2019 Global Sustainability Report 14 Home Overview Strategy Social Environment Product Appendix

Design + Raw Materials + Textile Product Development Processing Manufacturing Tier 3 Suppliers Tier 2 Suppliers Life Cycle Most of a product’s environmental impacts Our products use many types of fibers – Fabric mills use large quantities of energy are determined at the concept phase. natural fibers like cotton and wool, synthetic and water, and the chemicals used to dye Each stage of a garment’s Thus, our designers’ creative vision can fibers like polyester and spandex, and and finish fabrics may pose a risk to local have a significant impact on people and pulp-based manufactured cellulosic fibers watersheds if not treated properly. Our life – from the first design the environment. Our production and like rayon and modal. We work to minimize Mill Sustainability Program establishes sketches to end of use – sourcing teams bring this vision to life by the social and environmental impacts unique clear environmental standards, which we presents opportunities to placing orders with independent suppliers. to each fiber. We place a special focus on integrate into our sourcing decisions. We improve the sustainability These teams are trained on sustainability cotton, given its importance to many of our also aim to scale improvements across the principles and have significant influence products and water-intensive production industry by working with our peers to identify performance of our over who makes our clothes. This affords process. We are also taking steps to ensure and share best practices for the responsible business. Gap Inc. the ability to improve working that we source more sustainable synthetic use of water, chemicals and energy. conditions in facilities and address our larger and man-made cellulosic fibers. environmental footprint. Our Programs Our Programs > Assessment + Remediation (p.33) Our Programs > Water Stewardship Strategy (p.47) > P.A.C.E.: Empowering Women (p.43) > Water Stewardship Strategy (p.47) > Climate (p.59) > Water Stewardship Strategy (p.47) > Chemicals Management (p.56) > Product Sustainability (p.66) > Chemicals Management (p.56) > Product Sustainability (p.66) > Climate (p.59) > Circularity (p.63)

Product + Logistics + Retail Consumer Use + Finishing Distribution Stores Circularity Tier 1 Suppliers We believe in a comprehensive approach We ship products through a combination of Our stores express who we are – from our How our customers wear, care for and for improving working conditions in our sea, air, truck and rail from supplier facilities style to our commitment to operating in discard their clothes accounts for a portion supply chain, combining facility-monitoring to our distribution centers and then on to a way that cares for both people and the of our products’ total environmental and capability-building programs to help stores or directly to customers. We use the environment. They are where we sell our footprint. We use product labeling, catalogs, our suppliers continually improve. We also optimal mix of shipping options based on products and communicate directly with our social media and blog posts to share engage closely with all of our vendors to speed, cost and sustainability and have employees and customers. As part of our our efforts to improve sustainability. This measure and address their environmental taken steps to conserve energy and reduce owned and operated footprint, they offer informs customers about our work, inspires impact. waste at our distribution centers, the largest an opportunity to reduce our environmental them to consider water use in their daily facilities we own and operate. impact. We also run our This Way Ahead lives, and communicates the urgency of Our Programs program at our stores to help young people our environmental and social initiatives. > Assessment + Remediation (p.33) Our Programs experiencing barriers to employment obtain Recognizing that we have an opportunity > Capability Building (p.39) > Climate (p.59) their first jobs. to improve circularity, we engage in and > P.A.C.E.: Empowering Women (p.43) > Waste (p.62) contribute to industrywide solutions to end- > Water Stewardship Strategy (p.47) Our Programs of-life impacts. > Chemicals Management (p.56) > Equality + Belonging (p.22) > Climate (p.59) > This Way Ahead: First Jobs (p.29) Our Programs > Product Sustainability (p.66) > Climate (p.59) > Circularity (p.63) > Waste (p.62) > Product Sustainability (p.66)

2019 Global Sustainability Report 15 Home Overview Strategy Social Environment Product Appendix

Management Approach

Given our company's size, we recognize our responsibility OUR APPROACH RISK MANAGEMENT to the planet and to the people touched by our business. 1. Integrate sustainability into Gap Inc. has developed systems and our business procedures focused on identifying and Our global scale provides an opportunity to make a real managing risks, including those related to difference. We do this by enabling long-term business We create broader accountability for our sustainability. performance through managing risks, advancing sustainability strategy by creating shared goals and targets across Gap Inc. with the Our Global Sustainability team works with greater equality and opportunity, developing social and relevant business units. While we maintain business partners and experts to assess environmental innovations that allow people to fulfill their a centralized Global Sustainability function, the importance of potential social and potential, and scaling these innovations by integrating we integrate our approaches wherever it environmental risks and opportunities for our helps to deepen or broaden our impact. business and external stakeholders, including them into our business and products. suppliers and the people who make our products. These include the risks that climate In addition to aligning our goals with the UN Global 2. Set ambitious goals and environmental impacts could pose to our business. The team uses tools to help Sustainable Development agenda, we take an intentional We focus on key indicators across the prioritize risks and opportunities, including approach in all of our social and environmental programs. company so that we can measure our a sustainability materiality assessment, an progress on delivering real benefits to the assessment of representative products and a people and communities we serve. stakeholder-engagement process.

For these materiality and other risk 3. Make progress toward our assessments, we consider such factors as the magnitude, likelihood and time horizon commitments of potential impacts on our business and stakeholders. We also create country-specific We contribute in a meaningful way to the strategies that take into consideration local people and communities we rely on for our context when developing our program and business – which also helps our company addressing key issues. succeed. Learn more > Our risk-management process 4. Form partnerships with civil society, governments and other sectors to increase collective impact

By partnering with organizations from the local to the global level, we deliver impact on a bigger scale and create long-term, sustainable progress.

2019 Global Sustainability Report 16 Home Overview Strategy Social Environment Product Appendix

Governance

SUSTAINABILITY CODE OF BUSINESS communication, including guidance DATA PRIVACY GOVERNANCE CONDUCT for leaders on how to have effective conversations with their teams, FAQs, We believe that trust is a cornerstone of Our governance structure ensures that our Our Global Code of Business Conduct (COBC) policy links and contacts. a great brand and respecting the privacy Global Sustainability program both meets serves as our ethical compass, articulating our rights of our customers and employees is the company’s social and environmental commitment to high standards. • Our Global Integrity team conducts an integral part of building that trust. Our goals and supports our business. annual interviews with employees in comprehensive privacy program includes We encourage our employees to use our various business units and offices policies, standards and practices focused on Gap Inc.’s Board of Directors, particularly open-door process for discussing concerns and select suppliers. These interviews keeping the data we collect secure and the Governance and Sustainability with their supervisor, next-level manager or allow us to gauge how well our respecting privacy rights around the globe. Committee, oversees our Global human resources representative. Employees employees understand our COBC, Sustainability program. The board may also contact our Global Integrity remind employees and suppliers of their As a global company, our Privacy Policy receives regular updates from Chief Legal, team, which oversees our COBC program. responsibilities and our expectations of adheres to laws across the jurisdictions Compliance and Sustainability Officer, Additionally, we provide a confidential COBC how we engage with one another, and where we do business. While these rights Julie Gruber, and the leaders of the Global Hotline: a telephone and web-based reporting ensure that employees know how to may vary, we make reasonable efforts Sustainability team. Julie reports directly to system that is available 24 hours a day, seven report COBC violations. to honor requests even if a country or Gap Inc. CEO, Sonia Syngal, and meets days a week to employees and anyone who jurisdiction does not require us to do so. Our regularly with Gap Inc. Chief Operating conducts business with Gap Inc. or is affected • Senior-level employees must certify privacy policies have received accolades for Officer, Shawn Curran. by our business. We have investigative teams their COBC compliance annually and their clarity and simplicity, and we continue that log, process and address complaints are briefed on relevant compliance and to put privacy at the center of our customer Our organizational structure allows received through any channel, including our integrity topics to raise their awareness. experience. collaboration across key departments. Our COBC Hotline. Global Sustainability team works closely We are diligent about addressing corruption Maintaining brand trust is paramount as we with our brands’ Product and Marketing Key aspects of how we implement our COBC: risks, particularly in developing countries continue to embrace technology. Our goal is teams, as well as our Supply Chain, with limited rule of law. We have a to provide the highest quality experience to Corporate Strategy, Government Affairs, • All employees globally are required to take companywide program for monitoring, our customers while respecting their Public Affairs, Legal and Gap Foundation a COBC overview course within 30 days of enforcing and addressing any issues related privacy. We have adopted seven teams, among others. their initial hire date. to our Anti-Corruption / Anti-Bribery principles that guide our choices as we Policy, which combines elements from our adopt new products and services. These Learn more • We provide ongoing compliance training COBC with anti-bribery requirements under principles include consent, control, > Sustainability Governance to relevant employees on topics of the Foreign Corrupt Practices Act (FCPA) fairness, minimization, confidentiality, > Corporate Governance nondiscrimination and harassment, and other similar laws around the world. access and accountability. We also know wage and hour compliance, workplace The policy and related training programs that security is at the center of any good accommodations, anti-corruption, help employees recognize and avoid corrupt privacy program. We use widely accepted competition law compliance, and data business practices in all aspects of Gap security standards and practices to guide privacy and security. Our Global Integrity Inc.’s business. our decisions around securing personal team also conducts periodic live training information. sessions throughout the year. Learn more > Code of Business Conduct (COBC) Learn more • We provide a variety of online self-help > Policies > Privacy Policy tools for compliance education and

2019 Global Sustainability Report 17 Home Overview Strategy Social Environment Product Appendix

Stakeholder Engagement

Advancing progress We have a multitude of key stakeholders: the Our approach to working with stakeholders With over two decades of experience in people who make our clothes, customers, is guided by both a proactive engagement engaging stakeholders, we know there on systemic issues in suppliers and facilities, employees, unions, strategy, and our belief that it is important is no single formula for the frequency or the apparel sector – governments, multilateral institutions, NGOs, to respond to any credible inquiry that is mode of engagement that we pursue. We such as water access, industry associations, investors, communities relevant to potential misconduct in our supply balance regularly scheduled meetings climate change, women’s and others. We also belong to a number chain. Our Global Partnerships team, along and calls – to systematically capture and of organizations that enable us to more with our Supplier Sustainability team, is respond to stakeholder feedback – with empowerment, and safe effectively collaborate with and learn from responsible for managing and implementing dialogue and engagement in the moment and fair working conditions stakeholders. Multistakeholder initiatives our stakeholder engagement strategy, and as issues arise. Importantly, we have – demands collaboration bring together organizations and people from is in regular dialogue with expert labor and developed the relationships and connections different sectors, all of whom play a key role in human-rights organizations around the world. necessary to bring a broader perspective and and jointly developed finding new approaches and creating collective Our Supplier Sustainability team engages with multistakeholder approach to the issues with approaches. action. community-based organizations, NGOs and which we wrestle. trade unions at the local level enabling them Having operated a variety of facility-focused to gather insight into facilities’ employment Learn more We engage stakeholders programs in the 25 years since our Global practices and working conditions. This insight > Our stakeholder-engagement approach and establish partnerships Sustainability team was established, we helps augment the findings we gather through > A full list of our initiatives and partner with diverse groups of have developed a comprehensive network the assessments, training and surveys that we organizations of stakeholders on whom we rely for insight, conduct at our suppliers’ facilities around the experts and organizations guidance and accountability. world. These networks and the issues that they to more clearly understand surface are one of the primary inputs into how complex issues and local One area where stakeholder engagement we evolve and improve our programs focused conditions in the countries has supported progress is improving labor on catalyzing improvements in labor standards standards in our supply chain. We regularly and working conditions. where we do business. partner, both formally and informally, with a This dialogue helps us to broad set of stakeholders to help us ensure When issues arise, we seek to work with improve our programs, that we are maximizing our impact. These suppliers, unions, worker-representative stakeholders range from local trade unions organizations, and local and international refine strategies, reveal in the countries from which we source, to NGOs that have expertise and connections in unexplored issues and international NGOs and multilateral institutions, that area. Our aim is to prioritize the impact scale industry solutions. each with a specific expertise and focus. on affected parties and come to a resolution Within this diverse group, our approaches and that is fair and ethical given the events that practices are not always agreed upon, but we transpired. We take what we learn from remain open and willing to work with any entity, these experiences to continually improve our provided it will help us achieve our objectives: processes and protocols in responding to to improve worker well-being, labor standards, future issues, and seek to partner with other working conditions and the overall social buyers, governments and stakeholders to performance of our suppliers’ facilities. apply these lessons more broadly.

2019 Global Sustainability Report 18 Home Overview Strategy Social Environment Product Appendix Social

Our Employees: Talent 20 Equality + Belonging 22 Employee Engagement 27 This Way Ahead: First Jobs 29

Supply Chain + Communities: Supplier Sustainability 32 Assessment + Remediation 33 Capability Building 39 P.A.C.E.: Empowering Women 43 Home Overview Strategy Social Environment Product Appendix

Talent

Our business success depends on our people. OUR APPROACH and increases their engagement at work, which contributes value to our business. Our workplace culture and benefits are We cultivate a culture that attracts and engages talented designed to meet the professional and We invest in new programs to expand and employees and gives them opportunities to achieve personal needs of our employees and their enhance our training programs and resources their work and life goals, and we provide programs and families. and we are adopting a new approach to seeking employee feedback: more frequent customized experiences to help our people achieve their Over the years, we have built on our surveys that help us check the pulse of our full potential. foundation of putting people first. This includes people and respond more quickly to their improving wages and scheduling practices needs. Our talent practices are aimed at developing a diverse so that the people who work in our stores experience greater stability and flexibility. Looking ahead to 2020 and beyond, we will be pipeline of employees, giving individuals new challenges to We also offer financial incentives, work-life exploring strategies and programs focused on help them grow into roles with greater responsibility, and integration and benefits that help employees building the workplace of the future, with our people at the center. cultivating great leaders who can build great teams. We make the most of their professional and personal lives. This all supports employees believe in our employees’ potential and provide myriad career opportunities for those who want to learn and grow with us. Old Navy Named a 2019 Best Workplace in Retail Learn more > How we help our employees realize their potential Great Place to Work and Fortune named Old Navy on its list of 2019 Best Workplaces in Retail for the third consecutive year, an honor that came the same year the brand celebrated its 25th anniversary. Great Place to Work, the global people analytics and consulting firm, determined the honorees based on the results of an anonymous survey of more than 694,000 employees working at Great Place to Work-certified organizations in the retail industry.

In 2019, Old Navy focused on fostering a purpose-led culture by creating powerful moments that bring fun and creativity into work every day. As part of its 25th birthday celebration, Old Navy demonstrated its core value of belonging by being the first retailer to extend the Open to All pledge beyond the U.S. to Old Navy stores in Mexico and Canada. Old Navy is one of the founding partners to sign the pledge, which is a public commitment to protect customers from discrimination. Old Navy is proud to be open for everyone, and open to ideas, differences, dialogue and change.

The brand has also invested in employee programs focused on learning, creativity and wellness. Old Navy is home to Gap Inc.’s successful This Way Ahead program (p.29), which helps young people with barriers to employment obtain their first jobs.

2019 Global Sustainability Report 20 Home Overview Strategy Social Environment Product Appendix

Talent

BUILDING TALENT In 2019, we also continued our LinkedIn EMPLOYEE OPINION SURVEY Learning program for the second year, We invest in Gap Inc. people at every level of providing employees with access to We value our employees’ feedback and use our organization through accessible resources micro-courses on topics from strategic opinion surveys as a critical component of % and structured training programs that offer thinking and mental agility, to equality our ongoing listening strategy. We use these 72 all employees opportunities for development. and belonging and communicating insights to understand what is important to our By delivering best-in-class training, we aim to with confidence. Through this platform, employees and to determine where we should inspire and engage Gap Inc. talent through employees can work through courses focus our investments and build new programs employee opinion survey based on their development interests and a consistent framework that empowers and strategies that help us create a thriving, participation employees to drive their work forward while recommendations by Gap Inc. and their productive work environment. building strong relationships. peers. To date, over 4,000 employees (up from 62% in 2018) have accessed the platform and since its We are modernizing our approach to soliciting Our enterprise-wide approach to building talent October 2018 launch, our employees have employee feedback, shifting from an annual meets employees wherever they are on their viewed more than 40,000 courses. companywide opinion survey to more frequent professional journey: individual contributor, pulse surveys on topical issues. This allows new or seasoned manager, director or GREAT BOSSES us to capture real-time data so we can executive. understand and respond faster to employees’ % We know that one of the primary reasons immediate needs. We now issue surveys to 81 We create, manage or offer over 16,000 people stay in their jobs is because they representative samples of employees based courses for employees that cover a range of have great bosses. Great bosses build on the topic, with an aim to have all employees subjects: goal setting, how to be a great boss, great teams, and great teams contribute participate in at least one survey every quarter. employees reported situational leadership, unconscious bias and great value to the company. We focus on Each survey is fewer than 20 questions, inclusive leadership, how to have powerful developing our leaders’ ability to connect, and we share results through our ongoing active engagement conversations and more. Our enterprise listen to feedback and continually improve. employee communications. (up from 69% in 2018) learning efforts combine classroom-based experiences with virtual learning, homework, Our Great Bosses program focuses on hands-on workshops and ongoing learning 10 practical ways our people can “boss opportunities. better,” like rewarding successes; being honest, curious, and open-minded; and FIELD TO HQ We have always encouraged hiring store In 2019, we expanded our training for mid- understanding that progress is better than employees to our headquarters teams and, level managers through a one-to-one coaching perfection. Fueling our entry-level headquarters roles with in 2017, formalized a program in which program that prepares these managers for incredible talent is important to our success, we actively market opportunities to store senior leadership roles. Through a virtual Additionally, our Great Boss Survey is a and field employees are a key source of talent employees, support candidates through the platform, employees ranging from manager vehicle for managers to receive actionable for these roles. recruiting process, and provide a custom to vice president connect with experienced feedback directly from the people they lead. onboarding experience to ensure a successful coaches to receive customized guidance In the spirit of continuous improvement, we Our diverse field employees work with transition. In 2019, 1.5 percent of our entry- that takes into account each participant’s conduct this survey twice a year and the customers every day and understand what level headquarters roles were filled by field unique situation. In 2019, over 150 employees results go directly to managers. they need and want. Their connection to employees. Though we had a goal to fill 20 benefited from coaching and 89 percent of customers and understanding of how our percent by 2020, shifting corporate priorities participants reported reaching their coaching stores work is invaluable at our headquarters. have led to uncertain hiring needs, making it objectives. challenging to meet this goal.

2019 Global Sustainability Report 21 Home Overview Strategy Social Environment Product Appendix

Equality + Belonging

Since our founding, we have embraced core company values that include celebrating individuality, diversity and treating all people equally – with respect, dignity and fairness. Being an inclusive company is both a moral and a business imperative: It sends a message to the world that we stand for equality for all and that business can and should be a force for good. And it makes us a better, stronger company that reflects and serves the world in which we operate.

We know we are not perfect, but we are committed to making the necessary changes within our company and Banana Republic's inclusive range beyond. We see an opportunity to stand alongside our of nude necessities –True Hues – is designed for every skin tone. employees and other industry leaders to work toward greater equality and a sense of belonging for everyone. This helps our company attract and retain the best employees, create great products for all of our customers, New Goal New Goal foster creativity and innovation, and contribute to a more Double the representation Increase the representation inclusive and just world. of Black and Latinx of Black employees in U.S. employees at our U.S. store leader roles by 50% Our ongoing empowerment, employee and workforce headquarters offices by 2025 programs support the rights and well-being of the people by 2025 who embody and drive our business, ensuring they have equal opportunity and support to develop – both personally and professionally. Our new commitments, made in 2020, reflect our ambition to do better, listen % % more and drive greater change – starting within our 14 9 company and using our influence to enact systems change. We are devoted to creating a culture of belonging for our teams, our customers and future generations. Black + Latinx Black employees employees at our U.S. in U.S. store leader roles Learn more headquarters offices 2019 baseline > Our commitment to equality and opportunity 2019 baseline

2019 Global Sustainability Report 22 Home Overview Strategy Social Environment Product Appendix

Equality + Belonging

OUR APPROACH Step 1 Step 2 Step 3

We have a long history of striving First, we acknowledged that we have more Those conversations informed our second The last step we have taken is toward greater for equality, and in 2019 and 2020, work to do, taking time to listen to feedback step: setting bold new commitments transparency. Since 2007, we have publicly deepened our commitments and from our employees. We appreciate those that will foster change in our company reported our global employee gender data and engagement, elevating our ambition who engaged in these conversations – and beyond. We have established overall U.S. race and ethnicity data. Starting in response to rightful calls that real they have helped our company understand commitments in three areas (below). in 2020, we will regularly share additional data progress on racial justice is long overdue. more deeply what it means to be an ally. on how our employees identify their race and In addition to continuing our strong ethnicity at both stores and headquarters. We programs and resource groups that foster will also create a new Equality and Belonging diversity and inclusion, Gap Inc. has report in 2021 to talk openly about our taken three important steps in 2020. progress and the lessons we have learned along the way.

Commitment 1: Our Employees Commitment 2: Our Brands Commitment 3: Our Communities

By 2025, we will double the representation of We believe it is our responsibility to ensure that The third pillar of our commitments relates to Black and Latinx employees at all levels in our everyone feels seen in the products we make and systems change. We see three opportunities for U.S. headquarters offices, and increase the sell. Gap Inc. to support progress beyond our business: representation of Black employees by 50 percent through civic engagement; investments that improve in store leader roles in the U.S. We are proud to Our brands are committed to building and expanding the apparel industry’s accessibility and talent employ a 76-percent female workforce globally, and initiatives such as True Hues, a product-inclusion pipeline; and policy and advocacy aimed at ending that 56 percent of our U.S. staff identify as people strategy with a focus on Black consumers. It is racial inequality. of color. currently developing capsule collections featuring Black designers and artists. True Hues was initiated We are making it easier for our employees to But we have more work to do to fully represent the by the Color Proud Council, a cross-enterprise body participate in the democratic process, including communities we serve. Improving representation founded by employees in 2018 to focus on inclusion providing paid time off for voting. We are also is one step, but hiring the right talent is not in product design, merchandising and marketing. In partnering with organizations such as Open to All, enough. We will continue our efforts to cultivate 2020, we formalized the Color Proud Council within the NAACP and Embrace Race to engage with our a deep sense of belonging, and also increase our brands as a critical and necessary partner in customers, schools and communities on racism and our investment in pay equity. Since 2014, we achieving a 'best product, best experience' approach social justice. Our longstanding This Way Ahead have conducted annual reviews of our pay data to the product life cycle. Our brands are committed program (p.29), 95 percent of whose alumni by gender and, starting in 2020, we will have an to creating online and store experiences that identify as people of color, is helping to create a external firm assess our pay data by race for all authentically serve all customers and communities diverse pipeline of talented future leaders. We are U.S. employees. We are committed to fixing any and amplify Black voices. We are also including anti- also proud to continue our partnership with Harlem’s disparities we find. racism training as part of our ongoing employee- and Fashion Row to champion the next generation of customer-belonging initiatives. designers.

2019 Global Sustainability Report 23 Home Overview Strategy Social Environment Product Appendix

Equality + Belonging

EQUALITY + BELONGING communities where we do business, as TRAINING + RESOURCES launched our Be One. Get One. program to NETWORK GROUPS well as develop a company culture that empower employees to take an active role in embraces differences and individuality. Inclusion Training their own development and the development Gap Inc. Equality + Belonging Network Groups of others. are employee-led, company-sponsored Gap Inc. proudly supports the following In 2017, we launched a series of unconscious- communities representing employees from Equality and Belonging Network Groups: bias trainings to employees that we expanded SUPPLIER INCLUSION diverse backgrounds. They express, represent to our global workforce in 2018. We also PROGRAM and advocate for equality and belonging for • AANG: African American Networking created curricula and accessible resources Gap Inc. employees. Group that support equality and belonging. We want We are committed to increasing the diversity • ASIA: Asians Supporting Inclusion and our leaders and employees to identify how of the suppliers we use, helping diverse These groups provide opportunities for cross- Awareness unconscious bias and other issues present in businesses become competitive industry cultural learning, mentoring and relationship • GEAR: Gay Employees, Allies and their everyday work. Through our commitment leaders and enhancing the economic vibrancy building. They organize networking and Resources, an LGBTQ employee and to the CEO Action for Diversity & Inclusion, of the communities we serve. Our Supplier volunteering events to encourage belonging, ally group we continued to provide unique and engaging Inclusion Program, launched in January 2018, foster awareness of under-represented • Gap Parents education opportunities. provides a framework to increase our work groups, and provide personal and professional • GAPWIL: Women in Leadership with companies that are owned by or employ development. • HOLA: Honoring Our Latino Ancestry Be One. Get One. a large percentage of minorities, veterans, women and people with disabilities. Through Our network groups also help build a Learn more At Gap Inc., we value mentorship as a this program, we are forming new partnerships workforce that reflects our customers and the > Equality + Belonging Network Groups developmental process that helps build to expand our networks to connect with a more incredible careers. We view it as a personal diverse set of companies. journey that works best when people connect organically, instead of relying on matching Learn more systems and formalized reports. In 2018, we > Supplier Inclusion Program

2019 Global Sustainability Report 24 Home Overview Strategy Social Environment Product Appendix

Equality + Belonging

PUBLIC COMMITMENTS AWARDS

UN Human Rights LGBTI Bloomberg Gender-Equality Index Corporate Standards of Conduct for Business As a company working for a more equal, diverse and inclusive future for all, we’re proud to be included in the 2019 Bloomberg Gender- As the first global apparel retail company Equality Index for the second consecutive year. to sign on to the standards, we bolstered Bloomberg listed Gap Inc. as one of 230 global our efforts to support and lead on issues companies committed to transparency in gender that impact the Gap Inc. lesbian, gay, reporting and advancing women’s equality. bisexual, transgender and intersex (LGBTI) community around the world.

Refinitiv Diversity & Inclusion Index CEO Action for Diversity & Inclusion Open to All Gap Inc. was named one of the world's most In August 2017, we took the pledge, committing In October 2018, Gap Inc. and our family of diverse and inclusive companies for the third to advance diversity and inclusion in the brands announced that we joined a coalition of consecutive year in Refinitiv's Diversity workplace. The pledge aims to rally the business advocacy organizations and companies by signing & Inclusion Index, previously produced by community to work collectively toward that goal the Open to All Business Pledge. The pledge Thomson Reuters. Gap Inc. was ranked ninth and outlines a specific set of actions, such as reaffirms that our workplaces and stores are out of 7,000 international corporations, according unconscious-bias education. Companies are welcoming spaces for everyone, and each U.S. to Refinitiv, which scored companies across encouraged to share practices for cultivating a store displays the Open to All sticker. four key categories: diversity, inclusion, people trusting environment where all ideas are welcome development and news controversies. and employees feel comfortable and empowered For us, this is nothing new and is in line with our to discuss diversity and inclusion. In 2019, we Code of Business Conduct and Zero Means Zero hosted the Check Your Blind Spots Unconscious- policy. We are proud to join with other businesses Bias Tour, which offered a unique, technology- and national social-justice groups like the NAACP, enabled multimedia experience focused on blind HRC, ACLU and Anti-Defamation League to show Human Rights Campaign spots that can potentially influence everyday that we are open to all. Corporate Equality Index (CEI) decision making. For the 14th year in a row, in 2019, Gap Inc. received a perfect score on the CEI, an annual benchmarking survey and report on corporate policies and practices related to lesbian, gay, bisexual, transgender and queer (LGBTQ) workplace equality.

2019 Global Sustainability Report 25 Home Overview Strategy Social Environment Product Appendix

Equality + Belonging

WORKPLACE DATA Ethnic Diversity Gender Representation Promotion Rates by Gender United States* Global United States We believe diversity increases creativity and innovation, promotes high-quality decisions 2016 2017 2018 2019 2016 2017 2018 2019 2016 2017 2018 2019 and enhances economic growth. White VP + Above VP + Above We track and disclose data on comparable All Employees 48% 47% 45% 44% Women 51% 50% 54% 58% Women 3% 4% 3% 1% workplace information to enable us to Management 72% 71% 69% 68% Men 49% 50% 46% 42% Men 7% 11% 8% 3% monitor trends and the effectiveness of our New Hires 44% 41% 41% 41% strategy. Sr. / Director Sr. / Director Asian Women 61% 61% 62% 62% Women 10% 9% 7% 6% In an effort toward greater transparency, All Employees 7% 7% 7% 7% Men 39% 39% 38% 38% Men 12% 6% 6% 7% we will regularly share additional data on Management 10% 10% 10% 11% how our employees identify their race and New Hires 6% 6% 6% 6% Sr. / Manager Sr. / Manager ethnicity at stores and headquarters through Women 61% 61% 59% 58% Women 16% 13% 11% 12% a new Equality and Belonging report to be Black Men 39% 39% 41% 42% Men 14% 13% 7% 11% released in 2021. All Employees 19% 20% 19% 18% Management 6% 6% 7% 7% Store Management Professional Learn more New Hires 24% 25% 24% 23% Women 68% 68% 70% 72% Women 7% 8% 8% 8% > Workplace Data Men 32% 32% 30% 28% Men 8% 8% 8% 8% Hispanic All Employees 21% 22% 24% 25% New Hires Overall Management 10% 11% 12% 12% Women 74% 74% 74% 75% Women 7% 8% 8% 8% New Hires 19% 21% 22% 23% Men 26% 26% 26% 25% Men 8% 8% 8% 8%

Other Minorities* Overall All Employees 5% 5% 5% 5% Women 75% 76% 76% 76% Management 2% 2% 2% 2% Men 25% 24% 24% 24% Promotions are defined as movement to a higher- New Hires 6% 6% 7% 7% grade level. Promotion rate is the number of promotions during the year, divided by the average headcount for that year. All Minorities All Employees 52% 54% 55% 56% Management 28% 29% 31% 32% 56% New Hires 56% 58% 59% 59% 76%

*U.S. full-time and part-time, non-seasonal employees. Data on ethnic diversity is not available of U.S. employees identify outside the U.S. female workforce as people of color **Other Minorities include: American Indian, Pacific globally Islander and 2+ races.

2019 Global Sustainability Report 26 Home Overview Strategy Social Environment Product Appendix

Employee Engagement

We empower Gap Inc. employees to support the potential 2019 PROGRESS in Mexico that decorated a playroom in a of people in their communities through donations of time, children’s hospital, to staff in India who planted In 2019, we are proud that through the efforts trees, donated blood and distributed meal talent and money. of our global team, we met our goal for kits to those in need. In total our employees employee volunteer hours, even as we fell around the world contributed 67,000 volunteer Every year, we work to ensure that our legacy of short of our larger employee-driven community hours during the rally. As an added incentive, investment goal. In total, 28 percent of our any region with three or more employee community involvement remains strong and we are global employees logged more than 350,000 volunteers from every store in that region proud that this spirit is ingrained in our company culture. hours volunteering. received a $2,500 grant from Gap Foundation Encouraging our employees to volunteer or donate helps for the nonprofit of their choice, and the team Despite shortfalls in our employee- with the highest participation also received build strong communities as well as attract and retain engagement goals, which came during a year a grant for the nonprofit of their choice. In talented, engaged people for Gap Inc. of significant change across our business, addition to the volunteer hours, this campaign we are proud of the employee volunteer and supported $19,000 in Gap Foundation grants to charities including Kids Door in Japan, Getting involved in the community is easy for our donation efforts that have helped us exceed these goals in past years, and we especially Operation Smile in China, and Sacramento employees, as we build in time for them to volunteer: All value the contributions that have come during Children’s Home in California. salaried employees can volunteer five hours per month more difficult years such as 2019. “on the clock.” In addition, we match donations of both In recent years, we have evolved our We are pleased that our network of 2,700 approach, integrating our ability to give time and money so employees can support the causes Community Leaders is still running strong. back even more deeply into our culture they care about in the way that works best for them. These individuals serve as Gap Foundation and expanding our notion of what it means We measure the dollar value of employee donations of ambassadors and drive volunteerism for to give back. Beyond donating time and teams in our stores, corporate offices and money, we have used campaigns such as time and money, and the company match to both; we distribution centers around the world. They #LoveYourWater (p.50) to encourage refer to this aggregate as “employee-driven community also build partnerships with local nonprofits – employees to think more broadly about all the investment.” relationships that frequently span many years ways that they can have a positive impact in and move beyond good intentions, delivering their communities through choices that they true impact by leveraging the expertise of our make in their daily lives. Learn more worldwide teams. > How we invest in others and ourselves Today, each Gap Inc. function has at least one We are also energized by the enthusiasm representative on our Employee Engagement displayed by our global employees in Committee. These representatives are companywide campaigns like our Volunteer responsible for setting goals for volunteer Rally, during which individual districts and hours, employee participation and total regions, as well as teams from Gap Inc. employee-driven community investment. headquarters compete to achieve the highest We share monthly reports with these employee participation over the course of six representatives to help keep teams and a half weeks. In 2019, teams participated accountable for their goals. in a variety of causes, from an Old Navy team

2019 Global Sustainability Report 27 Home Overview Strategy Social Environment Product Appendix

Employee Engagement

Goal 2019 Employee-Driven Key Metric Community Investment Support $15 million in 25% of Gap Inc. employees annual employee-driven volunteer annually community investment* % Employees Volunteered Employee-Driven Community Investment $12.2M 2017 23% 2017 $14.8 M 2018 25%

2018 $15.6 M 2019 28%

2019 $12.2 M Ongoing $9M in volunteer hours Goal Ongoing (the financial equivalent of 25% Goal over 355,000 volunteer hours) $15M $1.1M in employee *Comprises volunteer hours, financial donations employee financial donations $2.1M in Gap Inc. matching of and Gap Inc. matching of time Key Metric and money volunteer hours + employee financial donations Gap Inc. employees log 430,000 volunteer hours annually

Employee Volunteer Hours

2017 421,000

2018 431,000

2019 355,000 Ongoing Goal 430K

2019 Global Sustainability Report 28 Home Overview Strategy Social Environment Product Appendix

This Way Ahead: First Jobs

This Way Ahead is opening doors for the next generation At the same time, the program builds leadership skills with first jobs, mentoring and building the confidence among the This Way Ahead mentors, allowing our company needed to make their dreams a reality. to grow and stay competitive while delivering benefits across our business. Since 2007, the program has helped Through structured training and paid work experience at Gap Inc. build a valuable pipeline of future employees while our stores and distribution centers, This Way Ahead helps developing best practices for managing talent that can be youth (ages 16 to 24) facing barriers to employment get applied across the company. a foot in the door for a life-changing first job. Beyond a paycheck, the program gives participants life skills Learn more and valuable first-job experience, helping to build their > How we developed our program + how we approach implementation confidence for the future.

8,201 youth have participated since 2007

2019 Global Sustainability Report 29 Home Overview Strategy Social Environment Product Appendix

This Way Ahead: First Jobs

2019 PROGRESS More broadly, Gap Inc. expects the Karen Diosa: expansion of This Way Ahead to From This Way Ahead Intern to In 2019, we saw great progress across This support our company goal to increase Old Navy Store General Manager Way Ahead, building on the program’s growth representation of Black employees by 50 in 2018 through a national partnership with percent in store leader roles in the U.S. by When Karen Diosa started as a This Way the Boys & Girls Clubs of America, which 2025. This Way Ahead alumni – 95 percent Ahead intern at Old Navy’s flagship store expanded the number of cities where the of whom are people of color – represent in Manhattan, she was a shy 16-year-old program runs. In 2019, more than 2,500 youth immense potential for our leadership high-school junior with a strong work ethic. participated in the program across 576 stores pipeline. “I started working at a young age because I in 70 cities, up from 444 stores and 53 cities wanted to both work hard for what I needed Also in 2019, we published the Gap Inc. in 2018. and also be able to one day provide for my This Way Ahead alumna, This Way Ahead Playbook, distilling family,” says Diosa, whose own parents, Karen Diosa, and Old Navy lessons from the program’s 10-plus years We dedicated time to evaluating how we could immigrants to New York from Colombia, Head of Stores, Steve Stickel make an even bigger impact through This to outline four key steps our stores can inspired her and her three siblings. Way Ahead and decided to shift the program take to find and hire untapped talent. The from several brands in our portfolio solely playbook also includes resources like an Nine years and several promotions later, Diosa the store floor to her leadership positions. “If to Old Navy. Building on Old Navy’s strong interview guide and a checklist for things to has become the first This Way Ahead graduate it weren’t for This Way Ahead, I wouldn’t be leadership in the program, its partnership with do as a mentor. to become a store general manager. “I saw here right now,” Diosa says. “The program the Boys & Girls Clubs of America, and the this opportunity to grow with the company, so I helped me come out of my shell. The Old Navy brand’s presence of more than 1,200 stores, Participant and mentor evaluations of said, ‘Nothing to lose here, I’ll go for it!’” Diosa and This Way Ahead partnership is like a big this transition will raise our opportunity for This Way Ahead continue to demonstrate recalls. family.” impact while supporting Old Navy’s business the program’s impact, with 68 percent model for recruiting and developing talent. For of participants reporting an increase in Diosa, who studied health science, psychology Now Diosa is supporting the next generation Old Navy, This Way Ahead is the first place confidence and 84 percent of mentors and sports science in college – all while of This Way Ahead interns by sharing her own to look for talent when it comes to hiring new reporting improved creative-thinking and working at Old Navy – credits Louis Reyes, story. “I encourage them to ask questions,” she associates. problem-solving skills. her then store director, for mentoring her from says. “It’s very rewarding to be a role model.”

2019 IMPACT* 68% 84% 72%

of youth reported of mentors reported of alumni have secured a significant increase improved creative-thinking stable employment *These results were reported in confidence + problem-solving skills compared to 55% of their peers, by a third-party evaluator. according to a study of 10 years of alumni

2019 Global Sustainability Report 30 Home Overview Strategy Social Environment Product Appendix

This Way Ahead: First Jobs

2019 REACH + GROWTH Goal Gloire Yahve: Reach 20,000 youth ‘I’m all about moving up.’ Youth through This Way Ahead When Gloire Yahve was 6 years old, she by 2025 resolved that she would be the first person 2017 1,148 in her family to graduate from college. The This Way Ahead Participants daughter of immigrants who came to Houston after fleeing the Congolese genocide in 1999, 2018 1,700+ 2007 Yahve saw how hard her parents had to work just to get by, sometimes holding two or three 2019 2,524 2016 2018 low-paying jobs. Yahve’s father always told 2,713 5,677 2025 her: “Education is key to a new beginning and a better life.” 2017 2019 Goal 3,900 8,201 20K Stores Yahve’s parents gave their eight children everything they could and would not allow them to work so that they could focus on Previous goal: Reach 10,000 youth through 2017 274 This Way Ahead by 2020 their studies. So when Yahve’s godmother suggested that she apply for This Way Ahead This Way Ahead alumna, – and Yahve got the internship – she didn’t tell 2018 444 Gloire Yahve her parents. “But when I started bringing home clothes from Old Navy for the family, they 2019 576 Goal asked if I had a job,” she says. the fitting room to her current job in loss Hire 5% of entry-level At first, her father was opposed to the idea of prevention. Outside of her achievements at employees from This Way Yahve working. But when he realized that she work, she has continued to apply herself in Cities was still making good grades and had earned school, and was accepted into six colleges. Ahead annually by 2025 enough to open a savings account and start “I’m all about moving up,” she says, paying for the dance lessons she had quit laughing. Entry-Level Hires from This Way Ahead years ago when her family couldn’t afford the 2017 15 fees, he was happy for her. She even earned Yahve credits her first boss, Adriana enough to help pay family bills and buy sports Fuentes, and her manager, Anthony 2018 53 2017 0.9% (668) gear for her siblings. “Some people say you Cooremans, with helping her become the can’t do it all: You can’t get your siblings to leader she is today. “This Way Ahead was 2019 70 2018 1.4% (1,107) school every day, volunteer, help pay the bills, my golden ticket,” she says. “It’s not just dance and work,” she says. “But I did, and I about the job. You can go somewhere else still do.” and get paid. It’s a fresh start and a second 2019 2.1% (1,618) chance for so many kids. If I hadn’t found 2025 When she started at Old Navy, Yahve says she this program, if I didn’t learn how to talk to Goal was shy and reserved, but she soon learned people and make friends, I’m honestly not 5% new skills and was promoted from her start in sure I’d even be here today.”

2019 Global Sustainability Report 31 Home Overview Strategy Social Environment Product Appendix

Supplier Sustainability

We partner with all of our branded-apparel suppliers Alongside our industry partners, we’re investing in initiatives and other key stakeholders – including peer companies, focused on a range of interventions: improving worker and employees, unions, governments, multilateral management relations, innovating how we assess and institutions, NGOs, industry associations, investors and improve working conditions, and using technology to directly communities – to help provide safe, fair and healthy engage with workers and respond to their needs. working conditions for the women and men who create our clothes. Learn more > How we're improving working conditions Using a holistic approach, we implement a variety of programs for monitoring facilities and building supplier capabilities to help catalyze improvements in working conditions, taking country-specific approaches where OUR APPROACH 2. Capability Building appropriate. Our Human Rights Policy guides our overall approach to developing a supply chain that is resilient, We believe in a comprehensive approach to In partnership with our suppliers, NGOs improving working conditions in our supply and others, we have established a suite responsive and respectful of the workers who make our chain, combining facility-monitoring and of programs that aim to develop facilities’ products. capability-building programs to help our capabilities for worker representation and suppliers continually improve. leadership involvement. Initiatives such as our Workplace Cooperation Program and Gap Inc. has developed and implemented a dedicated 1. Assessment + Remediation Workforce Engagement Program – which program for assessing and remediating issues in we developed with Better Work and Verité, sourcing facilities; we have also established a suite Our approach to improving working conditions respectively – focus on maturing industrial of capability-building programs focused on women’s is based on transparency, partnership and relations in facilities and providing functioning impact. We believe that by working together, grievance mechanisms while also measuring empowerment, social dialogue and supervisory skills. we can achieve our commitments to improve and improving the degree to which garment Field teams in our key sourcing countries enable us to workers’ well-being, protect human rights, workers feel valued and engaged at work. partner closely with facilities and local stakeholders, reduce environmental impacts and improve Our life-skills program, P.A.C.E., gives women business performance. training and support to advance in their providing thorough, on-the-ground insight into our professional and personal lives. In addition suppliers' performance and the salient issues that Read more to our cornerstone programs, we manage or workers in our supply chain face. > Assessment + Remediation (p.33) participate in a broad set of initiatives that address country-specific labor issues.

Our goal is to design, collaborate on and implement Read more industry-leading programs that drive transformative > Capability Building (p.39) innovation for the apparel-manufacturing sector.

2019 Global Sustainability Report 32 Home Overview Strategy Social Environment Product Appendix

Assessment + Remediation

We monitor the adherence of the facilities operated by We use a color-coded system to rate facilities’ Goal our suppliers to the Gap Inc. Code of Vendor Conduct performance based on assessments. High-performing facilities with no critical 100% of supplier facilities (COVC) before initial approval and then annually. This is in and few violations are rated green; average producing branded performers are rated yellow; facilities that conjunction with our efforts to build innovative programs apparel are rated yellow that create supportive, empowering workplaces. need improvement on one or more serious issues are rated red. Critical, severe and key or green by 2020 violations have a greater negative impact Our Assessment and Remediation program is the on a facility’s rating than more technical % Supplier Facilities foundation on which we evaluate our suppliers’ abilities “noncompliance” violations. Rated Yellow or Green to meet our sustainability expectations. The program In 2017, Gap Inc. set a goal to not work with 2016 84% provides insight on what issues workers may be facing any red-rated facilities by 2020. We have made significant strides toward this goal, and additional programs that would be beneficial. We 2017 95% moving from 16 percent red-rated facilities primarily evaluate facilities through our own field teams’ in 2016 to less than 2 percent by the end of assessments and our partnership with the International fiscal 2018. We maintained that percentage 2018 98% Labour Organization (ILO) Better Work (p.35) in countries of red-rated facilities in 2019. In 2020, we will where it operates. Our global field team is located work toward our goal of zero red-rated facilities 2019 98% by continuing to build on our established 2020 primarily in the countries from which we source, giving us management practices, including our work with Goal a direct, on-the-ground understanding of worker needs our supply-chain partners, which has helped 100% and facility performance. We also support the adoption us progress over the years. We create realistic corrective action plans to help red-rated and institutionalization of new industrywide tools, such as facilities resolve their challenges and improve the Social & Labor Convergence Program (SLCP) to help in a timely manner. We have learned that 2019 Facility Ratings assess factory performance. setting big goals and having the management systems to provide visibility and accountability leads to sustained improvement. We will continue to provide that visibility through tools such as integrated scorecards that prioritize sustainability and business performance. 737 Facilities While we didn’t reduce the percentage of red-rated facilities in 2019, the number of green-rated facilities increased by 6 percentage points between 2018 and 2019. Our analysis shows that the majority of these 45% Green-Rated Facilities green-rated facilities are our more established vendors, and a good percentage of them also 53%Yellow-Rated Facilities participate in our capability-building programs, 2% Red-Rated Facilities including our Workplace Cooperation Program and P.A.C.E. 2019 Global Sustainability Report 33 Home Overview Strategy Social Environment Product Appendix

Assessment + Remediation

We have been able to achieve success greater than when supplier sustainability and SUPPLIER PERFORMANCE closing out COVC violations in a sustainable, purchasing operate independently. responsible way by integrating this work We analyze our suppliers’ performance more deeply into our sourcing decisions and We use a strict approval process to reduce against our Code of Vendor Conduct concentrating our business with preferred the possibility of any red-rated facility (COVC) and use the consolidated, country- % vendors. In addition to a dedicated Supplier entering our sourcing base, and we prioritize level results to track and analyze progress 82 Sustainability team that engages directly improvements with any facilities that do slip or areas of concern for these issues. Our with facilities on these issues and targets, into red-rated categories. We are committed analysis showed that we resolved 82 percent we train global sourcing employees on to reassessing those facilities more of issues within 12 months, for those issues human rights policies and procedures, frequently, and we empower our teams to that were open as of Feb. 1, 2019. As we of COVC building companywide awareness on COVC work with all facilities to meet our standards monitor areas of concern for emerging issues requirements and collaborating internally and continually improve so that we can build or trends, we partner with our suppliers issues resolved were to manage vendor performance and drive a high-quality supplier base. While we are to implement changes to our systems or within 12 months sustained performance. Through training pleased with the impact of our efforts toward develop new policies or programs. and education, we also work closely with key our goal of 100 percent green- and yellow- vendors to build their capacity for continual rated facilities, we also recognize that at any improvement and help them implement given time, some facilities may slip below our proactive measures that will prevent COVC COVC standards – and we are committed to issues from arising in the first place. continuing to monitor and work closely with our suppliers to remediate issues. Achieving Resolution of Facility COVC Issues Open as of 2/1/2019 We have created internal systems to a baseline performance level allows us to develop a close partnership between our keep a closer eye on concerning issues Sustainability and Global Supply Chain and focus on capability-building programs, 2/1/2019 5/1/2019 8/1/2019 1/31/2020 (6 months) (12 months) teams. This integration is supported with such as enhancing bipartite committees (3 months) data analysis, which allows us to track and (our Workplace Cooperation Program) and Open Open % Open % Open % analyze major trends and the effectiveness of soliciting direct worker engagement (our Issues Issues Resolved Issues Resolved Issues Resolved our programs. When we identify concerning Workforce Engagement Program). trends or hot spots, we develop specific action Bangladesh 378 313 17% 240 37% 128 66% plans to build awareness with our suppliers, As we strive toward our goal, we also Cambodia 504 486 4% 449 11% 68 87% collaborate with all affected stakeholders, and recognize that the best way to address most China 553 418 24% 126 77% 45 92% formalize systems to address the issue. serious issues is to partner with our vendor Guatemala 0 0 – 0 – 0 – or their facility to remediate. However, in India 667 599 10% 421 37% 164 75% In 2019, an independent study by researchers the event that a facility or vendor fails to Indonesia 338 131 61% 76 78% 57 83% at the University of Oxford and the University address persistent noncompliance or other Pakistan 55 51 7% 48 13% 11 80% of Toronto confirmed that our approach of egregious issues over an extended period of Sri Lanka 71 49 31% 32 55% 21 70% aligning sourcing decisions and accountability time, we will create a responsible exit plan. United States 5 0 100% 0 100% 0 100% with social-compliance goals is an effective In that case, we give notice to the facility that Vietnam 943 754 20% 477 49% 130 86% model to improve supplier performance orders will not be re-placed, so as to minimize Other 160 131 18% 87 46% 43 73% against our COVC criteria. The researchers disruption to workers. In these situations, we Total 3,674 2,932 20% 1,956 47% 667 82% indicated that the improvement in performance will continue to monitor the facility and work under this aligned approach appears to be on pending issues through and following deactivation.

2019 Global Sustainability Report 34 Home Overview Strategy Social Environment Product Appendix

Assessment + Remediation

INTERNATIONAL LABOUR SOCIAL & LABOR 2019 Assessments in ILO Better Work Markets ORGANIZATION (ILO) CONVERGENCE PROGRAM BETTER WORK (SLCP) Facilities Assessed Facilities Assessed by ILO Better Work by Gap Inc. Total As part of our efforts to go above and beyond As a signatory to this collaboration among assessment and remediation and work more apparel and footwear brands, retailers, Bangladesh 33 69% 15 31% 48 collaboratively with our suppliers and other industry groups and civil society organizations, Cambodia 41 79% 11 21% 52 stakeholders, we have played a leading role we support a shared data-collection tool that Haiti 6 100% 0 0% 6 in multistakeholder collaborations such as assesses the social and labor performance Indonesia 54 82% 12 18% 66 the ILO Better Work program. As a founding of manufacturing facilities across the apparel Jordan 4 100% 0 0% 4 member of this program, we view the ILO and footwear supply chain and reduces the Nicaragua 5 100% 0 0% 5 team as our key partner in every country duplication of industry efforts. In 2019, we Vietnam 94 60% 62 40% 156 where it operates, representing several of joined the SLCP Council and are active in Total 237 70% 100 30% 337 our key sourcing markets. Better Work takes workstreams to accelerate adoption of the tool. an advisory approach to monitoring facilities, with an emphasis on protecting worker rights In 2018, we participated in a pilot program to and well-being by helping companies and test the first version of this tool, and in 2019, Mill Sustainability Program governments uphold the ILO’s core labor expanded our implementation by inviting 65 standards and national labor laws. Better mill facilities in China, Taiwan and India to Our supply chain is complex and reaches far beyond our Tier 1 suppliers Work leads facility assessments and helps complete the SLCP; 28 mill facilities did so. To – the cut-and-sew facilities from which we directly source, as well as their to address and remediate issues in Vietnam, support the wider adoption of the tool, we have supporting embroidery, screen printing and laundry facilities. Since 2017, we’ve Cambodia, Indonesia, Bangladesh, Jordan, applied lessons from the pilots to streamline expanded our efforts to monitor the social and environmental performance Haiti and Nicaragua. We also work closely communication and simplify materials that our of our Tier 2 suppliers – the mills that provide our fabric – through our Mill with Better Work on the Better Work Academy, staff use to train suppliers. As the program Sustainability Program. The program puts supplier ownership at its center and which we helped found to move beyond grows, we continue to seek new ways to uses three industry programs, including SLCP, to improve our mills’ social and an “assessment-only” approach to facility demonstrate the benefits of this initiative to environmental performance. The other two industry programs we use are the monitoring. suppliers. Sustainable Apparel Coalition’s (SAC) Higg Facility Environmental Module (FEM) 3.0, and the Zero Discharge of Hazardous Chemicals’ (ZDHC) Roadmap Read more Gap Inc. is committed to supporting the to Zero Programme. > ILO Better Work and Supervisory Skills expansion and sectoral adoption of the Training (p.41) SLCP; we continue to allocate resources to Our first step on this journey was to comprehensively map the mills from which > Better Work Academy (p. 41) institutionalize the program across our supply we source raw materials and group them into three categories: preferred mills chain to promote supplier ownership of social (which represent the majority of our business volume), secondary mills, and performance. niche and new mills. We have a comprehensive understanding of our Tier 2 supplier base, mapping over 200 facilities that represent a significant portion of our business volume. We continue to engage with them and incorporate their performance into our business decisions.

Read more > Mill Sustainability Program (p.54)

2019 Global Sustainability Report 35 Home Overview Strategy Social Environment Product Appendix

Assessment + Remediation

KEY ISSUES Fire, Building and Electrical created improvement plans for over 74 of the Supplier Sustainability team provides Safety Program top strategic facilities that manufacture our contact information to workers in the We are proud to support the principles product. facilities from which we source, so they outlined in the Universal Declaration of We established our fire, building and electrical are able to reach out to Gap Inc. directly if Human Rights (UDHR), the UN Global safety (FB+ES) program to reduce the risks Grievance Mechanisms there are issues that require our attention. Compact, the Organisation for Economic inherent in the industrial process of apparel Co-operation and Development (OECD) manufacturing. Our program is intended Being able to raise concerns to facility We believe that context-specific approaches Guidelines for Multinational Enterprises, to protect workers, especially in our key management or to Gap Inc. is essential to grievance mechanisms will increase the and the ILO's Core Conventions. sourcing countries and countries where these to ensuring that workers have a voice in likelihood that workers use them. We are in the dangers pose a high risk. Reducing the risk of their workplace. We have developed a midst of evaluating additional service providers These principles form the foundation of our catastrophic events is paramount, and we see comprehensive suite of programs that that can help to implement technology- Human Rights Policy, which defines our an opportunity to avoid supply disruptions from provide myriad workplace benefits and based solutions in other sourcing markets. approach and activities to respect human small-scale incidents that could result in lost channels where workers can effectively raise Additionally, we are responsive to third parties rights and prohibit human-rights abuses. working days, worker injury or displacement, grievances. Within each program, workers are that raise grievances with us via any of our and product damage. given a voice to raise concerns with facility communication channels. In addition to the programmatic updates management and outside parties, via various in this report, detailed information on Our approach is to lead local initiatives and channels: our human-rights policies, management partner with other brands, when possible, to approach and resolution actions for key support scalable solutions. In recent years, we • Our Workforce Engagement Program issues is available at the links below. have expanded our FB+ES approach beyond (p.41) offers an approach in which Bangladesh, where we had focused our efforts individuals can confidentially report Learn more since 2014. In Bangladesh, we are a member workplace-related grievances to facility > Child Labor and Young Workers of Nirapon, the organization created to carry management via worker surveys, > Discrimination and Harassment forward the important FB+ES improvements interviews and messaging applications. > Wages and Benefits that the Alliance for Bangladesh Worker Safety > Fire, Building and Electrical Safety has achieved. • Our Workplace Cooperation Program > Grievance Mechanisms (p.40) provides training for workers > Short-Term Contracts We joined the Life and Building Safety and management on how to improve > Human Trafficking and Forced Labor (LABS) initiative, which currently operates in industrial relations, with an emphasis on > Working Hours India and Vietnam. In 2019, LABS assessed how to develop and implement grievance > Humane Treatment 15 facilities in India and 29 in Vietnam for mechanisms. Our goal is to deliver this > Freedom of Association fire and building safety. We are proud to program to 200 facilities by 2020; as of > Foreign Contract Workers and help spearhead LABS’ work in its portfolio of the end of 2019, we had reached 182 Recruitment facilities, half of which are Gap Inc. suppliers. facilities. We assess grievances raised via > Unauthorized Subcontracting this program, including the amount of time We have also worked with expert service taken to remediate, channels used and providers to conduct assessments of our own outcomes. in other key sourcing countries, including Cambodia, Egypt, Indonesia, Jordan, Pakistan • Our Assessment and Remediation and Sri Lanka. To date, these providers program (p.33) evaluates the efficacy have conducted FB+ES assessments and and use of grievance mechanisms. Our

2019 Global Sustainability Report 36 Home Overview Strategy Social Environment Product Appendix

Assessment + Remediation

Freedom of Association Also in 2019, we launched a new partnership with our sourcing teams, enabling them to discrimination and harassment in Bangladesh, with the ILO and Better Work Bangladesh. This examine how their planning affects lead times Cambodia, China, El Salvador, Guatemala, Our Code of Vendor Conduct (COVC) and three-year initiative, the ILO Bangladesh Social and our visibility into our supplier’s capacity Haiti, Honduras, Indonesia, Jordan, Nicaragua Human Rights Policy explicitly support Dialogue Project, will be implemented by the to fulfill orders. Gap Inc. Sourcing teams and Vietnam. We are working with partners in freedom of association and the rights of ILO in all facilities from which Gap Inc. sources are working to develop systems that can these countries to implement the training. workers to lawfully and peacefully associate, in Bangladesh. It helps to build the capability of more appropriately place orders depending organize and bargain collectively. factory management, compliance staff, union on our suppliers’ capabilities to fulfill them; By the end of 2019, we had conducted training members and workplace-committee members these learnings are helping us to implement for more than 500 facilities in our global supply We use a wide range of approaches in seeking through training sessions on a range of topics improvements while we continue to solicit chain – about 70 percent of all facilities. to ensure that freedom of association rights including: freedom of association, collective supplier feedback. To review progress, Gap Inc. assessments are respected, from supporting open dialogue bargaining, international labor standards, and include components on POSH and determining between facility workers and managers, to communication and negotiation techniques. Gender-Based Discrimination areas for improvement, if needed, within a partnering with workers’ rights groups and It will also help to increase understanding and Harassment remediation plan. trade unions when appropriate. of the Bangladesh Labour Act. In 2019, we supported training in 28 facilities, an effort we Women comprise the majority of the global Looking ahead, we will build on this program In January 2018, we joined with The Arbitration will continue to expand, when feasible, to meet garment workforce, face challenges in the to focus on women’s empowerment, which Council and ILO Better Factories Cambodia our goal of reaching 50 facilities. workplace, especially regarding harassment. we will link to Empower@Work (p.44), our to lead a workshop on freedom of association Over the years, we have conducted regular collaborative effort with BSR HERproject, for our Cambodian suppliers and the unions Working Hours assessments of the facilities with which ILO Better Work, CARE, ICRW and Walmart. represented in their facilities. The purpose was we work and have found serious violations It aims to use common curriculum and best to improve employee-employer relationships One of the compliance issues we frequently related to gender-based discrimination and practices to advance women’s empowerment through a mutual understanding of freedom encounter relates to worker overtime, which harassment. These issues require all relevant and gender equity in global supply chains. of association, workplace cooperation, fluctuates but remains an issue of concern stakeholders in our industry to invest more and dispute-prevention and -resolution year after year. Overtime is a complex time and resources to address. mechanisms in the workplace. This workshop challenge to address: Many workers want to included in-depth trainings for factory request overtime because they seek hours To help move the needle, in 2018, Gap Inc.’s management, union representatives and other in order to earn premium overtime pay, while Supplier Sustainability team worked with our worker representatives on how they can better facilities seek to optimize their production suppliers in India. We helped them build an partner to jointly resolve workplace disputes. capacity across multiple buyers. In addition, environment where they clearly define and We look forward to scaling these types of buyers themselves, including Gap Inc., can implement policies on Prevention of Sexual trainings in additional countries in the future. negatively impact work hours when requiring Harassment (POSH) and create an Internal It also provided an overview of Gap Inc.’s changes that increase or decrease the size of Complaints Committee, both of which are Workplace Cooperation Program (p.40), an order. required under local law. Our aim was to help which aims to improve worker-management our suppliers raise awareness about this issue dialogue at facilities. In 2019, we built on these We continue to address the role that our and the rights and responsibilities of male and efforts by supporting the Arbitration Council’s buying practices have on overtime hours, female employees, including managers. development of the “Guidebook to Cambodian including through Better Buying, an initiative Labor Law,” which will be launched in the to understand the impact of our business Given the urgency and importance of this second half of 2020. planning, as well as other aspects of the issue in other key sourcing countries, we design and development process. After we have taken our learnings and expanded received our results, we shared our findings these trainings to address gender-based

2019 Global Sustainability Report 37 Home Overview Strategy Social Environment Product Appendix

Assessment + Remediation

Child and Forced Labor As part of our deep commitment to responsible and ethical practices and our strict policies We continue to maintain a strong focus on against the use of involuntary labor of any protecting human rights, including issues kind in our supply chain, we are monitoring such as forced and child labor. Under no concerns about China’s Xinjiang Uyghur circumstance is it acceptable for child, forced Autonomous Region (XUAR) region, where or trafficked labor to be employed within a significant amount of the world’s cotton our operations or used in the production of is grown and spun. We can confirm that any Gap Inc. product. Recent legislation we do not directly source any materials or has supported global awareness and we garments from the region and we are taking annually report our actions to uncover and steps to better understand how our global protect against these issues within our 2019 supply chain may be indirectly impacted. U.K. Modern Slavery Act and California This includes working with our suppliers and Transparency in Supply Chain Act disclosures. actively engaging with industry trade groups, While we have not discovered instances expert stakeholders and other partners to learn of forced or child labor in our supply chain more and advance our shared commitment to in recent years, we remain vigilant about respecting human rights. these issues and detail our comprehensive management approaches to both. Learn more > California Transparency in Supply Chains Act / UK Modern Slavery Act Statements

Uzbek and Turkmen Cotton

It has been well established that the governments of Uzbekistan and Turkmenistan have long relied on forced child labor and/or forced labor to harvest their country’s cotton. We have worked to educate and influence our suppliers and facilities on this issue, making it clear that we will not accept any clothing manufactured with fabrics that were made from Uzbek or Turkmen cotton. We were pleased to read reports from the ILO that acknowledged significant improvements in Uzbekistan’s cotton sector. We recognize that further reforms are necessary, but we are pleased to see progress on this critical issue.

2019 Global Sustainability Report 38 Home Overview Strategy Social Environment Product Appendix

Capability Building

We work with our manufacturing partners to implement Together, these programs provide a comprehensive and a suite of programs aimed at providing the tools and holistic engagement model for facilities to improve labor resources to continually improve industrial relations, worker standards, benefit workers, and support the business engagement and facility compliance. continuity and resiliency of our supply chain.

Learn more When we approach our suppliers about human rights and > How we're working with suppliers working conditions, we are sharing our conviction in enabling safe, productive and responsive workplaces. We seek to work with facilities where workers feel valued and engaged at work, where they have a voice to express concerns and see their grievances addressed, and where workers and managers can communicate effectively.

Gap Inc. coordinates with external partners – including NGOs, unions, multilateral agencies, peer companies and suppliers – to deliver our P.A.C.E. program, Workplace Cooperation Program, Workforce Engagement Program and Supervisory Skills Training. These programs can help empower women workers, enhance industrial relations in facilities, provide functioning grievance mechanisms, stabilize our sourcing operations, and create platforms for measuring and improving the degree to which garment workers feel valued and engaged at work. These complementary interventions can be implemented alone or together depending on a facility’s needs.

In addition, we participate in broader initiatives that support the individual programs, including the Better Work Academy and the Better Than Cash Alliance’s digital-wage program. These can be implemented in available markets to heighten our suppliers’ ability to adapt to their workforce's needs.

2019 Global Sustainability Report 39 Home Overview Strategy Social Environment Product Appendix

Capability Building

WORKPLACE We also continued to use the data their work environment and happier coming COOPERATION PROGRAM assessments we launched in 2017 to to work. They also reported feeling that they examine how many grievances have been were listened to and had a voice in decision 8,323 Our Workplace Cooperation Program (WCP) received and addressed, which channels making. grievances raised facilitates dialogue between workers and were used, and how long it took to address by workers in facilities management to address workplace issues, the issues. Our analysis shows that once participating in WCP from overtime and worker well-being, to functioning bipartite committees are in Key Metric from 2018-2019 washroom sanitation and better-quality food in place, workers feel more empowered to the canteen. This training program works with raise concerns, and that these concerns Reach 200 supplier elected bipartite committees, comprising both are more quickly addressed. In addition, our workers and management representatives data show that once these committees have facilities with our who collaborate to build good industrial been trained, grievances rise for a period Workplace Cooperation relations. Inherent in this training program is a and then diminish in frequency, illustrating Program by 2020 recognition that workers in many facilities do the comfort workers feel in voicing % not feel comfortable voicing their grievances in complaints and the subsequent actions Supplier Facilities Reached with WCP 88 the presence of upper-level management. Our taken to address their concerns. approach, designed in partnership with ILO Better Work, seeks to address those relations We believe that improving worker and 2016 31 by developing the skills of committee members management relationships and addressing and to help guide effective meetings. We also workers’ concerns can increase morale, issues resolved 69 provide guidance on how to best respect and which could improve our suppliers’ business 2017 within the abide by workers’ fundamental rights at work, performance. To understand whether the same quarter as defined in the ILO’s Core Conventions. WCP is indeed impacting productivity, 2018 129 efficiency and quality among our suppliers, we have been collecting data for analysis. In 2019, we focused on expanding and refining 2019 182 We created a quarterly data-collection tool this program, as well as analyzing data that we 2020 and asked participating facilities to track and collect quarterly. Since launching the program Goal share data on business indicators, such as in 2016, we have reached 182 facilities – 61 in 200 2019 – in 11 countries. We continue to expand absenteeism, number of grievances and % to our strategic vendors’ owned and sub- productivity. 11 contracted facilities for even greater impact. Our goal is to reach 200 facilities by 2020. In 2019, researchers from York University and Better Work conducted an evaluation Building on changes made in 2018, we have of the program, revealing that the training repeat issues continued to offer an abbreviated training has translated into workplace improvements period of 12 to 16 months instead of two in three areas: communication and cooperative work relationships, enhanced This data is self-reported by factories on a years. This gives facilities more flexibility in quarterly basis. It includes grievances reported ability for workers and managers to address offering the training modules, as teams can through any mechanism (i.e. suggestion box, opt to combine two half-day training modules workplace concerns, and a better business bipartite committee, union, hotline/helpline, into one all-day training, reducing the time for case for workplace cooperation. Workers mobile app, HR or a supervisor, an external party or any other mechanism). program completion. reported feeling more motivated, safer in

2019 Global Sustainability Report 40 Home Overview Strategy Social Environment Product Appendix

Capability Building

SUPERVISORY In 2019, we implemented a program-evaluation Gap Inc. hosts WEP workshops in each region a problem before it escalates or becomes a SKILLS TRAINING methodology that uses supervisor and worker to bring together our suppliers and WEP large risk, or hearing workers’ ideas about surveys and production-efficiency data from service providers. During these workshops, opportunities to improve efficiency, safety and We have continued our partnership with ILO facilities to measure several things: the extent our Supplier Sustainability team shares more. Better Work on Supervisory Skills Training to which participants reported trainings to be the importance of worker engagement and (SST), which we launched in 2018 to engage a effective, the extent to which they learned how it can help our suppliers’ business. We recognize that there are many ways to key group of employees: mid-level managers. new concepts, whether this learning led Research on worker engagement supports measure worker engagement. To increase This program helps facility managers improve to any behavior change, whether workers supplier adoption: Improved engagement brand collaboration and avoid the proliferation their communication with workers, who typically acknowledged that change, and whether has been correlated with business outcomes of tools with a similar purpose, we adopted contact middle management first to discuss behavior changes impacted production like reduced absenteeism and turnover. Nike’s survey tool in 2019 and plan to share problems or make suggestions to improve efficiency. Additionally, suppliers can learn from their best practices and resources to enhance working conditions. SST fills an important gap workforce to make improvements that are industry knowledge going forward. in management training, since many facility WORKFORCE good for business, whether that’s identifying supervisors are promoted based on technical ENGAGEMENT PROGRAM skills, but are not provided training in the people By engaging workers to amplify their voices skills that are critical for effective management. Better Work Academy and understand how they feel at work, the The three-day training program is designed Workforce Engagement Program (WEP) seeks As a founding member of the Better Work Academy, we are dedicated to moving beyond to give supervisors and middle managers a to increase worker engagement and empower “assessment-only” facility monitoring to support comprehensive solutions that improve deeper understanding of important leadership facilities to make worker-centric improvements. industrial relations in facilities. By including leadership in capability-building programs, and supervisory concepts: being a professional By the end of 2019, we had reached 45 facilities appropriate individuals are able to take action to address worker feedback provided supervisor, building good relationships, by supporting mobile-engagement tools, through new grievance mechanisms. influencing and managing workers effectively. applying lessons from our 2017 technology- Participants are trained to avoid a passive or enabled pilots. This builds on the 100 facilities To date, the Academy has reached 300 facilities in 18 countries, with eight brands now authoritarian style of leadership, and instead that we had reached previously through earlier participating, including Gap Inc. As a proud ambassador for the program, we have played strike a balance between the interests of the non-mobile-based iterations of the program. an active role in supporting its expansion. One of the ways we do this is by onboarding company and the interests of staff. As a result, other brands, sharing our insights, and providing training materials that brands can we expect participating supervisors to shift their We have learned from our experiences customize for their own programs. management style from “timid" or “domineering" engaging workers and have adjusted our to "professional," yielding higher worker approach to better fit the needs of individuals, Based on feedback from participating brands, the Academy is helping to empower motivation and retention, and ultimately more their workplaces and our business. We have facilities to make improvements themselves, with brands serving as advisers and efficient production. tested a variety of approaches, including worker partners. Facilities report improved communication with workers, fewer worker complaints discussion groups, pen-and-paper surveys and and better production performance and output. In 2019, our team trained 1,298 supervisors various mobile technologies. We now focus on – nearly triple the number trained in 2018. As a supplier-led model that uses scalable mobile Looking ahead, we believe it is important to continue growing the modules and to focus of 2019, 111 facilities in seven countries were technology, allowing workers’ voices to be heard areas of Better Work Academy for consistency and harmony with other capability-building active in the program. In Better Work countries, directly by those who are able to respond. To programs in our industry. For example, we see significant opportunity for the Academy where Better Work delivers the training, we sustainably expand the program, we are sharing to focus on developing management training, as having mechanisms to provide worker also encourage our facilities to nominate their best practices across suppliers, from Vietnam to feedback can only help if management is prepared to receive it and make improvements. supervisors to participate in SST. China to Indonesia to Guatemala.

2019 Global Sustainability Report 41 Home Overview Strategy Social Environment Product Appendix

Capability Building

DIGITAL WAGE PAYMENTS savings via a faster, more efficient payment stakeholders to develop working groups system. Digital wages also help to increase in countries that presently lack the In 2018, we set a goal for all of our Tier 1 accountability and transparency across the infrastructure or capital investment suppliers to transition from a cash-based garment sector. Since financial inclusion required to make digital wages a scalable, wage-payment system to a digital wage- requires both access to financial services and cost-effective model for garment workers. payment system by 2020. As of the end of knowledge about how to use those products In addition to our collaboration with the 2019, 92 percent of our suppliers were using and services, we are evaluating how we BTCA, we have partnered with the Bill digital wage payments, and we had rolled out can tie our digital wage-payment work to & Melinda Gates Foundation and BSR programs in 23 countries. (We define digital financial-literacy training programs, which our in Bangladesh, in tandem with other wage payments as mobile wallets, bank P.A.C.E. program (p.43) provides. international buyers, to identify solutions accounts, debit cards and other methods that that can help us address some of the key are digitally accessible.) We are pleased to see that our efforts have systemic barriers to digitization in the years created a positive impact for workers and ahead. To support our commitment, we joined the supply-chain facilities alike: In India, where UN’s Better Than Cash Alliance (BTCA), 100 percent of the facilities we work with now which works with the private sector, provide digital wage payments, time spent on governments and international organizations payroll is down 10 percent for Finance teams to accelerate the transition to digital payments, and 25 percent for HR teams at our suppliers. Goal which can help reduce poverty, build financial Digital wage systems have also supported inclusion and support inclusive growth. It more transparency in worker payments, 100% of Tier 1 suppliers also advances supply-chain efficiency and including overtime, which has helped workers transition to digital wage transparency. get paid what they earned. As a result, payments* by 2020 worker attrition and turnover has dropped 15 In addition to costing more time and money to 20 percent. % Tier 1 Suppliers Paying Digital Wages* for facilities, cash payments present a variety of security risks to workers and contribute to While we are seeing good progress in most of financial exclusion. Globally, more than 30 our sourcing countries, we are encountering 2017 68% percent of working-age adults lack access to different barriers to progress in countries formal financial services, with rates of financial such as Cambodia, Haiti and Jordan. In 2018 80% exclusion higher among women. Haiti, for instance, there’s a lack of banking infrastructure for workers to access accounts. By committing to work with our suppliers Other countries face high transaction costs 2019 92% to use digital wage-payment methods, we that create barriers for low-wage garment 2020 hope to increase the number of people in workers, or lack banking infrastructure in Goal our supply chain – particularly women – who rural areas where workers may want to send 100% have access to formal financial products and money to support their families. services, including bank and savings accounts, *Mobile wallets, bank accounts, debit cards and credit and insurance. This gives workers We recognize that we cannot solve other methods that are digitally accessible greater control over their finances and offers challenges across the banking ecosystem them a safer way to save, spend and invest alone, and as we work toward our goal, their money. Our suppliers benefit from cost we are partnering with a broad set of

2019 Global Sustainability Report 42 Home Overview Strategy Social Environment Product 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 to advance 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 to community settings and more countries, unlocking new possibilities for women and adolescent girls around the world. Our goal is to reach 1 million women and girls through vendor and community partnerships by 2022.

Learn more > How we're supporting women

REACH SINCE 2007

580K+ 80% women + girls

of our supply-chain vendors have made 2022 commitments 3,000+ to implement trainers P.A.C.E. training

2019 Global Sustainability Report 43 Home Overview Strategy Social Environment Product Appendix

P.A.C.E.: Empowering Women

2019 PROGRESS and pooling our knowledge and resources, (IOM) signed an agreement to implement We plan to build on the successes and lessons we aim to support economic independence P.A.C.E. curriculum modules for migrant learned from 2019 by continuing the use of In 2019, P.A.C.E. achieved an important and a better future for the more than 80 workers and in refugee sites. open-source, no-fee license partnerships, milestone of reaching more than 580,000 million women working in the apparel industry increasing opportunities to demonstrate women and girls, including more than worldwide. The approach is built on three • In Cambodia, we licensed our curriculum impact through qualitative and quantitative 279,000 in 2019 alone. We were able to pillars: Act to encourage and share best to Kampuchea Action to Promote assessment tools, and embedding P.A.C.E. make such significant progress scaling practices in worker training, innovate by Education (KAPE), which will reach programming into our Supplier Sustainability P.A.C.E. through innovative collaborations sharing successes and failures to develop new 100,000 girls in the next couple of years. team in facility settings. This positions the that included strategic partnerships with best practices, and advocate by amplifying our program as a business priority that contributes local governments and other brands, as collective voice for policy-level change. Late in • In India, we launched a pilot with the to supply-chain capability building, efficiencies well as a new multistakeholder initiative. the year, Empower@Work released an open- Ministry of Rural Development (MoRD) and enhancements. We also invested in open-source tools and source worker training open-source worker that will standardize the P.A.C.E. measurement and evaluation frameworks training toolkit for women’s empowerment life-skills curriculum across MoRD’s In 2019, we raised more than $200,000 for that will continue to ensure sustainability in that includes our P.A.C.E. women’s curriculum, implementing partners around the our P.A.C.E. implementing partners, CARE, quality and affordability even as P.A.C.E. as well as expertise and training from the other country under a social and economic through a campaign for International Women’s grows. Also in 2019, we began to see the partners. program focused on rural youth. Day led by our Gap, Banana Republic and fruits of our investments in adolescent Athleta brands. As we expand the P.A.C.E. girl’s curriculum, as some of these girls We are also using the open-source concept • In Indonesia, our program partner, program, we plan to continue exploring new transitioned into the women’s program, to scale P.A.C.E. through collaboration with CARE Indonesia, received a government ways to engage our employees and others. demonstrating the impact of P.A.C.E. other brands. We are offering no-fee license award for successfully integrating and through different stages of their lives. agreements for the use of P.A.C.E. curriculum rolling out the P.A.C.E. adolescent girl’s and training methodologies to our brand curriculum into a school district that In 2019, we extended the reach of P.A.C.E. partners, including Abercrombie & Fitch Co., reaches more than 5,000 girls. Goal in three ways: Avery Dennison, Hasbro, New Balance, PVH Corp., and the Chinese food and beverage To help ensure quality and sustainability at Reach 1 million women Gap Inc. partnered with Business for company, Want Want Group. scale, we have launched an online learning through P.A.C.E. by 2022 Social Responsibility's (BSR) HERproject, platform that has supported the training and International Labour Organization (ILO) Lastly, we are extending the program’s reach certification of 3,000 P.A.C.E. trainers. This P.A.C.E. Participants Better Work, Cooperative for Assistance and by partnering with governments to deliver platform allows partners to manage their Relief Everywhere (CARE), International P.A.C.E. in new settings where it can have own trainer base, while maintaining P.A.C.E. 2007 Center for Research on Women (ICRW) increased impact for women: program quality through a standardized and Walmart to launch Empower@Work, a curriculum. In 2019, we also funded the 2016 2018 2019 collaborative effort dedicated to empowering • Through a collaboration with the UN High development of community and workplace 68K 300K 580K women and advancing gender equity in Commissioner for Refugees (UNHCR) that measurement and evaluation frameworks by 2022 global supply chains through the sharing we began in Jordan in 2018 and expanded ICRW to demonstrate the impact of P.A.C.E. 2017 Goal of knowledge, skills and networks. This to Turkey in 2019, P.A.C.E. curriculum in a systematic and credible way. These 122K 1M effort aims to unlock the reach of leading is now benefiting people who have been frameworks will enable our community women’s empowerment programs that forcibly displaced in refugee settlements. partners and vendors to better access have collectively engaged more than 4.5 and use data and analysis to improve and million workers in global supply chains. By • In Bangladesh, Gap Inc. and the validate the social and business impact of harnessing the power of our collective reach International Organization for Migration P.A.C.E. programs.

2019 Global Sustainability Report 44 Home Overview Strategy Social Environment Product Appendix

P.A.C.E.: Empowering Women

REACH + GROWTH 2019 IMPACT*

Women + Girls 2019 Active Community Partners

% • Apparel Training & Design Centre 2018 178,000 79 ↑ • Association for Solidarity with Asylum-Seekers and Migrants (ASAM) • Beijing Social Work Development Center for Facilitators 2019 279,000 • CARE in communication skills • China Women's University Countries • Fujian Hwa Nan Women's College • Gram Tarang Employability Training Services 2018 17 • Hainan Tropical Ocean University % • Hebei Women's Vocational College 2019 17 79 ↑ • Heifer International • Hunan Women's University Vendors • Inno Community Development Organisation in execution skills • Jordanian Hashemite Fund for Human Development (JOHUD) 2018 61 • Kampuchean Action for Primary Education (KAPE) • MAMTA Health Institute for Mother and Child 2019 68 • Martha Tilaar Group Community Partners % • Mϋlteci Destek Derneği Refugee Support Center (MUDEM-RSC) 87 ↑ • Nanjing Normal University

2018 17 • Project Concern International (PCI) • Self-Employed Women's Association (SEWA) 2019 28 in financial literacy skills • Shaanxi Women and Children's Development Foundation *According to 2019 assessments that participants are • Shantou University Sourcing Dollars asked to complete before and after each P.A.C.E. module • ShareHope • TechnoServe Percentage of sourcing dollars • Want Want Group spent with PACE vendors 5.3% • Women Win turnover rate for • World Vision Honduras 2018 72% P.A.C.E.-trained women • Xi'an Peihua University compared to 10.1 percent among their peers, 2019 81% according to a sample set of 74 facilities

2019 Global Sustainability Report 45 Home Overview Strategy Social Environment Product Appendix

Environment

Water Stewardship Strategy 47 Women + Water 50 Resource Efficiency + Manufacturing 52 Chemicals Management 56 Climate 59 Waste 62 Circularity 63 Home Overview Strategy Social Environment Product Appendix

Water Stewardship Strategy

Few resources are as essential to human health and well-being as water.

Our water stewardship strategy is built on the principle that clean, safe water is an environmental concern, a basic human right and a business imperative. We have a responsibility and an opportunity to catalyze innovation in water for the industry.

Water is also a critical natural resource for our business: it is used in the cultivation process of raw materials like cotton; consumed in the mills and laundries that manufacture our products; and used by customers to wash their clothes. It is 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 resiliency of our company, our supply chain and the people who make our clothes, we are working strategically to use water more efficiently in product design and manufacturing, eliminate water contamination, and promote education about water and sanitation, particularly among women.

Learn more > How we create solutions for women + water

2019 Global Sustainability Report 47 Home Overview Strategy Social Environment Product Appendix

Water Stewardship Strategy

OUR APPROACH Women + Water Resource Efficiency + Product Manufacturing Our water stewardship strategy lies at We partner with organizations to support We look for opportunities to expand the the intersection of the apparel industry’s women’s access to water, sanitation and We partner with strategic fabric mills, cut- use of water-saving innovations across all significant use of water and our belief that hygiene (WASH) services and products and-sew facilities and laundries to reduce of our brands and, where possible, we are access to clean, safe water is a basic right. in India through the USAID and Gap Inc. manufacturing impacts through programs shifting to water-efficient raw materials. Women + Water Alliance. focused on energy and water efficiency, Gap Inc.’s strategy is focused on three key and water quality. Our program to reduce the water used in areas: women’s access to water, sanitation We also educate the women who make finishing denim saves at least 20 percent and hygiene (WASH); water stewardship our clothes about safe water-handling In 2019, we worked with 47 mills, four cut- of water used in the laundry stage of in manufacturing; and designing products practices through our P.A.C.E. (Personal and-sew facilities and 12 denim laundries production. Since it began in 2016 for that use less water to create. Advancement & Career Enhancement) through various sustainability programs. Gap brand, Washwell™ (p.70) has been program and key local organizations. adopted by Athleta, Old Navy and Banana This reduced the amount of water used in Republic. Including our partnership with CARE, manufacturing by 3.8 billion liters, helping we reached over 134,000 women with us reach our goal to save 10 billion liters We are also designing products that use education on WASH practices through of water by 2020. more sustainable raw materials that save P.A.C.E. in 2019. water, with a designer-focused Preferred Read more Fibers Toolkit (p.66), and training Read more > Resource Efficiency + Manufacturing programs for our employees. > Women + Water (p.50) (p.52)

134K+ 3.8B 634M women trained liters of water saved liters of water saved on WASH practices at mills, cut-and-sew through Washwell™ in 2019 facilities + denim in 2019 across laundries in 2019 Gap Inc. brands

2019 Global Sustainability Report 48 Home Overview Strategy Social Environment Product Appendix

Water Stewardship Strategy

2019 PROGRESS and hygiene (WASH) education to CEO Water Mandate New Goal women via the United States Agency In 2019, we continued directing resources to for International Development (USAID) We are a signatory to the CEO Water Water-resilient value chain water-savings programs to help us progress and Gap Inc. Women + Water Alliance Mandate, a UN Global Compact initiative, by 2030 toward an ambitious goal to conserve 10 billion by welcoming WaterAid to the alliance. joining with other companies, governments, liters of water by the end of 2020 through WaterAid is an implementing partner civil society and others to address sustainable manufacturing practices. This focused on capacity building of local challenges related to water scarcity, quality New Goal volume is equivalent to providing drinking institutions and stakeholders to improve and governance, and access to water and water for 5 billion people for one day. access to clean drinking water. We also sanitation. continued to further our outreach to women Net-positive water impact Our primary strategy to achieve this goal is via our P.A.C.E. program. In 2019, we collaborated with the CEO in water-stressed regions to engage with the mills and laundries in our Water Mandate and seven other signatory by 2050 supply chain and use water-saving methods Through our brands, Washwell™ and companies – AB InBev, Diageo, Dow Inc., in the production of our clothing. We achieved other programs help to connect our Ecolab, Microsoft, PVH Corp. and Cargill 8.36 billion liters of water savings by the design decisions with manufacturing – to form the Water Resilience Coalition, end of 2019, from a 2014 baseline. Through improvements, enabling us to save water pledging our commitment to collective continued partnership with our manufacturers, in our supply chain while also educating action and net-positive water impact we are proud to have achieved this goal in our customers about water impacts and by 2050. Launched in March 2020, the early 2020 (p.55) with 11.2 billion liters of reductions. coalition pledges to preserve the freshwater water saved. resources in water-stressed regions through Learn more ambitious, quantifiable commitments that During the year, we also expanded and > Detailed disclosures about our water deliver on three goals: amplified our efforts to deliver water, sanitation programs • Net-Positive Water Impact: Deliver measurable net positive impact in water- Goal stressed basins. Net-positive water impact means contributing more to basin Save 10 billion liters of water 2020 GOAL health than what is taken from it. in manufacturing by 2020, ACHIEVED • Water-Resilient Value Chain: Develop, from a 2014 baseline implement and enable water resilience 11.2B practices across 100 percent of our Liters of Water Saved liters of company’s global value chain. 2014 water saved since 2014 • Global Leadership: Raise the ambition of water resilience through public and 2016 2017 2018 2019 Q1 2020 corporate outreach, as well as inspire 668M 3.3B 5.7B 8.36B 11.2B other industry leaders to join the Read more 2020 Coalition. Goal > How we got there (p.55) 10B

2019 Global Sustainability Report 49 Home Overview Strategy Social Environment Product Appendix

Women + Water

We seek to improve access to water, sanitation and SUPPORTING WOMEN'S WASH4WORK hygiene (WASH) for women and communities touched by ACCESS TO WATER, SANITATION + HYGIENE Gap Inc. is a partner in WASH4Work, a our business. diverse group of stakeholders from the public Alongside our strategic implementation and private sectors that aims to mobilize Roughly 80 percent of the people who make our clothes partners, we lead a suite of programs to businesses that are working together to strengthen business contributions toward are women, and access and affordability to WASH is a provide education, access to services and financing to women and communities to achieving Sustainable Development Goal major challenge in many of our key sourcing countries. In address their WASH needs. Within Gap Inc. (SDG) 6. It aims to improve access to WASH many parts of the world, women are largely responsible partner facilities, our Code of Vendor Conduct in the workplace, in the communities where for household duties such as cooking and cleaning; they (COVC) requires that key WASH needs workers live and across supply chains. of garment workers are met. In addition, shoulder a disproportionate burden when it comes to our P.A.C.E. (Personal Advancement & RAISING AWARENESS water stress. Career Enhancement) program, aimed at workers in our supply chain as well as global In addition to mobilizing business through communities, provides additional capability to WASH4Work, we are committed to raising India, an important country for both growing cotton bring WASH education to women globally in awareness about the water crisis in our and making textiles, is experiencing a significant water both manufacturing facilities and communities. industry and beyond. In 2019, Gap Inc. and sanitation crisis that is expected to worsen over We are also spearheading the Women + brought together stakeholders from the W+W Water (W+W) Global Development Alliance Alliance to talk about women’s leadership on the next five years. Across the country, more than half (p.51) with the United States Agency for WASH at World Water Week in Stockholm. of all people face water stress: 163 million lack access International Development (USAID), which We also engaged our employees in the to improved water sources and 210 million lack access supports water stewardship and accelerates #LoveYourWater campaign, encouraging them to proper sanitation. Through water-risk assessments, women’s access to WASH financing and to share simple ways to reduce their own improved services. water use by making small changes in their we have identified India as a critical location for WASH everyday lives. services, which is why we focus many of our programs in cotton-growing and textile-manufacturing communities in India’s Godavari, Narmada and Ganges-Brahmaputra River Basins.

The programs we lead tackle different aspects of the water and sanitation challenges, and we also collaborate to mobilize broader business action and raise awareness of these critical issues.

2019 Global Sustainability Report 50 Home Overview Strategy Social Environment Product Appendix

Women + Water

USAID AND GAP INC. communities while improving our ability to 3,100 farmers – 45 percent of whom are access across India by 2024. As part of this WOMEN + WATER ALLIANCE deliver programs that support their well-being. women – on cotton-cultivation practices agenda, the government identified areas To catalyze progress, we are also learning and including the use of organic fertilizers and experiencing acute water stress, eight of which In 2017, we launched the Women + Water sharing best practices for WASH and water pesticides as a future livelihood opportunity overlap with our program. WaterAid supported (W+W) Global Development Alliance with stewardship across the apparel industry and for these women. Through this project, the government’s water-conservation the United States Agency for International beyond. ISC helped the communities save 400,000 campaign in two districts, which resulted in Development (USAID) to improve and liters of water through water budgeting, the construction of 215 rainwater-harvesting sustain the health and well-being of women 2019 PROGRESS smarter irrigation practices, and repair structures across W+W Alliance districts to and communities touched by the apparel and renovation projects. In the other date. Moving forward, WaterAid will work industry. In the Alliance’s third year, we deepened our project, ISC worked with one of Gap Inc.’s with the over 3,000 communities where we collaboration and expanded the capabilities strategic fabric mill partners, Vardham implement to create village-level water action Over the course of this five-year program, of our partnership network by formalizing our Mills, to develop a long-term water-security plans to improve access to safe drinking water Gap Inc. is serving as the co-funder and partnership with WaterAid and aligning our plan in partnership with local community to be funded by the government. primary program manager. The W+W efforts with the Indian government’s robust stakeholders for the Budhni watershed. Alliance operates in two Indian states critical new water agenda. Each of our partners This plan is one of the first of its kind for a We continued to advance work on evaluation, to the apparel industry – Maharashtra, a key applies unique expertise that allows the W+W mill partner. applying and sharing what we have cotton-growing state, and Madhya Pradesh, Alliance to address the holistic needs of water- learned to improve and scale our impact. a textile-industry hub. Four implementing stressed communities while using adaptive • Water.org: To support access to finance, The International Center for Research on partners – CARE, Water.org, Institute for management as a strategy to deliver focused Water.org brought on a new microfinance Women (ICRW) completed the first part of a Sustainability Communities (ISC) and interventions that respond to the unique partner and is working to get women longitudinal study on the impact of P.A.C.E. WaterAid – are helping the program work challenges in each location. access to funding for WASH needs. In and WASH behavior change. The evaluation of toward two objectives, where women’s self- 2019, Water.org’s financing model helped these findings is helping us continually improve efficacy and agency plays a critical role to: • WaterAid: In 2019, WaterAid helped lead catalyze over $2.4 million in financing, our trainings to P.A.C.E. CARE educators. the creation of 60 water-security plans benefiting more than 55,000 individuals to Additionally, the Institute for Development • Encourage communities to adopt key benefiting over 120,000 people, with the address their WASH needs. Impact (I4DI) completed a baseline study in WASH practices. support of government funding. WaterAid Maharashtra and presented the findings at also trained local women and youth to • CARE: For its part, CARE surpassed its World Water Week. • Build access to and sustainably manage complete water-equality testing in 757 annual target for the number of women quality water resources and sanitation villages and supported collaboration with completing the P.A.C.E. curriculum and services. local government on solutions. We also continued to enroll more women and men worked with WaterAid, as well as other into the program. In 2019, CARE helped This pioneering public-private partnership companies and consultants, to implement us reach more than 62,000 women with aligns closely to our goals related to a framework we developed together Gap Inc.’s P.A.C.E. program, putting us sustainable water stewardship and in 2018 on the supply-chain business 39 percent of the way toward our program empowering women with WASH education, case for WASH. We are now testing the goal to enroll 200,000 women by 2022. services and products. The program is being framework at a partner facility in India. implemented primarily in communities where In 2019, we also enhanced our engagement cotton is grown and fabric mills are located. • Institute for Sustainable Communities: with the Indian government and aligned our Through rigorous monitoring and evaluation, Another implementing partner, ISC, activities with the government’s new Ministry we are deepening our understanding of worked on two water-stewardship best of Jal Shakti, Abhiyan, which announced an the WASH needs of women and girls in practices projects. In one, ISC engaged ambitious commitment to expand piped-water

2019 Global Sustainability Report 51 Home Overview Strategy Social Environment Product Appendix

Resource Efficiency + Manufacturing

2019 PROGRESS with the mills and laundries in our supply RESOURCE EFFICIENCY In 2019, we participated in the creation of chain through a suite of water-efficiency the Clean by Design Plus program in China, In early 2020, we achieved our ambitious programs that support proven water- Through our resource-efficiency programs, we which works with mills that have graduated goal to conserve 10 billion liters of water saving methods in the production of our collaborate with strategic mills and laundries to from the original program and want to capture through sustainable manufacturing clothing. In 2019 alone, we achieved 3.8 significantly reduce their water impacts. additional, deeper opportunities for operational practices, including through an innovative million liters of water savings – more than efficiency and sustainability. This new program technology deployed in 2019 at our double the savings we saw in 2018. The facilities saw average water-use not only focuses on energy and water longtime sourcing and franchise partner reductions of 20 percent through their reductions, but also establishes an in-house Arvind Limited’s denim mill in India. Through our brands and our expansion of implemented efficiency programs. As many program to enhance continual improvement Washwell™ and other programs, we have water issues are based on local context and and develop long-range GHG- and water- Also in 2019, we established Gap Inc.’s helped to connect our design decisions needs, we have mapped all preferred facilities, reduction goals. Aii programming also science-based goal for Scope 3 supply- with manufacturing improvements and representing 85 percent of our business, expanded to India with a new pilot focused on chain emissions (p.60), a process that innovative dye techniques, enabling us against the World Resources Institute’s (WRI) water and chemistry efficiency. involved deep collaboration with cross- to save water in our supply chain while Aqueduct Water Risk Atlas to help prioritize functional teams within our company as also educating our customers about water areas of focus and drive countrywide or basin- Partnership for Cleaner Textile well as partnership with our suppliers. impacts and reductions. specific approaches. (PaCT)

In 2018, we set our sights high, committing Learn more Our resource-efficiency efforts comprise the In Bangladesh and Pakistan, we work to save 10 billion liters of water and we > Detailed disclosures about our water following programs: with PaCT to improve the environmental are proud that we met this goal in the first programs performance of the textile wet-processing quarter of 2020. Our success was due to Clean by Design + sector. In 2019, we continued phase two of the a simple but powerful strategy of engaging Apparel Impact Institute PaCT Bangladesh program, which culminated in early 2020. PaCT Pakistan was one of the We have collaborated with the Natural first industrywide programs in that country Resources Defense Council (NRDC) on its at its 2018 launch, and we are proud of the Clean by Design program since 2014. In impacts realized in 2019. 2018, we helped create the program’s new home: the Apparel Impact Institute (Aii). Today, Learn more 10B liters of Aii is an important platform for cross-brand > Resource efficiency programs in our supply collaboration to support facilities in improving chain water saved their operational efficiency and reducing (our goal) their water, energy and chemicals use. The = following programs were completed in 2019 5B peoples’ and future work will be transitioned and streamlined under the Aii umbrella: drinking water for one day • China Mill Efficiency Program • Taiwan Mill Efficiency Program • Race to the Top (Vietnam)

2019 Global Sustainability Report 52 Home Overview Strategy Social Environment Product Appendix

Resource Efficiency + Manufacturing

How We’re Saving 8 Million Liters of Water a Day: Using Reclaimed Wastewater at a Denim Mill in India

In 2019, we were able to make such significant gains in water reduction, in part, through our partnership with Arvind Limited and its innovative water-treatment facility. Instead of freshwater, Arvind’s denim mill now uses reclaimed wastewater from the city of Ahmedabad.

By the end of 2020, this facility is projected to save nearly 2 billion liters of freshwater, helping to preserve the local community’s vital resource. It will also support sustainability more broadly by using a chemical-free treatment method to clean domestic wastewater drawn from the surrounding community. Moreover, this sustainable approach will build business resilience for Arvind, Gap Inc. and other brands that source from the mill. As climate change and population growth contribute to water scarcity in countries like India – where 54 percent of the population faces high to extremely high water risk – the apparel sector must create solutions that reduce impacts on freshwater resources.

Looking ahead, we are working with Arvind to build an innovation center in 2020 Water-treatment facility at Arvind Limited that will promote the adoption of proven techniques and technologies to reduce water use in the textile-manufacturing industry. The 18,000-square-foot space will feature installations showcasing water-management best practices and recycling technologies; a library, lab and classroom; and conference spaces for apparel companies, manufacturing suppliers and vendors, and sustainability experts to advance water stewardship across the apparel sector.

Future innovation center at Arvind Limited

2019 Global Sustainability Report 53 Home Overview Strategy Social Environment Product Appendix

Resource Efficiency + Manufacturing

MANUFACTURING WATER QUALITY PROGRAM MILL SUSTAINABILITY Our suppliers’ involvement is key to our ability PROGRAM to calculate our energy, greenhouse gas and Our partnerships with suppliers support We actively monitor and help to improve water baselines, helping us drive social and our water goal through improvements wastewater quality at denim laundries through Our Mill Sustainability Program began through environmental performance. The data we in resource efficiency, water quality and our Water Quality Program (WQP), which pilots in 2013 and in 2018, became a strategic gather using these tools is also instrumental in overall sustainability. has been a requirement for over 15 years. initiative. We engage in three key industrywide our sustainability strategy and goal setting. In All of the denim laundries from which we efforts to help us meet our sustainability goals: 2019, we established a science-based target In 2019, we sharpened our understanding source must achieve our WQP standard, the Sustainable Apparel Coalition (SAC), Zero that includes our Scope 3 GHG emissions. of the environmental impact of our mill which requires complete compliance with Discharge of Hazardous Chemicals (ZDHC) We created a robust supply-chain climate suppliers through our use of the Higg FEM Zero Discharge of Hazardous Chemicals and the Social & Labor Convergence Program strategy using real data from the SAC’s Higg 3.0 and applied this knowledge to create (ZDHC) Wastewater Guidelines and chemical (SLCP). Facility Environmental Module (FEM) 3.0. We our first science-based target for Scope 3 data reporting. In 2019, 48 denim laundries appreciate our suppliers’ partnership and emissions. participated, with 87.5 percent of facilities Since that transition, our strategic mills have Gap Inc.’s cross-functional collaboration that meeting all conventional parameters and been required to participate, enabling Gap Inc. made this important process possible. Today, 97 percent of our cut-and-sew 79.2 percent of facilities meeting all ZDHC to align our approach with industry standards manufacturers and 91 percent of fabric Manufacturing Restricted Substances List that help us increase transparency and drive Read more mills and dyehouses use the Higg FEM 3.0 (MRSL) parameters. Appropriate corrective innovation. By leveraging our partnerships, we > Our climate and energy programs (p.59) – among the highest response rates of any actions were undertaken to address non- can analyze and improve the environmental > Our social programs (p.35) brand SAC members. compliance to our ZDHC requirements. performance of our supply chain. We have asked our wet-processing facilities to register We leverage three key industrywide efforts to By deepening our engagement with Read more for a chemicals-management platform to better support our Mill Sustainability Program: suppliers through these programs, we aim > ZDHC (p.56) track their ZDHC performance. to spur innovation so that our suppliers contribute additional ideas and pilot new technologies to reduce social and Sustainable Apparel Zero Discharge of Hazardous Social & Labor Convergence environmental impacts. Coalition (SAC) Chemicals (ZDHC) Program (SLCP)

As a founding member of the SAC, we We joined ZDHC’s Roadmap to Zero As a signatory to this collaboration use the Higg Index to evaluate suppliers’ commitment in 2014 to work toward the among apparel and footwear brands, environmental performance and engage elimination of hazardous chemicals in retailers, industry groups and civil society them to meet our goals. Since 2017, we our supply chain. We integrated ZDHC organizations, we continue to work with our have expanded our use of the Higg Facility Roadmap to Zero Programme tools and strategic mills in key geographies to use Environmental Module (FEM) 3.0 to collect resources, such as the Manufacturing the SLCP social and labor assessment. data from mills’ self-assessments. Increasingly, Restricted Substances List (MRSL) and We support the shared data-collection these self-assessments are verified by a third Wastewater Guidelines, into our Mill tool that can assess the social and labor party. In 2019, over 90 percent of our supplying Sustainability Program. Since 2018, we performance of manufacturing facilities mills completed the Higg FEM 3.0. We now have required our strategic mills to test their across the apparel and footwear supply ask our strategic mills, which represent over wastewater twice a year and publish the chain. Additionally, 28 mills participated in 75 percent of our total business, to complete results through the ZDHC Gateway. the SLCP pilot in 2019. the Higg FEM 3.0 annually. > Read more (p.56) > Read more (p.35)

2019 Global Sustainability Report 54 Home Overview Strategy Social Environment Product Appendix

Resource Efficiency + Manufacturing

HOW WE ACHIEVED TOTAL WATER SAVINGS FROM: China 10 BILLION LITERS OF NRDC China Mill Efficiency WATER SAVINGS Resource Efficiency Programs Clean by Design Program 2.46B liters 1.44B liters On Earth Day 2020, we announced that we had reached our 2020 goal to save 10 billion liters of water in manufacturing, achieved through product innovation and strategic Pakistan business partnerships. PaCT 10.2B 871M liters Liters Total Water Savings Since 2014 Saved 1B Processing + 10B Product Vietnam Goal Innovation Liters India Vietnam Country Saved 10.2B Arvind Water Improvement Partnership Resource China 3.89B Program Efficiency India 3.16B 1.74B liters Bangladesh 938M liters 11.2B Programs (annual) Liters of Vietnam 1.61B PaCT Pakistan 871M 656M liters Water Saved India Water Race to the Top Bangladesh 656M Partnership 677M liters Since 2014 1.42B liters

Processing + Product Innovation PROGRAM REACH GHG Emissions Reductions resulting from our Resource Efficiency Programs Process Liters Saved 91 supplier facilities 1B Washwell 979M have participated in Liters ↓126K (sustainable denim wash) our Resource Efficiency Metric Tons Saved Various Innovative Dyeing + 30M Wet-Processing Techniques Programs since 2014 CO2e

2019 Global Sustainability Report 55 Home Overview Strategy Social Environment Product Appendix

Chemicals Management

We aim to eliminate the discharge of hazardous chemicals OUR APPROACH chain programs like our Water Quality Program within our supply chain to reduce our environmental and Mill Sustainability Program. Our approach to chemicals management impact and improve access to clean, safe water in the includes three key components: 3. Compliance and monitoring communities where our suppliers’ facilities and mills operate. 1. Industry partnerships Through third-party testing of products, product components and wastewater effluent, as well We partner with industry groups, including as the use of industry data platforms, we The global apparel industry accounts for high amounts Zero Discharge of Hazardous Chemicals monitor the performance of our supply chain of chemical use in manufacturing, and the discharge of (ZDHC), the Apparel and Footwear and verify compliance with global chemical these chemicals can threaten local water sources and International RSL Management (AFIRM) regulations and Gap Inc. chemical restrictions. Group and the Sustainable Apparel Coalition Performance in our chemistry programs affect the people working with them and living nearby. (SAC), to implement a consistent set of tools informs facility evaluation. and processes to support best practices, Learn more monitor supplier performance and encourage > How we're reducing the impact of chemicals the use of safer chemicals. In addition to helping us achieve our water and sustainability Goal commitments, these partnerships help advance progress across the industry. Work toward zero discharge of hazardous Gap Inc. chemical restrictions are informed chemicals in our supply by global regulations as well as hazard- and risk-based considerations. They include chain by 2020 our Restricted Substances List (RSL) and Manufacturing Restricted Substances List (MRSL). Since 2008, 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 to comply with the ZDHC MRSL.

2. Working with suppliers

We communicate chemical safety and usage requirements to our suppliers through our Code of Vendor Conduct (COVC) and Mill Minimum Expectations, and we require our suppliers to acknowledge and comply with these conditions. These requirements have been incorporated into our existing supply-

2019 Global Sustainability Report 56 Home Overview Strategy Social Environment Product Appendix

Chemicals Management

2019 PROGRESS Industry Tools

Commitment to Eliminate We adopted new platforms to support the PFC-Based Finishes collection and analysis of chemical inventory and usage data from 150 of our strategic Increasing evidence shows that short-chain vendors and mill facilities. These online tools perfluoroalkyl and polyfluoroalkyl chemicals complement the ZDHC Gateway, an industry (PFCs) – which traditionally have been platform that houses information related to used in apparel to provide effects such as the ZDHC Roadmap to Zero Programme, water repellency and stain protection – can including Manufacturing Restricted have negative environmental impacts. In Substances List (MRSL) conformance of 2019, Gap Inc. committed to eliminating all commercially available chemical formulations. PFC-based finishes from our supply chain by These platforms will provide Gap Inc. and 2023. This expands our 2016 commitment to our suppliers insight into conformance to the ban long-chain PFCs. ZDHC MRSL and enable our transition to more sustainable chemistry. In 2019, we identified the primary uses of short-chain PFC-based finishes in our Apparel Impact Institute and branded apparel and accessories and Clean by Design Chemicals and began communicating our intent to eliminate Wastewater Pilot PFCs to our supply-chain facilities. We are committed to working with our suppliers As a founding member of the Apparel Impact to identify alternatives and solutions that Institute (p.52), we nominated three of our provide similar performance benefits without supplier facilities in India to participate in the the use of PFCs. 2019 Chemicals and Wastewater Pilot, which focused on determining opportunities to reduce Learn more environmental and human-health impacts > Our PFC Policy relevant to wastewater compliance and hazardous chemical formulations. The goals of this new program are two-fold: to optimize and reduce chemicals used within the facility, New Goal and to improve monitoring and operations at the wastewater-effluent treatment plant. Initial Eliminate all PFC-based results are promising and we are eager to finishes from our supply expand the program to additional facilities in chain by 2023 the coming years.

2019 Global Sustainability Report 57 Home Overview Strategy Social Environment Product Appendix

Chemicals Management

INDUSTRY INITIATIVES + STRATEGY

Input Management Process Management Output Management

Our suppliers' input chemicals Our suppliers must respond to the Our suppliers must comply with the Finished products must comply with the Higg Index FEM 3.0 ZDHC must comply with the ZDHC MRSL Upon request, key suppliers must Wastewater AFIRM RSL and other Gap Inc. policies adopt and use chemicals-management data platforms. Guidelines

Selection of better chemical inputs and Adherence to chemicals-management best Outputs of apparel and footwear manufacturing include finished products as well as starting materials is an essential part practices during manufacturing is critical for wastewater discharge. Managing these outputs is a foundational component of reducing of reducing the use and discharge of reducing human and environmental risks. discharge of hazardous chemicals. hazardous chemicals. To support best practices in our supply As a ZDHC Signatory Brand, we require chain, our COVC and Mill Minimum To address wastewater discharge, we Finished products manufactured for our suppliers to follow the ZDHC Roadmap Expectations outline a number of have adopted and integrated ZDHC tools our brands should comply with the to Zero Programme, which includes expectations for chemical use and handling. and resources for output management. AFIRM RSL; we use certified labs to test registering with the ZDHC Gateway, We require all Tier 1 cut-and-sew suppliers Our strategic mills and laundries are products to ensure they meet regulatory maintaining a chemical inventory list and and strategic Tier 2 fabric mill suppliers to required to test their wastewater to ZDHC standards established by the countries using input chemicals that comply with the respond to the Higg Index FEM 3.0, which Wastewater Guidelines and publish the where we sell our products. ZDHC MRSL. enables us to evaluate suppliers based results through the ZDHC Gateway, a on whether they follow specific chemicals- data-sharing platform that allows brands We also have additional policies related management practices. to monitor supplier wastewater data. The to specific chemical formulations that go ZDHC Gateway is also a repository for beyond the MRSL. In 2019, we publicly In 2019, we rolled out third-party chemicals- information on chemical formulations’ announced our commitment to phase out management platforms to monitor and MRSL conformance. all PFC-based finishes. evaluate suppliers’ chemical inputs and support best practices.

We use our chemicals program data to inform the evolution of Gap Inc.’s chemicals- management strategy.

2019 Global Sustainability Report 58 Home Overview Strategy Social Environment Product Appendix

Climate

Climate change is a global challenge that transcends to less than 1.5 degrees Celsius, we signed on to the Science boundaries, affecting people and communities everywhere. Based Targets initiative (SBTi) in 2017. SBTi – a partnership between CDP, World Resources Institute, World Wildlife Climate risk is the key sustainability issue of our time and is Fund, and UN Global Compact – is leading an effort that both a human and environmental challenge. Managing this now includes nearly 1,000 companies that have committed risk is critical for the long-term success of our business. We to emissions-reductions targets in line with climate science. feel an ethical responsibility to address climate change by In 2020, we established our comprehensive science-based aligning our goals and strategies with the best science and targets for reducing emissions, which were approved by industry practices. SBTi. Our goals include a target for our Scope 3 supply-chain emissions. As an apparel company, the vast majority of our climate impacts lie within our supply chain, and we are working Looking ahead, we recognize the urgent need to transition closely with our suppliers to address those emissions and to a low-carbon future, and we are exploring efficiency and improve the efficiency of their facilities. renewable-energy opportunities in our supply chain in the years to come. In recognition of the need to align our efforts with the scientific consensus and core commitment of the Paris Learn more Agreement to pursue efforts to limit global temperature rise > How we're doing our part on climate

2019 Global Sustainability Report 59 Home Overview Strategy Social Environment Product Appendix

Climate

2019 PROGRESS SCIENCE BASED TARGETS that we worked from an accurate baseline. New Goal INITIATIVE (SBTI) To arrive at these figures, we analyzed In 2019, we made significant progress environmental data collected from our Carbon neutral across toward our 2020 GHG-reduction goal In 2017, Gap Inc. signed on to the Science finished product (Tier 1) and textile our value chain by 2050 by executing three renewable energy Based Targets initiative (SBTi) to align our manufacturing (Tier 2) suppliers using the deals totaling 100.5 megawatts; these climate goals with the scientific consensus and Sustainable Apparel Coalition’s (SAC) Higg are expected to begin generating power core commitment of the Paris Agreement to index, a self-reporting tool that evaluates in 2020. We also achieved an important environmental performance and helps limit global warming to less than 1.5 degrees New Goal milestone by establishing our first science- Celsius. In 2020, through detailed work to identify opportunities for improvement. based target, including a target addressing Where actual data were not available, gather and analyze emissions data across our Source 100% renewable our Scope 3 supply-chain emissions. operations and supply chain, we established we used our known production volumes, In addition to these achievements, we our science-based targets for reducing coupled with leading industry data sources, electricity for our owned continued investments that improve emissions: Gap Inc. commits to reduce to approximate our impact. The process and operated facilities of pulling and analyzing real data and energy efficiency at our stores, offices and absolute Scope 1 and 2 GHG emissions by globally by 2030, from distribution networks. We also continued 90 percent and Scope 3 GHG emissions from integrating the work of our cross-functional our efforts to support better climate policy purchased goods and services by 30 percent teams allowed us to create a robust goal a 2017 baseline and transition across the industry. by 2030, from a 2017 baseline. Gap Inc. and strategy for tackling the biggest also commits to increase annual sourcing of opportunities across our supply chain. renewable electricity from 0 percent in 2017 Scope 3 Supply-Chain to 100 percent by 2030 for our owned and Looking ahead, we will be using this data New Goal to work closely with our top facilities to GHG Emissions operated facilities globally. improve their energy efficiency. We will Reduce absolute Scope Baseline (2017) In developing our target for Scope 3 also explore investments and partnerships 1 and 2 GHG emissions in renewable energy where the policy emissions, which comprise the vast majority by 90% by 2030, from of our emissions impacts, it was important landscape enables those opportunities. a 2017 baseline 5.18M Metric Tons New Goal CO e 2 Reduce Scope 3 GHG emissions from purchased goods and Fiber Production 13% services by 30% by Yarn Production 22% 2030, from a 2017 Knitting + Weaving 20% Fabric Dyeing, 38% baseline Printing + Finishing Garment Assembly 7%

2019 Global Sustainability Report 60 Home Overview Strategy Social Environment Product Appendix

Climate

RENEWABLE ENERGY • Fern Solar Project: We signed this ENERGY EFFICIENCY CDP CLIMATE CHANGE 7.5-megawatt off-site solar project in We were intentionally ambitious in setting our December 2018 and it will come online In 2019, we achieved a 23 percent Our CDP Climate Change response 2020 goal: to reduce greenhouse gas (GHG) and start generating power in late 2020. cumulative reduction of GHG emissions in includes detailed information on our emissions by 50 percent from our owned and The site will generate enough power to our owned and operated facilities, putting strategy and performance, which operated facilities, from a 2015 baseline. For offset 100 percent of our Athleta brand's us nearly halfway toward our 2020 goal to incorporates recommendations from the years, we have invested in energy-efficiency retail energy use. The innovative nature reduce GHG emissions by 50 percent from Task Force on Climate-related Financial programs that have reduced the impacts of of this deal’s contract structure – for which a 2015 baseline. In absolute terms, we Disclosures (TCFD). our operations, and the three renewable- we partnered with Salesforce, Bloomberg, reduced our GHG emissions by 107,715 energy deals that we secured in 2018 and Workday and Cox Enterprise to combine metric tons of carbon-dioxide equivalents. ARCTIC SHIPPING PLEDGE 2019 have been the next phase of our our buying power and make this project We made progress on these reductions journey, putting us on the path to achieve our possible – was highlighted in two awards: by transforming the energy-management In partnership with the Ocean 2020 goal. We are also pleased that this bold Smart Energy Decisions’ Innovation Award systems of 207 stores in 2019 (bringing Conservancy, we signed the Arctic action will make Gap Inc. one of the largest and the Center for Resource Solutions’ the total to 630 stores) and by replacing Shipping Pledge and committed to not purchasers of clean energy in the American Green Power Leadership Award. It has HVAC units with more energy-efficient intentionally sending ships through the retail industry. also become a case study for other leaders models in 73 stores. Arctic’s fragile ecosystem. in renewable energy to learn from our Over the course of 20 months, we signed collaboration. three contracts for projects that, once fully operational, will generate 400,000 megawatt • Gap Inc. Fresno Distribution Center Solar Goal hours of clean energy annually – enough to Project: We signed this 3-megawatt on- power 1,800 of our approximately 3,300 retail site solar project at our Fresno, California, Reduce GHG emissions by 50% in our owned and operated stores. These projects are: distribution center in June 2018 and power facilities globally by 2020, from a 2015 baseline generation began the first quarter of 2020. • Aurora Wind Project: We signed this The project will generate more than half of Metric Tons CO2e GHG Emissions, Scope 1 and 2, Global Market-Based 90-megawatt off-site wind project in April the building’s energy. 2019 and it will begin generating power in We recognize the urgent need to transition to 471,301 late 2020. This North Dakota wind farm – 500 one of the largest utility-scale installations a low-carbon future and we are excited about 447,687 ever contracted by a retail company – will continuing these efforts, including by exploring 450 405,503 generate enough clean power to address energy-efficiency and renewable-energy 387,644 nearly 50 percent of our North American opportunities in our supply chain in the years 400 363,586 energy use across Gap Inc. The project, to come. 350 made possible through Gap Inc.’s commitment to purchase power from it 300 for the next 12 years, will also green the 2020 electricity grid, supporting our nation’s 250 Goal transition to a low-carbon economy. 200 50%↓ 2015 2016 2017 2018 2019 baseline 7%↓ 16%↓ 18%↓ 23%↓

2019 Global Sustainability Report 61 Home Overview Strategy Social Environment Product Appendix

Waste

We have a responsibility to help prevent waste in our 2019 PROGRESS updating its standards on how apparel is operations, which can negatively impact the environment folded for packaging and shipping, which In response to growing global conversations is expected to reduce more than 40,000 and add unnecessary cost to our business. around plastic waste, Gap Inc. is striving to do pounds of plastic annually. our part to reduce plastic, both upstream and In North America, 90 percent of our waste is discarded downstream, in our business. We are placing • In 2019, Gap brand’s First Favorites line particular emphasis on the need to reduce tested alternative materials, moving from by our stores, and we are exploring ways to reduce and single-use plastics, an issue that has drawn plastic packaging to cardboard hangers, divert our packaging waste. By innovating to optimize greater attention in recent years. In 2019, we which eliminates more than 16,000 pounds packaging, reduce volume, lower business costs and conducted a complete inventory of our plastic of plastic every year. consumption and engaged in multiple efforts support industrywide change, we aim to divert more than to reduce the quantity and volume of plastic • Banana Republic introduced recycled 30 million pounds of material from landfill every year. packaging across our brands. We are also plastic into its woven product labeling continuing to invest in recycling solutions. saving 24 tons of plastic annually. Learn more In addition to these efforts, we are continuing > How we're diverting waste To tackle this challenge, we are focusing on steps we can take as a company to innovate to test a suite of solutions that account for the our packaging design, product labeling and fact that only a portion of our store locations recycling systems. One of the major changes are able to recycle soft plastics. Our ongoing solutions include better communication with Goal New Goal we are making is implementing stringent requirements on retail polybag size and store employees about current recycling Divert 80% of waste from Eliminate single-use thickness, with an expected elimination of 5 opportunities at their location, collaboration million pounds of plastic every year. across our brands to reduce the quantity of landfill across our U.S. plastics by 2030 polybags shipped to stores, and creating and facilities by 2020 Our brands are also taking action: selecting in-store marketing materials with recyclability in mind. We are also continuing % Waste Diverted from Landfill • Old Navy, Gap brand and Banana Republic to engage the industry and our landlords to have begun using 100-percent recycled develop longer-term solutions to reduce waste tape for all content and care labels, a and expand opportunities for recycling across the retail industry. 2017 47% change that is projected to save over 830 tons of plastic annually. These brands have also implemented a new price ticket with Looking ahead to 2020, we will be deepening 2018 47% smaller dimensions using FSC-certified our waste-reduction efforts by increasing paper, which saves 120 tons of paper. the recycled content of polybags we use for 2019 65% shipping logistics, researching ways to further 2020 • Old Navy is on track toward its reduce our use of plastic packaging in online Goal commitment to recycle hangers from 500 orders, and using more recycled content and paper for hangers across different brands, 80% stores. At the end of 2019, recycling was Cardboard hangers replaced plastic available at over 100 Old Navy locations while expanding Old Navy’s hanger-recycling packaging for Gap brand's line of baby and the brand had recycled 124,000 program. essentials, First Favorites. pounds of hangers. Old Navy is also

2019 Global Sustainability Report 62 Home Overview Strategy Social Environment Product Appendix

Circularity

In order to create truly sustainable fashion, we recognize 2019 PROGRESS is recycled to make new clothes. In early that we must address the full life cycle of our garments, 2020, we announced a new partnership Our brands and Gap Inc. joined partnerships with thredUP, the fashion-resale platform, from raw materials to end of life – and back again. with different organizations, including thredUP, to encourage customers to turn in second- the Global Fashion Agenda (GFA) and Hong hand clothes in exchange for shopping credit We are addressing product end of life because of the Kong Research Institute of Textiles and that can be redeemed at our Gap, Banana Apparel (HKRITA) to tackle clothing waste and Republic, Athleta or Janie and Jack brands. significant environmental impact of textiles – the majority solving technical challenges in textile recycling. thredUP is committed to reselling all clothing of which end up in landfills or incinerated. Our programs that meets its quality standards, which and partnerships to address product end of life and INDUSTRY COLLABORATION mitigates the carbon, waste and water footprint of a garment by increasing its usable life. create circular design systems are aimed at reducing Gap Inc. is committed to joining partnerships waste and increasing recycling, upcycling and reuse. that advance circular business models, create innovative solutions to outstanding Learn more issues, engage customers and scale new > How we map the product life cycle technologies.

Make Fashion Circular

We are collaborating with leaders in the circular economy, including as a core partner in the Ellen MacArthur Foundation’s Make Fashion Circular initiative. Through this initiative, we have made a three-year commitment to focus on safe and reusable inputs, sustainable-fiber models and recycling old clothing. Through our involvement, we participated in a textile-collection effort in New York City (p.64) that encouraged customers to bring their spent garments to select Athleta, Banana Republic and Gap brand stores for recycling.

thredUP

In 2019 and early 2020, we took these Artistic Garment efforts further through a partnership to tackle Industries recycles denim into yarn clothing waste. Today, more than 70 percent that is used to make of materials used to make clothes end up in recycled Gap jeans. landfills or are burned at the end of their first life, and less than 1 percent of old clothing

2019 Global Sustainability Report 63 Home Overview Strategy Social Environment Product Appendix

Circularity

Hong Kong Research Institute of Global Fashion Agenda CUSTOMER ENGAGEMENT Textiles and Apparel In addition to these partnerships, we We are building on our communication with In 2019, we embarked on a new partnership continued our engagement with Fashion customers for a deeper form of engagement with the Hong Kong Research Institute of Positive and Global Fashion Agenda (GFA) that encourages people who buy our clothing Textiles and Apparel (HKRITA) to address to explore circularity opportunities. Through to make sustainable choices, beginning the technology challenge of recycling certain Fashion Positive Plus, we helped create with what they purchase and ending with materials. Our shared mission is to develop the first Standard for Circular Materials what they do with the clothes that they no more sustainable production processes and guidance. longer wear. We communicate our product technology solutions that enable the industry sustainability efforts through store displays, to advance circular models across the life As part of our 2020 Circular Fashion product descriptions, product labeling, cycle of textiles. We have identified two initial Commitment with GFA, we have set three social media and other channels, as well as priorities: separating spandex from used commitments to achieve by 2020: educational campaigns and media around garments and decolorizing denim for recycling. events like Earth Day and World Water Day. • We will train our cross-functional Spandex is commonly used to add stretch and Product teams for each of our brands We addressed clothing waste in 2019 improve the comfort of fabrics, but currently it on circular-design techniques and best through Make Fashion Circular’s #WearNext is difficult to separate it from blended fabrics. practices. campaign in collaboration with other brands. HKRITA is partnering with Artistic Milliners, For this three-month initiative, our Athleta, one of our key suppliers, to develop an • We will help to increase the volume Banana Republic and Gap brand stores in environmentally safe method of separation of used garments collected globally New York City hosted recycling bins from using bio-solvents. through participation in pre-competitive, the Department of Sanitation for customers industry-led collection pilots. to drop off unwanted clothing for recycling To create a new method of denim or repurposing. In total, our brands involved decolorization, which traditionally relies on • We will identify the most promising in the effort collected and recycled over chemical treatment that can be harmful to recycling technologies for post- two tons of clothing from more than 1,100 the environment, HKRITA is working with consumer materials across multiple collection points. Arvind Limited, another key supplier. This product categories and start scaling mill has also pioneered a method to use them in our supply chain. wastewater instead of freshwater in denim manufacturing (p.53). We hope these These partnerships are supporting our investments make it easier to recycle, reuse strategy and setting the stage for large- or re-dye textiles that currently end up in the scale industry-level innovation. 2 TONS waste stream. of clothing collected + recycled at our NYC stores through the #WearNext campaign

2019 Global Sustainability Report 64 Home Overview Strategy Social Environment Product Appendix

Product Product Sustainability 66 Raw Materials 67 Brand Goals 69 Home Overview Strategy Social Environment Product Appendix

Product Sustainability

We design great products with sustainability in mind while 2019 PROGRESS integrated into our companywide learning and collaborating across our business and throughout our development program. This strategic approach In 2019, all of our brands enhanced their allows us to support progress in a holistic industry to improve the sustainability performance of our dedication through new goals, expanded way by building a sustainability mindset in our brands and the apparel sector as a whole. efforts to embed sustainability into product employees, and by giving them the resources design and raw-materials selection, and they need to make decisions and take actions deeper engagement in industry-leading that improve the sustainability of our products. Our brands approach impact reduction throughout initiatives. In doing this, our brands are In addition to life-cycle assessment data the product life cycle, examining the materials they strengthening their ownership of sustainability on global-warming potential, water use and source, the products they design and the suppliers as a unique expression of their brand value to eutrophication, we consider a holistic set of their customers. indicators while evaluating our preferred-fibers with which they work. Each brand takes ownership strategy including biodiversity, potential for of its sustainability journey and uses its unique voice We have several highlights from 2019 and the circularity, chemistry, land-use change and to communicate directly with its customers on the early part of 2020: social conditions within production. importance and impact of producing responsibly and • Gap Inc. established a new goal to more In 2019, we trained more than 400 Product shifting toward a circular economy. Together with our sustainably source 100 percent of cotton Design and Development employees brands, Gap Inc. is making our efforts toward developing for all of our brands by 2025. through our workshops: Sustainability 101, more sustainable products accessible and visible to our Sustainability Claims, Fiber Sustainability, • Banana Republic and Old Navy set their Conscious Design for Circularity, Sustainable customers. first public sustainability goals in honor of Wet Processing and Sustainable Denim. To Earth Day. date, we’ve reached over 1,800 employees Learn more with these workshops. We also continued our > Our work on product sustainability • Our Washwell™ technology, which monthly newsletter on product sustainability, debuted with Gap brand in 2016 and has which now provides the latest sustainability now expanded to Old Navy, Athleta and developments and best practices to 450 Banana Republic, contributed a savings of employees. In line with our support of the more than 1 billion liters of water toward Circular Fashion Commitment with Global our goal of conserving 10 billion liters of Fashion Agenda (p.64), we hosted intensive water, which we achieved in early 2020. workshops for many of our Designers and other product-focused teams on how to PREFERRED FIBER + incorporate circular thinking and sustainability MATERIALS TOOLKIT AND into their product-creation process. TRAINING

Since launching our internal Preferred Fiber & 1,867 Materials Toolkit – which we created alongside Product Design + Textile Exchange and MADE-BY in 2018 – we Development employees have continued to empower our Product teams trained on sustainable to select the best fibers based on sustainability impacts through expanded trainings that are practices through 2019

2019 Global Sustainability Report 66 Home Overview Strategy Social Environment Product Appendix

Raw Materials

We believe great products are created with sustainability 2019 PROGRESS Sustainable Fiber Sourcing at their core – which means going all the way down to the As in previous years, we continued our Fiber Type % of Fiber Type earliest stages of the product life cycle to reduce impacts. strategy in 2019 to focus on the materials that account for approximately 97 percent 2018 2019 Our brands are empowered to improve the sustainability of our fiber consumption: cotton, polyester, nylon and manufactured cellulosics, such Natural Fibers of their products by selecting the best raw materials that as rayon and modal. Organic Cotton 0.2% 0.3% of cotton meet garments’ performance requirements, while also BCI Cotton 40% 57% of cotton meeting Gap Inc. standards for social and environmental Over the year, we focused on further Recycled Wool 3.5% 15.7% of wool improving our fabric-management sustainability. We continue to refine and evolve our systems to provide detailed data on our Synthetics strategy and engage in industry partnerships that focus fiber consumption and volumes, and to Recycled Nylon 0.3% 0.5% of nylon on preferred raw materials and circular approaches to increase our team’s awareness through Recycled Polyester 0.7% 0.7% of polyester training programs and shared tools. materials use and end of life. Sustainable-fiber consumption reports are Manufactured Cellulosics provided to internal decision makers on Lenzing Modal 3.9% 2.4% of rayon Learn more a regular basis to highlight progress and TENCEL 6.1% 5.4% of rayon > How we source more sustainable raw materials continue to drive improvements.

Biodiversity

We commit to support the development of SBTs on biodiversity and the implementation of these targets within our industry to assure our contribution to the protection and restoration of ecosystems and the protection of key species. Specifically, we commit to develop a Gap Inc. biodiversity strategy to meet forthcoming SBTs on biodiversity.

2019 Global Sustainability Report 67 Home Overview Strategy Social Environment Product Appendix

Raw Materials

Cotton Synthetics Manufactured Cellulosics Goal

Cotton is one of the most important The synthetic materials in our products, We are working closely with our top suppliers Eliminate the use of wood- fibers for Gap Inc. We focus our cotton including polyester, nylon and spandex, to support our policy to eliminate our use derived fibers sourced from strategy around building fiber security and provide essential performance properties. of wood-derived fibers from ancient and maintaining a comprehensive evaluation of However, since they are generally derived endangered forests by 2020. This commitment ancient and endangered cotton-sourcing risks, as well as building a from nonrenewable, petroleum-based helps to protect critical forests and also forests by 2020 more sustainable source of cotton that is sources, there are concerns about their supports our efforts to tackle climate change, better for people and the planet. As a crop production and processing; they also do as forest ecosystems are vital natural % Products Compliant that is primarily grown in high water-stress not biodegrade like natural fibers, providing resources that promote biodiversity, protect with Our Commitment locations such as India, China and Pakistan, limited end-of-life options. watersheds and help to mitigate the release cotton is especially vulnerable to water- of carbon dioxide into the atmosphere. related impacts. We are also seeking to use We’re taking steps to source more Our policy – developed in partnership with 2018 77% more sustainable cotton across all of our sustainable synthetic fibers, including Canopy’s sustainable fashion and forestry brands with Gap brand, Banana Republic recycled polyester and recycled nylon. We initiative, CanopyStyle – aims to ensure that 2019 86% and Old Navy having committed to use 100 have been increasing our use of recycled our suppliers do not use ancient, endangered, 2020 percent sustainable cotton by 2025. As an polyester and nylon where possible, while high-conservation or high-carbon-value Goal enterprise, Gap Inc. has also committed also working to understand how to reduce forest areas to make cellulose-based textiles, 100% to source 100 percent sustainable cotton. manufacturing challenges and develop high- including rayon, modal, viscose and lyocell. This includes Better Cotton Initiative (BCI), performance products with these materials. recycled and organic cotton. We are also an active member of the To achieve our commitment, we are partnering Textile Exchange Recycled Polyester and with mills on the following: identifying our Biosynthetics Working Groups, investigating raw-material suppliers in order to eliminate industry innovations toward more sourcing of wood-derived fibers from sustainable fibers. In 2019, we embarked ancient and endangered forests; leveraging Goal on a collaboration with the Hong Kong CanopyStyle’s audit and remediation plan; and Research Institute of Textiles and Apparel encouraging the development of innovative, Source 100% of cotton (HKRITA) (p.64) that aims to innovate a more sustainable fabrics. In partnership with from more sustainable process to separate spandex from other our major suppliers, we are also exploring sources by 2025 fibers in used garments to increase its ways to integrate recycled cellulosics into recycling opportunities. our products. In 2019, we gathered data on % Cotton from More Sustainable Sources* our supply chain representing more than 80 percent of our cellulosic-fiber volume through a detailed survey and follow-up conversations Q1 2020 57% with suppliers. Through this data, we show 2025 that 86 percent of our cellulosic volume is Goal compliant with our commitment. We still have work to do to engage additional suppliers to 100% take the Canopy audit, and encourage some engaged suppliers commit to a remediation plan.

2019 Global Sustainability Report 68 Home Overview Strategy Social Environment Product Appendix

Brand Goals

New Goal New Goal Source 100% of cotton Make 100% of denim Old Navy’s Heart Earth messaging, from more sustainable products using water- established in April 2019, targets focus on sources* by 2022 saving techniques* by 2022 two areas of critical importance to the brand and Gap Inc.: water and cotton. Old Navy is % Cotton from More Sustainable Sources % Denim Products Made Using helping to improve and scale water-saving Water-Saving Techniques efforts and sustainable-cotton sourcing, as well as educating customers on the 2018 40% importance of more sustainable apparel 2018 60% production and waste reduction. 2019 56% 2019 88% In 2019, Old Navy committed to recycling 2022 2022 hangers from 500 stores, diverting 124,000 Goal Goal pounds of hangers from landfill. The brand is 100% 100% also updating its packaging standards with an aim to reduce more than 40,000 pounds *Primarily through BCI as well as *Includes proven wash processes of plastic annually. Old Navy’s Heart Earth verified, responsibly grown and campaign celebrates these achievements recycled cotton and highlights the importance of everyday 88 percent of Old Navy’s denim purchased sustainable choices for its customers. for Spring 2019 was made using water- saving techniques, saving 20 percent or more water in the garment-wash stage, compared with conventional methods.

2019 Global Sustainability Report 69 Home Overview Strategy Social Environment Product Appendix

Brand Goals

Goal Goal Source 100% of cotton Make 75% of qualifying from more sustainable products* using Washwell™ Gap for Good sources* by 2021 water-saving techniques by 2021 Gap brand launched its consumer- % Cotton from More Sustainable Sources facing Gap for Good platform in 2017 to % Products Made Using Washwell™ highlight more sustainable fashion. The Water-Saving Techniques platform builds on Gap’s Earth Day 2017 2018 53% commitment to source 100 percent of its cotton from more sustainable sources 2019 67% 2018 22% by 2021. In 2019, Gap brand introduced 113M BetterMade Denim, a collection of iconic liters of water 2021 2019 42% denim pieces made with organic cotton and saved by Gap brand Goal finished with 100-percent recycled thread through Washwell™ 100% 2021 – the brand’s most sustainable denim to in 2019 *Includes Better Cotton *Qualifying products Goal date. Initiative (BCI), recycled include denim jeans, and organic cotton jackets and shorts. 75% Washwell™

Since Gap brand’s debut of Washwell™ – a denim wash program that conserves water in the laundry stage of production – the process is now used across all of our brands, and has contributed more than 1 billion liters of water savings toward our goal to save 10 billion liters of water, which we achieved in early 2020.

In 2019, 24 Gap brand vendors participated in Washwell™, an increase from 19 vendors in 2018. We saved 113 million liters of water through Washwell™ in 2019, an increase from 98.9 million liters in 2018.

2019 Global Sustainability Report 70 Home Overview Strategy Social Environment Product Appendix

Brand Goals

New Goal New Goal Source 100% of cotton Make 50% of products As a brand, Banana Republic is committed from more sustainable with sustainable fibers* to creating timeless clothing designed with sources* by 2023 by 2023 quality and durability in mind. After working in 2018 and 2019 to integrate sustainability % Cotton from More Sustainable Sources % Products Made with Sustainable Fibers into design and manufacturing decisions to reduce the environmental impacts of each garment, Banana Republic unveiled 2018 45% 2018 28% its sustainability goals on Earth Day 2019: source 100 percent of cotton from more 2019 75% 2019 55% sustainable sources, use environmentally 2023 2023 preferred fibers, reduce water impacts *Primarily through Better Cotton Goal Goal and promote cleaner chemistry. In honor Initiative (BCI), as well as recycled 100% of Earth Day 2020, the brand introduced and organic sources 50% Better Republic, a forward-thinking ideal that underscores the brand’s sustainability *Includes cotton through BCI, as well as recycled and organic sources; partnering with goals and commitment to do better for New Goal Canopy-compliant suppliers to source preferred people and the planet, along with a manufactured cellulosics; recycled and responsible Sustainable Shop on bananarepublic.com. Make 50% of products wool from vendors that are compliant under the using water-saving Responsible Wool Standard; and recycled materials As part of its commitment to use less water and promote cleaner chemistry techniques* and cleaner in the manufacture of its products, chemistry practices** in New Goal Banana Republic is partnering with the our supply chain by 2025 Spanish denim mill Tejidos Royo to use Make more eco-friendly* an innovative dyeing technique – Dry % Spring 2020 Products Made with denim by 2023 Indigo®. This process reduces water use Techniques that Save Water or by up to 99 percent (requiring just one Preserve Water Quality % Denim that is Eco-Friendly teaspoon of water per pair of jeans), uses 89 percent less chemicals, and reduces energy consumption by 65 percent. The 2019 1.4% Q2 2020 68% first products manufactured with this 2025 2023 *Techniques that save at least *Includes Washwell™; sustainable technology launched in stores and online Goal 20 percent of water compared Goal cotton primarily through BCI, in spring 2019. to conventional methods at mill 50% as well as recycled and organic 100% facilities; includes Washwell™ sources; more sustainable dyeing **Through Gap Inc.’s Zero Discharge methods, such as foam dye; of Hazardous Chemicals (ZDHC) eco-friendly finishes, such as bio- commitment, ongoing efforts to softeners and laser technology; select preferred chemistry options, and trims made with recycled and preferred dyeing techniques materials

2019 Global Sustainability Report 71 Home Overview Strategy Social Environment Product Appendix

Brand Goals

POWER OF SHE Goal: Protect Resources Goal: Conserve Water Make 80% of materials Make 25% of products Athleta has a strong commitment to with sustainable fibers using water-saving environmentally conscious products by 2020 techniques by 2020 and sustainable practices. The brand believes in protecting the Earth as a natural playground, positively contributing % Materials Made with 30% or More % Products Made Using to the direction of the apparel industry, Sustainable Fibers Water-Saving Techniques offering customers responsible options, driving demand for sustainable goods, and 2017 35% 2017 1% supporting the empowerment of women and girls. 2018 46% 2018 4% Following a significant year in 2018 when Athleta received its B Corp certification 16K+ 2019 70% 2019 4% and formed an internal governance women reached 2020 2020 Goal Goal committee to support its sustainability through P.A.C.E. efforts, the brand continued working 80% 25% toward its goals in 2019 to protect and Fair Trade resources, conserve water, divert waste and empower women. Athleta also continued to engage customers in its sustainability story, using prominent Goal: Divert Waste Goal: Empower Women messaging in stores and catalogs on the brand’s five core values and progress Divert 80% of store waste Impact 10,000 women toward its 2020 sustainability goals. from landfill by 2020 through P.A.C.E. and Fair Trade by 2020 In 2019, Athleta joined forces with Allyson % Waste Diverted from Landfill Felix to empower women and girls Women Who Participated in P.A.C.E. or through sports. Allyson is one of the most Received Premiums from Fair Trade USA* decorated track-and-field athletes in U.S. 2017 70% history and is our first-ever sponsored athlete. In addition to building confidence 2018 70% 2017 2019 in women and girls and encouraging them 2020 2,503 16,555 to use their voices, Allyson partners on Goal 2019 72% the design of high-performance product 2018 and plays a key role in our Power of She 2020 10K Allyson Felix: Track and 3,212 campaign. Goal field athlete, mother, activist and Athleta partner 80%

2019 Global Sustainability Report 72 Home Overview Strategy Social Environment Product Appendix

Brand Goals

Intermix has taken a leadership role in sustainability within the multibrand contemporary market with a mission to educate its 300+ brand partners on more sustainable sourcing, to reduce single-use plastic in packaging and to demonstrate how contemporary fashion can be sourced with more sustainable raw materials through its private-label brand.

In 2019, Intermix, in partnership with the Gap Inc. Global Sustainability team, hosted its first Sustainability Summit with its New York-based top brands. At the summit, Intermix established its commitment to become more sustainable and held a workshop on the first steps that brands can take to source more responsibly. Since then, Intermix has worked to reduce the number of garments shipped on plastic hangers and source a new cardboard hanger to replace existing plastic hangers. The company is currently testing this new hanger and encouraging its brand partners to adopt this more environmentally friendly option, a switch that could have an exponential impact. Lastly, Intermix has begun to convert fabrics and yarns used in its private-label line, Intermix Collection, to more sustainable options, such as swapping polyester for recycled polyester.

Intermix has an internal “Green Team” of volunteer employees who champion and operationalize its sustainability goals.

2019 Global Sustainability Report 73 Home Overview Strategy Social Environment Product Appendix

Appendix

Sustainable Development Goals 75 SASB Reference Table 76 Home Overview Strategy Social Environment Product Appendix

Sustainable Development Goals

The Sustainable Ensure inclusive Achieve gender Ensure access Development Goals (SDGs) and equitable equality and to water and developed by the United quality education empower all sanitation for all and promote women and girls Nations are a blueprint to lifelong learning achieve a better and more sustainable future for all. Our Work Our Work Our Work > Talent (p.20) > Equality + Belonging (p.22) > Women + Water (p.50) > P.A.C.E.: Empowering Women (p.43) > P.A.C.E.: Empowering Women (p.43) > Resource Efficiency + Manufacturing (p.52) To meet these goals, > This Way Ahead: First Jobs (p.29) > Women + Water (p.50) > Mill Sustainability Program (p.54) everyone – from business, > Chemicals Management (p.56) to government to civil Our Goal Our Goal Hire 5% of entry-level employees through Reach 1 million women through P.A.C.E. Our Goal society – must do their This Way Ahead by 2025 by 2022 Save 10 billion liters of water in manufacturing part. by 2020, from a 2014 baseline

After the SDGs were adopted, we assessed Gap Inc.’s opportunities Promote inclusive Ensure sustainable Take urgent action to advance progress on and sustainable consumption and to combat climate the individual targets. economic growth, production patterns change and its This assessment revealed employment and impacts that our company’s decent work for all sustainability efforts align most closely with six of the Our Work Our Work Our Work goals. While some of our > Talent (p.20) > Chemicals Management (p.56) > Climate (p.59) > Equality + Belonging (p.22) > Waste (p.62) programs may contribute > This Way Ahead: First Jobs (p.29) > Circularity (p.63) Our Goals to other goals, we have > Supplier Sustainability (p.32) > Product Sustainability (p.66) Carbon neutral across our value chain by mapped Gap Inc. initiatives 2050 Our Goal Our Goal and goals against these 100% of supplier facilities producing Source 100% of cotton from more Reduce absolute Scope 1 and 2 GHG six SDGs to demonstrate branded apparel are rated yellow or sustainable sources by 2025 emissions by 90% and Scope 3 GHG how we are contributing to green by 2020 emissions from purchased goods and services by 30% by 2030 from a 2017 achieving global targets. baseline

2019 Global Sustainability Report 75 Home Overview Strategy Social Environment Product Appendix

SASB Reference Table

The Sustainability Accounting Standards Board (SASB) is an independent, private-sector standards-setting organization dedicated to enhancing the efficiency of the capital markets by fostering high- quality disclosure of material 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 the location of that information in Gap Inc.’s Global Sustainability Report (GSR) and gapincsustainability.com.

Unit of Topic Activity Metric Category Measure Code Data Reference

Number of (1) Tier 1 suppliers and (2) Quantitative Number CG-AA- As of 2/1/2020 (FY’19), we sourced from 737 Tier > Social: Supply Chain suppliers beyond Tier 1 000.A 1 branded-apparel supplier facilities, defined as > GSR: Assessment + Remediation direct-relationship cut-and-sew facilities and their (p.33) associated embroidery, laundry and screen-printing > GSR: Mill Sustainability Program facilities. We have mapped out 191 mill facilities that (p.54) represent about 75% of our business in 2019.

Management Description of processes to maintain Discussion N/A CG-AA- > Environment: Chemicals of Chemicals in compliance with restricted substances and Analysis 250a.1 > GSR: Chemicals Management Product regulations (p.56)

Discussion of processes to assess Discussion N/A CG-AA- > Environment: Chemicals and manage risks and/or hazards and Analysis 250a.2 > GSR: Chemicals Management associated with chemicals in products (p.56)

Environmental Percentage of (1) Tier 1 supplier Quantitative Percentage (%) CG-AA- 100% of Tier 1 supplier denim laundries are > Environment: Mills + Laundries Impacts in the facilities and (2) supplier facilities 430a.1 expected to have wastewater meeting or exceeding Supply Chain beyond Tier 1 in compliance with legal requirements, in accordance with our Water > GSR: Water Stewardship wastewater discharge permits and/or Quality Program (WQP). In 2018, we enhanced the Strategy (p.47) contractual agreements program by adopting Zero Discharge of Hazardous Chemicals (ZDHC) Wastewater Guidelines as > GSR: Resource Efficiency + WQP requirements for wastewater sampling and Manufacturing (p.52) testing; 48 denim laundries participated, with 87.5% of facilities meeting conventional parameters and > GSR: Chemicals Management 79.2% of facilities meeting ZDHC parameters. (p.56) Supplier Facilities beyond Tier 1 • N/A Through strategic partnerships with the Sustainable Apparel Coalition (SAC) and Zero Discharge of Hazardous Chemicals (ZDHC), we expect strategic Gap Inc.-approved mill facilities to report compliance with wastewater-discharge permits and ZDHC Wastewater Guidelines.

2019 Global Sustainability Report 76 Home Overview Strategy Social Environment Product Appendix

SASB Reference Table

Unit of Topic Activity Metric Category Measure Code Data Reference

Environmental Percentage of (1) Tier 1 supplier Quantitative Percentage (%) CG-AA- 100% of Tier 1 suppliers were requested > Measuring Our Progress: Impacts in the facilities and (2) supplier facilities 430a.2 to complete the SAC’s Higg Index Facility Environment Supply Chain beyond Tier 1 that have completed Environmental Module. (continued) the Sustainable Apparel Coalition’s • 97% of active Tier 1 branded apparel suppliers > GSR: Water Stewardship Higg Index Facility Module (Higg completed the 2018 data request. Strategy (p.47) FEM) assessment or an equivalent Suppliers beyond Tier 1 were requested to complete environmental data assessment the Higg Index FEM. > GSR: Resource Efficiency + • 174 out of 191 Tier 2 mills have completed the Manufacturing (p.52) Higg Index FEM (91% of strategic mills).

Labor Conditions Percentage of (1) Tier 1 supplier Quantitative Percentage (%) CG-AA- 90.6% of Tier 1 branded apparel suppliers that were > Measuring Our Progress: in the Supply facilities and (2) supplier facilities 430b.1 active for the full year were audited to our Code of Working Conditions Chain beyond Tier 1 that have been audited Vendor Conduct (COVC) during the fiscal year. to a labor code of conduct, (3) • 34% of audits were conducted by a third-party > Social: Working Conditions percentage of total audits conducted assessor, primarily through ILO Better Work. by a third-party auditor • Facilities with a consistently low non- > Gap Inc. Code of Vendor conformance rate may be assessed on a Conduct (COVC) biannual basis; all facilities are audited prior to initial production. > Gap Inc. Supplier Facility List Suppliers beyond Tier 1 audited to COVC • N/A > Environment: Mills + Laundries As part of our Mill Sustainability Program, we communicated to our entire mill base our > GSR: Assessment + expectations of their social and environmental Remediation (p.34) performance, which are requirements of doing business with us.

Priority non-conformance rate and Quantitative Rate CG-AA- As of fiscal year 2019, 2% of facilities received red > Measuring Our Progress: associated corrective action rate for 430b.2 ratings during assessments against our Code of Working Conditions suppliers’ labor code of conduct audits Vendor Conduct. For issues open as of 2/1/2019, 82% of corrective > GSR: Assessment + action plans were resolved by 1/31/2020. Remediation (p.33)

Discussion of greatest (1) labor and (2) Discussion N/A CG-AA- > Environment: Supply Chain > Social: Working Conditions environmental, health, and safety risks and Analysis 430b.3 in the supply chain > GSR: Water Stewardship Strategy (p.47) > GSR Supplier Sustainability (p.32) > GSR: Chemicals Management (p.56)

2019 Global Sustainability Report 77 Home Overview Strategy Social Environment Product Appendix

SASB Reference Table

Unit of Topic Activity Metric Category Measure Code Data Reference

Raw Material Discussion of environmental and social Discussion N/A CG-AA- > Environment: Raw Materials Sourcing risks associated with sourcing priority and Analysis 440a.1 raw materials > GSR: Raw Materials (p.68)

Percentage of raw materials third-party Quantitative Percentage (%) CG-AA- Fiber Type % of Fiber Type > Environment: Raw Materials certified to an environmental and/ by weight 440a.2 Natural Fibers or social sustainability standard, by > GSR: Raw Materials (p.67) Organic Cotton 0.3% of cotton standard BCI Cotton 57% of cotton Recycled Wool 15.7% of wool Synthetics Recycled Nylon 0.5% of nylon Recycled Polyester 1.1% of polyester Manufactured Cellulosics Lenzing Modal 2.4% of rayon TENCEL 5.4% of rayon

2019 Global Sustainability Report 78 gapincsustainability.com