CDP 2013 Investor CDP 2013 Information Request … Inc. Investor CDP...Carbon Disclosure Project CDP...

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Carbon Disclosure Project CDP 2013 Investor CDP 2013 Information Request Gap Inc. Module: Introduction Page: Introduction 0.1 Introduction Please give a general description and introduction to your organization We established our company in 1969 with a brand called Gap and a promise to make it easy to buy a great pair of jeans. Gap In c. is one of the world’s largest specialty retailers, with over 130,000 employees and 3,400 stores in 47 countries around the world. Our family of brands includes Gap, Banana Republic, Old Navy, Piperlime, Athleta, and Intermix. We are committed to being the world’s favorite for American style. While we are proud of what we achieved in 2012, we recognize that with growth and opportunity come greater challenges, wider impacts, and a heightened sense of urgency to more deeply incorporate social and environmental responsibility into our core business. We know that we must continue to adapt and innovate if our business is to thrive. As a global retailer, we have the potential to make a difference on critical environmental issues, such as saving energy and combating climate change. We believe social and environmental responsibility allows us to innovate and helps to improve the company’s employee engagement, operational efficiency, productivity, and ultimately, our profitability. We encourage our brands to go above and beyond these fundamentals in ways that best serve their customers and communities. Each of our brands has unique opportunities to implement its own ideas, from exploring ways to make our clothes more sustainable to fostering a culture that supports responsible business practices. This ultimately creates value for our business and helps us meet the expectations of our customers, employees and shareholders. 0.2 Reporting Year Please state the start and end date of the year for which you are reporting data. The current reporting year is the latest/most recent 12-month period for which data is reported. Enter the dates of this year first. We request data for more than one reporting period for some emission accounting questions. Please provide data for the three years prior to the current reporting year if you have not provided this information before, or if this is the first time you have answered a CDP information request. (This does not apply if you have been offered and selected the option of answering the shorter questionnaire). If you are going to provide additional years of data, please give the dates of those reporting periods here. Work backwards from the most recent reporting year. Please enter dates in following format: day(DD)/month(MM)/year(YYYY) (i.e. 31/01/2001).

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Transcript of CDP 2013 Investor CDP 2013 Information Request … Inc. Investor CDP...Carbon Disclosure Project CDP...

  • Carbon Disclosure Project CDP 2013 Investor CDP 2013 Information Request

    Gap Inc.

    Module: Introduction

    Page: Introduction

    0.1

    Introduction

    Please give a general description and introduction to your organization We established our company in 1969 with a brand called Gap and a promise to make it easy to buy a great pair of jeans. Gap Inc. is one of the worlds largest specialty retailers, with over 130,000 employees and 3,400 stores in 47 countries around the world. Our family of brands includes Gap, Banana Republic, Old Navy, Piperlime, Athleta, and Intermix. We are committed to being the worlds favorite for American style. While we are proud of what we achieved in 2012, we recognize that with growth and opportunity come greater challenges, wider impacts, and a heightened sense of urgency to more deeply incorporate social and environmental responsibility into our core business. We know that we must continue to adapt and innovate if our business is to thrive. As a global retailer, we have the potential to make a difference on critical environmental issues, such as saving energy and combating climate change. We believe social and environmental responsibility allows us to innovate and helps to improve the companys employee engagement, operational efficiency, productivity, and ultimately, our profitability. We encourage our brands to go above and beyond these fundamentals in ways that best serve their customers and communities. Each of our brands has unique opportunities to implement its own ideas, from exploring ways to make our clothes more sustainable to fostering a culture that supports responsible business practices. This ultimately creates value for our business and helps us meet the expectations of our customers, employees and shareholders.

    0.2

    Reporting Year

    Please state the start and end date of the year for which you are reporting data. The current reporting year is the latest/most recent 12-month period for which data is reported. Enter the dates of this year first. We request data for more than one reporting period for some emission accounting questions. Please provide data for the three years prior to the current reporting year if you have not provided this information before, or if this is the first time you have answered a CDP information request. (This does not apply if you have been offered and selected the option of answering the shorter questionnaire). If you are going to provide additional years of data, please give the dates of those reporting periods here. Work backwards from the most recent reporting year. Please enter dates in following format: day(DD)/month(MM)/year(YYYY) (i.e. 31/01/2001).

  • Enter Periods that will be disclosed

    Sun 01 Jan 2012 - Mon 31 Dec 2012

    0.3

    Country list configuration

    Please select the countries for which you will be supplying data. This selection will be carried forward to assist you in completing your response

    Select country

    United States of America

    0.4

    Currency selection

    Please select the currency in which you would like to submit your response. All financial information contained in the response should be in this currency. USD($)

    0.6

    Modules

    As part of the request for information on behalf of investors, electric utilities, companies with electric utility activities or assets, companies in the automobile or auto component manufacture sectors, companies in the oil and gas industry and companies in the information technology and telecommunications sectors should complete supplementary questions in addition to the main questionnaire. If you are in these sectors (according to the Global Industry Classification Standard (GICS)), the corresponding sector modules will not appear below but will automatically appear in the navigation bar when you save this page. If you want to query your classification, please email [email protected]

  • If you have not been presented with a sector module that you consider would be appropriate for your company to answer, please select the module below. If you wish to view the questions first, please see https://www.cdproject.net/en-US/Programmes/Pages/More-questionnaires.aspx.

    Module: Management [Investor]

    Page: 1. Governance

    1.1

    Where is the highest level of direct responsibility for climate change within your company?

    Individual/Sub-set of the Board or other committee appointed by the Board

    1.1a

    Please identify the position of the individual or name of the committee with this responsibility

    a. Gap Inc. has increasingly sought to build connections between social and environmental responsibility and to integrate this work throughout the company. Our organizational structure supports these efforts, enabling us to translate our vision into action. Our Social and Environmental Responsibility department is headed by knowledgeable leaders with proven business and sustainability experience. Bobbi Silten, Senior Vice President of Global Responsibility at Gap Inc. and President of Gap Foundation oversees our Social and Environmental Responsibility department. Bobbi reports to Eva Sage-Gavin, Executive Vice President, Global Human Resources and Corporate Affairs, who reports to Gap Inc. chairman and chief executive officer Glenn Murphy. Our Social and Environmental Responsibility team is comprised of people with diverse backgrounds and skill sets who have experience working for non-governmental organizations, apparel factories, trade unions, socially responsible investment firms, government agencies, and other companies. Our organizational structure also requires particularly close collaboration across key departments at Gap Inc., which is why our Social and Environmental Responsibility department works in close conjunction with our Government Affairs, Public Affairs, Supply Chain, Legal, and Gap Foundation teams, among others. We believe that such varied backgrounds and perspectives help spur innovation and foster accountability, allowing us to better analyze, understand, and address the social and environmental issues material to our business. The common thread that unites us is a shared belief in both the capability and responsibility of our company to create positive social and environmental change. b. Gap Inc.s Board of Directors oversees the companys Social and Environmental Responsibility program and receives regular updates directly from Bobbi Silten. In addition, Bobbi Silten meets on a quarterly basis with Gap Inc. chairman and chief executive officer Glenn Murphy to discuss social and environmental responsibility issues, and continues to meet on a regular basis with Gap Inc.s Executive Vice President of Global Supply Cha in with the objective of continuing to integrate our respective strategies.

  • However, acting responsibly is not limited to one team or even one department at Gap Inc. It is a business strategy and a cultural pillar of our company that extends broadly to our leadership, our day-to-day operations and initiatives that involve employees at every level throughout the organization. Our Environmental Council, for example, includes business leaders from across the company working to improve our environmental practices and achieve our sustainability goals. In his role as the head of Human Resources for Old Navy, Dan Henkle (former head of Social & Environmental Responsibility for Gap Inc.) further links our social and environmental efforts to the rest of the company, helping to instill responsible practices into Gap Inc. operations, such as bringing social and environmental responsibility training into Gap Inc.s Retail Academy (an in-depth introduction to all aspects of our business for new Gap Inc. employees).

    1.2

    Do you provide incentives for the management of climate change issues, including the attainment of targets?

    Yes

    1.2a

    Please complete the table

    Who is entitled to

    benefit from these

    incentives?

    The type of incentives

    Incentivized performance indicator

    Management group

    Monetary reward

    In all of our efforts, we are working throughout Gap Inc. to drive change, enlisting the passion and talent of our employees across numerous functions to support our values of do: whats right when it comes to the environment. Many of our employees are passionate about the work they do as well as caring for our natural resources. Many of our best ideas come from our employees, who consistently challenge themselves to find solutions that link seamlessly with our design, processes and operations, often enhancing the products and experience that we offer to customers. We actively encourage and support sustainable innovation in each of our brands. The incentives we provide for innovation across the company, while not solely dedicated to issues regarding climate change, may be awarded for work on reducing emissions, meeting set targets, leading emissions reduction initiatives and piloting innovative programs which actively respond to environmental issues. Gap Inc.s Annual Performance Bonus plans provide financial incentives to reward our employees for achieving company and/or individual performance goals which may include environmental initiatives or programs. The objectives of our bonus plans are: To reward financial performance, achievement of organization and individual goals and to support the companys pay-for-performance philosophy. Performance measures vary by plan and may include individual performance, company or

  • Who is entitled to

    benefit from these

    incentives?

    The type of incentives

    Incentivized performance indicator

    division financial performance, key business goals, and store sales or other specified measures such as environmental sustainability initiatives.

    Management group

    Monetary reward

    Doris and Don Fisher built our company on four core principles innovation, integrity, community and store excellence. The Fisher Award was created to recognize our employees impact on the business and community which may include sustainability and environmental efforts. This is an annual award that recognizes select employees around the world who exemplify our companys most important values. Recipients receive a grant to the nonprofit of their choice, as well as a personal financial incentive, and global recognition. Employees can nominate teammates or themselves for bringing our values to life, which may include environmental sustainability initiatives such as volunteering with environmental organizations in the communities where they live and work.

    Management group

    Monetary reward

    The Exceed Award is Gap Inc.s company-wide spot bonus program. The cash award is designed as a tool to reward team members in real-time who demonstrate superior performance and generate results above and beyond the expected job scope. Results should be achieved in a manner that is aligned with our four pillars: Inspire: creativity; Think: customers first; Do: whats right; Deliver: results. The Exceed Award may be given to an individual or a team for outstanding performance in a variety of areas, which may include environmental sustainability initiatives such as work on reducing emissions, meeting set targets, leading emissions reduction initiatives and piloting innovative programs which actively respond to environmental issues.

    All employees Recognition (non-monetary)

    Our peer-based, online recognition program, Applause, underwent a makeover in 2009. The website received a new look and feel and was updated to reflect our cultural pillars Inspire: creativity, Think: customers first, Do: whats right, and Deliver: results. And for the first time, we introduced Applause to our employees in Europe, Global Sourcing and Athleta, as well as expanded the program into four languages. In 2011, we estimate our employees created and distributed more than 160,000 online Applause cards including recognition for environmental sustainability initiatives such as effectively communicating climate change internally, participating on internal working groups who help to mitigate energy consumption and reduce waste and those who are helping to pilot tools such as the Sustainable Apparel Coalitions Apparel Index internally.

    Page: 2. Strategy

    2.1

    Please select the option that best describes your risk management procedures with regard to climate change risks and opportunities

    Integrated into multi-disciplinary company wide risk management processes

  • 2.1a

    Please provide further details

    a. Risks are assessed at an enterprise level, brand level and asset level in order to help manage these risks and capitalize on opportunities related to our social and environmental goals. Weve developed a framework for our social and environmental risk management process which identifies particular events or circumstances, such as social issues, regulatory impact, and climate change that are relevant to our objectives and then analyzes and plots them along a matrix with degree of risk on one axis and our preparedness to address it as a company on the other axis. Risks are prioritized based upon criteria for financial, material and reputational risks. We are integrating these risk assessments more deeply into our business, meeting with corporate leadership as well as strategic business partners within the company to review current strategies and initiatives, collect data and help facilitate additional initiatives that would have a positive environmental impact. In addition, our Business Continuity Planning teams and our brands address potential weather-related risks in development of their strategies. To help ensure that our public reporting continuously improves and meets our stakeholders expectations, we regularly review the universe of issues in order to focus on those most important to our company, our stakeholders, and society at large. In 2012, we conducted a materiality assessment with respect to our sustainability initiatives that found the issues we cover in this report to be highly or moderately material from a sustainability perspective. At Gap Inc., materiality in the context of sustainability reporting is defined by the degree to which an issue is of significance to society and our interested stakeholders, and the degree to which it is relevant to Gap Inc.s scope of operations and ethical commitments. As part of our assessment, we analyzed indicators from key frameworks, indexes, and surveys including those from the Global Reporting Initiative, the Dow Jones Sustainability Index, Corporate Responsibility Officer, Ethical Trading Initiative, Social Accountability International, As You Sow, and Free 2 Work. We then rated each issue according to its aggregate score along each of the following dimensions: 1.) Significance to society Awareness of issue; Significance to key stakeholders; Evidence and impact of issue Industry and peer response; 2.) Relevance to Gap Inc.: Potential short and long term business impacts; Ethical relevance and policy commitments; Peer-based and social norms; Stakeholder activity and reputational risk. Our assessment revealed that, while we had been appropriately focusing our previous reporting on material issues, we were not sufficiently emphasizing our goals or the strategies to achieve them. Moving forward, we aim to address this by more clearly discussing our strategies, and by ensuring that our goals are easier to find when navigating our website. This assessment reconfirmed the enormous value that stakeholders contribute to our efforts. By keeping in close and direct contact with stakeholders from across the social and environmental responsibility spectrum, we are better able to proactively address the issues that most urgently demand our attention. While conducting a materiality assessment is a valuable exercise, there are no greater assets in identifying what matters than having an internal team with deep social and environmental expertise, and the relationships and partnerships we build with experts around the world. Additionally The company has developed long-range plans by department throughout the organization to clarify business priorities and address strategic risks and opportunities at all levels. For example, one long-range plan, in particular, is focused on textile mills, and reducing the amount of energy, water and chemicals consumed at that stage of the apparel supply chain. b. At the enterprise level, our Internal Audit team conducts an annual risk assessment based on interviews with over 70 senior management leaders, our executive leadership team, heads of the various divisions and our Board of Directors. All business partners are given a pre-read document which clearly defines risks and asks a set of questions regarding risks for the business. Based on the findings from these interviews, our Internal Audit team develops heat maps and summarizes the most significant risks to the company, which are reviewed and signed off on by our executive leadership team and the Board. Our Social and Environmental Responsibility team also works with our Environmental Council and internal business partners to monitor risks and opportunities, set goals and determine strategies to address these risks, and publicly report on our progress. While the Environmental Council meets quarterly to identify opportunities to support our objectives, other issues are reviewed and addressed with business partners on an as-needed basis. In addition, weve engaged with partners, such as Ceres, in our risk assessment process to help validate our findings as well as act as a sounding board for current and future initiatives. By proactively working with our internal business partners and outside stakeholders, we can identify and address risks and work to integrate these assessments more deeply into the business. Ultimately, through this type of assessment and engagement, we can protect the business and create real value for our stakeholders, employees,

  • customers and the environment. c. At the asset level, Gap Inc. operates facilities around the world in the form of stores, field offices, Gap International Sourcing (GIS) hub and spoke facilities, HQ facilities, distribution centers, data centers and call centers. Gap Inc.s Global Business Continuity Program (BCP) extends its services and response capability to every company location and the employees that service those locations. Each year Gap Inc.s BCP department faces challenges from predictive models of inclement weather around the world. Corporate BCP relies on predictive and actual models from the National Oceanic and Atmospheric Administration (NOAA) and other national and international agencies as well as integrative GoogleEarth tracking tools that are overlaid against all of Gap Inc.s facilities for tracking potential impact or actual impact. In addition to facility overlays, GoogleEarth, NOAA and national and international sources of weather-specific information, Corporate BCP also relies on members of its integrated San Francisco Headquarters Incident Command Structure (SFHQ ICS) to provide detailed information specific to impact from hurricanes. One such member of the SFHQ ICS is store facilities and the use of a predictive modeling tool that utilizes real-time information from NOAA to anticipate damage to facilities along a hurricanes predicted course. The combination of these powerful tools provide Corporate BCP, in collaboration with the SFHQ ICS, a comprehensive collection of detailed information for use in preparing our employees, facilities and our ability to support employees and operations impacted by severe inclement weather-related damage quickly, effectively and reliably. d. At an enterprise level, these risks are assessed on an annual basis. Within the Social & Environmental Responsibility department, social and environmental risks specific to our work and their placement along the matrix continue to change and move and are evaluated as new risks are identified or circumstances change. At the brand level, these risk assessments are currently being developed and are evaluated by season. At the facility or asset level, risks are assessed on an ongoing basis. e. At the enterprise level, the executive leadership team and the Board of Directors signs off on the risk assessment of the company. At the brand and department level, each division determines the criteria and main priorities. At the asset level, our Business Continuity Planning team determines what the criterion for risk is and how to prioritize. f. Enterprise risks are reviewed annually and any change in our assessment is reported to the Board on an annual basis. Gap Inc.s Board of Directors oversees the companys Social and Environmental Responsibility program and receives regular updates directly from Bobbi Silten. In addition, Bobbi Silten meets on a quarterly basis with Gap Inc. chairman and chief executive officer Glenn Murphy to discuss social and environmental responsibility issues, and continues to meet on a regular basis with Gap Inc.s Executive Vice President of Global Supply Chain, with the objective of continuing to integrate our respective strategies.

    2.2

    Is climate change integrated into your business strategy?

    Yes

    2.2a

    Please describe the process and outcomes

  • a. Our environmental initiatives are founded on the premise that we live in a world of constrained, finite natural resources, and that the long-term viability of companies will depend on the ability to do more with less. Climate change and water scarcity have become significant risks for many industries, and they are increasingly affecting companies ability to operate. We recognize that in order to meet the environmental challenges of the 21st century, innovations will be required across all sectors. Our environmental strategy to date has stemmed from careful analysis of our environmental challenges as a global apparel retailer and taking action in the areas where we have the most opportunity and influence to create change. For example, while we have more direct control over our store and facility construction and our product and packaging design, we have less control over suppliers in our supply chain. Our evolving environmental strategy leverages our strengths and requires partnership with stakeholders to address the issues most important to our company and society. It allows us to more closely measure our environmental impacts and the return on investment of our initiatives. We will continue to align our environmental initiatives with new opportunities for our business, and to build on the steps we have taken so far. To help ensure that our reporting continuously improves and meets our stakeholders expectations, we regularly review the universe of issues in order to focus on those most important to our company, our stakeholders, and society at large. In 2012, we conducted a materiality assessment with respect to our sustainability initiatives that found the issues we cover in this report to be highly or moderately material from a sustainability perspective. At Gap Inc., materiality in the context of sustainability reporting is defined by the degree to which an issue is of significance to society and our interested stakeholders, and the degree to which it is relevant to Gap Inc.s scope of operations and ethical commitments. As part of our assessment, we analyzed indicators from key frameworks, indexes, and surveys including those from the Global Reporting Initiative, the Dow Jones Sustainability Index, Corporate Responsibility Officer, Ethical Trading Initiative, Social Accountability International, As You Sow, and Free 2 Work. We then rated each issue according to its aggregate score along each of the following dimensions: 1.) Significance to society Awareness of issue; Significance to key stakeholders; Evidence and impact of issue Industry and peer response; 2.) Relevance to Gap Inc.: Potential short and long term business impacts; Ethical relevance and policy commitments; Peer based and social norms; Stakeholder activity and reputational risk. Our assessment revealed that, while we had been appropriately focusing our previous reporting on material issues, we were not sufficiently emphasizing our goals or the strategies to achieve them. Moving forward, we aim to address this by more clearly discussing our strategies, and by ensuring that our goals are easier to find when navigating our website. This assessment reconfirmed the enormous value that stakeholders contribute to our efforts. By keeping in close and direct contact with stakeholders from across the social and environmental responsibility spectrum, we are better able to proactively address the issues that most urgently demand our attention. While conducting a materiality assessment is a valuable exercise, there are no greater assets in identifying what matters than having an internal team with deep social and environmental expertise, and the relationships and partnerships we build with experts around the world. b. Our environmental strategy has stemmed from a careful analysis of our environmental challenges as a global apparel retailer, the areas over which we have the most control and opportunity to create change, and the issues that we believe enable us to make the biggest difference. While we have direct control over our store and facility construction, we can only influence areas in the supply chain such as textile and garment production. At our owned and operated facilities, energy consumption comprises the majority of our Scope 2 emissions. And as such, we have prioritized energy and emissions reduction and have committed to reducing our absolute U.S. GHG emissions 20% by 2015, based on a 2008 baseline, which will help to inform our strategy in the years to come. Additionally, given the interconnected nature of climate and water, we are working to enhance our approach to water issues in our supply chain. For example, leveraging more than three years of work with BSRs Apparel Mills & Sundries working group and the Natural Resources Defense Council (NRDC)s Responsible Sourcing Initiative, we are in the process of piloting a program to address environmental impacts at textile mills. We are specifically focused on improving compliance with local environmental laws and regulations, as well as reducing the amount of energy, water and chemicals consumed at that stage of the apparel life cycle. c. To have the greatest positive impact, we have prioritized our short term efforts (1-3 years) to focus first on the facilities that we own and operate, because we have more control over the energy they use and the waste we create and, therefore, more opportunity to create immediate change. To this end, we have assembled a cross-divisional group of business partners in our Sustainable Buildings and Operations working group. Their goal is to identify and drive implementation of initiatives that reduce Gap Inc.s environmental impact and expenses related to building construction and operations, in alignment with business objectives. This group is currently focused on exploring and analyzing various initiatives and programs such as installation of EMS systems, LED lighting and store recycling efforts that will help towards achieving our 20% GHG reduction goal by 2015.

  • d. In addition, we are currently looking further back into our supply chain, where we believe the majority of our impact lies, and developing a long term strategy (3-5 years) to address our risks and opportunities. For example, the water and energy used in manufacturing our products is a significant focus of our efforts moving forward. To that end, we have identified textile mills as an area of focus where Gap Inc. can engage strategically to reduce its impact on the environment. e. Given our operations, two of the biggest areas where we can create a positive environmental impact are through energy and water management. In both cases, whats good for the environment is also good for our business. As we improve efficiencies, we can also save money and help to address and mitigate the risks of climate change in the communities where we live and work. In addition, energy and waste reduction at our owned and operated facilities both have the potential to reduce our operational costs and improve our bottom line. All of these are important strategic areas for our future success. f. While we continue to evaluate and determine our overall strategy going forward, there were no substantial business decisions made that were directly influenced by the climate change driven aspects of our strategy.

    2.2b

    Please explain why not

    2.3

    Do you engage in activities that could either directly or indirectly influence policy on climate change through any of the following? (tick all that apply)

    Direct engagement Trade associations

    2.3a

    On what issues have you been engaging directly?

    Focus of legislation

    Corporate Position

    Details of engagement Proposed solution

    Energy efficiency

    Support

    We believe that it is important to participate in political and regulatory processes on issues that affect our business and community interests, and we work proactively to support our strategies through public policy and government advocacy. This includes providing our perspective on social and environmental responsibility issues that are aligned with our company values. We are members of Ceres Business for Innovative Climate and Energy Policy (BICEP) coalition, a group of over 20 public and private companies seeking to help pass meaningful energy and climate change legislation.

  • Focus of legislation

    Corporate Position

    Details of engagement Proposed solution

    The goal of the coalition is to work directly with key allies in the business community and members of Congress to pass meaningful energy and climate change legislation consistent with BICEPs core principles. As a member of BICEP we are helping stress the urgency of finding solutions to climate issues.

    2.3b

    Are you on the Board of any trade associations or provide funding beyond membership?

    2.3c

    Please enter the details of those trade associations that are likely to take a position on climate change legislation

    Trade association

    Is your position on climate change consistent with theirs?

    Please explain the trade association's position

    How have you, or are you attempting to influence the position?

    2.3d

    Do you publically disclose a list of all the research organizations that you fund?

    2.3e

    Do you fund any research organizations to produce public work on climate change?

    2.3f

  • Please describe the work and how it aligns with your own strategy on climate change

    2.3g

    Please provide details of the other engagement activities that you undertake

    2.3h

    What processes do you have in place to ensure that all of your direct and indirect activities that influence policy are consistent with your overall climate change strategy?

    2.3i

    Please explain why you do not engage with policy makers

    Further Information

    Gap Inc. is also a member of various industry and trade associations such as RILA (Retail Industry Leaders Association) that further our business, economic and community interests. These associations keep us informed of developments and trends in our industry, and help us focus our advocacy in the most effective way. We often communicate and advocate our positions through our membership in concert with our industry partners. All dues paid to these trade associations are made with corporate funds.

    Page: 3. Targets and Initiatives

    3.1

    Did you have an emissions reduction target that was active (ongoing or reached completion) in the reporting year?

  • Absolute target

    3.1a

    Please provide details of your absolute target

    ID

    Scope

    % of emissions in

    scope

    % reduction from base

    year

    Base year

    Base year emissions

    (metric tonnes CO2e)

    Target year

    Comment

    GPS1 Scope 1+2

    100% 20% 2008 615105 2015

    Weve made a commitment to reduce absolute GHG emissions in our U.S. operations 20 percent by 2015, compared to 2008 levels. Informed by the environmental footprint assessment we completed in 2009 and as a follow up to our 2003-2008 EPA Climate Leaders Goal, this goal is ambitious and will require significant effort across our company. Though we are a global company, we are focused on our U.S. stores and facilities as they continue to represent more than 75% of our sales and approximately 90% of our total facility square footage.

    3.1b

    Please provide details of your intensity target

    ID

    Scope

    % of emissions in

    scope

    % reduction from base year

    Metric

    Base year

    Normalized base year emissions

    Target year

    Comment

    3.1c

    Please also indicate what change in absolute emissions this intensity target reflects

  • ID

    Direction of change anticipated in absolute Scope 1+2 emissions at

    target completion?

    % change anticipated in absolute Scope 1+2

    emissions

    Direction of change anticipated in absolute Scope 3 emissions at target

    completion?

    % change anticipated in absolute Scope 3

    emissions

    Comment

    3.1d

    Please provide details on your progress against this target made in the reporting year

    ID

    % complete (time)

    % complete (emissions)

    Comment

    GPS1 57% 100%

    To date, weve reduced absolute emissions 166,000 metric tons CO2e from our base year, resulting in an overall 27% reduction. Weve done this through a variety of energy reduction activities and greater operational efficiencies. We will maintain these efforts to further reduce our emissions to ensure that we maintain a 20% reduction from the 2008 base year. NOTE: Actual % complete (emissions) is 135%

    3.1e

    Please explain (i) why not; and (ii) forecast how your emissions will change over the next five years

    3.2

    Does the use of your goods and/or services directly enable GHG emissions to be avoided by a third party?

    No

    3.2a

  • Please provide details (see guidance)

    3.3

    Did you have emissions reduction initiatives that were active within the reporting year (this can include those in the planning and implementation phases)

    Yes

    3.3a

    Please identify the total number of projects at each stage of development, and for those in the implementation stages, the estimated CO2e savings

    Stage of development

    Number of projects

    Total estimated annual CO2e savings in metric tonnes CO2e (only for rows marked *)

    Under investigation 0 0

    To be implemented* 0 0

    Implementation commenced* 4 0

    Implemented* 12 7741

    Not to be implemented 0 0

    3.3b

    For those initiatives implemented in the reporting year, please provide details in the table below

  • Activity type

    Description of activity

    Estimated annual CO2e

    savings (metric tonnes CO2e)

    Annual monetary savings

    (unit currency -

    as specified in

    Q0.4)

    Investment required

    (unit currency -

    as specified in Q0.4)

    Payback period

    Energy efficiency: Building services

    Scope 2 Voluntary In 2012, we tested new LED lighting fixtures for Banana Republic brand stores and completed the relamping of 245 stores. Each store installed a mix of MR16 and PAR lamps which have a life expectancy of 5 and 10 years, respectively.

    5671 1700000 3700000 1-3 years

    Energy efficiency: Building services

    Scope 2 Voluntary In 2012, we tested new LED lighting fixtures for Old Navy brand stores and completed the relamping of 71 stores. Each store installed a mix of MR16 and PAR lamps which have a life expectancy of 5 and 10 years, respectively.

    633 221000 694000 4-10 years

    Energy efficiency: Building services

    Scope 2 Voluntary In 2012, we tested new LED lighting fixtures for Gap brand stores and completed the relamping of 18 stores. Each store installed a mix of MR16 and PAR lamps which have a life expectancy of 5 and 10 years, respectively.

    205 101000 215000 1-3 years

    Energy efficiency: Building services

    Scope 2 Voluntary In 2012, we continued to use LED specs in all new Athleta stores built in 2012. We installed LED lighting in 10 stores in 2012. Each store installed a mix of MR16 and PAR lamps which have a life expectancy of 5 and 10 years, respectively.

    34000 93000 1-3 years

    Energy efficiency: Building services

    Scope 1 & 2 Voluntary In 2012, we implemented a Building Management System which allowed us to curtail demand charges and reduce our energy rates overall.

    70000 96000 1-3 years

    Energy efficiency: Building services

    Scope 1, 2 & 3 Voluntary In 2012, we began a partnership with GE to conduct Energy & Waste Treasure Hunts in our distribution centers (DC). We assembled a team of subject matter experts made up of service providers, engineers, energy consultants, motors, lighting and HVAC experts and matched them up with the DCs management, operations and maintenance staff. Over the course of two days, the team evaluated every opportunity to reduce energy usage and incorporate waste management best practices. For the Fresno DC, we identified 90 prospects, including the summer months (even taking into account that 2012 was one of the hottest summers on record), to achieve on average a 17% reduction in energy usage and cost savings and avoidance of close to 30%. Based on the success at the Fresno DC, we completed an additional Treasure Hunt at our DC in Ohio and are planning another scheduled for 2013 in Gallatin, TN.

    1-3 years

  • Activity type

    Description of activity

    Estimated annual CO2e

    savings (metric tonnes CO2e)

    Annual monetary savings

    (unit currency -

    as specified in

    Q0.4)

    Investment required

    (unit currency -

    as specified in Q0.4)

    Payback period

    Energy efficiency: Building services

    Scope 2 Voluntary LED lights were installed in a few phases at our 2 Folsom headquarters facility over the fiscal year of 2012. We installed LEDs in conference rooms and retro-fit existing elevator cab lights. The majority of the project consisted of lamp replacements for MR16 lamps, track light lamp replacement in conference rooms, display windows, work space common areas, etc. We plan on looking at other high output lamps throughout the building this year, time permitting. And, well perform a study in partnership with a lighting consultant to verify what type of LED fixtures there are for the art decorative fixtures we have in the building. LED replacement also took place at our 1 Harrison location for similar type of fixtures and lamp replacement used at 2 Folsom.

    Energy efficiency: Building services

    Scope 2 Voluntary We achieved LEED Gold certification for our NY headquarters building through a focus on site location, water efficiency, energy and atmosphere, materials and resources, indoor environmental quality and innovation in design. Specifically, the building optimizes energy performance through a 15% reduction in lighting power, occupancy sensors connected to 75% of the lighting load, 90% of appliances are ENERGY STAR rated, and the use of green power

    Transportation: fleet

    Scope 3 Voluntary We continue to service Western Canada pool points/stores via rail in order to reduce cost, fuel dependency and the environmental impacts resulting from truck transport. Considerable effort and focus was also applied in the expansion of intermodal efforts within the U.S. In 2011, groundwork was established to begin utilizing rail for inbound (Domestic vendor and deconsol locations) merchandise movements into U.S. distribution campuses. In fiscal year 2011, 87 truckloads were converted from truckload to intermodal (rail). That initiative was expanded exponentially in 2012 with 433 truckloads of merchandise converted to rail. In 2012, a portion of outbound (non-merchandise /store supplies) product was converted from truckload to rail as well. In 2012, 158 loads of store supplies were shipped via rail compared to 25 shipped in fiscal year 2011. Savings as well as environmental impact are still being determined.

    339

  • Activity type

    Description of activity

    Estimated annual CO2e

    savings (metric tonnes CO2e)

    Annual monetary savings

    (unit currency -

    as specified in

    Q0.4)

    Investment required

    (unit currency -

    as specified in Q0.4)

    Payback period

    from freight transport. Currently, all of our Linehaul Carriers are SmartWay certified and will be certified SmartWay shippers through 2014. Re-certification is an annual activity. We will continue to advance our efforts at reducing our environmental impact through N.A. Transportation operations.

    Transportation: use

    Scope 3 Voluntary In 2012, Gap Inc. continued its partnership with RideSpring, a web based commuting platform that enables us to offer employees an easy and secure way to find carpool partners at Gap. The RideSpring service actively promotes measures and rewards employee activity in all alternative commute modes (biking, carpooling, transit, etc.). Employees have positively embraced the program, 'greening' their commute saving fuel and CO2 emissions. In 2012, our employees removed more than 197,672 car trips from the commute, saving over 3,155,389 miles, 148,694 gallons of gas, and prevented over 1,300 metric tons of CO2 from entering our atmosphere.

    1300

    Other

    Scope 3 Voluntary In 2012, our Old Navy brand continued a voluntary construction waste recycling pilot project with the goal of diverting construction waste from landfills to recycle centers when remodeling or constructing new stores. Targeting single stream and metal recycling, depending on each citys recycling capacity, Old Navy leveraged our existing national waste company to provide recycle containers to identified stores. 93 stores were in the program and we diverted 509 tons of construction waste from landfills, or about 25% of the construction waste produced (from those in the program) and reduced our Scope 3 emissions. There was no cost add per project for recycling construction waste. The long term goal of this initiative is to determine if and how we might roll this out to our other brands in the future.

  • Activity type

    Description of activity

    Estimated annual CO2e

    savings (metric tonnes CO2e)

    Annual monetary savings

    (unit currency -

    as specified in

    Q0.4)

    Investment required

    (unit currency -

    as specified in Q0.4)

    Payback period

    process to all Old Navy stores that qualify and determine if and how we might roll this initiative out to our other brands in the future.

    Other

    Scope 3 Voluntary In August 2012, all brands started a voluntary paint disposal program with the goal to ensure paint was disposed of properly. We leveraged our existing national waste company to provide the program for any location to call in to have paint cans picked up for proper disposal. 4 stores have participated and we disposed 160 cans of paint. The cost was $2,264 for 2012.

    2264

    Behavioral change

    Scope 3 Voluntary In 2009, our Outlet brand piloted a voluntary, flexible work program based on the Results Only Work Environment (ROWE) methodology. This program allows employees to work from home or remotely thereby reducing Scope 2 emissions as well as our employee commute Scope 3 emissions. Continuing in 2012, based on compelling survey data and strong performance by the brand during the pilot, ROWE was rolled out to Gap, Banana Republic and numerous groups in our Inc. and Gap Inc. Direct functions.

    25000

    1-3 years

    Product design

    Scope 3 Voluntary In 2012, Gap brand continued to work with its packaging vendor to change our standard recycled plastic gift cards to paper gift cards. In addition, we changed our hang tags to paper tags which are FSC certified using 100% PCW. With over 2 millions pounds of product produced during the year, these gift cards and hang tags are more than recyclablethey are produced with the environment in mind. These gift cards are produced at a facility which is carbon neutral and uses 100% renewable energy.

  • Method

    Comment

    Financial optimization calculations

    ROI calculations are a key method for driving investments in emission reduction activities, especially as a selling point to upper management and leaders within the business groups. Investments which have a 1-3 year ROI are the types of activities we have typically engaged in the past.

    Employee engagement

    In surveys across the company, a significant majority of our employees are proud of Gaps reputation within the community, believe in our values and feel that our leadership demonstrates a high degree of integrity with regard to Do Whats Right within the communities we live and work in. Engaging our employees in climate change issues allows us to reflect on a common set of values, promote healthy and sustainable living and working and drives recruitment and retention rates within the company. To that end, we have communicated our GHG goal to the entire company to give visibility to the goal and help drive engagement on environmental initiatives. Given that our employees are so passionate about these values, we feel that we can leverage our employees to help meet our goals and integrate sustainability further into the company.

    3.3d

    If you do not have any emissions reduction initiatives, please explain why not

    Page: 4. Communication

    4.1

    Have you published information about your companys response to climate change and GHG emissions performance for this reporting year in places other than in your CDP response? If so, please attach the publication(s)

    Publication

    Page/Section reference

    Attach the document

    In voluntary communications (underway) previous year

    Pages 65-92: Information on our energy conservation programs, our GHG reductions goals and initiatives, and our progress towards meeting our GHG reduction goal has been published in our companys Social

  • Publication

    Page/Section reference

    Attach the document

    attached Responsibility Report, available online under the Environment section. We publish our CSR report every two years and have included the last year published 2009/2010. 2011 data was updated online only and 2012 data will be published later in 2013.

    In voluntary communications (complete)

    Gap Inc. Page: Page 3, 4 section on Environment - UNGC COP and Advanced Programme Q/A. As part of our participation with the UNGC COP, companies are required to issue an annual Communication on Progress (COP) to stakeholders regarding progress made in implementing the principles of the UN Global Compact.

    https://www.cdproject.net/sites/2013/60/7060/Investor CDP 2013/Shared Documents/Attachments/Investor-4.1-C3-IdentifytAttachment/Investor-4.1-PublishedInformation2/GapInc0910SR.pdf

    In voluntary communications (complete)

    Page 2: Corporate Responsibility 100 Best Corporate Citizens List. In 2012, members of the CRO Associations Corporate Citizenship committee gathered data on corporations environmental efforts as corporate citizens. http://www.thecro.com/files/100BestF.pdf

    https://www.cdproject.net/sites/2013/60/7060/Investor CDP 2013/Shared Documents/Attachments/Investor-4.1-C3-IdentifytAttachment/Investor-4.1-PublishedInformation3/Gap_Inc._UNGC_COP_Summary_12.14.2012.pdf

    In voluntary communications (complete)

    Page 6: Newsweek Green Rankings. Each year Newsweek publishes an environmental ranking of the 500 largest publicly traded companies in America based on environmental footprints, management (policies, programs, initiatives, controversies), and reporting practices.

    https://www.cdproject.net/sites/2013/60/7060/Investor CDP 2013/Shared Documents/Attachments/Investor-4.1-C3-IdentifytAttachment/Investor-4.1-PublishedInformation4/100BestF.pdf

    In voluntary communications (complete)

    The Dow Jones Sustainability Index (DJSI) for 2012. Indexes are not publically available, but have included the report of this annual survey that Gap Inc. participates in. See page 72 which references Gap Inc. ranking.

    https://www.cdproject.net/sites/2013/60/7060/Investor CDP 2013/Shared Documents/Attachments/Investor-4.1-C3-IdentifytAttachment/Investor-4.1-PublishedInformation5/Newsweek Green Rankings 2012_ Global 500 List - Newsweek and The Daily Beast.pdf

    Module: Risks and Opportunities [Investor]

    Page: 5. Climate Change Risks

    5.1

  • Have you identified any climate change risks (current or future) that have the potential to generate a substantive change in your business operations, revenue or expenditure? Tick all that apply

    Risks driven by changes in regulation Risks driven by changes in physical climate parameters Risks driven by changes in other climate-related developments

    5.1a

    Please describe your risks driven by changes in regulation

    ID

    Risk driver

    Description

    Potential impact

    Timeframe

    Direct/ Indirect

    Likelihood

    Magnitude of impact

    Gap01 Fuel/energy taxes and regulations

    Fuel and/or energy taxes continue to pose a potential impact on our transportation costs, increasing our overall expenditures. Because the cost of fuel is a significant component in transportation costs, increases in the price of petroleum products could affect our gross margins. Our transportation vendors, who could be more directly affected through these regulations, could pass along a percentage of the cost increases to Gap Inc.

    Increased operational cost

    6-10 years Indirect (Supply chain)

    About as likely as not

    Low

    Gap02 Emission reporting obligations

    As consumers and the investment community become increasingly concerned with climate risks and businesses response to these risks, there could be additional scrutiny on our companys sustainability strategies as well as broader regulations requiring more stringent disclosure on climate risks. Efforts such as the newly formed Sustainability Accounting Standards Board (SASB) continue to drive efforts aimed at requiring standardized reporting on material sustainability issues for publically listed corporations. Mandatory obligations to report emissions and an increase in reporting requirements and processes could require an added level of data collection and verification and additional personnel not currently in place.

    Increased capital cost

    Current Direct Very likely Low-medium

  • ID

    Risk driver

    Description

    Potential impact

    Timeframe

    Direct/ Indirect

    Likelihood

    Magnitude of impact

    Gap03

    Product efficiency regulations and standards

    More stringent building codes and ordinances such as the San Francisco Existing Commercial Buildings Energy Performance Ordinance requires building owners to benchmark energy use each year, track progress and obtain an energy audit every five years. In addition, San Francisco's Commercial Lighting Efficiency Ordinance requires that lamps and ballasts systems in commercial buildings be 81 lumens per watt of electricity consumed. These types of stringent regulations regarding building and construction signal a growing trend across the United States and abroad towards adoption of more sustainable end efficient building standards. These revised standards could require us to invest differently in our overall store design, building products and construction processes to align with new code requirements regarding energy efficiency, water reduction, waste reduction and the inclusion of sustainable materials.

    Increased capital cost

    Current Direct Likely Low

    Gap04

    Product labeling regulations and standards

    More stringent product labeling requirements such as the proposed Grenelle Law in France and other proposed international regulations would require us to change our processes internally in order to comply with requirements in these countries in which we do business. These types of regulations may vary from country to country and may ask us to account for CO2 emissions as well as energy and water consumption in ways not currently done. These regulations could require us to more heavily partner with our suppliers in order to collect and compile this data. In addition, product sold in these countries would require different labels that would need to be custom-made, which would result in increased operational costs.

    Increased operational cost

    1-5 years Direct About as likely as not

    Low

    5.1b

    Please describe (i) the potential financial implications of the risk before taking action; (ii) the methods you are using to manage this risk and (iii) the costs associated with these actions

  • Laws and regulations at the local, state, federal and international levels frequently change, and the ultimate cost of compliance cannot be precisely estimated. In addition, we cannot predict the impact that may result from changes in the regulatory or administrative landscape. Any changes in regulations, the imposition of additional regulations, or the enactment of any new or more stringent legislation that impacts employment and labor, trade, product safety, transportation and logistics, health care, tax, privacy, operations, or environmental issues, among others, could have an adverse impact on our financial condition and results of operations. Fuel/energy taxes and regulations (i) the potential financial implications of the risk before taking action Fuel and/or energy taxes could have an impact on our transportation costs, increasing our overall expenditures. Because the cost of fuel is a significant component in transportation costs, increases in the price of petroleum products could affect our gross margins. Our transportation vendors, who could be more directly affected through these regulations, could pass along a percentage of the cost increases to us. Additional regulations for fuel economy requirements or low-carbon fuel standards could require investments in new equipment or retrofits and could have an impact on our business indirectly though additional increased transportation costs. (ii) the methods you are using to manage this risk In order to help mitigate these risks, we are engaging our energy management provider to work with all our utility vendors to monitor utility rates and lock in competitive rates over a period of time, positioning ourselves to be less prone to large price fluctuations within the market due to increased taxes or regulations. In deregulated markets we have a strategy in place to procure energy at the lowest rate possible. In regulated markets, our energy management provider works on our behalf to obtain optimum rates. (iii) the costs associated with these actions. While these changes could all result in increased costs, we believe that some of the costs due to increased regulation, such as fuel/energy taxes would have a similar impact across the industry and would occur gradually enough to allow companies to adjust their business practices. We recognize that while increases in costs due to these measures could potentially occur, the actual corresponding cost is unknown at this time. Emissions reporting obligations (i) the potential financial implications of the risk before taking action Additional scrutiny on companies and increased calls for disclosure regarding carbon emissions could result in increased capital costs in the form of additional expenses needed to gather data through new data management systems, new processes, and possibly new personnel. (ii) the methods you are using to manage this risk We are also continuing to gather data from across our business practices to better assess our overall carbon footprint and identify where we have the opportunity to make improvements. We are in the process of implementing an enterprise-wide energy management system that will aid in an increased and integrated level of data collection and reporting. This increased level of data collection and management will help us more closely monitor our operations and report on various initiatives and their corresponding emissions reductions to the larger community of our customers, employees and shareholders. (iii) the costs associated with these actions. While these changes could all result in increased costs, we believe that some of the costs due to increased regulation, such as emissions reporting obligations would have a similar impact across the industry and would occur gradually enough to allow companies to adjust their business practices. We recognize that while increases in costs due to these measures could potentially occur, the actual corresponding cost is unknown at this time. Product efficiency regulations and standards (i) the potential financial implications of the risk before taking action The energy used to operate our buildings is one of our largest operating expenses and regulations impacting energy could have an impact on our business costs. More stringent building codes and ordinances such as the San Francisco Existing Commercial Buildings Energy Performance Ordinance and San Francisco's Commercial Lighting Efficiency Ordinance could require us to invest differently in our overall store design, building products and construction processes to align with new code requirements regarding energy efficiency, water reduction, waste reduction and the inclusion of sustainable materials.

  • (ii) the methods you are using to manage this risk We also review energy reporting across our entire fleet of stores on a monthly basis and look for any outliers where energy usage is above the norm and we work with those stores to examine behaviors and reduce energy consumption. In addition, our store design and construction teams monitor federal, state and local building codes to ensure our design and construction processes adhere to all applicable regulations and standards. As trends develop within the industry, we seek to incorporate best practices to help reduce overall energy, water and waste consumption throughout our fleet. (iii) the costs associated with these actions. While these changes could all result in increased costs, we believe that some of the costs due to increased regulation, such as revised product efficiency standards will likely have a similar impact across affected geographies and would occur gradually enough to allow companies to adjust their business practices. We recognize that while increases in costs due to these measures could potentially occur, the actual corresponding cost is unknown at this time. Product labeling regulations and standards (i) the potential financial implications of the risk before taking action More stringent product labeling requirements such as the proposed Grenelle Law in France and other proposed international regulations would require us to change our processes internally in order to comply with requirements in these countries in which we do business. These regulations would require us to more heavily partner with our suppliers in order to collect and compile these data with potential costs associated with this collection. In addition, product sold in these countries would require different labels that would need to be custom-made, which would result in increased operational costs. (ii) the methods you are using to manage this risk We are currently monitoring the various legislative and regulatory developments around the world that could implement these data collection and labeling requirements in the markets in which we sell products. (iii) the costs associated with these actions While these changes could all result in increased costs, we believe that some of the costs due to increased regulation, such as revised product labelling will likely have a similar impact across our industry and would occur gradually enough to allow companies to adjust their business practices. We recognize that while increases in costs due to these measures could potentially occur, the actual corresponding cost is unknown at this time.

    5.1c

    Please describe your risks that are driven by change in physical climate parameters

    ID

    Risk driver

    Description

    Potential impact

    Timeframe

    Direct/ Indirect

    Likelihood

    Magnitude of impact

    Gap05 Change in temperature extremes

    As an apparel company, the supply of agriculture commodity materials, such as cotton, is critical in the production of denim, t-shirts and other apparel products core to our business. Changes in temperature extremes could quickly impact the productivity of the cotton growing regions from which we source. In addition, these temperature extremes could contribute to a growing scarcity of ground water

    Reduction/disruption in production capacity

    6-10 years Indirect (Supply chain)

    About as likely as not

    Low-medium

  • ID

    Risk driver

    Description

    Potential impact

    Timeframe

    Direct/ Indirect

    Likelihood

    Magnitude of impact

    needed for cotton growth, potentially reducing the global cotton yield and resulting in an increase in the cost of raw materials. Increases or decreases in temperature could also potentially change the product assortment sent to specific regions around the country and the world. These sustained temperature changes could require us to do more product diversification with regards to the time of year and the affected regions we sell in.

    Gap06 Change in precipitation pattern

    Because cotton production requires adequate water supplies during the growing season, increases or decreases in precipitation could have an adverse effect on cotton growth. Changing weather patterns resulting in a too much or too little rain in major cotton producing countries such as China and India could result in too little cotton on the global market, potentially raising overall prices. Yearly and/or sustained changes in normal rainfall patterns could disrupt established cotton production zones, resulting in a reduced global cotton yield. Increases or decreases in precipitation patterns could also require us to change our overall product assortment in specific regions around the country and the world where we sell our product.

    Reduction/disruption in production capacity

    1-5 years Indirect (Supply chain)

    About as likely as not

    Low-medium

    Gap07

    Change in precipitation extremes and droughts

    Worsening global drought conditions may also continue to have an affect on future cotton production. In addition, the increased length and severity of extreme precipitation patterns resulting in worsening tornadoes and storms throughout much of the U.S. could impact our business through decreased consumer buying, resulting in lost sales.

    Reduction/disruption in production capacity

    Current Indirect (Supply chain)

    More likely than not

    Low-medium

    5.1d

  • Please describe (i) the potential financial implications of the risk before taking action; (ii) the methods you are using to manage this risk; and (iii) the costs associated with these actions

    Changes in temperature extremes (i) the potential financial implications of the risk before taking action Interruptions in the supply of cotton due to extreme weather conditions such as changes in temperature could drive up material costs and impact product availability. If these increased material costs were widespread across multiple product categories, it could have an overall impact on our performance. We are directly impacted by increases in the cost of commodity products. Moreover, in the event of a significant disruption in the supply of the fabrics or raw materials used by our vendors in the manufacture of our products, our vendors might not be able to locate alternative suppliers of materials of comparable quality at an acceptable price. Any delays, interruption, or increased costs in the manufacture of our products could result in lower sales and net income. (ii) the methods you are using to manage this risk While the risks and the magnitude of the impact due to temperature extremes are uncertain and difficult to pinpoint the geographies that may be impacted, we feel that the risks to our supply chain would not be unique to Gap Inc. and would be widespread throughout the retail and manufacturing industries that produce product within the affected areas. One way in which these risks are mitigated is through active monitoring and geographic diversification with shifts in production among countries and contractors. These risks may not be substantial due to diversification across brands, product categories, channels of distribution and geography. (iii) the costs associated with these actions. We recognize that while increases in costs due to these impacts could potentially occur, the actual corresponding cost is unknown at this time. Changes in precipitation patterns (i) the potential financial implications of the risk before taking action Extreme changes in weather patterns resulting in variations in normal seasonal patterns such as longer or later winters and summers could result in a decrease in sales if our product assortment does not match this shift in seasonal patterns. Since our product is produced far in advance of weather-induced seasonal changes, we may not have merchandise appropriate for a given weather pattern which could result in decreased consumer purchases. The effect of these changes would be felt most when experienced at the beginning and end of particular season. (ii) the methods you are using to manage this risk While the risks and the magnitude of the impact due to extreme weather or sustained changes in precipitation patterns are uncertain and difficult to pinpoint the geographies that may be impacted, we feel that the risks to our supply chain would not be unique to Gap Inc. and would be widespread throughout the retail and manufacturing industries that produce product within the affected areas. One way in which these risks are mitigated is through active monitoring and geographic diversification with shifts in production among countries and contractors. In addition, Gap Inc. uses information about climate differences across our fleet to influence the assortments we carry in each of our stores. These risks may not be substantial due to diversification across brands, product categories, channels of distribution and geography. (iii) the costs associated with these actions. We recognize that while increases in costs due to these impacts could potentially occur, the actual corresponding cost is unknown at this time. Changes in precipitation extremes and droughts (i) the potential financial implications of the risk before taking action Natural disasters, such as hurricanes, tornadoes, floods, earthquakes, and other adverse weather and climate conditions whether occurring in the United States or internationally, could disrupt our operations, the operations of our franchisees, or the operations of one or more of our vendors. In particular, these types of events could impact our product supply chain from or to the impacted region and could impact our ability or the ability of our franchisees or other third parties to operate our stores or websites. In addition, these types of events could negatively impact consumer spending in the impacted regions or depending upon the severity, globally.

  • To the extent any of these events occur, our operations and financial results could be materially, adversely affected. (ii) the methods you are using to manage this risk Gap Inc. employs a comprehensive business continuity plan in which our teams (headquarters, stores, distribution centers, and field teams) are prepared to respond to extreme weather related events such as hurricanes, tornadoes and earthquakes. Our Corporate Business Continuity Planning (BCP) Team monitors all events throughout the world that may potentially impact our employees and or their ability to do business. We provide a comprehensive and sustainable company-wide continuity program consisting of preparedness, emergency response, crisis management and business recovery. We train members of the Incident Command Structures used to ensure an effective emergency response and crisis management actions leading up to and following any serious business interruption. We provide a higher level of preparedness by creating infrastructure, tools, training, documentation and plans designed to protect employees, company assets, company reputation, and stakeholder interest. We educate and empower our employee population so they are able to respond to and recover from emergency events, at work and/or at home and we help coordinate resources and information during response and recovery activities. Weve invested in these strategies over the years to help minimize the impact to our employees and our business from these weather related events. (iii) the costs associated with these actions. We recognize that while increases in costs due to these impacts could potentially occur, the actual corresponding cost is unknown at this time.

    5.1e

    Please describe your risks that are driven by changes in other climate-related developments

    ID

    Risk driver

    Description

    Potential impact

    Timeframe

    Direct/ Indirect

    Likelihood

    Magnitude of impact

    Gap08 Changing consumer behaviour

    The global specialty retail business fluctuates according to changes in consumer preferences. To the extent we misjudge the market for our merchandise or the products suitable for local markets or fail to execute trends and deliver product to market as timely as our competitors, our sales could be adversely affected, and the markdowns required to move the resulting excess inventory could adversely affect our operating results.

    Reduced demand for goods/services

    Unknown Indirect (Client)

    Unknown Low

    Gap09

    Fluctuating socio-economic conditions

    Some of the factors influencing consumer spending include fluctuating socio-economic conditions such as interest rates and credit availability, fluctuating fuel and other energy costs, fluctuating commodity prices, higher levels of unemployment, higher consumer debt levels, reductions in net worth based on market declines, home foreclosures and reductions in home values, and general uncertainty regarding the overall future

    Reduced demand for goods/services

    Current Indirect (Client)

    Likely Low-medium

  • ID

    Risk driver

    Description

    Potential impact

    Timeframe

    Direct/ Indirect

    Likelihood

    Magnitude of impact

    economic environment.

    5.1f

    Please describe (i) the potential financial implications of the risk before taking action; (ii) the methods you are using to manage this risk; (iii) the costs associated with these actions

    Changing consumer behaviour (i) the potential financial implications of the risk before taking action Our success is largely dependent upon our ability to gauge the tastes of our customers and to provide merchandise that satisfies customer demand in a timely manner. However, lead times for many of our purchases are long, which may make it more difficult for us to respond rapidly to new or changing fashion trends or consumer acceptance of our products. The global specialty retail business fluctuates according to changes in consumer preferences, dictated in part by fashion and season. To the extent we misjudge the market for our merchandise or the products suitable for local markets or fail to execute trends and deliver product to market as timely as our competitors, our sales will be adversely affected, and the markdowns required to move the resulting excess inventory will adversely affect our operating results. Some of our past product offerings have not been well received by our broad and diverse customer base. Merchandise misjudgments could have a material adverse effect on our operating results. (ii) the methods you are using to manage this risk Our ability to anticipate and effectively respond to changing fashion trends depends in part on our ability to attract and retain key personnel in our design, merchandising, marketing, and other functions. Competition for this personnel is intense, and we cannot be sure that we will be able to attract and retain a sufficient number of qualified personnel in future periods. (iii) the costs associated with these actions We recognize that while increases in costs due to these measures could potentially occur, the actual corresponding cost is unknown at this time. Fluctuating socio-economic conditions (i) the potential financial implications of the risk before taking action Gap Inc.s performance is subject to global economic conditions and their impact on levels of consumer spending worldwide. Some of the factors influencing consumer spending include high levels of unemployment, higher consumer debt levels, reductions in net worth based on market declines and uncertainty, home foreclosures and reductions in home values, fluctuating interest rates and credit availability, government austerity measures, fluctuating fuel and other energy costs, fluctuating commodity prices, and general uncertainty regarding the overall future economic environment. Consumer purchases of discretionary items, including our merchandise, generally decline during periods when disposable income is adversely affected or there is economic uncertainty. Adverse economic changes in any of the regions in which we sell our products, could reduce consumer confidence, and therefore could negatively affect earnings and have a material adverse effect on our results of operations. In a challenging and uncertain economic environment, we cannot predict whether or when such circumstances may improve or worsen, or what impact, if any, such circumstances could have on our business, results of operations, cash flows, and financial position.

  • (ii) the methods you are using to manage this risk (iii) the costs associated with these actions In a challenging and uncertain economic environment, we cannot predict whether or when such circumstances may improve or worsen, or what impact, if any, such circumstances could have on our business, results of operations, cash flows, and financial position.

    5.1g

    Please explain why you do not consider your company to be exposed to risks driven by changes in regulation that have the potential to generate a substantive change in your business operations, revenue or expenditure

    5.1h

    Please explain why you do not consider your company to be exposed to risks driven by physical climate parameters that have the potential to generate a substantive change in your business operations, revenue or expenditure

    5.1i

    Please explain why you do not consider your company to be exposed to risks driven by changes in other climate-related developments that have the potential to generate a substantive change in your business operations, revenue or expenditure

    Page: 6. Climate Change Opportunities

    6.1

  • Have you identified any climate change opportunities (current or future) that have the potential to generate a substantive change in your business operations, revenue or expenditure? Tick all that apply

    Opportunities driven by changes in regulation Opportunities driven by changes in other climate-related developments

    6.1a

    Please describe your opportunities that are driven by changes in regulation

    ID

    Opportunity driver

    Description

    Potential impact

    Timeframe

    Direct/Indirect

    Likelihood

    Magnitude of impact

    Gap10 Fuel/energy taxes and regulations

    Incentives could be a major driver of renewable energy investment in the upcoming years. State or federal proposals that incentivize business investment in energy efficiency or renewable energy could allow us to install renewable energy sources and adopt emerging technologies that might not have been possible otherwise without these incentives.

    Investment opportunities

    6-10 years Indirect (Supply chain)

    About as likely as not

    Low

    Gap11

    Product efficiency regulations and standards

    More stringent building codes such as the California Green Building Standards and the International Green Construction Code indicate a growing trend in the building industry towards adoption of green building standards. These new standards could spur our internal design and construction teams to actively pursue green building standards for stores affected by these regional standards. Incorporating these green building standards into our store design templates could allow us to leverage costs savings across our fleet and could give us an advantage in other states which havent adopted these standards yet but intend to.

    Reduced capital costs

    1-5 years Direct More likely than not

    Low

    6.1b

  • Please describe (i) the potential financial implications of the opportunity; (ii) the methods you are using to manage this opportunity and (iii) the costs associated with these actions

    i. More stringent building codes could create incentives to review and revise our current store designs in order to reduce our overall energy, water and waste consumption during construction and through operations, potentially reducing our initial capital expenditures and our lifetime operational costs. In addition, environmental regulations which provide incentives aimed at reducing energy, water and waste consumption also present an opportunity to reduce our operational costs through greater energy efficiency and improve our overall environmental performance. These potential savings could then be directed towards capital investments in renewable energy, more energy efficient equipment, adoption of emerging technologies and other sustainable initiatives throughout our business. ii. Our store design and construction teams monitor federal, state and local building codes to ensure our design and construction processes adhere to all applicable regulations and standards. As we see trends develop within the industry, we seek to incorporate best practices to help reduce overall energy, water and waste consumption throughout our fleet. In addition, our Environmental Affairs team and business partners from within our Store Design, Real Estate and Construction teams meet quarterly to share industry news, learnings and best practices throughout our functional groups and develop initiatives to meet our environmental goals. In 2011, we formed the Sustainable Building and Operations working group comprised of these corporate functions to facilitate the sharing of information and best practices. We continued these efforts into 2012. iii. We recognize that while these investments could potentially reduce our capital costs, the actual corresponding investment and saving costs are unknown at this time.

    6.1c

    Please describe the opportunities that are driven by changes in physical climate parameters

    ID

    Opportunity driver

    Description

    Potential impact

    Timeframe

    Direct/ Indirect

    Likelihood

    Magnitude of impact

    6.1d

    Please describe (i) the potential financial implications of the opportunity; (ii) the methods you are using to manage this opportunity and (iii) the costs associated with these actions

  • 6.1e

    Please describe the opportunities that are driven by changes in other climate-related developments

    ID

    Opportunity driver

    Description

    Potential impact Timeframe

    Direct/ Indirect

    Likelihood

    Magnitude of impact

    Gap12 Reputation

    Being able to clearly articulate our environmental strategy and overall goals and show demonstrated progress towards these goals has the potential to increase our reputation with customers, employees and the larger investment community. In addition, a larger commitment to the environment and to corporate sustainability could also help attract and retain top talent. Its also part of our core values - to Do whats right, and our employees place a high value on community involvement and environmental stewardship.

    Increased demand for existing products/services

    Unknown Indirect (Client)

    About as likely as not

    Low

    6.1f

    Please describe (i) the potential financial implications of the opportunity; (ii) the methods you are using to manage this opportunity; (iii) the costs associated with these actions

    i. Changes in customer behavior and preferences could create new potential product offerings or an increased and varied assortment resulting in increased sales and/or higher profit margins across our brands. In addition, increased employee and customer engagement regarding our environmental initiatives could allow us to continue building our reputation with our customers and employees and would keep us competitive within the market. ii. An example of managing this opportunity came in the form of a partnership between Old Navy and TerraCycle. In a month long drive beginning on Earth Day, our customers were encouraged to donate their old flip flops at an Old Navy store. Donated flip flops were used to create safe, spongy surfaces and structures for childrens playgrounds, and kept out of the landfill. iii. We recognize that while these opportunities might require investments and could potentially increase our profit margins, the actual corresponding investment associated with these actions is unknown at this time.

    6.1g

  • Please explain why you do not consider your company to be exposed to opportunities driven by changes in regulation that have the potential to generate a substantive change in your business operations, revenue or expenditure

    6.1h

    Please explain why you do not consider your company to be exposed to opportunities driven by physical climate parameters that have the potential to generate a substantive change in your business operations, revenue or expenditure

    At this time, we do not believe that current or anticipated physical impacts related to climate change present substantive opportunities for our company. However, we are taking steps to reduce our environmental impact by focusing on promoting energy conservation and efficiency at our owned and operated facilities and developing a strategy for reducing environmental impact in our supply chain. Based on the environmental footprint assessment for our owned and operated facilities completed in 2009, we now better understand how our business affects the environment. In 2012, we extended the scope of our assessment beyond our owned and operated facilities which include stores, headquarters and distribution centers to our supply chain. We measured energy, water and waste in a representative sample of our Tier 1 vendors factories globally to create a baseline to begin to identify hot spots and priorities for future action. Additionally in 2012, and continuing into 2013, we conducted a series of Green Manufacturing Workshops for our vendors focused on resource efficiency (both water and energy). These workshops have been conducted in five countries for 139 of our vendors to date. Both our owned & operated and supply chain assessments will give us the information to set long-term environmental goals, direct our resources to operate more efficiently, better address physical and regulatory risks due to climate change, and capitalize on opportunities.

    6.1i

    Please explain why you do not consider your company to be exposed to opportunities driven by changes in other climate-related developments that have the potential to generate a substantive change in your business operations, revenue or expenditure

    Module: GHG Emissions Accounting, Energy and Fuel Use, and Trading [Investor]

    Page: 7. Emissions Methodology

  • 7.1

    Please provide your base year and base year emissions (Scopes 1 and 2)

    Base year

    Scope 1 Base year emissions (metric tonnes

    CO2e)

    Scope 2 Base year emissions (metric

    tonnes CO2e)

    Tue 01 Jan 2008 - Wed 31 Dec 2008

    27258 587847

    7.2

    Please give the name of the standard, protocol or methodology you have used to collect activity data and calculate Scope 1 and Scope 2 emissions

    Please select the published methodologies that you use

    Other

    7.2a

    If you have selected "Other", please provide details below

    The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition) in conjunction with the US EPAs Climate Leaders Greenhouse Gas Protocol: Design Principals provide the overarching methodology for Ecolabs greenhouse gas inventory. The following source specific documents are used as guidance emission factors and the collection of activity data: EPA Emission Factors for Greenhouse Gas Inventories, Nov 2011. US EPA Climate Leaders: Mobile Source Guidance US EPA Climate Leaders: Direct Emissions from Stationary Combustion1 US EPA Climate Leaders: Indirect Emissions from Purchases/ Sales of Electricity and Steam1 US EPA Climate Leaders: Direct HFC and PFC Emissions from Use of Refrigeration and Air Conditioning Equipment1

  • 7.3

    Please give the source for the global warming potentials you have used

    Gas

    Reference

    CO2 IPCC Second Assessment Report (SAR - 100 year)

    CH4 IPCC Second Assessment Report (SAR - 100 year)

    N2O IPCC Second Assessment Report (SAR - 100 year)

    HFCs IPCC Second Assessment Report (SAR - 100 year)

    7.4

    Please give the emissions factors you have applied and their origin; alternatively, please attach an Excel spreadsheet with this data

    Fuel/Material/Energy

    Emission Factor

    Unit

    Reference

    Further Information

    Please see the attached emission factor spreadsheet file in response to question 7.4.

    Attachments

    https://www.cdproject.net/sites/2013/60/7060/Investor CDP 2013/Shared Documents/Attachments/InvestorCDP2013/7.EmissionsMethodology/Investor CDP 2013 Question 7 4 Emission Factors -Gap.xlsx

  • Page: 8. Emissions Data - (1 Jan 2012 - 31 Dec 2012)

    8.1

    Please select the boundary you are using for your Scope 1 and 2 greenhouse gas inventory

    Operational control

    8.2

    Please provide your gross global Scope 1 emissions figures in metric tonnes CO2e

    18897

    8.3

    Please provide your gross global Scope 2 emissions figures in metric tonnes CO2e

    429865

    8.4

    Are there are any sources (e.g. facilities, specific GHGs, activities, geographies, etc.) of Scope 1 and Scope 2 emissions which are not included in your disclosure?

    Yes

    8.4a

  • Please complete the table

    Source

    Scope

    Explain why the source is excluded

    Non-U.S. operations

    Scope 1 and 2

    Activity data are not yet available for operations outside the U.S. and are therefore excluded from the inventory. Non-U.S. facilities account for approximately 10% of Gap Inc.s facility space and corresponding emissions.

    8.5

    Please estimate the level of uncertainty of the total gross global Scope 1 and 2 emissions figures that you have supplied and specify the sources of uncertainty in your data gathering, handling and calculations

    Scope 1

    emissions: Uncertainty

    range