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Despite the Pandemic, Gap Inc. Reports Environmental Wins

“Inclusive, by design,” a phrase that guides Gap Inc.’s operations, is clear in its brands’ consumer-facing initiatives such as Old Navy’s Bodequality, an omnichannel shopping experience that aims to democratize its fit process, prices and how women of all shapes and sizes shop for fashion. How it impacts its global supply chain, however, underscores the company’s “multi-threaded” approach to building a more sustainable future.

The phrase is “about using the scale of our business and the influence of our brands to improve people’s lives and the communities in which we operate,” according to Sally Gilligan, Gap Inc. chief growth transformation officer. “We have a balanced focus across how we empower women, enable opportunity and enrich communities and the environment,” she wrote in the company’s new 2020 sustainability report.

Published Wednesday, the report reviews the social and environmental wins for the company’s family of brands including Gap, Old Navy, Banana Republic and Athleta.

By aligning with the international sustainability agenda and guided by frameworks including the UN Guiding Principles on Business and Human Rights, the UN Sustainable Development Goals (SDGs) and the Paris Agreement on climate change, the company touts achievements like a 39 percent reduction in greenhouse gas emissions in its owned and operated facilities and a 13 percent reduction in single-use plastic waste.

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Brand by brand

Each brand is doing its part to contribute, and denim is leading the way.

As of summer 2021, 91 percent of Old Navy’s denim assortment incorporates water-saving techniques, with one billion liters of water saved so far, the report stated. The brand is working toward a goal of having 100 percent of its denim made with water-saving techniques by 2022. The same year, Old Navy aims to source 100 percent of its cotton from sustainable sources while increasing the use of recycled cotton in denim products.

For Gap, the Washwell program, an efficient wash system that has helped save 402 million liters of water since 2016, continues to be the backbone in its range of sustainable denim. At the end of 2020, 91 percent of qualifying denim was part of the Washwell program and Gap is on track to reach 100 percent by the end of this season, exceeding its goal of 75 percent. Along with renewing its commitment to the Ellen MacArthur Foundation’s Jeans Redesign, 2021 marked Gap’s involvement with the Textile Exchange’s 2025 Recycled Polyester Challenge, which asks apparel brands to collectively increase the percentage of recycled polyester in the industry from 14 percent in 2019 to 45 percent by 2025.

Over 60 percent of the materials used in Banana Republic’s 2020 collection were from more sustainable sources, including denim styles that are “designed and constructed with recyclability in mind,” according to the report. Water savings have been a key endeavor for the brand. Banana Republic saved 19.99 million liters of water in 2020 and it continues to explore innovative dyeing and wash methods to conserve water, including bio-softeners, foam dye and Washwell techniques.

Certified B Corp Athleta “made substantial progress against its first ever sustainability targets” by onboarding a North Carolina-based solar farm to offset 100 percent of its operational footprint in the U.S.

People power

Gap Inc. said it is on track to achieve its 2022 goal to reach one million women and girls through the P.A.C.E. (Personal Advancement & Career Enhancement) program it established in 2007. By working within vendors’ facilities, P.A.C.E. provides women with foundational life skills, technical training and support to advance at work and in their lives.

While covid restricted Gap’s ability to hold in-person training programs, the program’s 2020 impact resulted in an 81 percent increase in communication skills and a 75 percent increase in financial literacy skills among participants, according to the report.

Meanwhile, the Gap Foundation became a founding partner of, and investor in, the newly launched Resilience Fund for Women in Global Value Chains. Described as a “first-of-its-kind funding initiative,” it was established to support pandemic recovery and to advance long-term, systemic changes that build resilience for females and communities. The fund seeks to pool investments from multiple sources to support local women-led organizations, enhance learning and drive the strongest outcomes.

The company’s partnership with ILO Better Work has helped established programs to improve worker representation and leadership involvement across the board. It uses a color-coded system to rate each facility’s performance, with high-performing facilities with “no critical and few violations” rated green; average performers rated yellow; and those that need to address one or more serious issues rated red.

“In 2020, we almost met our goal of only working with facilities rated yellow or green; only 1 percent of facilities were rated red, down from 16 percent in 2017 when we set the goal,” Gap Inc. stated, adding that “each facility has its own issues at any given time, which may cause a decline to a red rating.” In such circumstances, the company said it provides corrective action plans to resolve any issues.

Gap Inc. is also working to help amplify the voice of workers in its supply chain. By 2025, it wants to have 100 percent of workers employed in strategic factories to have access to “representative, gender-equitable workplace committees.” All factories will have prevention and response management systems and trainings in place to address gender-based violence by 2025 as well.

“Over the years, we have regularly assessed the facilities we work with and have found serious violations related to gender-based discrimination and harassment but we recognize that it’s not enough to rely solely on auditing to detect and address these issues,” Gap Inc. stated.

Will widespread adoption of the United Nation’s Sustainable Development Goals stack up to right the denim industry’s wrongs?
Gap Inc.’s India P.A.C.E. program Courtesy

Equality efforts

In 2020, Gap Inc. fine-tuned its approach to talent development by launching This Way Onward, a hiring program that “tackles systemic barriers to employment by providing opportunity to youth” with structured training and valuable first-job experience.

Launched with Old Navy, the report states that This Way Onward surpassed its 2020 hiring goal with 912 new store hires, 90 percent of whom self-identify as people of color. The program also supports Gap Inc.’s Equality & Belonging goal to achieve diverse representation in its pipeline. The company is committed to doubling the representation of Black and Latinx employees at all levels in its U.S. headquarters offices by 2025 and increase representation of Black employees in store leader roles in the U.S. by 50 percent.

Hardships brought on by the pandemic were felt across retail, and Gap Inc.’s stores were no different. The company established the Selvage Fund, which provides cash grants to employees facing unemployment and other financial fallouts. The fund provided over $840,000 in relief grants to over 1,600 Gap Inc. staff members by December 2020.

Responsible production

From water stewardship to chemical management, the report highlights the steps Gap Inc. is taking to incorporate sustainability into product design and protect the planet by partnering with business, nonprofit, governmental and community organizations.

Through a Mill Sustainability Program, Gap Inc. engages in three industrywide efforts to help meet its sustainability goals: the Sustainable Apparel Coalition (SAC), Zero Discharge of Hazardous Chemicals (ZDHC) and the Social & Labor Convergence Program (SLCP).

Such partnerships, according to the report, resulted in the company exceeding its 2020 goal to save 10 billions liters of water with fabric mill and wet-processing partners by 1.3 billion liters.

By the end of 2020, all of Gap Inc.’s own manufacturing facilities and 70 percent of its strategic mills had completed the Higg Index self-assessment to communicate their water and energy use along with chemicals and waste management. A total of 280 facilities verified their responses, according to the report.

In 2020, the company developed an internal dyeing, finishing and wet processing toolkit to “empower cross-functional teams to evaluate new opportunities and make informed decisions.” The toolkit supports compliance with Gap Inc.’s MRSL, RSL and wastewater testing policies, as well as additional guidance on performance finishes and dyes.

One of Gap Inc.’s long-term goal is to achieve carbon neutrality across its value chain by 2050. Part of this effort includes “exploring climate adaptation strategies that can mitigate the financial and physical impacts of climate change while building business and community resilience” for partners. The other part is investing in renewable energy for its owned and operated facilities globally. The company’s goal is to have all facilities running on renewable electricity by 2030.

With 2020 being a year that saw consumers reevaluate their purchasing behavior and their own impact on the environment, circularity took on even greater importance. In addition to Gap and Banana Republic releasing circular denim collections, the company donated 6 million units of excess inventory to clothing charities. The year also marked Banana Republic’s first 12 months in the clothing rental business. The brand launched its Style Passport program, a subscription service through which U.S. customers receive three items at a time and have the option of renting and returning them or purchasing their favorites.

And though Gap Inc. is in the business of clothing, plastic remains a hot topic. Along with diverting 13 percent of its single-use plastics waste, the company set new folding standards to reduce plastic packaging and slash freight costs by $13 million and increased the recycled content in its poly mailer bags from 35 percent to 50 percent. Old Navy has expanded its hanger recycling program to 600 stores, which will divert 2.2 million pounds of plastic from landfill annually. The program will be expanded to all stores by the end of 2021.