Title Sponsor

RETAIL SUSTAINABILITYCONFERENCE 2015

Title Sponsor

BE A CATALYST FOR CHANGE

Title Sponsor

• Overview of macro trends in supply chain sustainability

• Why is it important? How are retailers doing?

• Overview and update on the Sustainable Apparel Coalition (SAC)

• Perspective of a key member (Target)

• Audience Polling & Questions

Agenda

Title Sponsor

Poll: Before today, had you heard of the Sustainable Apparel Coalition?

Title Sponsor

Confidential Property of Schneider Electric

Common Retailer Challenges

Trouble acquiring, synthesizing, reporting, and analyzing “big data” and translating it into focus action

Difficulty managing reporting requirements (customers, investors, senior leadership, NGOs, industry & government groups, compliance markets)

Trying to adapt strategy based on global megatrends such as resource scarcity, energy revolution, social unrest, & radical transparency

Title Sponsor

5

Macro Trends

Source: 2015: State of Green Business

Title Sponsor

Where Natural Capital Impacts Occur in the Value Chain

Title Sponsor

RILA Sustainability Maturity Matrix Results:2015 Retailer Supplier Engagement

Starting51%

Standard34%

Excelling3%

Leading5%

Next Practice7%

Starting Standard Excelling Leading Next Practice

Title Sponsor

Starting61%

Standard25%

Excelling7%

Leading7%

Next Practice0%

Starting Standard Excelling Leading Next Practice

RILA Sustainability Maturity Matrix Results:2015 Retailer Supply Chain Transparency & Traceability

Title Sponsor

So here’s the gap…

While over 90% of natural capital impacts

for retailers occur within the supply chain,

the majority of retailers (as of 2015 RILA

Sustainability Maturity Matrix) are at a

“starting” level of maturity in the areas of

Supplier Engagement and Supply Chain

Transparency and Traceability.

Title Sponsor

Poll: Before today, had you heard of The Higg Index?

Title Sponsor

Scott MillerDirector, Business DevelopmentSustainable Apparel Coalition

Title Sponsor

• Formation of The SAC

• Development of The Higg Index

• Future of Higg

Title Sponsor

SAC Vision

The Sustainable Apparel Coalition’s

vision is of an apparel, footwear, and

home textiles industry that produces

no unnecessary environmental harm

and has a positive impact on the

people and communities associated

with its activities.

Title Sponsor

Milestones

2009

20122010

2013

- Walmart and

Patagonia

letter seeks

universal

measure

sustainability

performance

- 12 Companies

meet to form

Sustainable

Apparel Coalition

- Higg 1.0 pilot

- EcoIndex pilot

- SAC

Incorporates as

nonprofit

- Higg Index

environmental

modules released

to public

- Higg online goes live

- Social/labor &

footwear modules

launch

- 100th SAC member

- 2000+ Facility modules

- 150 SAC members

- SAC Amsterdam office

opens

- Product Enviro

Footprint pilot w/

European Commission

-Modules on Higg

up >100%

- Design &

Development

Module launch

- Clean By Design

w/ NRDC launch

2011

2014

2015

Title Sponsor

Title Sponsor

DEVELOPMENT OF THE HIGG INDEX

Title Sponsor

Higg Index Building Blocks

Title Sponsor

Departure From The Status Quo…

Title Sponsor

…To A Roadmap For Improvement

Level 1

•Compliance

•Awareness and Understanding

Level 2

• Planning, Managing, and DemonstratingPerformance

Level 3

• Aspirational Innovation and System Change

Title Sponsor

Higg Suite of Tools

Higg Index

Online

Facility

• Environment Module

• Social/Labor Module

Brand

• Environment: Apparel/Textiles Module

• Environment: Footwear Module

• Social/Labor Module

Product• Design & Development Module

• Product Environmental Footprint (~2017)

Retailer• Environment Module

• Social/Labor Module

Title Sponsor

Higg Index Online Dashboard

Title Sponsor

Higg Index Online and Its Core Functionality

Title Sponsor

1: Complete & Post Modules

Title Sponsor

2: Connect With Customers & Partners

Higg Online User Connections –January 2014Retailer / Brand

Facility / Vendor

Affiliate / NGO

Retailer / Brand

Facility / Vendor

Affiliate / NGO

Higg Online User Connections –August 2014

Higg Online User Connections –October 2014Retailer / Brand

Facility / Vendor

Affiliate / NGO

Title Sponsor

A Global Web Of Connections

As of August 14, 2015:

• 3613 Accounts

• 5551 Individual Users

• 16129 One-to-one Account Connections

• 3287 Posted Modules

• …And growing every day

Title Sponsor

3: Benchmark Performance

Title Sponsor

Benchmarking Insights: Brand Environmental Module

64

80

88

93 95 93 93

80

44 45

53

4548

64

29

1620

13

0 0

5

13

7

00

10

20

30

40

50

60

70

80

90

100

Mo

du

le S

co

re

2nd & 3rd Quartiles Maximum Average Minimum

Title Sponsor

Benchmarking Insights: Facility Environmental Module

100 100 100 100 100 100 100 100

4963

5052

37 39

50

45

40 0 0 0 0 0 0

47

67

47

40

2730

27

33

0

10

20

30

40

50

60

70

80

90

100

Total Score EMS Energy &GHG

Water Use WastewaterEffluent

Emissions toAir

WasteManagement

Chemicals

Mo

du

le S

co

re

2nd & 3rd Quartiles Maximum Average Minimum Median

Title Sponsor

FUTURE OF HIGG

Title Sponsor

Impact Priorities

Product Tools: 1) Design &

DevelopmentModule (DDM)

2) Product Environmental Footprint (PEF)

Verification:

1) Facility Modules

2) Brand & Retailer Modules

Higg V3:

1) Update Environmental

Modules

2) Converge Social/Labor

Modules

Consumer Facing:

1) EU Product Labeling

2) Full Transparency

by 2020

New Module:

Retail Stores (pilot 2015)

Title Sponsor

Recap

Active Leadership

Collaboration

Equal Partnership

Continuous Improvement

Transparency

Title Sponsor

RETAIL SUSTAINABILITYCONFERENCE 2015

Title Sponsor

BE A CATALYST FOR CHANGE

Title Sponsor

EMILY MCGARVEYGROUP MANAGER CORPORATE SOCIAL RESPONSIBILITY

TARGET CORPORATION

Title Sponsor

Target & SACStrategic Approach

• Changes in global landscape and stakeholder expectations drive opportunities for brand

management and profitability

• Industry wide approach removes supply chain redundancy & audit fatigue

• Multi-stakeholder engagement provides credible and cost-effective resources

Immediate Value

• Create a consistent language for stakeholder engagement

• Identify “hot spots” for process and resource management opportunities

• Develop framework for collaboration and continuous improvement

Title Sponsor

HIGG INDEXPurpose: A common, industry-wide tool for measuring the environmental performance of

products and the supply chains that produce them.

Brand

• Assesses brand or retailer based on processes & requirements which influence supply chain sustainability

Product

• Assesses products based on materials, processes, components and packaging inputs which influence product sustainability

Facility

• Assesses facilities based on awareness and management of environmental impacts including waste, water & energy

Title Sponsor

Poll: For non-members in the audience, what would prevent you from joining an organization like SAC?

Title Sponsor

Social Q&A

Title Sponsor

RETAIL SUSTAINABILITYCONFERENCE 2015

Title Sponsor

BE A CATALYST FOR CHANGE