GAP Inc Environmental Sustainability and Building a Credible Brand

Building a Sustainable Brand at GAP Inc.

Kindley Walsh Lawlor, Sr. Director, Social ResponsibilityFranky Mo, Sr. Manager, Environmental AffairsMonica Oberkofler, Director, Social ResponsibilityTraci Passero, Marketing Manager, Banana Republic

June 5, 2008

Building a Sustainable Brand

Agenda

– Mission– History– Gap Inc. Focus– Brand Integration– Moving Forward

Mission Statement

We believe we should go beyond the basics of ethical business practices and embrace our responsibility to people and the planet. We believe this brings a sustained, collective value to our shareholders, our employees, our customers, and society.

We understand that our operations affect the environment. Our goal is to improve how we use resources to reduce our environmental impact while still meeting our business objectives.

Our environmental strategy is focused on the three areas that have significant environmental impact across our operations: Energy conservation, Cotton/sustainable design, and Output/waste reduction (ECO).

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2005-2006 SR Report

Code of Business Conduct

Global Partnershipsteam formed

(focus on stakeholder engagement)

Organic Cotton T-shirtsdebut at Gap

Gap Inc.

- Ethical Sourcing

- Community Investment

- Environment

Our Focus

Energy ConservationWe are committed to reducing our greenhouse gas emissions through energy conservation efforts and/or renewable energy options.

Cotton/sustainable designWe are exploring fabrics made of materials other than conventionally-grown cotton to create products that are fashionable and better for the environment.

Output/waste reductionWe are committed to minimizing the amount of resources we use and reducing the amount of waste we produce through our daily business operations.

Life-Cycle Assessment

Garment Production Inputs - Fuel, water, chemicalsOutputs – Emissions, wastewater, waste

Transportation of GoodsInputs – Fuel, corrugate, plastic Outputs – Emissions, maritime waste

Store & Facility ConstructionInputs – Energy, wood, otherconstruction materialOutputs – Emissions, waste

Consumer Use & DisposalInputs –Energy, water, dry cleaning chemicalsOutputs – Emissions, waste

Raw Materials & Textile Production Inputs – Water, pesticides, fertilizers, dyes, energyOutputs – Emissions, waste, runoff (wastewater)

Store & Facility Operations (including packaging)Inputs – Energy, corrugate, plasticOutputs – Emissions, waste

Sustainable Design

We believe in promoting environmental sustainability. We know that true sustainability will take time, but we believe in taking incremental steps to make it happen.

We believe that protecting the environment is good for our business. We believe that each of our brands has a unique opportunity to define what sustainable design means to them and to their customers.

CAN CLOTHES BE FASHIONABLE AND MAKE A DIFFERENCE?

CANPROTECTINGTHEENVIRONMENTBE GOODFOR BUSINESS?

Banana Republic: Sustainability Model

Branding/Communication

Business PracticesPackaging Products

Employee Engagement / Community

Today’s Consumer …

“Today’s customer is the savviest in history. Armed with instant information and interest, they can highly praise or deftly damn a company’s social initiative.

Customers are saying to companies, ‘Don’t just tell me. Show me. Invite me in. Let me interact with you in a variety of ways. And let me determine what is real. Then I can tell others about how you express your humanity and values in action.’”

Carol ConeChairman and Founder,Cone, Inc.