Gap Inc. was named to the 2015 Dow Jones Sustainability Indices — here’s why that matters.
Sustainability is getting a lot of attention these days — with good reason. Around the globe, water shortages affect the lives of more than a billion people and can impact business from agricultural production through product manufacturing.
The international community is embarking on a long-term path to a new set of Sustainable Development Goals (SDGs). These SDGs recognize how ending poverty and reducing inequality are linked to climate action, clean water and sustainable communities. It's clear that environmental issues are, fundamentally, human-rights issues.
The complex connections between sustainability, industry and regulatory issues often require collective action to forge effective solutions. For Gap Inc., this means taking leadership or active roles in collaborative initiatives like the International Labor Organization's (ILO) Better Work program, the Sustainable Apparel Coalition, the Alliance for Bangladesh Worker Safety and Ceres' BICEP (Business for Innovative Climate & Energy Policy) coalition.
Sustainability Matters to Millennials and Investors
More and more, customers and investors recognize how social and environmental issues are connected to companies and the products they sell. And companies like Gap Inc. that care about doing the right thing are working on integrating sustainability more deeply into their businesses.
Millennial customers and employees want to buy products and work for companies that help them live their values and contribute to a better world. Market research by GlobeScan and BBMG points to a large consumer segment of “aspirationals" who love to shop, but still value sustainability and identify with responsible brands.
Investors, from pension funds to investment banks, are joining the conversation by honing in on how sustainability can help lower risk, cut costs and increase sales, and developing tools to measure these impacts. For example, Morgan Stanley recently increased the stock price valuations for a select group of sustainability leaders. The global market for sustainable investing surpassed $21.4 trillion by early 2014. More than 822 institutional investors, representing more than $95 trillion in assets, back CDP initiatives that assess companies' efforts to manage climate, water and deforestation risks.
Dow Jones Sustainability Indices (DJSI) 2015
So how do investors and other concerned stakeholders assess sustainability? And where does Gap Inc. stand? There's a burgeoning cottage industry of surveys and rankings that attempt to evaluate whether companies make the grade on sustainability.
According to research by SustainAbility, one of the most credible benchmarks for sustainable business and investing is the Dow Jones Sustainability Indices (DJSI). The DJSI uses an extensive array of questions to evaluate sustainability across a variety of business functions. In addition to social and environmental criteria, the DJSI covers corporate governance, ethics, supply chain management, strategy for emerging markets, human capital and philanthropy.
Gap Inc. recently joined a select group of companies on the DJSI World and North America indices for 2015. This marks the third straight year that Gap Inc. made the DJSI World Index, which distinguishes the top 10 percent of companies in each industry out of more than 2,500 of the world's largest companies.
The DJSI recognizes Gap Inc.'s focus on protecting human rights, improving working conditions and expanding opportunities for the people who make our clothes and work for our brands. We have seen how treating workers with dignity and respect and providing training in life and job skills through the Gap Inc. P.A.C.E. program for advancing women can boost participants' self-confidence, while also delivering business benefits through increased productivity and retention. Our commitment to gender equality includes ensuring the women and men who work for Gap Inc. are paid equally for the same work everywhere we do business.
At our stores, installing LED lighting and other energy efficiency measures helped lower our absolute U.S. greenhouse gas emissions by 34 percent below the 2008 level, while saving money. Improving water quality and conservation in our supply chain not only makes the way our clothes are made more sustainable, it also protects the health and well-being of workers and local communities.
Beyond recognition, surveys like the DJSI have real business benefits. They help identify and share good practices, as well measure and compare progress against industry peers and leaders. They can also catalyze conversations, point to opportunities for improvement and contribute to integrating sustainability throughout a company's business.